Minneapolis nonprofit argues the state arbitrarily rejected it from meal program due to separate fraud

A Minneapolis nonprofit argued Thursday that it's being unfairly scrutinized in light of the massive Feeding Our Future fraud investigation and was arbitrarily denied the chance to serve meals to children in need.

Gar Gaar Family Services asked the Minnesota Court of Appeals to reverse the state's decision preventing it from participating in federally funded meal programs. The organization argued that the state Department of Education rushed to take action because of the Feeding Our Future scandal.

"This case ... is not Feeding Our Future," Gar Gaar's attorney Barbara Berens told the three-judge panel. "The concern that we have expressed is that this case is being confused ... with other sponsors who allegedly have engaged in substantial misconduct."

Berens and the Education Department's attorney, Kristine Nogosek, made their cases to the appeals court, which now has 90 days to decide whether to reverse or uphold the Education Department's denial of Gar Gaar's program application.

The department rejected the application a year ago — one month before the FBI fraud investigation centering on Feeding Our Future became public. So far, 50 people connected to Feeding Our Future have been charged in what prosecutors say is the largest pandemic-related fraud case in the nation. The scandal involved more than $250 million in taxpayer dollars — most of which they say was spent on luxury houses and other goods, not food.

The U.S. Department of Agriculture (USDA) funds the meal programs, reimbursing schools, child care centers and nonprofits for feeding low-income students after school or in the summer. In Minnesota, the Education Department enforces the federal rules and disburses the money.

In 2020, Khadija Ali started Gar Gaar, which means "help" in Somali, with the goal of helping Somali and other at-risk communities with education and food assistance. The organization, also known as Youth Leadership Academy, was approved to serve meals in the USDA's summer food program and received more than $21 million in reimbursements for sites that served 7 million meals in 2021 — the top provider of summer meals in Minnesota that year.

Gar Gaar then applied to participate in the separate school year meal program. But the Education Department denied the application and cited several reasons, including that the organization hadn't demonstrated it was financially viable as required by federal rules. For instance, the department said Gar Gaar failed to provide a budget, didn't properly document that after-school centers met federal eligibility rules and submitted "unallowable expenses."

Gar Gaar appealed to an Education Department panel, which upheld the decision in February. Gar Gaar took the case to the Court of Appeals the next month. A separate decision by the Education Department to disqualify Gar Gaar and its six leaders from participating in the school year program was reversed by the department's appeals panel in May, agreeing the action was "procedurally premature and improper."

On Thursday, Berens told appellate judges Francis Connolly, Matthew Johnson and Lucinda Jesson that the Education Department found no evidence of fraud with Gar Gaar and no one associated with the nonprofit has been linked to Feeding Our Future. The organization had some "growing pains" as a newly formed nonprofit, but corrected the financial issues, she said.

"I would ask this court to give it another chance," Berens said.

She blamed the Education Department for giving Gar Gaar incomplete or conflicting directions and said many of its findings about the organization's financial issues were based on partial records.

Berens said in court documents that Gar Gaar was being confused with other sponsors "perhaps as a result of stereotyping, unconscious bias, or simply to avoid additional criticism."

Feeding Our Future worked with many Somali business owners and restaurants, and several of the 50 people charged are East African immigrants. Feeding Our Future's leaders have accused the Education Department of discrimination.

"They got spooked," Ali added after the hearing. "There was a rush to conclusions. We were not given a chance."

Ali, who also started a language interpreter service and is on the board of the Minneapolis Foundation, said she founded Gar Gaar because she understood as a Somali immigrant the struggles immigrant families face. While some of the food sites Gar Gaar was working with transferred to another Minneapolis nonprofit, she worries some children are now going hungry, especially Somali families who are reluctant to seek help for fear of being tied to Feeding Our Future.

Gar Gaar has submitted an extensive management plan, hired third-party auditors and accounted for every expense that the Education Department initially called into question, Berens said.

"We put the right people in place," Ali added. "The need is there."