Hearings to examine fraud and foreign influence in state and federal programs.

[Gavel sounds.] Well, let me call to order this third hearing of the Senate Committee on Homeland Security and Governmental Affairs Subcommittee on Disaster Management, which I am delighted to work on with my colleague, Ranking Member Kim. I want to thank, say a thank you to all of our witnesses for being here, as well as everybody who is in the room and joining us online. The title of today's hearing is "Examining Fraud and Foreign Influence in State and Federal Programs." And today's hearing is going to examine two pillars that are truly fundamental to our republic and to the confidence of the American people in our republic, and that is the integrity of our public funds and the integrity of our political system. Let me just start with the second one. As early as the Constitutional Convention, Alexander Hamilton warned that foreign powers would try to exploit America's freedoms to sow divisions inside our country. Threats from foreign influence, he said, should never be dismissed as idle or as hypothetical. And today, we are confronting a raft of allegations and reports that foreign influence and foreign money is making its way into the American political system and is financing activities that is not only destructive, detrimental, and divisive, but also potentially illegal. At the same time, more and more Americans are rightly concerned about the use of their tax dollars and where their tax money is being spent around the country. You know, I've often thought, watching and reading reports here in recent months, that if you are a hardworking American taxpayer, if you're somebody who wakes up every morning, goes to your job, plays by the rules, pays your taxes, you must feel like such an idiot. I mean, you must feel so taken advantage of because here we have reports, credible reports, and we're going to hear more about it today with some substantiation of billions of dollars of taxpayer money, your money, your tax funds being taken and spent on illicit activities, on foreign overseas activities, on other illegal and criminal activities. It's absolutely outrageous, and it's time that we got accountability for how Americans' hard-earned tax dollars are being spent and how the integrity of our political system is being protected. We're going to hear testimony that tens of billions of dollars intended to serve the public have been lost to fraud in the state of Minnesota alone. Organized criminal syndicates stole COVID-era disaster money to the tune of billions of dollars, and since then, they have defrauded money from every single federally funded program in the state of Minnesota. Let me say that again: every single federally funded program in the state of Minnesota. Programs intended for children, for the elderly, for the poor, for the sick, for the most vulnerable Americans. We're going to hear testimony that $9 billion has been defrauded in Minnesota from Medicaid alone. $9 billion vanishing into luxury cars, overseas vacations, billions going to fund foreign adversaries, billions shipped out of the country. In the last two years alone, get this now, nearly $700 million in cold hard cash was stuffed into suitcases and flown out of Minneapolis. $700 million. That is 14,000 pounds of $100 bills in suitcases flown out of our country overseas. We're going to hear testimony that American taxpayers nationwide are losing north of a trillion dollars a year in government programs. That's the Pentagon's entire budget. A trillion dollars a year. This isn't isolated cooks gaming the system. I wish it were. It's transnational criminal syndicates siphoning money out of America. 70 percent of that loot flows overseas, funding cartels, terrorists, adversaries like North Korea, China, Iran, Russia. Money meant for American grandparents, working families, the elderly, the sick is instead funding organized crime, arming our enemies, and subsidizing the trafficking of children. And the threats don't end there. In recent weeks, we have seen anti-ICE protests escalate into outright lawlessness. What we're going to hear testimony about today is these were not spontaneous protests in many cases. It's manufactured chaos. And who is behind it? Dark money networks and foreign actors, some of whom have ties to the Chinese Communist Party. We're going to hear testimony that these activities are funded and coordinated by a dense network of nonprofits and foreign-linked actors who use layer upon layer of pass-through entities to hide the money trail. A classic dark money money laundering to take foreign money and foreign influence and to dump it into our political system. It's sort of like Riot Incorporated. Pre-planned tactics designed not to protest, but to destabilize, to erode faith in our institutions, and to force political change through manufactured crises. Listen, at the end of the day, this hearing's about a simple question: is our government equipped to safeguard taxpayer dollars, protect the rule of law, and defend our institutions from exploitation? Because right now, it sure doesn't look like it. And it's time we got some answers for the American people. With that, I'll recognize my colleague, Senator Kim.

Thank you, Chairman, and good afternoon, everyone. Look, it's so very important that we stand up for the American people, that we stand against fraud. And I want to thank the witnesses here today to join us and to hear their perspectives. Fraud is an issue that touches every single state, not just one. It touches every single community. Its perpetrators include individuals from every background, and its impact is felt by every American. And so I hope we can all come together and say absolutely we need to be stewards of our taxpayer dollars and to be able to do this in a way where we can look them in the eye and say that we are running a government that's able to look out for their investments and be able to deliver for them. So I understand that, but we have to make sure we're doing this in a way that doesn't single out any one group or people or broadly classify them as fraudsters, as we know that would be inaccurate as well, given how widespread this is. So I want to be clear: I condemn fraud at every level and believe that those who make a living scamming the American people must pay a price. And I take preventing fraud and prosecuting wrongdoing very seriously. However, we again cannot and should not use fraud as an excuse to go after political enemies, to militarize American cities, or wield government power in a way that goes after the American people as they utilize constitutional rights to stand against injustice, to make sure that we are not delegitimizing legitimate freedom of expression and gathering. Just last month, we saw another horrific, unnecessary death of an American citizen. This is a moment where many are frightened, and I hear that back in my home state as well. We have a responsibility as we are doing our due diligence in terms of governance to make sure we are not throwing gasoline on the fire and that we are doing it in a way that can keep a level head and be able to think through pragmatically what we can do to be able to address these problems that we face. They deserve serious executive and legislative action to address fraud and can and need to be bipartisan for us to be able to get them done. This committee and this Congress must address these important problems of addressing fraud with an understanding that fraud happens all over our nation and has a wide range of issues and programs. Happens in the private sector, happens in the public sector, happens under both Democratic and Republican administrations and leadership. We should not be complacent to it. We have a responsibility, again, to be stewards of the taxpayer dollars, but this demands a comprehensive strategy, not a whack-a-mole approach. Thus, I'll conclude by just saying we must show the American people that we are using their hard-earned dollars responsibly and not rewarding wrongdoers or looking the other way due to partisan or political convenience. We must also restore trust in our government at a time when it is at an all-time low and be able to make sure that there's accountability no matter who is at fault, regardless of their political background or if they sit in the Oval Office or here in Congress or in a governor's office. Actions that only invite more fraud within the programs that we have. I'm looking forward to hearing from our witnesses today and working on this matter together. And with that, Mr. Chairman, I yield back.

Thank you very much, Ranking Member Kim. It's the practice of this subcommittee to swear in our witnesses before they testify. So I'll ask you if you would to stand with me now, raise your right hand, and answer this question. Do you swear that the testimony you're about to give will be the truth, the whole truth, and nothing but the truth, so help you God?

I do.

I do.

I do.

I do.

All of the witnesses answered in the affirmative. We will now proceed to questions. Actually, I'm jumping the gun. I'll let you speak first. How about that? I'd love to start with questions, but we'll let the witnesses speak first. Let me introduce, we'll just go down the panel, we'll start here on the left. Let me introduce first the Honorable Mr. Mark Koran, Senator Mark Koran. Mark Koran is a Minnesota state senator. He's also a member of the Minnesota Senate Legislative Audit Commission. It's great to have you with us, Senator Koran, and I'll turn it over to you for your opening statement.

