Welfare Fraud In Blue Cities: How Pervasive Is The Kleptocracy?

If you keep up with current events at all, it is unlikely that you have missed in the past week the explosion of the Minnesota Somali welfare fraud scandal into the national, and even international, news.

Not that the enormous Somali welfare fraud in Minnesota is something new. The bloggers at Powerline, who are based in Minnesota, have been covering the subject since at least 2018. Here is a May 2018 City Journal piece by Scott Johnson (of Powerline), reporting on an investigation of Somali-owned daycare centers in Minneapolis suspected of stealing millions by billing the government for inflated number of enrollees. But things really got going when the pandemic hit in 2020-21. Minnesota became ground zero for Somali fraudsters setting up sites supposedly to feed hungry children, and collecting millions for meals that were never prepared or served. Federal indictments for this fraud — including 47 people charged in the first indictment — began to issue in 2022. Dozens of articles at Powerline have traced the scandal since that time, as the revealed scope of the fraud has gradually gone from the millions to the hundreds of millions, and most recently into the billions of dollars.

Yet somehow the scandal didn’t make it into the national press in a big way until the New York Times finally jumped in on November 29, 2025, with a long article headlined “How Fraud Swamped Minnesota’s Social Services System on Tim Walz’s Watch.” Excerpt:

The fraud scandal that rattled Minnesota was staggering in its scale and brazenness. Federal prosecutors charged dozens of people with felonies, accusing them of stealing hundreds of millions of dollars from a government program meant to keep children fed during the Covid-19 pandemic. At first, many in the state saw the case as a one-off abuse during a health emergency. But as new schemes targeting the state’s generous safety net programs came to light, state and federal officials began to grapple with a jarring reality. Over the last five years, law enforcement officials say, fraud took root in pockets of Minnesota’s Somali diaspora as scores of individuals made small fortunes by setting up companies that billed state agencies for millions of dollars’ worth of social services that were never provided.

The Times piece appears to have given the cue to the rest of the liberal establishment that it was now OK to break the omertà previously in effect against covering the Minnesota scandal. Suddenly the story is everywhere.

Perhaps the most remarkable aspect of the Minnesota story has been the revelation of total abdication by the state’s Governor (Tim Walz) and Attorney General (Keith Ellison) of any role in catching or prosecuting the fraudsters. The frauds occurred in programs largely funded by the federal government, but administered by the State of Minnesota. The State is the one that actually paid the checks to the crooks. Yet all of the investigations and prosecutions have been done by the Minnesota U.S. Attorney’s office. It appears that Walz and Ellison could not have been less interested in prosecuting.

One might ask whether allowing fraud like this to fester is actually part of the business model of Walz and Ellison, and of the Democrat-Farmer-Labor Party (as the Democratic Party is known in Minnesota). Somalis are a key voting bloc for Minnesota’s DFL. Of the billion plus dollars of government money going to the fraudsters, might any of it have been diverted to fund DFL electoral activities? Although I haven’t seen specific reporting on this aspect, it is hard to imagine that none of it did.

And the same question can be posed around the country. Yesterday station KTLA in Los Angeles broke the story of a new scandal there, where eleven LA County employees have been charged with collecting pandemic unemployment benefits even while working full time for the government. Peachy Keenan commented on X: “All blue cities are run by the same kleptocracy.”

Before commenting, I’ll provide one further, and rather large, example, from the early days of this blog. In 2013 here in New York a scandal rocked something called the Metropolitan Council on Jewish Poverty. At the time, the Met Council (as it was and still is known) was headed by a guy named Bill Rapfogel, who was the spouse of Judy Rapfogel, who was the Chief of Staff to the Speaker of the State Assembly, Sheldon Silver. The Met Council was receiving about $90 million annually in funds from New York State, out of a total budget for the organization of around $110 million.

I covered the Met Council scandal in a piece here at MC on October 10, 2013. Here is the gist, from a complaint filed by the Attorney General (then Eric Schneiderman):

The allegation in the AG complaint against Rapfogel is that, as the Times describes it, he "conspire[d] with someone at the insurance brokerage . . . to pad the charity's insurance payments by several hundred thousand dollars a year. . . .  Mr. Rapfogel . . . pocketed some of the money and was involved in getting the rest to politicians who supply the government grants to the nonprofit organization. . . ."

The State funds a supposed “anti-poverty” program to the tune of tens of millions, and some of that money, deeply buried, makes it back to the political campaigns of the politicians who pass out the taxpayer money. And then, of course, the final and also critical part of the scam is that the anti-poverty program must never actually raise anyone out of poverty. That would defeat the whole purpose. From my 2013 piece:

Absolutely the last thing they want is for the "poverty" population to shrink.  Then the funding would go down!  The basic idea is in-kind handouts of one sort or another.  As readers here know, those do not count at all in the official measures of "poverty"and therefore will never remove anyone from the rolls.  Look at their list of programs:  "providing quality housing," "providing clothing, furniture, and help with home repairs," "assisting seniors with essential living tasks," "helping families recover from domestic violence," "enrolling New Yorkers in low and no-cost health care and food stamps," etc., etc.   There is no risk at all that these kind of things will decrease the poverty count by a single soul. 

If you are interested, the Met Council continues to survive on a much reduced budget, having lost most of its State funding. Sheldon Silver was convicted on unrelated charges in 2018, and died in a federal prison hospital while serving his sentence.

I suspect that it is completely pervasive that organizations that receive large amounts of government funds for welfare programs then are expected to and do provide political support back to the politicians that arranged for the funding. The “political support” could be campaign contributions, or campaign workers, or door knockers, or phone banks, or advocacy. The teachers’ unions are undoubtedly the ones who have perfected these techniques beyond the level of anyone else. The handout state is inherently corrupt.