New allegations are emerging in Minnesota’s ongoing nonprofit fraud scandal, raising questions about the role of high-ranking state officials and whether political considerations influenced oversight failures. While the controversy initially focused on what state leaders knew — and when — about widespread misuse of government funds, new claims now suggest that Minnesota Attorney General Keith Ellison may have played a more significant role in the situation than previously understood.
The revelations follow reports from whistleblowers, local watchdog groups, journalists, and policy experts who say the state failed for years to properly vet or monitor certain nonprofit organizations operating within the state’s Somali community. The nonprofits reportedly received substantial grant funding, despite recurring indicators of financial irregularities, operational inconsistencies, missing documentation, or questionable spending patterns.
The scandal has become one of the most consequential in Minnesota’s recent political history, not only because of the dollars involved — estimated to be in the billions — but also because of the human impact. Funding that was intended for social services, community support, and food assistance programs may have been misappropriated, contributing to preventable tragedies and, according to some reports, being funneled outside the country for illicit purposes.
Background: A Massive Fraud Case That Shook Minnesota
The public first became widely aware of the scale of alleged fraud when law enforcement agencies uncovered significant wrongdoing within certain community organizations operating under the umbrella of humanitarian or social service programs. These groups, many of which served immigrant and refugee communities, had been receiving state funding for years.
Investigations that followed uncovered a network of organizations believed to have submitted falsified invoices, inflated service numbers, or claimed to operate programs that—according to investigators—were ineffective, duplicated, or nonexistent. What began as a localized concern soon escalated into a statewide scandal involving multiple state agencies, grant administrators, and political offices.
Critics argued that the fraud persisted for years because of a lack of oversight and reluctance by state officials to aggressively audit or investigate organizations embedded within politically sensitive communities. Supporters of these groups said the majority of community nonprofits are legitimate, vital organizations that should not be discredited because of the misconduct of a few.
Still, the scale of the scheme raised questions about whether political pressure, institutional blind spots, or administrative shortfalls allowed the situation to continue far longer than it should have.
Governor Walz Under Scrutiny
Earlier reporting revealed allegations that Minnesota Governor Tim Walz had been warned about the fraud years before it was publicly acknowledged. According to whistleblowers, state employees attempted to elevate concerns internally about the scope of the possible misuse. Some claim those warnings were ignored, minimized, or dismissed — not because they lacked evidence, but because investigating them might create political controversy.
Whistleblowers further alleged that individuals who raised concerns faced retaliation. These claims are still being examined, but if substantiated, they would indicate systemic failures at multiple levels of state government.
The governor’s office has repeatedly denied the allegations, stating that his administration took action when sufficient evidence became available and cooperated fully with federal investigations.
Yet the controversy has widened — and attention has now shifted to another prominent figure in Minnesota politics: Attorney General Keith Ellison.
New Allegations: Funding Decisions, Political Support, and Recorded Promises
Recent claims suggest that Attorney General Ellison may have used his political influence to protect or support certain nonprofit organizations that were later implicated in fraud investigations. According to watchdog reports and audio recordings circulating online, Ellison allegedly expressed willingness to assist nonprofit leaders who were seeking support or protection from state legal challenges.
In one recording, Ellison reportedly tells community leaders that he is committed to helping their organizations continue operating and accessing state resources. Critics say the recording implies a willingness to overlook concerns or complaints in exchange for political loyalty or fundraising support. Supporters counter that Ellison has a long history of community engagement and that offering guidance to nonprofits — many of which serve vulnerable populations — is a normal part of his public role.
The American Experiment, a Minnesota-based research organization that has closely followed the case, reported that the recording captures Ellison promising his support to individuals who would soon receive substantial state funds. According to the organization, some of these same individuals later contributed to Ellison’s political campaigns.
While campaign donations from nonprofit leaders are not inherently improper, the timing and context described by critics raise questions about whether normal boundaries between political advocacy and state oversight were blurred.
The Larger Question: Was This “Pay-to-Play” or Community Outreach?
The debate over Ellison’s involvement centers on perception versus legality. On one hand, state attorneys general often work closely with groups across the political and nonprofit spectrum, especially in communities that rely heavily on public funding for social programs. Engaging with these groups, explaining state policies, and offering guidance on compliance is not unusual.
However, the allegations suggest something more troubling:
that certain nonprofits may have been shielded from scrutiny because they were politically connected or supportive of influential elected officials.
Political opponents argue this constitutes a form of “pay-to-play,” where access to state support or the absence of oversight appears to correlate with political contributions. They point to the recording as evidence that Ellison may have created the impression — intentionally or not — that financial backing of his campaigns could strengthen a nonprofit’s standing with his office.
Ellison’s defenders strongly reject this interpretation. They emphasize that Minnesota’s nonprofit sector includes thousands of organizations, many serving immigrant communities, and that the attorney general has historically worked across diverse groups to address legal and social challenges. They also argue that the recording, when taken in full context, does not prove misconduct.
Still, the allegations have fueled political tensions and public skepticism, especially given the scale of fraud in the broader Minnesota nonprofit network.
The Impact on the Somali Community
Many Somali-run organizations in Minnesota provide critical services, including job assistance, childcare support, language education, and food distribution. The fraud scandal has placed a spotlight on the community in ways that leaders say are unfair and harmful.
Community advocates stress that the majority of Somali nonprofits operate ethically and serve real needs. They warn that using the misconduct of a subset of organizations to generalize about an entire community risks stigmatizing thousands of Minnesotans who rely on these services and who contribute meaningfully to the state.
Nevertheless, some local Somali leaders have also acknowledged that oversight failures allowed opportunistic individuals to exploit both community trust and state resources. They have called for more transparency, stronger auditing systems, and clearer guidelines to prevent future abuse.
Looking Ahead: Investigations, Reforms, and Accountability
State and federal agencies continue investigating the nonprofits involved, and additional arrests or charges appear likely. Meanwhile, lawmakers are evaluating regulatory reforms that would increase auditing, tighten background checks for grant administrators, and impose stricter accounting standards on organizations receiving state funds.
As for the political implications, the allegations involving both Governor Walz and Attorney General Ellison remain unresolved. Hearings, inquiries, and public discussions are expected to continue into next year.
Whether the claims result in legal consequences, political fallout, or administrative changes will depend on what investigators ultimately confirm. What is clear, however, is that Minnesota’s nonprofit sector — and the state officials who oversee it — are facing one of the most significant accountability challenges in recent memory.