Thank you, Mr. Chair, members. Thank you for the work that you do to investigate and stop the large-scale systemic fraud that Minnesota is experiencing under Democrat Governor Tim Walz. I appreciate the opportunity to share my insight on the fraud as I've seen it in my nine years as a Minnesota state senator, as well as being on the Legislative Audit Commission. The Legislative Audit Commission is a bipartisan commission. The commission appoints the legislative auditor, a nonpartisan position whose job is to hold state agencies accountable. The auditor reviews programs across state government, flags misuse of taxpayer dollars, and statutory noncompliance and violations. I spent nine years overseeing that work and I can tell you plainly that most of these audits are bad. One of the most common failures of state agencies is not verifying that grant recipients did the work that they were paid to do. In January 2026, just recently, the auditor found something that she said she's never seen in her 27-year career. State employees are backdating and fabricating documents after an audit has started, looking to mislead our auditors. The fraud in Minnesota is pervasive and systemic from the executive branch through the state agencies. Even when the legislature puts safeguards in place, they are often ignored, and there are rarely any real consequences. I've seen this up close, which is why as I look at the broader fraud crisis, I want to start by highlighting three things. First, the billions of dollars in fraud in Minnesota is devastating to our social service programs and communities. Our children, disabled, elderly Minnesotans, and the legitimate providers who earn their livelihood providing these vital services. Second, the Governor Tim Walz and his administration, including Attorney General Keith Ellison, have overseen the largest expansion and fastest acceleration of fraud this country has ever seen. They have repeatedly ignored data warnings, data and warnings from legislators, nonpartisan audits. They've retaliated against whistleblowers exposing fraud, and they've actively attempted to block and disrupt anti-fraud efforts. And third, because of the failure of Governor Walz and the Minnesota Democrats to address fraud, we welcome the federal government to step up and uncover the audit and stop the fraud in Minnesota to protect state and federal tax dollars. Governor Walz and Minnesota Democrats' fraud crisis is either a result of gross incompetence or willful complicity, and I think it's both. The devastation of this incompetence and complicity totals far more in dollars than the media, Governor Walz, or the Democrats admit in public. It's not millions, it's not hundreds of millions, it's billions of dollars stolen. As for the perpetrators stealing the money from children, the elderly, and the people who rely on social services to live a normal life, their actions are un-American. While justice should not discriminate against any specific community, whether the criminal is from Minnesota, Philadelphia, or Somalia, make no mistake that fraudsters discriminate against just one community: Americans. This targeted discrimination to swindle funds from our social programs from the United States has to be stopped. But it's critical that the fraud is investigated and prosecuted, legitimate businesses and providers are not also punished for the illegal actions of some. So as we direct our hindsight towards addressing the crisis, we also have to take measures to stop the fraud before it starts. Minnesota Republicans have been exposing this rampant fraud in state programs for many years now, talking with whistleblowers and proposing new safeguards to stop fraud. Increased eligibility checks and incentives from the federal government to reduce error rates will help ensure programs are there for those who need them most. What's clear is that our state agencies need stricter oversight. Last year in the Senate, we passed bipartisan legislation to create an anti-fraud office, the Office of the Inspector General, an independent nonpartisan office designated to identify and investigate and prosecute fraud. This effort was blocked by the Democrats in the House, but it remains our top priority as we go into this next session. Hindsight measures like the OIG and federal oversight combined with foresight measures to drastically improve eligibility determination will help protect taxpayer dollars and get it to the programs that need it most, not in the hands of the criminals who betray our goodwill and take advantage of our generosity. I appreciate the time and your careful attention to the fraud crisis in Minnesota. It has only been because of the national spotlight that our leaders have begun to admit the fraud problem is as dire as it is. Minnesota is ground zero for the fraud epidemic, but we can become the blueprint for how to prevent fraud if the right actions are taken. I hope that our leaders will work with the federal government to be able to move forward from this dark stain on our state's history. Thank you, Mr. Chair.

Thank you, thank you, Mr. Koran. Next up is Haywood Talcove. Mr. Talcove is the CEO of LexisNexis Risk Solutions. Mr. Talcove, the floor is yours.

Chairman Hawley, Ranking Member Kim, and members of the subcommittee, thank you for the opportunity to testify today. I have spent my career working to protect taxpayers and our most vulnerable from organized criminal groups who exploit our country's generosity and kindness. I have worked with the Secret Service on investigations and felt the personal impact fraud has on loved ones, like my 84-year-old mother who lives in Florida. This country has built a social safety net grounded on a pledge: when Americans face hardship through disaster, job loss, or crisis, their government will respond with speed, fairness, and dignity. In my remarks, I will focus on the scale of the fraud crisis and key solutions we can implement to stop it. The United States government is ripe for exploitation and likely the single largest funder of cybercrime in the world. Fraud in government programs is significant. It materially undermines the financial health of the country and contributes meaningfully to the nation's $38 trillion national debt. These are not your constituents. These are real criminals stealing real tax dollars using fake companies and stolen identities. The scale of the problem is real. The GAO places losses at over $500 billion a year. Secretary Bessent estimates losses of up to $600 billion a year, around 2 percent of GDP, while I put the number closer to $1 trillion annually, or $115 million every single hour. Of which 70 percent is related to transnational criminals. Others have placed the number as high as $1.5 trillion. Over the last decade, taxpayers have lost anywhere between $7 to $12 trillion to these criminal organizations stealing from our benefit programs. We now spend more on fraud than we spend on servicing the national debt or the defense budget. Fraud is a national security issue. It is a fiscal crisis. It is a betrayal of the people these programs are meant to serve, and it impacts the trust your constituents have in their government and its leadership. The problem is not new, but it's been escalating. It started with Hurricane Katrina when benefits were provided with no controls. The criminals learned that government was a soft target. It never runs out of money. You have a low chance of being caught, less than one-tenth of 1 percent, and pay-and-chase does not work. The pandemic then took fraud to the next level. Domestic and transnational criminal organizations steal and manufacture identities and companies, share data and best practices on the dark web, exploit complicated eligibility systems, and move cash around borders to foreign adversaries. These actors are sophisticated, they are dangerous, and they operate in all 50 states. They weaponize our compassion against programs we consider too vital to question. They know officials will hesitate to scrutinize aid meant for people in desperate need. They exploit our best instincts to commit their worst crimes. This is not a flaw in the system; it is a feature of how these criminal enterprises operate. The core problem has a name: self-attestation. Programs that operate on the honor system invite exploitation by transnational criminal groups. This is the first time in my career that I have confidence we can effectively counter threats to the most vulnerable while also protecting hard-earned tax dollars. I want to commend the administration for establishing a new Department of Justice leadership position focused on fraud enforcement and the United States Secret Service for its support work, especially in the SNAP program. Their involvement shows that when federal resources are applied, criminal networks can be shut down. If we want to save $1 trillion annually and restore trust, we must change how we do business before it's too late. These are my four recommendations. First, front-end identity verification like that used in the private sector. Second, enforce mandatory recertification and continuous validation for every current recipient of an entitlement. Third, independent third-party audits. Fourth, the use of federal law enforcement. These fixes are easy. The technology and the data exist and are used every day by commercial entities. Let me be clear: fraud prevention is not benefit prevention. Integrity is not the opposite of compassion; it is what makes compassion sustainable. Thank you, and I look forward to your questions.

Thank you very much. Next up is Mr. Seamus Bruner. Mr. Bruner is the Vice President at the Government Accountability Institute. Go ahead, Mr. Bruner.

