Minnesota fraud: Prevention and oversight committee hearing

[1:06] With a Session Daily Update, I'm Chris Carpenter. [1:09] The House Fraud Prevention and State Agency Oversight Policy Committee [1:12] is scheduled to gavel in today's hearing. [1:14] The panel is meeting for what may be the final time during the 2026 legislative session. [1:19] Members are expected to have an end-of-session wrap-up discussion [1:22] on some of the fraud issues and policies that the committee has covered [1:26] since being established last year. [1:28] Let's find out more and join members in Capitol Room G3 for coverage of the hearing. [1:33] Good afternoon, I call this meeting of the House Fraud Prevention and State Agency Oversight Committee to order. [4:33] A quorum has been established, and our first motion will be to approve the minutes of April 28th. [4:40] Representative Schultz, have you had a chance to look at the minutes of April 28th? [4:46] Thank you, Madam Chair. [4:49] I have had the chance to review the minutes, and I would move the adoption of the minutes from Tuesday, April 28th. [4:57] Thank you. Is there any discussion? [4:59] Seeing none, all those in favor of the amendments, approving the amendments of April 28th, [5:04] please signify by saying aye. [5:06] Those opposed, nay. [5:07] The motion carries. [5:10] Minutes are adopted. [5:11] So, members, this is our last hearing, [5:14] and it has been an eventful two years, to say the very least. [5:21] And before we launch into today's wrap-up discussion, I first want to thank our incredible committee staff, [5:30] who have done heroic work for our teams, and for the committee as a whole, and for the state of Minnesota. [5:39] So, first, I would like to thank, on our side, the partisan staff, Curtis Peterson, Will, and Lori Cuisineau. [5:56] Thank you. [5:57] And on the Democrat side, Benji, Molly, and Jonathan. [6:03] Thank you so much. [6:04] But most importantly, we want to thank our nonpartisan staff, who have been incredible. [6:11] And we can't thank you enough, Ben, your ability to juggle so many things and provide expert advice in real time, [6:22] every day in committee, and behind the scenes has been incredible, [6:25] and we're very grateful for your work with our committee. [6:27] So, I'm sure Lead Pinto would like to also thank the staff, and also, I want to thank the pages. [6:35] So, our pages are Ben and Liz, and they have been amazing, and we're very grateful for your help. [6:42] And also, I want to thank House IT and Media, who has been here with us all along the way. [6:50] So, with that, Lead Pinto, did you have any comments? [6:53] Thank you, Chair. [6:54] Yeah, no, I'll just, always a good idea to thank the folks who are working with us, [6:57] and we're really grateful to them for their efforts. [7:00] And we've had several folks on the DFL side who have kind of helped with the committee [7:04] at different times through the year, with the current team of Benji Brinks and Molly Peterson, [7:08] and I'm very grateful to them and to all, thank you. [7:10] Thank you. [7:12] All right, so, members, before we bring the testifiers up, I just wanted to give some sort [7:22] of round-up perspective, shall we say, about the work that we have done in the last [7:29] two years. [7:30] We have had multiple hearings, not only during session, but the committee kept meeting monthly [7:36] in the interim last year. [7:39] And we have covered a number of topics, including Medicaid fraud in the areas of non-emergency [7:45] medical transportation, adult day services, assisted living, autism centers, integrated [7:51] community supports, housing stabilization, feeding our future, and child care assistance. [7:56] But we also had hearings with the Attorney General discussing both the role of his office in [8:03] Medicaid fraud, and then separately a hearing about recording that he was made, an audio recording [8:11] of him. [8:12] And we also had the Secretary of State in to talk about election fraud and the security [8:18] of our voting system. [8:21] Then twice, last year and this year, we heard the Governor's fraud package in both hearings. [8:26] We had the Governor's Director of Program Integrity, Judge O'Malian, and we did a hearing focused [8:32] on charter school concerns that was suggested by our DFL colleagues. [8:38] So, we have covered the waterfront members, and it has been eye-opening for me, and I think [8:45] for all of our members, and also for the public. [8:48] So, I think the role of having a broad oversight committee has served the institution well, and [8:56] I hope that future legislators will continue to have an oversight committee, because I do [9:02] think it's important for this body. [9:05] With that being said, just one week ago today, we were here and learning more about child [9:12] care fraud while the federal government was raiding 22 sites, some autism, some child care, [9:23] for more concerns about fraud with search warrants. [9:26] And I just think it's very important to highlight that. [9:31] We have been doing this work for two years. [9:34] Prior to our committee existing, there were multiple years of OLA reports, of whistleblowers, [9:40] of investigative journalism. [9:42] And yet, in real time a week ago, we were still seeing FBI raids. [9:47] So as much as I'm proud of the work we have done, there is a lot of work left to do. [9:52] And we, as a legislature and the governor's administration, we all have to continue to focus on fraud, to [10:03] not tolerate fraud, to hold people accountable in agencies and criminals accountable through [10:10] the judicial process. [10:12] This work is not going away just because the committee will no longer be meeting. [10:17] And so I implore all of us to continue to keep working on the research, the bringing things [10:24] to our federal partners' attention and BCA as well. [10:29] We have to keep fighting fraud even though the committee is not going to be present or publicly [10:36] holding hearings anymore. [10:39] So with that, I just wanted to say why we're doing today's hearing. [10:48] So we, every hearing it felt like we ran out of time, and I know as chair that's mostly [10:54] my fault, not managing the clock well. [10:57] But we've had really good, important discussions. [10:59] But I felt like many hearings we left feeling like we had so many questions left to ask both [11:04] of the agencies and of the different testifiers who had been before us. [11:10] And so for today, we had invited people from the commissioner or to their department heads [11:16] from MDE, Department of Human Services, and Department of Children, Youth, and Families. [11:23] And originally, as many people know in the public, this hearing was scheduled for one o'clock [11:26] today, which was our normal hearing time. [11:29] But when we heard from the agencies, they responded that they couldn't possibly come at one o'clock [11:33] today because they were going to be in Ways and Means, which I understand. [11:37] This is a tough time, right? [11:40] So Representative Nash was also just in Ways and Means. [11:43] And so we said, of course, we will try to accommodate your schedule. [11:46] We will move the hearing until three o'clock. [11:49] We knew they were in the building because they were just at Ways and Means. [11:52] But they all still declined to come. [11:54] And I cannot express how frustrated and disappointed I am at that response. [12:01] The agencies, to their credit, they have shown up many times. [12:04] But they should be here to finish answering questions at our last hearing. [12:09] And they were literally in the building. [12:11] And we accommodated their request to move the hearing. [12:15] So I'm very disappointed that agency officials are not with us today to answer questions. [12:21] And