How a single discrimination claim helped Minnesota's largest food-aid fraud slip past state watchdogs

Minnesota is under renewed scrutiny for how a now-defunct nonprofit was able to allegedly siphon hundreds of millions in taxpayer dollars - a breakdown that some critics say was fueled in part by officials easing off oversight because of accusations of racism.

The nonprofit, called Feeding Our Future, was run largely by Somalians, and it sued the Minnesota Department of Education (MDE) in 2020, alleging discrimination. Critics have suggested that litigation could have made the MDE nervous and caused state officials to let up on its supervision of Feeding Our Future, potentially letting more fraud occur.

While state officials began questioning Feeding Our Future prior to 2020, the nonprofit went on offense that year and sued the MDE in state court, claiming that the department's lack of action on applications for new food distribution sites during the COVID-19 pandemic amounted to discrimination against Somalians and needy communities.

But the litigation did not stop there. Months later, the MDE stopped administering payments to Feeding Our Future because of what it said were "serious deficiencies," leading Feeding Our Future to bring another court challenge, and the MDE resumed the payments.

Feeding Our Future became the subject of a massive FBI investigation that uncovered allegedly more than $250 million in fraud and led to dozens of indictments. At the time of the initial wave of indictments, then-Attorney General Merrick Garland accused the nonprofit of committing the "largest pandemic relief fraud scheme charged to date."

When the case broke open, the Minnesota court system put out a rare, lengthy statement countering media claims that a judge ordered the MDE to resume the payments. The court system instead said the education department acted voluntarily to resume payments to the nonprofit.

In a trial, an MDE official responsible for overseeing the nutrition programs, which distributed meals to needy children, was asked if any of her superiors told her to stop looking into Feeding Our Future because of the racism claims.

Honer also said the discrimination lawsuit did not stop her from reporting abnormalities she noticed about Feeding Our Future, such as an "incredibly high" number of reimbursement requests and an unusually high number of purported children to be feeding.

"I was frustrated, but I was also confident that I was not [racist]," Honer said, though she described the Feeding Our Future lawsuit allegations as "very nasty."

"The Department of Education denied claims when questionable claims were made about these meals. My office went to court, explained that to the court… We are very able to go after fraud, and we do all the time," Ellison said.

State officials were concerned with legal risks once Feeding Our Future began threatening to sue, and "the threat of legal consequences and negative media attention affected MDE's decisions about the regulatory actions it did and did not take against Feeding Our Future," the audit report said.

"We believe MDE's actions and inactions created opportunities for fraud," the report said.