Crisis erupts at Minnesota DHS as commissioner, top deputies quit

ST. PAUL, Minn. (FOX 9) - Minnesota Department of Human Services Commissioner Tony Lourey resigned Monday, six months after taking office, handing Gov. Tim Walz the first full-blown crisis of his brief tenure.

The move comes four days after DHS announced the resignations of the second- and third-ranking officials at the agency, deputy commissioners Chuck Johnson and Claire Wilson. Walz said a struggle over the direction of the agency had emerged between top leaders.

Republicans on Monday called for major changes at the state agency. But Walz sought to downplay the unfolding drama, saying social services for 1 million Minnesotans continue uninterrupted.

“There’s going to be a desire to find more drama than what’s there,” Walz told reporters. “Those of you that know me, I don’t do drama.”

Nevertheless, there’s been plenty of it at DHS lately.

Walz said he did not ask Lourey to resign when the two men met Sunday evening. Instead, the governor said Lourey wanted to quit immediately because he believed “new leadership” was needed to carry out Walz’s vision.

The governor had an acting DHS commissioner ready to go within 24 hours of Lourey’s decision, comparing it to a public safety emergency response plan after a tornado.

The governor appointed Pam Wheelock, a finance commissioner under former Gov. Jesse Ventura and a veteran government administrator, to the temporary job.

Lourey, a Democrat, abandoned his state Senate seat early this year to take the Walz administration job. That triggered a special election, which Republicans won and doubled their one-seat Senate majority.

Walz said he had “no regrets” over the political ramifications of what turned out to be a six-month appointment.

The leadership crisis started on Thursday, when DHS officials said Johnson and Wilson would leave – Wilson on Aug. 1 and Johnson within two months. Department officials declined to give explanations for the resignations, refusing to release their resignation letters. (Walz’s office did release Lourey’s resignation letter Monday.)

The two deputy commissioners had conversations with Walz’s chief of staff to explain their decisions, the governor said.

“Maybe they felt that they were at a disagreement, they felt like there wasn’t the ability at the agency of the direction that they thought it should go, and they felt they were exercising their right to make a decision based on that,” Walz said.

Walz said he did not know if Johnson and Wilson would return to their jobs now that Lourey was out. A DHS spokeswoman did not respond to a request for comment about their job status.

House and Senate Republicans said there was “cultural problems” at the agency.

“I like to say right now that DHS is a dumpster fire,” said state Rep. Mary Franson, R-Alexandria.

The agency has been under the microscope for years, most recently for fraud in the state’s child care assistance program. The nonpartisan legislative auditor found this year that DHS’s investigative unit was too dysfunctional to prevent the fraud.

Republicans pointed to the handling of the unit’s leader, Inspector General Carolyn Ham, who has been paid more than $42,000 to sit at home for four months while under investigation. Ham said Friday that the investigation has never started and was now scheduled to begin July 23.

Walz said Monday that the investigation had started, but could not say if it began before Ham made her comments Friday.

“Four months went by when she drew a paycheck where no investigation happened. That’s the problem,” said House Minority Leader Kurt Daudt, R-Crown. “No one was investigating. Nobody cared. And she just kept drawing a paycheck.”

Republicans said they would seek legislation in 2020 to limit the amount of time a state employee could be paid while under investigation. They did not say whether the same limits should apply to law enforcement officials who are on paid investigative leave.