yes, Representative Nash. [12:23] Thanks, Madam Chair. [12:24] And to that point, I will point out that I went to Ways and Means, did the full docket [12:28] of Ways and Means, had time to walk back to my office to get a couple of things that I [12:32] needed for today, had a couple of quick meetings, one with the speaker, grabbed my water bottle, [12:38] grabbed my stuff, walked back over, and here I am. [12:42] So I'm curious. [12:43] And I also saw Commissioner Campbell walking in the tunnel. [12:46] So everybody had ample time to be here. [12:50] I'm just curious as to why they're, you know, not. [12:52] Yes. [12:55] So I appreciate that, Representative Nash. [12:57] And I will just say, as I do almost every hearing, we will be following up with additional [13:01] questions for the agencies. [13:03] I've lost count of the number of letters I've sent to the agencies with requests that they [13:09] have not responded to. [13:10] So when they say, oh, we've been there, we've testified, we've responded to everything. [13:14] In fact, they have not. [13:16] And I have many outstanding requests to the agencies that I'm still waiting on. [13:21] So we will obviously do that again at the end of today. [13:26] But I also, we also wanted to bring back some of the whistleblowers who have given incredible [13:30] testimony, shown incredible courage, and speak on behalf of hundreds of other whistleblowers [13:36] that I hear from. [13:38] And so I am very grateful to the whistleblowers who were willing to take time out of their schedules [13:43] to come back and finish answering questions for us. [13:47] And I'm incredibly grateful for that. [13:50] So with that, members, our first, we're going to take testimony from Nathaniel Olson, who [13:56] had first signed up. [13:58] And if, I'm sorry, if Nathaniel would like to come to the testifier table, you'll have [14:05] two minutes to share. [14:07] Nathaniel's been in committee before, and he has been advocating for people with disabilities. [14:14] And this is our final hearing, and he has to present one more time. [14:17] So welcome to the committee. [14:18] Please state your name for the record. [14:19] Thank you, Madam Chair. [14:20] I'm Nathaniel. [14:21] I'm also the disability advocate for the state of Minnesota, and it's our last hearing. [14:25] As we wrap up this session of the Minnesota legislature, I want to reflect on the challenges we have [14:33] faced and the unfortunate lack of progress. [14:36] Sadly, Minnesota seems always to find someone to blame, most recently President Trump. [14:41] I have done everything within my power as a disability advocate for Minnesota. [14:46] But the reality of fraud in our system remains undressed. [14:51] Under Governor Walz, my efforts to false fraud were met with indifference, stands as proof [14:56] that whistleblowers are ignored seriously and fraud is dismissed. [15:01] Governor Walz chooses to turn his head away from those raising concerns, and not a single Democrat [15:07] has stepped up to tackle the issue. [15:09] It's disheartening to witness this attitude, not only here, but across the nation. [15:16] Despite this, I come here every day, hoping to bring attention to the issue of fraud, which [15:21] is far more prevalent in Minnesota than many are willing to admit. [15:25] Having lived in Minnesota for 26 years, I've never imagined my two-year career with a disability [15:31] end so abruptly. [15:33] Speaking out as a whistleblower and advocating for people like myself led to retaliation, not [15:37] the freedom of speech assumed that I was protected. [15:45] Governor Walz's system is not for the people, and his actions have betrayed the trust of Minnesota's. [15:50] As I say goodbye to the state I once loved, I hope that in 2026 voters will choose the truth [15:58] over lies. [15:59] I hope another disability advocate will step up to carry this message forward as I move [16:03] to serve the United States as a whole. [16:05] Minnesota has been the great state, but protection and dignity by people with disabilities remains [16:11] lacking. [16:12] Abuse, bullying, and neglect persist. [16:15] As ICS homes care more about profit than people, fraud and exploitation can't be allowed [16:20] to continue. [16:21] We must demand accountability to protect the vulnerable. [16:25] Thank you, Madam Chair, Vice Chairs, and Committee Members for allowing me to speak. [16:29] And if my presence is unwelcome, I leave with a clear conscience knowing I felt that I fought [16:35] for the truth. [16:36] The truth will set me free. [16:38] Your truly Nathaniel M. Olson, a former disability advocate for the state of Minnesota and now the [16:42] United States. [16:43] Thank you. [16:45] Thank you, Mr. Olson. [16:46] We appreciate you coming. [16:47] So next up, I would like to invite Jay Swanson and Faye Bernstein to the testifier table. [16:56] And Scott Stillman is joining us online via Zoom. [17:01] And then I also want to say great thanks to the Legislative Auditor Judy Randall who is [17:08] in the audience and is willing to take questions. [17:11] And she and her team have been incredible partners long before this committee formed. [17:16] They have been doing the work of bringing accountability and focusing on how we need to strengthen internal [17:24] controls across state government. [17:26] And we are very grateful, Auditor Randall, for your team, for your work, for your leadership. [17:32] And we look forward to continuing to work with you. [17:36] So with that, rather than have presentations from our testifiers, I thought we'd dive right [17:42] into the questions. [17:44] And so when you do, when you are asked a question, please just state your name for the record and [17:51] remind the committee and the public what your role has been at the department, just so everyone [17:57] remembers. [17:59] And I'll start. [18:00] I have four pages of questions, but I'm going to try and keep myself under control here. [18:06] And with that, I would like to talk to just my first question to Ms. Bernstein. [18:11] So when you and I first talked, which was many, many months ago, we had a conversation about [18:21] all of the different hotlines and tip lines at DHS and how they're staffed, how they function. [18:31] And I just wondered, for the sake of how we are going to improve that system of reporting [18:39] and tip lines in the future, if you could just talk briefly about what they are, how [18:43] they're staffed, who takes the tip once they come in, how are they logged? [18:48] If you could just reflect on that for a couple of minutes. [18:51] Ms. Bernstein. [18:52] Yes. [18:53] Faye Bernstein currently working at the Minnesota Department of Human Services. [18:58] We have probably two major tip lines. [19:05] I have to say, we probably have too many tip lines. [19:09] It just makes it hard for both employees and the public to know where to call. [19:15] But we have two main tip lines that we would use, one within the OIG and one within central [19:21] office. [19:22] The one within central office is more often used by employees, I would say. [19:30] Then there is also many other emails that are published and they will be dedicated to a [19:38] specific thing. [19:40] For instance, there could be one in the behavioral health division that is specifically for questions [19:47] about a new service we're operating or something like that. [19:52] And we, especially on the two major tip lines, but also on the others, we log them. [20:01] I guess, let me retract what I said. [20:04] On those smaller tip lines, I don't believe we do log those. [20:08] I think we just answer them as they come in. [20:12] On the two major tip lines, the one at the OIG and then one in central office, those are [20:18] logged and, uh, there's some basic data points that are kept on