Mr. Chairman, thank you. Ranking Member and members of the committee, thank you. I want to build directly on the testimony we just heard regarding pervasive fraud in state-administered federally funded benefit programs. As Senator Koran and Mr. Talcove described, what we are seeing in Minnesota is not isolated misconduct. It is systemic fraud enabled by weak oversight, fragmented authority, and a benefits architecture that allows large sums of taxpayer assistance to be distributed with minimal verification and little consequence for abuse. What is important for the committee to understand is that the nonprofit and NGO systems operating around these benefit programs do not exist in isolation. They are part of a broader ecosystem that links migration, government benefits, political mobilization, and when challenged, organized disruption. Put simply, these anti-ICE disruptions are not isolated protest activity but part of a larger interconnected system involving migration, government benefits, and political mobilization. At the front end of this system, nonprofit and NGO networks facilitate and incentivize mass migration by navigating access to government benefits and services for the migrants, what we refer to as Migrant Inc. The benefits themselves do not flow into these NGOs; instead, they function as a form of patronage, creating dependency among migrant populations and anchoring them to nonprofit intermediaries that manage information access and ongoing engagement. That dependency is the leverage. It keeps populations embedded within an organizational ecosystem operating in environments of weak oversight and limited enforcement, conditions we've clearly seen in Minnesota. These same nonprofit ecosystems then transition into political mobilization: voter registration, ballot education, turnout operations, and sustained civic engagement, what we call Election Inc. While often presented as nonpartisan activity, in practice, this functions as a durable political infrastructure, maintaining communications networks and organizational capacity that persist across election cycles and reliably align with particular political outcomes. Importantly, many of these large NGO networks operating across these stages rely on complex and opaque funding structures, including donor-advised funds, fiscal sponsorships, and international financing streams, some of which trace back to foreign nationals and foreign-connected entities. These arrangements are designed to obscure the true source of funding while preserving centralized operational control. And when enforcement actions, fraud investigations, or policy changes threaten this system, whether through ICE operations, benefit eligibility scrutiny, or election integrity measures, those networks activate a third component, what we call Riot Inc. At this stage, organized disruption, intimidation, and civil unrest are deployed strategically to raise the political cost of enforcement and to deter accountability. The same organizational infrastructure that facilitates migration and political mobilization suddenly appears in coordinated street activity, complete with pre-planned tactics, logistics, importantly, legal support, and messaging designed to overwhelm or paralyze lawful government action. These are not separate phenomena. They are interconnected stages of the same NGO-driven political operation sustained by dependency, protected by opacity, and in some cases amplified by foreign-linked funding intersecting with domestic political activity. The same analytical tools that expose benefit fraud—following the money, mapping nonprofit relationships, and tracing organizational control—also reveal the continuity between Migrant Inc., Election Inc., and when the system is threatened, Riot Inc. Understanding that full pipeline is essential if Congress is serious about restoring accountability, protecting taxpayers, and preventing foreign-linked influence operations from hiding behind nonprofit status in the language of activism. Thank you. I look forward to your questions.

Thank you. And now to introduce our fourth witness, I'm going to turn it over to Senator Kim.

Yeah, thank you, Chairman. My pleasure to be able to introduce our witness, Dylan Hedtler-Gaudette, Acting Vice President of Policy and Government Affairs at the Project On Government Oversight. I know you've been making your rounds on Capitol Hill, and I'd like to thank you for your commitment to government oversight and in particular your commitment to safeguarding American taxpayer dollars. You and I share the desire to ensure that American democracy is transparent, accountable, and free of corruption. I look forward to engaging in conversation with you.

Chairman Hawley, Ranking Member Kim, and members of the subcommittee, I appreciate the opportunity to testify before you today on the important issue of fraud in the federal government. My name is Dylan Hedtler-Gaudette, and I am the Acting Vice President of Policy and Government Affairs at the Project On Government Oversight, POGO. We are a nonpartisan independent watchdog organization with 45 years of experience promoting accountability, transparency, and effectiveness in the federal government. Fraud in government is a real and persistent problem. This is not unique, however, to the United States, and it certainly is not unique to any particular locality or community within the United States. Fraud persists pretty much everywhere. The only thing that mitigates and bounds fraud is the vigilance of watchdogs and oversight practitioners and the strength of transparency tools and accountability mechanisms. With that said, it is incumbent upon all of us to do what we can to prevent fraud, especially when fraud is related to hard-earned taxpayer dollars and critical public services. This is true whether the fraud takes place in food assistance programs in Minnesota or if it takes place in the context of Mississippi welfare programs, which involved the world-famous Hall of Fame NFL quarterback. This is true whether the fraud is perpetrated by large multinational defense corporations. The point here is fraud is a systemic problem and it requires systemic solutions. Please allow me to touch on a few of those solutions here, though I elaborate on them in more detail in my written testimony. First, key oversight practitioners and internal watchdogs as well as essential sources of information must be strengthened, preserved, protected, and sufficiently resourced. Specifically, I'm talking about Inspector General. I'm talking about the Government Accountability Office. I'm talking about the Office of Special Counsel. And I'm talking about whistleblowers. We must also take a long hard look at the technology and the architecture we currently use to monitor, track, analyze, and assess spending. That architecture is currently broken and in dire need of overhaul, reform, and modernization. We're in the age of 5G, quantum computing, and generative AI, and the federal government still largely operates in the analog world. Maybe at best in the Windows 95 world. We must also remember that corruption, conflicts of interest, and cronyism, they act as the anabolic steroids to waste, fraud, and abuse in the federal government. No successful effort to tamp down on waste, fraud, and abuse can be undertaken without cracking down on corruption. We've seen recently over the past two administrations and for much longer how susceptible to abuse and corruption the presidential pardon power is, for example. We also must enact much stronger, more robust rules around conflicts of interest and really crack down on the pay-to-play lobbying activities that often corrupt and corrode key federal decisions, including on the spending of taxpayer dollars. But just as important as what we must do is what we must not do. What we must not do is undertake foolhardy, over-promising endeavors like the Department of Government Efficiency, or DOGE. Now, despite its progenitor claiming it was going to find $2 trillion in taxpayer savings, up to this point on DOGE's so-called wall of receipts, we've only seen about $215 billion of savings. And that's assuming you can trust that data on its face, which you cannot. We've seen a rash of reviews, reports, and analyses of this wall of receipts which have found basic mathematical mistakes, misstatements, cherry-picking data, and a whole host of other errors. And that says nothing about the fact that the federal government spent more money in 2025 than it did in 2024. We have to hand it to DOGE on one hand, though. It did illustrate perfectly exactly how not to go about rooting out waste, fraud, and abuse in the federal government. The key takeaway here is that fraud is a persistent cancerous disease upon the federal government, but the only way to address it is to get at root causes. By focusing on sensationalistic anecdotes, we are doing the same thing as focusing on symptoms rather than attacking the root cause of the disease. I look forward to answering your questions, and I thank you again for inviting me to testify today.

Thank you very much. Thanks to each of the witnesses. Now we will turn to questions. We will alternate sides, Democrat, Republican. We'll start with me. We're going to do seven-minute questioning rounds. Let me just start with you, Senator Koran, if I could. I'm sure you're familiar with the recent anti-ICE protests in Minnesota. Let me just ask you this: from your vantage point in the state, are the majority of these protests spontaneous or more organized? What is your impression? You're there.

Sorry, Mr. Chair. They're highly organized and coordinated.

What evidence— ...answer to that, what data, what signs have you observed that would indicate some level of coordination?

