State Representative Walter Hudson, a Republican from Albertville, said on May 8 that the Minnesota House passed major anti-fraud legislation by a vote of 127-5.
The bill, known as S.F. 856, would create an Office of the Inspector General (OIG) designed to operate independently and have future law enforcement authority. Hudson said this measure is intended to bring more transparency and accountability to state government in response to fraud that has cost taxpayers $9 billion or more by some estimates.
House Republicans have pushed for an OIG with true independence and enforcement power. “House Republicans have insisted on creating an Office of Inspector General that is genuinely independent with real authority instead of establishing a symbolic office with no real authority that just issues reports showing what we already know: Minnesota has a massive fraud problem,” Hudson said. “The reforms we consistently demanded be part of the bill, despite Democrat efforts to water it down, are essential to safeguarding taxpayer dollars and it’s good to see they are included.”
According to Hudson, Democrats tried earlier in the session to remove these key components from the proposal after work began in mid-February, causing delays due to the evenly divided House. The version passed by the House closely matches legislation approved last year by the Senate but blocked at that time in the House. The new OIG would investigate state agencies, grant recipients, and contractors; possess subpoena power; and could freeze or stop distribution of funds under court order. It will be housed within the executive branch due to constitutional concerns so it can exercise law enforcement powers.
Federal officials estimate that fraud within Minnesota’s social services and Medicaid programs could total $9 billion or more—about half or more of roughly $18 billion billed since 2018 may be fraudulent according to investigations into high-risk Medicaid programs.
Hudson said passage of this bill would make Minnesota one of about 15-20 states nationwide with a statewide inspector general office overseeing executive agencies. He added that next steps depend on action by the Senate.
Hudson was elected in 2023 as a Republican representative for Minnesota’s 30A District, succeeding Paul Novotny according to Ballotpedia.