them before they [20:25] are sent off to where they go, where they need to go for investigation. [20:30] That is something that the logging has always been a little, uh, that's sort [20:35] of bothered me because the one group of whistleblowers that has the Twitter [20:41] account. [20:42] It's always bothered me that we do not log their, their information and that [20:49] really makes no sense to me. [20:53] Um, I don't know why we don't. [20:55] I think it sends a, I've asked many, many times that why don't we log those? [21:00] And why don't we keep data points on those? [21:04] And the response is basically that, uh, we don't want to encourage anonymous [21:09] reports like that. [21:10] We, which to me says we don't want to encourage whistleblowers. [21:14] So we're really missing, uh, a great deal of information that that our [21:17] whistleblowers are giving us. And it sends a very bad message. [21:20] Certainly to them, they feel very disrespected. Um, I, I don't know why [21:26] they would ever speak directly to DHS auditing staff, uh, because they've, [21:29] they've been very, very disrespected by, um, I don't know why they would [21:33] ever speak directly to DHS auditing staff, uh, because they've, they've been very, [21:38] very disrespected by just being written off as if nothing they say matters. [21:43] And, and here I read very closely what they say. [21:47] And I know the media reads very closely what they say, but DHS ignores them. [21:51] Thank you. And one additional question I wanted to ask you on this. Um, so I've heard this from a few whistleblowers, not, um, to be named, but I've heard that there have been whistleblower reports to [21:55] these tip lines where female recipients are saying they are being pressured for sexual favors in order to maintain housing in particular, but other services as well. [22:19] Have you seen or heard, uh, reports like this and what has happened to those reports? Have they been investigated? [22:33] Yeah, I ran into those when I was doing redactions of documents. Um, somebody, I think it's a media outlet, has a data request into us for all of the emails that came into the HSS housing [22:50] supports and services program and email address and I don't want to call that a tip line because a lot of what came in there was just general questions. How do I qualify for the service? How do I apply? [23:06] Um, but so they were very uninteresting. But then there, um, I did come across some and I whenever I think of this, the word that just comes to my mind is it's just it's really gross. [23:22] It is kind of gross to talk about here. But yes, there would be women. I would look at the names and it would be a woman's name and saying using the one I remember particularly used the term sexual harassment. [23:36] sexual harassment. Another one was more detailed about being asked by a housing provider for sex in exchange for the service. And then I would look at what our response was because some of the people that were monitoring that email address were licensed. [24:01] And when you're licensed and when you're licensed, you have to report, um, something like this as a sexual abuse and maltreatment report, you have to, you have to advance that. And instead we would respond with a form letter in the email version that would direct them to various state agencies. Um, where, because we said we, we did not handle complaints of that sort. [24:33] And so we would refer them to other agencies where they could seek help, I guess, which is completely incorrect. Um, the Department of Human Services absolutely investigates allegations of sexual abuse. I did that as my first job at the Department of Human Services. [24:50] Um, the Department of Human Services. Licensed professionals can absolutely not ignore those reports. And it, it is just, it's how we handled that is, is so gross to me that we were leaving people in that situation. [25:09] You know, when you're in that situation, you know, when you're in that situation, you are extremely vulnerable, extremely vulnerable. And you may do whatever you need to do for housing. And it is just gross that we sent them back a form letter. [25:24] Thank you. Um, vice chair Anderson. I have a question for Mr. Swanson. Um, so I think it was yesterday or the day before I saw on the, one of the news stations had an art, had a story about, um, daycare centers and how hard it was to comply. [25:46] They were essentially interviewing someone that ran a daycare center and talked about how, how it was a lot of work and paperwork, um, to comply and they were talking about how they send in the forms and fill it, fill it out. [26:02] And the, and the daycare owner essentially said, I don't know how people could screw this up. If you do it, it's pretty laid out. So, um, yet we know that there's been huge fraud in daycare. [26:16] And other in daycares out there and, um, the two don't mix. I mean, they don't, it doesn't make sense unless you have legitimate daycare centers that are doing all this paperwork correctly, you know, out compliance. [26:32] And then the other fraudulent daycares aren't doing anything and no one is checking anything. Do you have any insight on this? Um, Mr. Swanson. [26:43] Chair and representative, my name is Jay Swanson. [26:46] Oh, I'm sorry. Yeah. [26:47] I'm a retired, um, DHS employee for about seven years and I was the manager of, um, recipient and childcare provider investigations up until I retired. [26:58] Um, in response to your question, um, I didn't think it was ever terribly complicated. [27:04] Uh, in the CCAP program, uh, providers were required, um, to have someone log the child's, um, name and the time that they arrived at, uh, the center and, uh, they had to log the time that, uh, the child left the center. [27:21] Um, my, my kids were in daycare years and years ago and we had to do that. [27:27] And I know many parents across Minnesota who bring their kids to daycare, uh, have to do something like that. [27:33] I never thought it was terribly complicated. [27:35] Um, and, um, so yeah, what we were seeing from the, um, fraudulent providers is that, um, oftentimes either no kids were coming to the center or, um, sometimes kids were coming to the center or, um, [27:52] sometimes kids would come for, um, part of the day, sometimes 15 minutes. [27:58] They would walk in and, uh, sign in and their parents would walk out with them. [28:04] Um, so there was kind of a variety of circumstances that we were, um, dealing with. [28:12] And again, sometimes, um, the daycare center was closed for the day for whatever reason. [28:17] Uh, no staff was there and, um, and no parents or children showed up. [28:24] Um, but when it came time to do the, uh, the billing every two weeks, sometimes those fraudulent centers, you know, sometimes it billed for 50 or 70 kids when there was no staff or children at the center of the entire day. [28:37] Um, now if, if that makes things complicated, well, um, so be it. [28:44] But, uh, I thought it was a fairly simple process. [28:47] Vice Chair Anderson. [28:48] Thank you. [28:49] Um, yeah, it seems that way. [28:52] I, I was just worried. [28:53] How can I just, I'm just floored by the fact that we have all these fraudulent centers that literally are, I think, falsifying records, you know? [29:04] And there's lots of them and that no one caught this. [29:07] And do you, you were an investigator. [29:10] How did you, how did DHS catch any of it? [29:15] How did they look? [29:17] Did they look? [29:18] So. [29:19] Mr. Swanson. [29:20] Chair, our chair and representative, um, all of our investigations started with a tip or a lead or a complaint or somehow we received information that something very strange was going on at this, um, childcare center. [29:38] Um, and then usually we would send investigators