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MN fraud: Lawmakers hold hearing as FBI raids businesses
Minnesota lawmakers held a hearing on Tuesday hours after the FBI raided 22 businesses in the Twin Cities as part of ongoing fraud investigations.
ST. PAUL, Minn. (FOX 9) - Gov. Walz has removed Shireen Gandhi as the commissioner of the Minnesota Department of Human Services in an attempt to "shore up" leadership of the department.
Minnesota Department of Human Services shakeup
What we know:
On Monday, the governor announced that Shireen Gandhi would be removed as commissioner of the Department of Human Services. The current deputy commissioner, John Connolly, will now serve as temporary commissioner.
According to Monday's release, Connolly has asked Gandhi to stay with the department as a deputy commissioner to focus specifically on safeguarding Minnesota's Medicaid programs. Connolly also appointed Andrew Johnson, who currently serves as the general counsel for DHS, as deputy commissioner.
The backstory:
The shakeup comes as DHS has faced intense scrutiny in recent months over its handling of Minnesota's fraud response. It also comes days after the FBI raided nearly two dozen businesses across the Twin Cities related to ongoing Medicaid fraud investigations.
What they're saying:
In a news release, Gov. Walz blamed the shakeup on attacks from the federal government.
"While President Trump and Dr. Oz play politics with Minnesotans’ health care, we are focused on stability and results," said Governor Walz. "We’ve made significant progress to strengthen programs and root out fraud. Today, we’re building on our success by putting an even stronger structure in place; adding leadership, improving oversight, and ensuring these programs are managed with the discipline and accountability Minnesotans expect. That’s how we protect care and deliver for families."
"Since February of 2025, I have led aggressive and proactive work to protect Minnesota’s Medicaid program for Minnesota’s most vulnerable people, to detect and prevent fraud, to prevent federal cuts to funding, and to improve internal culture at the agency," said Deputy Commissioner Shireen Gandhi in a provided statement. "My goal has been to hand off the Minnesota Department of Human Services in a stronger position to the next administration in 2027. Because I remain steadfast to these goals, I have accepted Temporary Commissioner Connolly’s request that I return to my position as deputy commissioner. I am honored to continue serving the people of Minnesota for the last 8 months of the Walz Administration."
GOP blasts DHS decision
The other side:
In a statement Monday afternoon, Republican lawmakers pointed out the shakeup came one day before Gandhi was due to face a confirmation hearing. Now, due to the fact that she has been removed as commissioner, that hearing has been canceled.
Rep. Demuth statement: "Governor Walz proves once again that fraud is free to continue under his leadership. Recycling the same failed staff will not root out fraud – only wholescale change will. Fraud will continue until the Walz administration takes the problem seriously, and keeping Shireen Gandhi in a key leadership role proves they still don’t."
Rep. Harry Niska added: "For the second time in under a year, the day before a Walz employee is set to face tough questions over the DHS response to fraud, they’re removed from their position. This is a pathetic attempt to dodge real accountability on fraud, and Minnesotans can see right through it. Keeping the same staff who have overseen the fraud explosion will only allow the fraud to keep growing unchecked."
Senate Republicans also roasted the decision, with Senator Paul Utke writing:
"It is astounding that we have yet another temporary commissioner overseeing the agency we need steady leadership in to fight the fraud our state has been subjected to – we could have avoided this entire circus had Governor Walz seriously considered who was best-equipped to lead DHS in the first place. Someone who denies the existence of fraud was never fit to lead the agency experiencing the most fraud our state has ever seen. Keeping her on board as a Deputy Commissioner does a disservice to every single taxpayer that has lost money to the fraud she has totally failed to address."