Well, you've seen in Minnesota, we've seen a wide variety of coordinated efforts. The agitation groups on the ground, there are a wide variety of them, some national, some very professional, in addition to local reports that state they've trained some 30,000 observers to get in and get in the middle of the protests.

And what are the, how would you describe the tactics that are used during these protests that you've observed? Peaceful, aggressive, inciting violence, trying to draw a reaction? I mean, again, you're on the ground, so you tell us.

Yeah, what we've seen is a whole host of doxing, highly coordinated efforts in doxing. We've seen instances of violence against federal agents. I think in two cases, we've had agents that have had one had their finger bitten off and they've been pelted with frozen bottles, stones, and every other type of thing, in addition to directly interfering with legal law enforcement.

Let me ask you this, have you seen any evidence that state officials are cooperating or coordinating with these efforts in any manner?

Yes, we've seen there are a variety of state officials, elected officials that represent the Minneapolis area that have gotten involved. Some are on the chat box, the chats out there. We've got one representative, very proud, Brad Tabke is a representative out there proud making sure to help train and coordinate those efforts.

Mr. Bruner, can I just turn to you? Senator Koran has said that he has seen coordinated efforts within his state to disrupt ICE, including lookout signal chats, etc. Your organization specializes in following nonprofit funding and organizational networks. So based on your research, what organizations have been active on the ground in Minnesota? What can you tell us?

Thank you, Mr. Chair. Yes, we have tracked over $60 million according to the latest 990 disclosures to approximately 14 groups, some of them national, others on the ground. Groups like the ACLU provide the legal defense as well as facilitate the trainings for some of the tactics that Senator Koran just described. A group named Democracy Forward, Take Action Minnesota has gotten over $10 million from these large NGO networks, including the Neville Roy Singham network, Indivisible, National Lawyers Guild, CTUL, the Council on American-Islamic Relations Minnesota, CAIR, Minnesota 350, Voices for Racial Justice, on and on. Like I said, over $60 million just according to the latest 990 disclosures.

$60 million, 14, at least 14 different groups. That sounds like a pretty broad ecosystem here. Where's this money coming from? I mean, how is it flowing to these groups? Do you have any sense?

So we've built a database that contains hundreds of thousands of rows from grants from networks like the Soros network, the Arabella funding network, as mentioned, the Neville Roy Singham funding network, many others, Tides, the Ford Foundation network, the Rockefeller funding network, these massive NGOs that have billions of dollars to spend on all kinds of coordinated protest or, in this case, riot activity.

Give us a sense, if you could, of how this money flows to the ground level. You know, how does it get from these various donors and come down to ground level and start funding protests and other violent activity?

It comes in the form of a check, a six-figure check. You know, that'll come from whether it's the Open Society or the Tides groups, the Singham groups. They'll fund directly some of these on-the-ground organizations. And we've seen this happen time and again, it's not just in Minnesota.

So the money, I think we've got a chart perhaps, the money gets moved around. You just referenced a number of these groups, Arabella Advisors, the Tides groups, these are left-wing dark money groups. So you've got this incredible, I mean, just look at the number of different entities on this one chart. All of this money moving through all of these different groups, many of them, again, non-disclosed donors, right? So we don't know exactly where the donors ultimately come from. Oftentimes, the entity that gets the money doesn't have to report where they get the money. So it's washed through multiple times. And what you're saying is your research has found multiple different left-wing groups that are funding these protests on the ground in Minnesota. Is that a fair statement?

Yeah, that's absolutely fair. And the foreign money is probably the most concerning, whether it's from Neville Roy Singham or the Swiss billionaire Hansjörg Wyss.

Okay, talk about that. Talk about the foreign money because you've mentioned Singham now a couple of times. There was a New York Post article not long ago talking about Neville Singham, who's based, I think, in China. Tell us what your research has uncovered about this foreign money making its way to American protests that often harm our law enforcement officers.

Sure. So Neville Roy Singham, he's an American citizen, he's an avowed Marxist. And he made nearly a billion dollars roughly a decade ago selling his tech company. You know, one of the funds that purchased the tech company had Chinese sovereign wealth money in it. And once he sold that company, again, got close to $1 billion, he now uses that money to fund a variety of protest, riot, anti-Semitic protests, the pro-Hamas things in New York. He funded the LA riots earlier this year. And so he lives in China, is a pro-CCP guy. And he's not done. He's also got very close ties to the communists in Cuba. He finances trips for American groups to go down to Cuba to receive Marxist revolutionary training. They come back here and then they operate on the ground. Famously, one of the groups in Salt Lake City, the Armed Queers of Salt Lake City, they went down to Cuba and got one of these trips. They are also very anti-ICE and working on these anti-ICE demonstrations.

So let me just make sure I understand. You're telling me that protest, quote-unquote protest activity we've seen in Los Angeles, we've seen in Minnesota, we've seen in other places that often turns violent, that some of this, maybe much of it, is funded by overseas money, including by this individual who has ties to the Chinese Communist Party? Have I got that right?

Yeah, that's right. You can see on a lot of the placards, when you see all these placards roll out, Party for Socialism and Liberation, other groups like that, the Democratic Socialists of America. These are not organic spontaneous. They've got thousands and thousands of signs that get pointed out. Those are all within the Singham network.

Let me just finish with this. You mentioned another major source of foreign money. Tell us about that.

Yeah, Hansjörg Wyss, he's a Swiss billionaire. The New York Times reported this. He's one of the largest funders of the Arabella network of funds. He pledged to give $200 million to electing people in the United States. Many people have wondered how is a foreigner allowed to fund political operations. Thus far has escaped, you know, there's been some investigations but not enough.

This is exactly the kind of thing that Alexander Hamilton all those years ago warned about when he warned about the danger of foreign influence and foreign adversaries in our elections, and we're seeing it play out in real time. Senator Kim, I'll turn over to you.

Yeah, thank you, Chairman. Mr. Bruner, I just want to pick up here. How many people have been protesting in the streets in Minnesota?

Depending on the day, you know, I'd refer to Senator Koran, but dozens, possibly hundreds.

Dozens or possibly hundreds of people are protesting in the streets of Minnesota. Is that what you're saying? Does that sound right to you, State Senator Koran?

Thank you. I'd respond thousands. So thousands of them in their variety of groups. So those at the national level which were just discussed, those that are home-based in Minnesota, as well as all of those that have been encouraged by our leadership.

So of those thousands, how many do you believe are just doing this on their own, or do you really think that the majority, if not most of them, are actually coordinated in the way that Mr. Bruner was talking about?

I think there's a variety, there's three tiers again. Those that are national and global as just described, those that have ties based in Minnesota coordinating with the national efforts, and then those that are homegrown that just residents that have been encouraged. I mentioned earlier, they talk that they've trained 30,000 Minnesota residents to be observers and to engage and impede federal law enforcement.

Look, I just want to say that I strongly disagree with how you've been categorizing this and talking about this. And it's not just people in Minnesota. People all over this country are frustrated and concerned and upset. They're scared and they're worried about things because they just saw two American citizens get killed in the street by federal agents. And you know, I just had a town hall in New Jersey this weekend and the idea that people would be saying that this type of anger and this type of outrage, whether in New Jersey or in Minnesota, is being predominantly coordinated in this type of way, I just have to say it is delegitimizing the anger and the fear that people are facing right now. So I just have to say, the way in which it's been described in terms of are the majority of the protesters or talking about this in that kind of way, I just think is very dangerous right now. And I hope that we can still say and recognize that there are a lot of people, a lot of people that are furious right now and worried. And I just wanted to be able to push back on what I've been hearing. To go back to the topic of this hearing in the broader vein on the examining fraud, I guess I wanted to just start here, Mr. Hedtler-Gaudette. You talked about this in terms of, you know, this is not episodic, right? You said it's not unique in terms of fraud happening just in one state. This is something I think we can all say with confidence is happened in every single state. Is that correct?