out. [29:41] Um, they would be in plain clothes and in unmarked cars. [29:45] Uh, they would do physical surveillance of the childcare center for a period of time. [29:50] Uh, we would, um, do electronic surveillance of the childcare center for a period of time. [29:56] And we'd try to determine, um, are kids going to the center and, and being cared for? [30:03] Um, uh, are the attendance records and the billing records accurate based on what our surveillance showed? [30:10] Um, and we could tell pretty quickly, um, whether or not this was a significant fraud problem or not. [30:18] Thank you. [30:21] Thank you. [30:22] Just one more follow up. [30:23] So, how did, um, tell me again how DHS essentially shut down or, or stopped you, your division from dealing with this. [30:35] What happened? [30:36] Mr. Swanson. [30:37] Chair and representative. [30:39] Um, in roughly mid 2017, um, you know, I started to notice a change that there was pushback, [30:49] uh, you know, um, um, on us, um, initiating and completing childcare investigations. [30:57] Um, and then in, um, the second half of 2018 when the, um, uh, OLA was doing its, um, special [31:09] review of childcare and I, um, uh, I was answering questions, uh, posed to me by the OLA in an email, [31:16] uh, and the document that I, um, wrote, um, and forwarded, uh, to my superiors. [31:25] Um, they, um, they, um, they didn't want that document going to the OLA because what they [31:33] told me was this is going to make us look bad. [31:35] Um, from, and then I refused to make changes to the document. [31:39] And I said, you, if, if you want to send a different answer to the OLA, feel free, but take my name [31:46] off it. [31:47] But if my name is going to be on a response, it's going to be the document that I prepared. [31:51] Um, from that point on, um, it was almost like all out war, you know, with the, uh, operational [31:59] line of DHS focused on, um, shutting down, uh, childcare provider investigations. [32:07] And, uh, it was done, um, you know, these, I talked about them spending $90,000 on a consultant [32:15] to discredit, um, our allegations, um, you know, they had that continuous improvement program, [32:22] which was, um, basically a way of, uh, bullying and harassing, uh, our investigators. [32:28] And they changed, you know, the way we would do investigations and, um, they, um, changed, uh, [32:38] how it was decided which centers would be investigated. [32:41] Um, that was taken out of, uh, my hands and the hands of the CCAP supervisor that worked for [32:47] me, uh, again, we had 70 years of criminal investigative experience between us. [32:52] Um, those decisions would be made by a committee of three, two of which are DHS officials with [32:58] no experience investigating, uh, financial fraud or public benefit, um, crimes. [33:05] So it was, it was kind of a slow, um, well, what didn't seem slow at the time, but, uh, they [33:13] enacted this new process and then I retired in, um, mid-2019 after I learned what the new [33:20] system was going to be. [33:21] I said, I'm not going to be a part of that. [33:23] And so that system continued as, you know, it functioned as it was designed, um, where [33:29] they weren't spending as much time looking at providers receiving very little CCAP as those [33:34] that received huge amounts of CCAP. [33:37] And that continued, as I understand it, up until, um, uh, that unit was moved to Children, [33:44] Youth and Family a year ago when that, um, department was formed. [33:48] Thank you. [33:49] Thank you. [33:50] Uh, representative Nash. [33:52] Thank you, Madam Chair. [33:53] I'm gonna go back to Ms. Bernstein, if I could, and pick up on something that the chair mentioned. [33:58] Ms. Bernstein, you mentioned that there were, uh, allegations of, of sexual abuse that were reported [34:04] up through, uh, that you would ostensibly then pass along to somebody further up the chain. [34:09] Is that correct? [34:10] They just ended up in that mailbox and they really went unaddressed. [34:20] Representative Nash. [34:25] Thanks, Madam Chair. [34:26] I, here's the thing that, that is, is creating a problem for me and, and I'll actually give credit [34:31] where credit is due. [34:32] Representative Pinto helped me with an issue four years ago regarding mandatory reporters. [34:38] And, uh, for those that don't remember or, or don't know, I grew up as an abused kid and [34:43] a mandatory, a series of mandatory reporters completely failed me. [34:47] Beyond description completely failed me. [34:50] And it sounds that that's what's happening here at the state of Minnesota, that anybody [34:56] who is in a supervisorial role inside of your department would be a mandatory reporter. [35:02] Maybe not everybody, but certainly a predominant number of people that would have seen these emails [35:08] were mandatory reporters. [35:10] And are you saying that, that those that would have received these that likely would be mandatory [35:15] reporters chose to do nothing? [35:16] Ms. Bernstein. [35:17] It's always been a question, uh, whether DHS employees are mandatory, mandatory reporters. [35:25] I have always proceeded that we all are. [35:28] I am actually not licensed as an attorney, but not as a mental health professional. [35:32] I have always considered myself as an employee of the Department of Human Services that I [35:38] needed to report. [35:39] I need to pass on these. [35:41] So, I always have. [35:44] Some of the people who were monitoring this email box that I was seeing, uh, were licensed. [35:53] And if you're licensed, you absolutely have to. [35:56] There's no question. [35:57] The ones that weren't licensed, I, I personally still think they did have to. [36:03] Uh, that's, that's an open question, but the, the ones that were licensed, I, I cannot believe [36:10] that they sent back a form letter and that they just left that person in that situation. [36:16] Mr. Nash. [36:19] Thank you, Madam Chair. [36:21] Uh, and that's, that's the problem, isn't it? [36:25] Is that somebody who comes to work for the state in a supervisorial role that if they are [36:31] indeed a mandatory reporter chose to sweep it under the rug? [36:36] And, and look, we're, we're here mainly talking about fraud, which is apparently one of our net [36:40] exports here in the state of Minnesota. [36:44] But there's also incompetence or just willful dereliction of duty. [36:49] And again, this is very personal to me, that we would have somebody who works for the state [36:54] of Minnesota that is in a role that requires their reporting of something as heinous as sexual abuse, [37:02] ignore that, sweep it under the rug, and then instruct the distribution of a form letter. [37:11] Um, and, and I just want, if, if Ms. Bernstein would confirm that that, that was the process, [37:17] Madam Chair. [37:18] Yes, Ms. Bernstein. [37:19] Yes, there was a form letter. [37:21] It sent them to, it was a list of state agencies, uh, human rights. [37:26] I can't even remember the other state agencies. [37:28] State agencies that do not handle this. [37:30] The Department of Human Services handles this. [37:34] Representative Nash. [37:35] Thank you, Madam Chair. [37:36] And for the love of God, what the hell, people, that we would have people who come, [37:42] probably bearing their, their vulnerabilities and their souls to somebody who should do something [37:51] with that, only to get a form letter? [37:55] Let that sink in. [38:00] Somebody who has been sexually abused, comes to the state, raises their hand, says this happened, [38:10] no investigation, and they're the lucky recipient of a, of a form letter. [38:16] Uh, back to Ms. Bernstein, if I could, Madam Chair, last question before I get back on the list here a little bit. [38:23] Representative Nash. [38:24] I'm, I have