ST. PAUL, Minn. (FOX 9) - NOTE: FOX 9 has updated this story to reflect Ramsey County Judge John Guthmann's June 2021 order based on new comments from the judge and further analysis of the court record.
Minnesota Gov. Tim Walz, making his first public comments since the indictment of 48 people in what authorities describe as the biggest pandemic fraud scheme in the U.S., says there should be an investigation into why a Ramsey County judge allowed the alleged fraud to continue.
Judge John Guthmann in 2021 held Minnesota education officials in contempt of court for failing to process applications from nonprofit Feeding Our Future for federal child nutrition payments. The state Department of Education had stopped payments late the previous year amid fraud concerns, but Feeding Our Future sued.
"I would hope there would be an investigation into that," Walz told reporters Thursday. "I was speechless, unbelievable that this ruling could come down. (I) did not really know what to say. Obviously, we had to honor it but at that point I said, we have got to continue to push the federal government and the FBI to do the investigation."
The FBI's investigation started in April 2021 and ultimately led to the 48 indictments this week. Federal authorities accuse people connected with Feeding Our Future of stealing at least $250 million from a federal program that provided meals to children during the pandemic.
Walz said he was alerted to his education officials' concerns early on but did not say an exact date. Education officials have said they grew suspicious in summer 2020 about Feeding Our Future's partner companies that claimed to be feeding thousands of children.
Walz said he was also frustrated that the U.S. Department of Agriculture, which oversees food nutrition grant programs, did not take state education officials' concerns seriously. The alleged fraud spanned across President Donald Trump and President Joe Biden's administrations.
Guthmann was out of the office and was unable to respond Thursday, a spokesman said.
Education officials and Feeding Our Future engaged in a 14-month legal battle after the state stopped processing applications for new meal sites in 2020 and later stopped making payments to the nonprofit, court records indicate.
Feeding Our Future sued, and Ramsey County Judge John Guthmann ruled that Minnesota education officials lacked the legal authority to stop payments. In June 2021, he held the Education Department in contempt of court for failing to process 143 applications from Feeding Our Future for new meal sites. Guthmann ordered the agency to pay Feeding Our Future more than $47,000 as both a fine and reimbursement for attorneys' fees.
"Only through a strong statement by the Court, accompanied by a meaningful financial consequence, can the Court ensure that the MDE will follow its orders," the judge said in his order.
Republicans, including Walz's challenger, Scott Jensen, said the governor's administration should've appealed Guthmann's ruling even as the FBI investigation started.
"Frankly, the word 'speechless' just isn’t good enough," Jensen told reporters after being told of Walz's comments. "I would’ve said, 'We’ve got to get in this right now. We’ve got to dig in this.' I wouldn’t wait months or years. And then say, 'Gee, I was speechless.' There would be a substantial difference in response."
State Sen. Roger Chamberlain, who chairs the Senate Education committee, said the Walz administration -- not the judge -- is at fault.
"Lax oversight allowed bad actors to commit massive fraud and there were no appeals to the judge’s ruling," Chamberlain, R-Lino Lakes, said in a statement.
State Department of Education officials said they didn't appeal Guthmann's ruling for several reasons.
"MDE had already been held in contempt of court once, was facing mounting legal fees, and the court had made it clear that if we were to continue the legal fight to withhold payments, MDE would incur additional sanctions and legal penalties," said Kevin Burns, a spokesman for the agency. "Further, as partners in the federal investigation, there were concerns that ongoing litigation would result in the now-indicted fraudsters learning of the investigation.
Wednesday, the education department filed a claim against Feeding Our Future seeking to recover $583,915 it spent on legal fees.
The previous day, U.S. Attorney Andy Luger announced the indictments against Feeding Our Future CEO Aimee Bock and 47 others, accusing them of conspiracy and fraud.
The indictments say Feeding Our Future sponsored more than 200 meal sites across Minnesota, each claiming to serve thousands of kids every day, but said very few meals were served and most of the kids on the paperwork submitted were simply invented.