Yes.

Mr. Talcove, is that similar in your mindset too?

Yes, Senator.

Now you talked about it, Mr. Talcove, as a persistent vulnerability and not episodic in that type of way. I want to kind of go through some of the tools that we have to try to address this. First, let's start with the Government Accountability Office, GAO. As far as I can tell, some of the stats are saying it's saved $1.45 trillion since 2002. Mr. Talcove, does that sound about right? I mean, not the specific number, but has it saved the taxpayers a lot of money in that way?

They definitely have saved some money, but not to the full extent of the fraud that's taking place.

Oh, certainly not. No, I mean, this is just one tool that we have at our disposal in that way. So I guess I would just ask you, do you see importance in supporting the GAO?

I think the GAO is very important as part of the process, but part of the challenge has been their recommendations tend not to be followed. In fact, there was an article in yesterday's Wall Street Journal talking about the TANF program. 165 recommendations were made, 65 were critical, zero of those recommendations for the past 10 years have been followed up on.

So the concern that you have is actually that their recommendations are not being followed up. Do you have any reason to believe that GAO is working in a partisan way?

No.

I guess I just wanted to follow up on this in part because our current OMB director, Russell Vought, said that he doesn't think that GAO should exist. Do you agree with that assessment?

Not my bailiwick.

Not your bailiwick. Republicans in the House of Representatives proposed cutting GAO by 50 percent last year. Do you think a 50 percent cut to GAO would hurt their ability in terms of being able to shine a light on fraud in our government?

The most important thing that can happen right now if we're serious about saving a trillion dollars annually is to allow the states to start sharing data and to go through the four recommendations that I had: front-end identity verification...

I agree with a lot of your recommendations on that front. I'm just trying to get a sense of all of our different tools. So we can get back to that, but Mr. Hedtler-Gaudette, I guess I wanted to ask you those same questions. Do you agree or do you disagree with Russell Vought's suggestion that we get rid of the GAO?

I emphatically disagree.

Do you have a problem with Republicans in the House trying to cut GAO by 50 percent?

I have a problem with anyone messing with GAO. I'm a staunch GAO defender, be they Republican or Democrat.

Yeah, look, I think, you know, just in these broad tools that we have, you know, we have GAO and I hope that we can in a bipartisan way think through how we can use these tools, how we can support them going forward in our efforts if we are seriously and earnestly trying to address fraud. Also when it comes to Inspector Generals. And I think that that's something that we've seen a lot of challenge on here as we saw immediately President Trump come in and get rid of 17 Inspector Generals. Mr. Hedtler-Gaudette, does that concern you in terms of how he has dismissed Inspector Generals in his time in the office so far?

It is deeply concerning. Not only is it antithetical to any serious effort to root out waste, fraud, and abuse, but it's also unlawful in many cases. So it's kind of got two dimensions of problematicness there.

Yeah, look, a number of these different efforts. But Mr. Talcove, I agree with you in terms of the data and the efforts we can do on that front. So I guess I just want to ask you, you know, what are actions that Congress can take to fix the gaps in data transparency and make it easier for us to follow where the dollars are going?

So the first thing I'd recommend if I was in your seat is to allow the Death Master File to be shared to the different federal agencies. That has been an outstanding issue for 10 years, and that's why you see so many quote-unquote deceased recipients in the benefit programs. The other part that I would strongly recommend is third-party audits. Too many times now you see in government the audits are being conducted by the individuals that have responsibilities for the program. Like Lexis, we have a third-party auditor that checks our books. I think there needs to be third-party auditors going in and checking. And I think if you do those things, you can take the fraud right down from 20 percent in government down to 3 percent.

Thank you, Chairman. I'll yield back.

Senator Scott.

Thank you, Chairman. Thanks for this hearing. I want to thank each of you for being here. So when I travel around Florida, people are fed up with government in a lot of ways. It's all because of the fraud. I mean, they're sitting there pay their taxes and they get sick and tired and they read these stories about money being wasted. It's something I had to fight when I was governor of Florida and I fought about it since I've been up here. Estimates show that up to 10 percent, it's probably way more than that, of federal spending is on fraud, waste, and abuse. Just in Minnesota with the recent revelations, the administration estimates at least $19 billion in fraud, and it's probably more than that. So I think this everybody that pays their taxes should be furious about this. We're supposed to be the stewards of taxpayer dollars. It's a betrayal of the American taxpayer by the people responsible for overseeing those programs and their taxpayer dollars. I agree with you, we ought to do audits. I ran public companies, I ran private companies. Guess what? They're all audited. We had outside groups that audited how we did to make sure and they gave us recommendations how we could improve every year. It's also a betrayal for the families who the funding was intended to actually help who might be left without a safety net because of these fraudsters, because the federal government's been so easy to steal money from. I've been, I'm introducing my SNAP Data Transparency and Oversight Act this week. It's going to hold states accountable from sheltering fraudsters by requiring, it's real simple, requiring states receiving SNAP funding to provide recipient data to the USDA when requested. Pretty basic. Federal government puts some money up, we ought to get the data. I think this bill is just a start. We need to figure out exactly how the fraud occurred, where every single tax dollar is going, why, and we got to hold people accountable. I remember when I became governor of Florida in January 2011, people were telling me that they knew there was fraud in the unemployment program and they weren't going after the people that they knew were committing fraud. Like how is that, how are you being a fiduciary to the taxpayer if you know there's fraud and you're not holding people accountable? So I think we've got to hold, we got to hold the people in Minnesota accountable, California, all across the country. So Senator, as a member of the Minnesota Senate, you have experience with fraud prevention and detection in programs like unemployment insurance, Medicaid, disaster relief, and others. It's clear fraud has become a systemic problem for the Walz administration. I was governor of Florida, it's hard to believe that as a governor of the state, he had no idea it was handing out money to such blatant scammers and that billions of dollars could be stolen continually, not just once, over and over, with what looks like zero accountability. So since this scandal has been unveiled, what has the Minnesota government, what has the governor, the Minnesota government done actually, anything, what have they done to halt the fraudulent payments?

Well, thank you. The governor has done very little. I think he's promoted and created a czar, a fraud czar, under the Department of Public Safety, and there was just a recent article that came out and he's done nothing since that started. We have put, he has put a hold on those 14, just 14 of the suspected programs which receive Medicaid funding. And some of those Medicaid funding programs like housing support services and autism, where based on the federal investigators in Minnesota, have deemed that 90 percent of that was entirely fraud. Each of those programs, just those two programs, are about $800 million of taxpayer dollars that are being stolen. And so they have taken a little action. Unfortunately, they're so horribly ineffective that even the good providers are caught up in there and they're willing to open their kimono, all good providers willing to open their kimono and be audited. They're not even able to do that. And when you talk about the level of fraud, we all agree it touches the pocketbook, but it's stealing from the most needy in the state and in the country. And we're not even talking about the stuff that rises to the level that we could be criminally prosecuted, not that which is wasted by swimming through the lane of government ineffectiveness. That's exponentially greater than what we're talking about here today.