lots of things. [38:25] Um, Ms. Bernstein, and because I'm, I'm relatively new to the committee. [38:29] But how many allegations would you say over the time that you were there have been effectively dismissed [38:39] or similarly been given a different type of form letter to make them just go away? [38:44] Ms. Bernstein. [38:47] Are you speaking specifically about sexual abuse allegations? [38:50] Representative Nash. [38:51] Thanks, Madam Chair. [38:52] In general. [38:53] Ms. Bernstein. [38:54] In that, that particular email box, uh, which I was in doing red, redactions for, uh, probably about two weeks. [39:05] I saw probably two to three of the sexual abuse allegations. [39:12] The other ones I saw was a tremendous amount of recipients of the service writing in to tell us that they weren't getting the service, but in fact, they were getting billed for the service. [39:27] I could not even count those. [39:29] There were so many lovely people who wrote in to tell us that we had a fraud problem. [39:35] Representative Nash. [39:36] Representative Nash. [39:37] Well, thanks, Madam Chair. [39:38] I'll, I'll, um, I'll be done for now until I get back on the list. [39:41] But an, an immeasurable number of people who have raised their hands following the process that our state has set forward, saying, [39:55] there's a problem here, and we send form letters and give them a little chuck on the shoulder and say, it's gonna be okay. [40:01] Please be quiet and go away. [40:05] That is ridiculous. [40:07] Uh, thanks, Madam Chair. [40:08] Uh, next up, Representative Altendorf. [40:12] Thank you, Madam Chair. [40:14] Uh, Mr. Swanson, my question is for you. [40:17] Thank you for coming back. [40:19] You had testified last week, and, um, in your testimony, you talked about the OLA report of 2019. [40:25] Um, specifically, uh, if you have that in front of you, you're familiar with it. [40:30] In Appendix B, um, B2, uh, or, um, on page B2 of that document, uh, this was your statement. [40:40] These investigators and agents, however, also firmly believe that the extraordinary level of weaknesses, [40:47] present in the internal controls of this program, will allow the fraud to continue unabated, or, unfortunately, [40:55] possibly increase until changes are made in this area. [40:59] And, Mr. Swanson, my question to you is, was that one of the paragraphs that a senior DHS official ordered you to delete? [41:08] Yes, it was. [41:09] Yes, it was. [41:10] Mr. Swanson. [41:11] Mr. Swanson. [41:13] Um, yes, it was, Representative and Chair. [41:15] Representative Altendorf. [41:16] Uh, thank you, Mr. Uh, Swanson. [41:18] Now, I'd like to draw your attention to page B3 of that document to the second paragraph, which, which reads, [41:26] in calendar year of 2017, there were fraud concerns involving 42 of the highest paid centers. [41:36] Investigators have significant fraud concerns regarding 72 of the top 100 highest paid centers. [41:45] And, investigators have significant fraud concerns regarding 100 of the top 150 highest paid centers. [41:55] Mr. Swanson, the question is, was this a paragraph that a senior level DHS official ordered you to delete as well? [42:03] Mr. Swanson. [42:04] Chair and Representative, yes, it was, although there's, there's a typo in that paragraph, which was probably my error. [42:12] But, it was meant to read that in 2017, we had fraud and concerns involving 42 of the 50 highest paid centers. [42:20] Thank you for clarifying. [42:22] Representative Altendorf. [42:23] Thank you. [42:24] Um, and thank you. [42:25] And, further down, um, on that same page, B3, we're still looking at the CCAP payments to the 50 highest paid centers in 2017. [42:34] Average over 1.5 million per center. [42:39] And, the average payment to the remaining 1,043 centers was a little over 103, 135,000. [42:51] Was this a part of your document that you were also ordered to delete, Mr. Swanson? [42:56] Mr. Swanson. [42:57] Chair and Representative, yes, it was. [43:00] Representative Altendorf. [43:02] Mr. Swanson, was the person that ordered you to delete these sections, um, the DHS Inspector General? [43:09] Mr. Swanson. [43:12] Representative, um, as I said last week, uh, I'm happy to answer questions when it, when they involve the identity of, of, um, DHS officials. [43:25] Um, my preference would be to, um, answer this committee's questions in a non-public setting. [43:31] Thank you. [43:33] Representative Altendorf. [43:34] Thank you, Madam Chair. [43:35] Mr. Swanson, why do you think, even though you are leaving her unnamed at this point, why would she want these sections deleted? [43:45] Why were you ordered to delete these from your statements? [43:48] Mr. Swanson. [43:49] Chair and Representative, what I was told was, these are going to make us look bad. [43:55] Um, yeah, I think that's what I was told and I believe that to be the case. [44:04] Representative Altendorf. [44:05] Yeah. [44:06] Madam Chair, thank you. [44:08] Um, Mr. Swanson, um, have you previously, before this report, expressed these same concerns to the DHS senior management about the disparity? [44:17] And really, we're talking about 50 of the highest centers out of over a thousand centers, which is quite alarming when we're looking at the numbers that they were receiving. [44:28] And this should have been a red flag. [44:30] Did you previously report it? [44:32] Mr. Swanson. [44:33] Chair and Representative, repeatedly throughout, I would say, the 2017 and 2018 timeframe, I continually brought this up to officials above, um, my level. [44:47] Um, but, um, I was told that it's not an issue and don't worry about it. [44:52] Anything else for President Altendorf? [44:55] Okay. [44:56] Um, thank you, Mr. Swanson. [44:57] I guess my last question just, you know, would be, in summary, um, this is alarming. [45:03] Um, you know, you saw the red flags and you were ignored. [45:06] You were told to, to stop and to not go down that road, not to expose that. [45:11] You were told to delete it. [45:12] You were ordered that by senior people in DHS, even though you've not named them. [45:17] Um, did you see this disparity as a serious problem? [45:23] Mr. Swanson. [45:24] Chair and Representative, I, I thought it was a very serious problem. [45:28] Um, because if, if you do the math, um, what this amounted to is, um, 50 out of, um, over a thousand childcare centers, um, those centers were four and a half percent roughly of our total childcare centers in Minnesota at that time. [45:50] Um, that four and a half percent of centers, um, um, was eating up, uh, over 35% of, of the, of the CCAP budget. [45:59] Um, and at that time, I would speak regularly with county, uh, CCAP employees, county CCAP supervisors, um, and they saw, um, what they believed to be, um, flagrant and large scale fraud taking place at childcare centers. [46:21] In their areas. [46:22] And I'm talking for the most part, primarily the Twin Cities area, Rochester and St. Cloud. [46:28] Um, but I was continually receiving calls from, uh, these CCAP program staff at the county level, and they were frustrated because of the huge, uh, amount of billing that some of their centers were doing. [46:43] And while they had a concern about fraud, certainly their other concern was that these centers were eating up the budget, um, the CCAP budget, um, for their county. [46:57] And, um, most of these counties had wait lists, uh, of families waiting to, you know, um, receive, um, approval to, for CCAP. [47:09] Um, some of these counties had lengthy waiting lists, um, and these county, um, human service officials, you know, they, they see the flagrant, large scale fraud by certain centers in their areas. [47:22] And that they have to turn around and explain to us, you know, the families on the wait list that yes, you qualify for CCAP. [47:29] We don't have the funding, you know, to put you on the program at this point. [47:33] So it, it's not like it was a victimless crime. [47:35] There were families in Minnesota that would qualify for the program and they couldn't get on the program because, you know, the thieves, uh, were taking all the money. [47:46] Thank you. [47:48] Um, just to clarify before we go on, um, one of the whistle, multiple whistleblowers to me have said that when the criteria for these investigations was, [47:59] was red flags and one of the red flags was just the large amount of billing from particular centers. [48:06] That, um, they received feedback from supervisors at DHS that just looking at the high dollar billing centers was not appropriate. [48:16] And that, um, once your unit was shut down, that no longer happened. [48:21] Do you, do you have any thoughts on that? [48:24] Was that true? [48:25] Were you told not to just investigate the high dollar unit, uh, providers? [48:30] Could you comment on that? [48:31] Uh, sure. [48:33] Um, when I was, um, at DHS, um, you know, the, the high dollar billing, you know, was not the only, um, indicator that, that we used to open an investigation. [48:47] There were, there were multiple indicators. [48:50] Um, but frankly, um, when you, when we saw a center that opened and, you know, after a year was billing us for over a million dollars, [48:58] that's, that's not a normal trajectory that we'd see from, you know, the vast majority of our childcare centers. [49:05] Um, and while I was, um, you know, while we had discussions or I had discussions with senior DHS officials and say the latter part of 2017 and 2018. [49:19] Um, and they would express to me that, you know, that, that shouldn't be, um, an indicator. [49:26] Um, like, you know, I just, we continued to have a, a disagreement, but then, uh, after, uh, we had the, um, issue with what we were going to tell the OLA, um, then from that point on, um, you know, they made it absolutely clear that, um, that we were going to be spending as much time looking at, um, childcare centers receiving, um, funding on the low end as we did on, uh, providers. [49:57] On the high end, and frankly, my concern at that point was, you know, we were looking at a figure of 50%. [50:03] If we're going to spend 50% of our time looking at centers receiving minimal CCAP funding, that means we're probably looking at centers, you know, receiving less than $100,000 a year in CCAP funding. [50:15] That also meant that we were going to spend 50% less investigative resources on centers that were billing us for over a million dollars. [50:23] And I, I didn't think that that was, uh, a good use of, uh, taxpayer money. [50:28] Thank you. [50:30] Representative Schultz. [50:31] Thank you, Madam Chair. [50:34] So, we've heard about suppressed fraud reports, the failure of leadership, and, uh, in instances, you know, directly, um, arguing with the things that you have said, Mr. Swanson, and seeking to remove those from OLA reports. [50:49] And we've seen retaliation against whistleblowers, so I commend both of you for standing, or, uh, being here again, uh, in front of this committee. [50:57] Uh, Ms. Bernstein, given the fact that you are, uh, still at, uh, DHS, and hearing these examples, have you seen a shift in culture? [51:10] Are we seeing positive steps towards program integrity from, uh, the changes within the, uh, department today? [51:19] Ms. Bernstein. [51:20] I would say generally no. [51:24] I don't see a change in culture. [51:26] Uh, there is still very much a, a need to, for, for employees, my coworkers, to avoid the target, avoid being the target. [51:44] Uh, and, because once you're the target, I mean, I, I was officially a target seven years ago, but I, I still suffer from that. [51:53] I still have a job that I am drastically overpaid for. [51:58] I have a very simplistic job that I'm paid too much money for because DHS has made the decision that that isn't their best interest to keep me from doing real work. [52:11] So, no, I, the, the damage that comes from retaliation is gonna take years and years and years to undo. [52:22] It, it really is. I, you, you can't just say, and I've heard every commissioner say, we don't tolerate retaliation. [52:32] It, then, then who am I? Then, then what am I? It doesn't, it, obviously you do. [52:41] Madam. Representative Schultz. Thank you. So, um, that's really hard to hear and I'm sorry. [52:51] I'm sorry to you, Ms. Bernstein. I'm sorry to the countless other, uh, whistleblowers within the Department of Human Services [52:58] who could be under, uh, direct, um, retaliation, uh, from this department, especially considering that the same people remain at the agency. [53:11] The Senate didn't have the votes to confirm Shereen Gandhi. She was demoted. [53:17] And John Connolly, the guy who's been the director of Medicaid, which has seen over $9 billion dollars in fraud, [53:27] according to the acting U.S. Attorney during the Wall's administration, is now the acting commissioner of that agency. [53:36] No firings of top leadership. No one to be said that has been held accountable. [53:43] Whistleblowers having been retaliated against. This is the story of the Wall's years. [53:50] So I want to thank you both for being here and helping tell the story that others would want to tell. [53:56] But right now, I know in the room we have Mr. David Hoke and I'd love, uh, to hear from him. [54:03] If he could come to the, to the desk. Um. [54:11] So as you know, Mr. Hoke was, um. Representative Schultz, just a minute. [54:16] Okay. Please, uh, welcome to the committee, Representative Schultz. [54:22] Thank you, Madam Chair. And, uh, and, uh, you know, I'll just highlight and I'm sure Mr. Hoke will introduce himself as well. [54:29] But, um, you know, I'll just highlight that he is his own independent investigator, someone who's been boots on the ground, uh, here in the Twin Cities [54:40] and likely across the state to, uh, investigating the concerns around fraud, um, that has resulted in part in this being told on a nationwide basis. [54:51] So to you, Mr. Hoke, based upon your work, uh, my first question for you is, following your concerns being made so public in videos, did the Department of Human Services [55:06] or the Department of Children, Youth and Families ever reach out to you to follow up on your claims of fraud? [55:12] No. Uh, Mr. Hoke, please state your name for the record and then respond. [55:16] My name is David Hoke, Lifelong Minnesotan. DHS has never reached out to me, despite the fact that I invited DHS as a whole [55:26] and Shereen Gandhi to meet with me to clarify that perhaps I was wrong in my investigation and in my data. [55:34] Representative Schultz. [55:37] Representative Schultz. [55:38] Representative Schultz. [55:39] Representative Schultz. [55:40] Representative Schultz. [55:41] Thank you, Madam Chair. [55:42] Uh, as, as you know and as, as has been portrayed, uh, DCYF claimed that they investigated, uh, the daycares that you reported on last December [55:50] and said that they were all functioning normally. [55:54] Uh, you know, we just had, uh, Commissioner Brown in front of us last week. [55:58] She said it to the media and offered no additional information to us in front of this committee last week. [56:04] Uh, but then, uh, following the video, uh, a month later the owner of one of the daycares you exposed was arrested [56:11] while trying to flee the country as part of the Feeding Our Future scandal. [56:15] And as we are all very well aware, last week another one of the daycares that you reported on was raided by federal law enforcement. [56:25] Mr. Hoke, do you believe and do you think that the department, the agency, do you believe that they missed some of the red flags? [56:34] Mr. Hoke. [56:37] I