So we have a big challenge to solve. One of the pieces that I would argue would be, I think the advice was good that you've heard so far, but in Minnesota, between one and three elements of eligibility when you look or applying for benefits, it's a county-based system in Minnesota, is proven based on a self-attestation. I think our federal government should eliminate self-attestations. So has Governor Walz, has he or the Attorney General, has any company, any person been prosecuted?

There have been very few based on our Attorney General and fraud that's discovered by our state agencies. Almost exclusively everything you see in the headlines today is because of our federal government came in under the Feeding Our Future program, the $500 million in which has only had about $330 million charged and prosecuted, almost 100 charged and some 60 have been convicted. That is just the beginning of the discovery in all those other Medicaid programs and their financial discovery. They've discovered all of the other fraud in the tentacles because it's coming from the very same providers.

So in your state, are the taxpayers okay with fraud?

They're, I think you've seen Governor Walz is no longer running for reelection. They're upset, but they're just learning about it. When Governor Walz pranced on the stage in the presidential election is when Minnesotans started to realize, or not realize, but when our local media was kind of forced to cover the actions that have actually taken place under his administration.

So no fraud is a victimless crime. At the end of the day, it's hardworking American taxpayers in your state, Minnesota taxpayers paying their local taxes, their state taxes, then federal taxes, who suffer from fraudulent activity. How have legitimate providers and families in Minnesota seen reduced services, delayed payments, and tight rules that make it harder for honest people to get help because of this fraud?

Yeah, we've heard, we've got stories all over the state of good providers that are providing critical services and the delays, even in a legitimate autism service provider was just highlighted this week, quarter-million dollars a week in payroll, and they've delayed it for 90 days, payments for 90 days. And they only plan to roll it out in a limited environment. Many of the critical services and providers that actually are doing the work may go under and leave a huge portion of our population unserved.

Mr. Talcove, as we know, a simple visit to these fraudulent businesses in Minnesota revealed they are not real businesses. Can you explain how weak identity verification and self-certification systems like the one we've once we've seen in Minnesota and the Senator just talked about are common vulnerability that criminals abuse across unemployment insurance, SBA loans, SNAP, Medicaid, and other major federal programs?

This happens in all 50 states, Senator, and it starts with the Secretary of State and how the businesses are registered. You can go on to any of your state web portals, enter in any name you want for a business, as long as it doesn't impact a copyright, it's set up. And what the criminals do is they take those shell companies and then they create fake employees, they create fake services, and they deliver fake services, yet they're stealing real taxpayer dollars.

All right, thank you. Thank you, Chairman.

Thank you, Senator Scott. Now I understand that Senator Johnson has agreed to let Senator Moreno. That's extraordinary.

I'll see whose work.

Okay, very good. Senator Moreno, you are recognized.

Thank you, Mr. Chairman. Thank you for allowing me to be in this subcommittee hearing. Mr. Talcove, I'll start with you. At the beginning of the session, I came over and introduced myself and shook your hand.

You did.

If I had stolen $4,000 out of your pocket, would you hunt me down like a wild animal?

I think it'd be my wife that would go at you pretty hard, yeah.

Well, that's what the taxpayers are losing in this country every single year to fraud. Think about that, every single person who pays income tax in this country is getting robbed $4,000. And when we sit here in Washington, D.C., and we say all these technical conversations and we say, well, it's not just Minnesota, this happens everywhere, as if that's okay. In the business world, they call that institutional rot. When you can't even realize how bad your actions are because it's not our money. If it were our money, we wouldn't even accept, you wouldn't accept $4,000. We're accepting by estimates half a trillion dollars every single year. So you mentioned, Mr. Talcove, and I'm picking on you because you said that what the American people want is the kindness and generosity of a nation. Is that correct? You said that?

Yes.

But they actually got stupidity and corruption. Isn't that more accurate?

They are not getting what they paid for.

They voted for kindness and generosity and got stupidity and corruption. And Mr. Koran, I'd ask you over in Minnesota because obviously we're talking about your state here. Just a simple outsider's point of view here. The federal government gave Minnesota a lot of money. Gives every state a lot of money. So I would say this to my colleague from New Jersey. Why would we not have the state be on the hook for the money that was lost in fraud? I mean, if I handed you money and said, hey, spend this to do X, and you wasted it, you allowed people to steal it, why would we not charge the state that money and say, hey, look, we gave you the money, you lost $12 billion, you owe it to the federal government. Why not give them a big fat IOU?

Senator, that's our greatest concern with the actions of the governor and their administration. Just in the Feeding Our Future, that was $500 million. We only charged $330 million of it, but we haven't been able to prove any of the $500 million fed Minnesota children in need.

So but again, I get all that. But why wouldn't we just tell Minnesota, you owe us the money that you did not use the way we asked you to use it?

Senator, that's our greatest concern. Our spending in Minnesota is 35 percent of all of our spending, $45 billion are federal dollars, every one in every three dollars spent.

But maybe if the taxpayers of Minnesota felt it, they'd stop electing idiots like their current governor and the current mayor. They would make changes. But right now there's really no accountability. So I'll switch over to you, Mr. Bruner. I have a bill called the STOP Act. It says if somebody, anybody, is on any kind of social welfare program, so rent assistance, finance assistance, food stamps, whatever menu of liberal wish list programs that are created that people are on, you cannot send a single solitary cent outside the United States. Does that seem logical and common sense?

It's very common sense.

What type of instrument would have to hit your head for you to think that that wasn't common sense?

I don't know, you'd have to be benefiting pretty big from the fraud.

Right, right, because you'd say, well, if the U.S. taxpayer's giving somebody who's down-and-out money, right, we're covering you, why would you then have that person send money outside the country? That doesn't make any sense, right?

No, and it's billions of dollars.

And Mr. Hedtler-Gaudette, you said something that's I think things are only, and I don't know that you meant to say it. I don't know you, you seem like a good person. But you said something that I think is something I would ask all of my colleagues to reflect on because we accept these kinds of statements as normal. You said obviously you don't like the DOGE effort, that was crystal clear, you weren't ambiguous on your feelings towards DOGE. But you said it only saved $215 billion. Do you have $215 billion?

No.

I mean, that's a lot of money. Like if all of a sudden you woke up tomorrow morning and somebody gave you $215 billion, man, you're pretty good day. And by the way, let's say that's wrong. Let's say that they miscounted and Elon didn't do the math right. Let's say it's 10x wrong. $21 billion. I'd take $21 billion. Let's say they're 100 times wrong. It's still $2 billion. And I think the commentary I think we have to do and I think Mr. Chairman, I think what we have to really realize as elected officials where maybe we spend too much time here and not enough time actually talking to normal Americans. People who pay taxes don't expect us to put up with that kind of waste, fraud, and abuse. This is the second, I think, or third hearing we've had in the greater committee around waste, fraud, and abuse. We had the GAO here, and the head of the GAO basically said, hey, this has been going on so long, we've wasted $3 to $4 trillion, which is a number none of us can comprehend, by the way. We don't even know what a trillion is. We know that it would be an obscene amount of money. But the way we have almost disdain for the taxpayer, where we normalize this, where we say things like, well, let's not pick on Minnesota, everybody does fraud. If we don't actually deliver substantive changes to the American people, where very soon Republicans and Democrats get together and say we're going to actually structurally fix this problem, there's going to be accountability because quite frankly, I'll go back to, I'll end where I started with you, Mr. Talcove. If I walked over to you and took $4,000 out of your pocket, you would leave this hearing and chase me down like a wild animal. And yet for us, we're like, well, it's only $4,000. That kind of, would you ever imagine saying something like that?