don't believe they missed them. [56:38] I believe that they were 100% complicit in allowing the fraud to continue. [56:43] Representative Schultz. [56:45] Thank you, uh, Madam Chair and Mr. Hoke. [56:48] I think that that's why it's incredibly frustrating why, uh, there have been no people fired by this Governor, by Tim Walz. [56:59] That he has failed to protect taxpayer money. [57:04] That he has failed to hold his agency accountable. [57:08] It's one reason why we need the Fraud Isn't Free Act. [57:12] So, Mr. Hoke, your-your work, uh, it brought so much attention, uh, to fraud here in Minnesota. [57:18] No one has done it more than-than you have. [57:21] Uh, that the Department of Human Services established an entire webpage attempting to debunk you and your work, [57:29] including the statement, [57:31] showing up with a camera and the goal of getting YouTube views isn't the same as conducting legitimate fraud investigations. [57:40] So, were you trying to, uh, conduct a criminal investigation, expose blatant red flags and problematic providers that DHS allows to continue to, uh, bill the state? [57:52] Mr. Hoke. [57:53] So, when a person is elected to office in the state of Minnesota, there's something they have to do before they're officially recognized. [58:02] In their new position, they have to take an oath of office. [58:06] And that oath of office is designed to represent the people of Minnesota and protect and defend the people of Minnesota against this very thing. [58:17] And when someone knowingly and willingly violates their oath of office, that makes them a traitor to the United States. [58:24] And in my second video, what did I say? [58:28] I pointed to the camera and I told Tim Walz, I'm coming for you. [58:31] And told the Department of Human Services, I'm coming for you. [58:34] And what's happened since? [58:35] Governor Walz announced he's not running for re-election. [58:37] Now, Gandhi got the boot. [58:38] And I'm telling you that you better hope that I don't set my sights on you. [58:43] Because, especially if you're on this committee, the people want to know what are you going to do to stop this fraud. [58:50] Not that guy over there or that woman over there or somebody over there. [58:53] You, you're on the fraud committee for God's sakes. [58:56] Tell the people what you're going to do individually to stop this fraud. [59:01] Today. [59:02] Not next week. [59:03] Not a month from now. [59:04] Not another hearing. [59:05] Tell them today what you are going to do to stop this fraud. [59:08] Anything further, Representative Schultz? [59:12] Yes. [59:13] Thank you, Madam Chair. [59:14] Thank you, Mr. Hock. [59:15] And I will just note for the record that it has taken a lot of the work of investigative journalists and the media, the legacy media, many of which are in the room, to help tell this story that agencies and the departments have failed to do. [59:32] They failed to do their job and, oh, by the way, they're all being paid. [59:35] They're being paid to do that job. [59:37] Being paid to protect the taxpayers' resources and they're not doing it. [59:41] So it's become routine for this level of failure, this level of fraud. [59:45] And you're right. [59:47] Minnesotans are rightly outraged by this. [59:52] But thanks to the work of the three of you at this table and countless others, this story has never been bigger. [1:00:01] It has led to a nationwide effort to combat fraud that I don't think has ever taken place in the history of our country. [1:00:11] And we're starting here in Minnesota. [1:00:14] We are starting to clean up the mess in Minnesota. [1:00:17] And when the FBI raids 22 facilities last week, that is only the tip of the iceberg specifically on Medicaid fraud. [1:00:30] And there is so much more to go. [1:00:34] We can't prosecute our way out of it. [1:00:37] But through our work in the legislature, through hopefully the work of Vice Chair Anderson's OIG proposal, [1:00:46] and through our continued attention to this matter, we can protect taxpayer money for decades and generations to come. [1:00:54] Thank you all. [1:00:55] Thank you, Representative Elton Dorff. [1:00:58] Thank you, Madam Chair. [1:01:00] And I'd like to reiterate, Mr. Hoke, thank you sincerely for what you did to help expose the fraud and to bring national attention to this in Minnesota. [1:01:13] I sit on the Children's and Families Committee meeting. [1:01:16] You said you want solutions here in Minnesota. [1:01:19] Everyone wants solutions here in Minnesota. [1:01:22] I can tell you that when we, the Republicans, have brought up bills about addressing daycare fraud, we were stopped. [1:01:29] And the Democrats literally said, alleged fraud. [1:01:33] Alleged. [1:01:34] The rest of the country is well aware that there's daycare fraud in Minnesota, apparently, except for many of the people in the other party here. [1:01:43] But, Mr. Hoke, my question to you specifically is, are you a professionally trained investigator? [1:01:50] Number one. [1:01:51] Number two, the information that you had for going to these daycare centers, was it publicly accessible to anyone? [1:01:58] Mr. Hoke. [1:01:59] The answer is no, I'm not a professional investigator. [1:02:02] I work in the construction industry I have for the last 42 years. [1:02:06] I work full time. [1:02:08] Everything I did was on my own. [1:02:09] I wasn't paid for any of it. [1:02:11] I wasn't looking for YouTube views or any popularity or any fame. [1:02:16] In fact, I've been called a racist and Islamophobe, every name under the sun. [1:02:21] But the reality is, my target was never the fraudulent childcare facilities. [1:02:26] It was the Department of Human Services for funding the fraud and allowing the fraud to go on. [1:02:32] Like I said in front of Secretary Besson's Fraud Committee roundtable, if you put your hand out and someone puts $100 in it, you're going to stick your hand out again. [1:02:40] You've got to stop giving out the money. [1:02:43] You've got to get out there and go look at these places. [1:02:45] And when there are seven healthcare places registered at one address, for God's sakes, aren't you looking at it and going, wait, something isn't right here. [1:02:53] Get out and go look at the facility. [1:02:55] Hire somebody to go out there and physically inspect these areas and say this is a liquor store, it's a wire service. [1:03:00] You saw the video. [1:03:02] I could have gone to a hundred of them. [1:03:04] They don't exist. [1:03:05] They're mailboxes. [1:03:06] They're phantom companies. [1:03:07] And the state keeps writing the check. [1:03:09] And people are tired of it. [1:03:11] I'm hearing from people not only around the country, but around the whole world now that are seeing the same types of fraud. [1:03:16] And it's all pinned back to Minneapolis. [1:03:19] We're the laughing stock of the entire world right now because of this fraud. [1:03:23] People should be ashamed if you're elected in office. [1:03:26] You should be out front screaming fraud every single day. [1:03:30] And the people of Minnesota should be out front with torches and pitchforks showing their anger because they vent on me and they want me to come and do exactly what I'm doing. [1:03:40] Because they would all like to sit here and do this very same thing. [1:03:43] Thank you, Mr. Hoke. [1:03:45] And I just want to say for the record that our staff in the interim did go and also look at a number of these places and had a similar experience of finding multiple places registered at the same address. [1:04:02] No sign of anyone. [1:04:04] So we on the committee did do our own work last summer, actually. [1:04:11] And we had a similar experience. [1:04:14] And I know other people who have looked into this and the investigative journalists have as well. [1:04:20] Very quickly, Mr. Hoke. [1:04:22] Madam Chair, so sort of the elephant in the room. [1:04:27] And again, I'm not Democrat or Republican. [1:04:29] I always get painted as right leaning. [1:04:30] But if you look at my history, I ran for Attorney General of Minnesota under the Resource Party banner. [1:04:37] I was not a Democrat or Republican. [1:04:39] If what I have said is false in any way, if any of the documentation or the numbers I put out are false, why has nobody sued me? [1:04:49] I'm claiming these facilities are committing fraud. [1:04:54] I'm destroying their businesses. [1:04:56] Why aren't they suing me? [1:04:58] They know where I live. [1:04:59] They know who I am. [1:05:00] Nothing. [1:05:01] But what I can tell you is I had to put up security cameras around my house and spotlights because people were showing up at my house at 1 and 2 and 3 o'clock in the morning. [1:05:10] I had to get a gun permit to protect my property, all because I took this on. [1:05:18] And I'm not getting paid for it. [1:05:19] I'm not an elected official. [1:05:20] But you know what? [1:05:21] I'd do it all again because it's the right thing to do. [1:05:23] And when I die, I can die with a clear conscience that I did my best to make a difference. [1:05:28] Can you say the same thing? [1:05:31] Thank you. [1:05:32] Last one, Representative Altendorf. [1:05:33] Just real quick. [1:05:34] And again, Mr. Hoke, seriously, courage is contagious. [1:05:39] And to everyone in Minnesota, I hear all the time how frustrated everyone is because this is happening. [1:05:45] Everybody can see it except for there's not a complete willingness for us to go after it and to fix it. [1:05:52] So what all of you are doing, all of you whistleblowers, you are making the difference in Minnesota. [1:05:57] You are the start of the snowball rolling down the hill and the snowball is getting bigger and bigger and bigger. [1:06:05] We are getting more whistleblowers coming forward all the time because of you, because of each one of you coming forward. [1:06:13] So thank you. [1:06:14] And to the public, get in front of the snowball. [1:06:18] If you work in DHS and you have seen this happen, get in front of the snowball and talk to the feds because we are not stopping until this fraud is eliminated in the state of Minnesota. [1:06:31] Thank you to all of you. [1:06:32] Thank you, Representative Altendorf. [1:06:33] So I know Mr. Stillman is somewhere. [1:06:34] Is he still on the video? [1:06:35] He's on Zoom. [1:06:36] Or on Zoom? [1:06:37] Mr. Stillman, can you hear us? [1:06:38] Yes, I'm still here. [1:06:39] Okay, so I wanted to go back to something Mr. Swanson had said earlier that reminded me of a video that I believe was an investigation Mr. Stillman had been involved in, but I am honestly not sure. [1:07:02] So this video was sent to me yesterday by a whistleblower and it was too late for them to come and be part of our last hearing. [1:07:11] So I want to, but because Mr. Swanson brought up this issue of the counties flagging fraud years ago and it's the same pattern. [1:07:22] And to represent Greenman's point, we have been looking at the same pattern for two years. [1:07:28] It's high numbers of billing, it's high numbers of violations, it's facilities that are vacant or have their windows blocked out or are having way more numbers of children than they are having license for, the attendance records. [1:07:51] I mean, this has been going on, according to the whistleblower from yesterday, since 2011 was the first time they started seeing it. [1:08:01] And they flagged, this person, some of these exact childcare centers in 2011. [1:08:08] And then they were finally prosecuted in 2015, 2016. [1:08:12] And some of them are still not having been prosecuted. [1:08:16] So let's play the video. [1:08:18] And then Mr. Stillman, I would like your reaction or Mr. Swanson or whoever else would care to comment. [1:08:24] But to me, what we need to do as a committee is understand that this is not rocket science. [1:08:33] These same red flags are the same ones we see in childcare, in feeding our future, in housing stabilization, in integrated community supports, in autism centers. [1:08:44] Every vector of fraud, it's the same playbook. [1:08:48] So fool me once, shame on us, or shame on you. [1:08:52] But fool us twice or 20 million times, shame on us. [1:08:57] We have got to recognize these signs and take immediate steps. [1:09:01] And I do appreciate the work of the committee and the legislature to tighten internal controls. [1:09:07] But this has been going on since 2011. [1:09:13] And the video is from 2015. [1:09:16] When you're ready, Curtis. [1:09:17] Sorry, we're having a couple of technical difficulties. [1:09:44] I didn't. [1:09:45] No, no. [1:10:01] Did you change this? [1:10:03] No, you didn't. [1:10:05] Yes. [1:10:24] Thank you. [1:10:27] All right. [1:10:32] Well, while you keep working on it, we'll see if there's any additional questions. [1:10:37] Otherwise, we can go to Lee Pinto for a closing. [1:10:41] Oh, for the committee as a whole. [1:10:45] Okay. [1:10:46] Yes. [1:10:48] So, well, I wanted him to react to the video. [1:10:49] But, Mr. Stillman, I wondered, the video is in regard to the DECO case. [1:10:57] I'm not sure I'm pronouncing it right. [1:10:59] It might be DECO. [1:11:00] And this was one of the first cases, I believe, for childcare that was investigated. [1:11:07] And I just wondered, my understanding is that the estimate of the fraud was substantial. [1:11:16] And could you—did you have any involvement in that case? [1:11:19] And could you describe your involvement in it? [1:11:22] Thank you. [1:11:23] Mr. Stillman, state your name for the record. [1:11:27] My name is Scott Stillman. [1:11:28] I was the Department of Human Services Digital Forensics Lab supervisor. [1:11:33] And I believe it's pronounced DECO. [1:11:37] And I was involved with the DECO investigation. [1:11:42] And I examined the evidence that the BCA, the Secret Service, I believe maybe possibly the [1:11:50] FBI and Ramsey County Sheriff's Office gathered during multiple search warrants. [1:11:56] And I'm sorry, could you tell me again what you wanted me to answer about that question? [1:12:04] So what were the red flags from the beginning that you and your investigate—you were doing [1:12:11] forensics and you were one of the investigators. [1:12:14] Did you have interactions with counties reporting fraud? [1:12:18] And what were the red flags that you got from different counties? [1:12:21] I was not a part of the initial investigation. [1:12:27] The people involved were the BCA and Secret Service and Ramsey County. [1:12:34] And they initiated the search warrants. [1:12:40] And they had found so much evidence that they couldn't process it. [1:12:45] So they asked me to do the processing. [1:12:47] And when they brought it to me, I was told that the approximate amount of fraud was in [1:12:53] the $40 million range, but it was eventually prosecuted in the $4 million range. [1:13:00] Thank you. [1:13:03] And my understanding is that the defendant in this case, Yasmin Ali, her bail was set at [1:13:10] $1 million. [1:13:11] Is that correct? [1:13:12] I don't recall what her bail was set at. [1:13:18] I do recall that she reportedly fled the country. [1:13:21] Yes. [1:13:22] And the prosecution vociferously did—her bail was set at $1 million. [1:14:23] Is that correct? [1:14:24] I don't recall what her bail was set at. [1:14:30] I do recall that she reportedly fled the country. [1:14:34] Yes. [1:14:35] And the prosecution vociferously did—her bail was set at $1 million. [1:15:41] Is that correct? [1:15:42] I don't recall what her bail was set at. [1:15:48] I do recall that she reportedly fled the country. [1:15:51] Yes. [1:15:52] And the prosecution vociferously did—