No, sir.

So I hope what comes out of this is concrete steps that says we just will not put up with one cent of waste, fraud, and abuse in our programs. And I hope part of it is this accountability of the states because the federal government doesn't administer these programs. The states do. Give the states who are doing a good job, like when Senator Scott was the governor of Florida, they do a great job, give them motivation, and then absolutely hold the states that are ripping us off, which is what they're doing, and hold them accountable and have their voters understand that Missouri, Wisconsin, Ohio, I hope New Jersey doesn't want to pay for Minnesota's crap. That's what our voters tell me every single day. Mr. Chairman, thank you for having this hearing.

Senator Johnson.

Thank you, Mr. Chairman. Let me try and tie together what I think is some pretty extraordinary testimony here to really... ...get to what is going on here. The political aspect of the fraud, of making people dependent on government to keep one political party in power. So I was shocked by a recent revelation, I'd never known this before, the St. Louis Federal Reserve actually tracks the assets of non-governmental organizations, NGOs. $14.1 trillion is the latest estimate. $14.1 trillion. Now let me, because we don't have enough time to go through this whole thing, but during the open borders of the Biden administration, we heard repeatedly that there were NGOs operating in the Darien Gap facilitating and welcoming people that they then funneled up into America, millions of people coming into this country illegally. Generally into, oftentimes being funneled into blue states, into sanctuary cities, sanctuary states. Now Mr. Bruner, what you're talking about is these groups being funded by groups like Soros and Arabella to what? To stabilize our political situation? To turn America into a one-party state? Mr. Bruner, tell me what your testimony is all about here.

Yes, thank you Senator. That's exactly right. I mean it's to create a political benefit by bringing in, so in the case of California, there are estimates that range up to 13 representatives just through apportionment, not even taking into consideration voter fraud and illegal migrants who make it onto the voter rolls, which we know happens. So just through apportionment, you're talking about 13 members in the House who shouldn't be there if it weren't for all of these millions of migrants under Biden. So that's one, that's a political benefit.

The ranking member made a statement that the people are furious about what they're seeing in Minneapolis. You know what they're not furious about is where ICE is doing what ICE has always done under the Obama administration, under the Clinton administration, under the Biden administration, where they actually enforce our laws and they get cooperation from state and local governments. Trump is behind deportations and removals and returns from Clinton, Obama, and Biden. But all of a sudden now the public is furious. Why? Is it because NGOs are funding the 30,000 trained observers, I'd call them activists, who are, some of them are actually shooting at ICE officers, right? They're ramming their vehicles into their vehicles. They throw rocks at them. One of them actually showed up with a semi-automatic pistol with multiple clips of ammunition, correct? So ICE officers are obviously on hair-trigger alert. And these government officials, is this correct Senator Koran, that your lieutenant governor was managing the Signal chat site that was following ICE enforcement actions and deploying their observers to the scene?

We haven't been able to verify that the lieutenant governor has, but she's overtly made those statements as our governor has. Get out there and go interfere and block them. One representative, Tabke, has been in those chats and actively promoting it.

So those groups, those officials that are training these observers and then encouraging them to put themselves into harm's way, right? To obstruct law enforcement. Who's really responsible for the fact that they got hurt? Again, I would never encourage my supporters to go obstruct justice, put yourself in harm's way. I won't go there. But we need to understand exactly what's happening in this country. This isn't just, this didn't just happen. These protests didn't just spring up. Now some of the protesters maybe, they may be coming out and you listen to the appeals of the governor saying go record this. But these people are trained, correct Mr. Bruner?

Yes, Senator. Trained and encouraged to do this.

Mr. Talcove, you said that you've calculated the fraud about a trillion dollars a year.

Yes, sir.

What metric do you use? Because I want to go to those sources. I want to figure this out because that's probably a low estimate as well.

Well, we have unique access because of our position. So it's looking at mule networks, identity theft rings, foreign IP infrastructure. And here's the worst part, especially in government, seeing the same identity used in all 50 states and not being able to do anything about it.

So again, I want, if you're willing, for the record, I'd like you to provide those sources of that data. I'd love to see how you've mapped out the funding of these organizations. Now again, I talked about NGOs facilitating the Biden open borders. Let's go back to what happened with Somalis into Minnesota. Were there NGOs that were supporting that effort as well? I mean, is this the same thing just on a much smaller scale? And are we just seeing the maturity of it? That we just haven't got, well I'm sure we've got to that level of fraud in California, but not necessarily with the new immigrants. But Senator Koran, who facilitated the Somalis into Minnesota?

Minnesota-led NGOs as well as some national ones. Minnesota has been one of the leaders in where a sanctuary state, not legally, but we are by the fact that our large metro cities are sanctuary cities and you're seeing those policies. But if I could add one piece to it, you've talked about kind of what are the motives, and we're only talking about the violent protesters and the organization and coordination. But each and every one of the dollars when we talk about the fraud on the other side, the first part of this conversation, are also feeding that network for pure political gain and eternal power.

So Mr. Talcove, you also mentioned that the secretaries of state facilitate this by allowing people to register their businesses. Somebody's training these people to do this, right? I guess a bunch of people could have the same idea, but my guess is somebody somehow is being trained to go to the secretary of state, register as a business, claim you have all these kind of employees, and this is how you commit fraud in all these programs. I mean, would you dispute that?

No. The fundamental issue is when we look at fraud, we look at it as a country through a program, whether it be EBT, unemployment insurance. And what happens is the criminals look at it nationally, not statewide. And by setting it up the way we have it set up, we allow them to share their quote-unquote sauce, and whether it's unemployment insurance fraud, EBT fraud, healthcare fraud, they share that across the country and they work at scale. That's why federal law enforcement needs to be engaged in these investigations because state and local agencies can't handle them. They eventually lead back to transnational criminals in countries such as Russia, China, etc.

And I'd argue the reason the GAO, and I love them too, they can do some great work, but they're so incredibly ineffective. The same thing with IGs. They're not actually looking at the true perpetrators of this fraud. It is foreign actors, it is transnational criminal organizations, it is the non-governmental organizations that we funnel all this money through and we don't track it. Where did they get $14.1 trillion worth of assets? Could that potentially be taxpayer funds that we funneled through them that they were supposed to give to some worthy cause that they just put in their bank account? Is that what's happening here? Again, we need to open our eyes, we need to understand exactly what's happening here, but I think it's the shadow groups that the chairman was talking about here. They need to be fully investigated and we need to, again, we need to understand exactly what's happening. This is far more than a couple one-offs, an outrageous example of Minnesota. This is endemic. This is persistent. And this is costing American taxpayers probably at least a trillion out of the $7 trillion we overspend every year. Thank you, Mr. Chairman.

Thank you, Senator Johnson. Senator Koran, let me just come back to you. I want to get a handle here on just the scale of the fraud in Minnesota. We talked about the dark money groups funding much of what's going on on the ground, but let's just get a handle here on the scale of the fraud. You are a member, I want to get this right, of the legislative, the Office of the Legislative Auditor. So, I'm sorry, go ahead.

Mr. Chair, of the Legislative Audit Commission, who oversees the Office of the Legislative Auditor.

Okay, got it. So you've got access to all of this information. Give me your best estimate based on the information you've seen, the audits that you've seen. How many of the agencies, 20 or so agencies I think in the state of Minnesota, public agencies, how many have rampant fraud?

All of them are wrapped up in some sort that can issue. There's 20 primary state agencies in state law. Of the largest, there are 10 of our largest primary agencies. Many of the nonprofits receive grants and funding from all 10 agencies.

If you had to put a number on it based on what you've seen, your work, your investigations, the audits that you've seen, what do you think the total losses are to Minnesotans in terms of fraud?

I think the conservative number is what our federal investigations have determined of just the 14 Medicaid programs that half of all of it would be about $9 billion. And I don't think that's, and I think the reason I believe that's true is in each audit that the legislative auditor produces, we measure right level in the samples of what they have done, now 20 to 80 percent of each one, they're unable to prove that the dollars were actually gone, have gone to the programs in which they're indicated.

$9 billion. How much of this money has left Minnesota for overseas?

Well, in I arrived in 2017. The childcare assistance program fraud, for which the program I believe is $130 million, the whistleblowers proved to or showed us that they believe $100 million of that was fraudulent. We had a whistleblower come forward actually publicly. And at that time we also discovered something new to me, which is the hawala process of the movement of cash through our airports in Minneapolis-St. Paul. And what I've learned, in that year it was just coincidentally $100 million in fraud, suspected fraud, and $100 million went out in cash through our Minneapolis-St. Paul airport.

How did that work? Tell us how that worked. $100 million in cash through the airport.

In suitcases, back then it was a million at a crack. And so I've learned that in the year before it was about $74 million. Secretary Besant just, I've tried for two and a half years to get that number because I wanted to get a view of how many excess dollars are sent out from the community that's sending them. And in the last two years it was $340 million each year. And so if you look at it, it's about a 25 percent increase over this period from 2017. That's $1.8 billion in cash. And I don't think the average citizen who works for their money understands how complicated it is to ship or to obtain $6 to $7 million of cash every single week of every year. That's, and our federal government certainly must have been aware of it and has done nothing to look at it, but that's just all but about $130 million I think is originated out of Minnesota.

You know, but what every American taxpayer absolutely understands is their federal tax money being taken on suitcases out of this country to go heaven knows where. I mean, if that's not infuriating, I don't know what is. And the fact that it is systemic in Minnesota and probably to your testimony, Mr. Talcove, probably systemic in a lot of other places. I mean, millions of dollars in suitcases out of an airport, and that's just one means of shipping this money around. It's absolutely unbelievable. I want to come back to you, Mr. Talcove. You testified that about a trillion dollars you think is lost in fraud every year. Where is this money going? I mean, we know where some of it's going in Minnesota, it went overseas, it went to Somalia, it went to NGO fronts. We know where it's gone in some other states. California gave away millions, billions of dollars to a pro-Hamas NGO. Where, but a trillion dollars nationally, where is this money going to?

I appreciate that question because most people don't ask that question. It goes to terrorism, it goes to child trafficking, it goes to drugs, it goes to terrorism. And then it's used to purchase luxury items, cars, purses, homes. That's all funded by people like me that pay taxes.

So you're telling me that the electrician who goes to work every day and clocks in and works his butt off and tries to earn just enough to be able to, you know, make his rent, maybe have a kid or two, put food on the table, his tax money is being used to buy other people luxury items, cars, yachts, whatever else, and is going to fund terrorism and child trafficking? Yes, sir. A trillion dollars a year on this stuff?

$115 million an hour.

$115 million an hour. How do they get their hands on it? What are we talking about here? Transnational organizations, criminal networks? How do they get their hands on this money?

They take advantage of antiquated government systems and processes. They go into programs that they know elected and appointed officials won't touch, and they can steal at scale. And what happened really was during the pandemic, between the PPP loans and the unemployment insurance, they learned a really valuable lesson. Government never runs out of money, and the probability of getting caught is virtually zero. I have it at one-tenth of one percent.

So come back to the recommendations that you mentioned in your opening statement. What do we need to do to put a stop to this hemorrhaging of people's hard-earned money going overseas to finance child trafficking and luxury yachts? What needs to happen here?

It's really simple. It's used every single day in the commercial sector. Front-end identity verification. You just don't get to say I am who I say I am. Second, recertification of all the recipients. There is so much fraud right now in the benefit programs all across the country. We need to get a baseline. Third is this notion of a third-party independent audit. And finally is involving federal law enforcement like the Secret Service to investigate it. The thing that people don't understand is that most of these beneficiaries, Senator, they're not real. They're fake. They're someone's stolen identity that is getting used in all 50 states.

Incredible. Senator Kim, do you have anything further?

Thank you. Thank you, Chairman. I mean, look, what you just laid out there, Mr. Talcove, I mean, it should piss off every single American. I mean, this is absolutely atrocious and it just, I'm just furious, honestly, Chairman. And like, I think that there is something here, as we've tried in other hearings too, where we can work in a bipartisan way to be able to address this. You know, my job today, I'm not trying to defend any single state. I'm just saying that we can't look at it just through that lens. I mean, Mr. Talcove, you were talking about this saying the criminals are looking at this nationally. Is that right? I think that was your quote.

Yes, sir.

Then we need to make sure we're looking at this nationally too, because it's not something that any single state is going to be able to handle on their own. Is that right, Mr. Talcove? Like no single state in our country has the capacity on their own to be able to address this.

You don't see the connections when you're looking at it within a state. You have to look at it nationally to find the connections.

Yeah, and so, you know, I think just our best opportunity here going forward to really try to deliver for the American people because this is outrageous and should not continue on. It's just not just the scale of the money, but what it's being used for and what it's going towards. And I say that as someone who used to work counterterrorism at the Pentagon before. Like I can't stand this. But we need to make sure we're focusing in on the criminals and thinking through, you know, what you were saying about federal law enforcement and other efforts. So look, Mr. Chairman, again, I just think that there's an opportunity for us to come up with a comprehensive set of a menu of actions that we can take and think through what is it that we can work with this administration on, what is it that we can work through Congress on, what is it that we can empower the states to be able to step up and to be able to handle on that front. And Mr. Hedtler-Gaudette, I just wanted to just follow up with you because, you know, we were talking through this about just the challenges, for instance, on the data side. You know, I had seen different reports about, for instance, usaspending.gov, right? But it seems from my appearance wholly inadequate right now in terms of being able to really rise to the level of the detail. I mean, I think it's admirable we're trying to have that transparency, but would you agree that, you know, this is something if we're really serious about this, need to make sure that we're taking the tools that we have, investing in them to have a greater level of detail and the fidelity to really be able to try to track. Does that make sense to you?

Yeah, it makes perfect sense. And I would just note that we're actually at a kind of an interesting moment right now where 20 years, 20-year anniversary of the passage of the Federal Funding Accountability and Transparency Act, which was the piece of legislation bipartisan co-led by Senator Tom Coburn and then-Senator Barack Obama, by the way, that created usaspending.gov and really tried to begin the process of bringing federal funding and the tracking of federal funding into the 21st century. We have obviously not kept up, and as I mentioned in my opening testimony, we have a long way to go to really reflect 21st-century sort of technological capabilities when it comes to how we track, monitor, and assess federal spending. But it's something we can do. It's not hard. You know, the statute is there. We have the reforms. We have the fixes. We just need to do it.

Mr. Hedtler-Gaudette, I just wanted to stick with you a little more. You know, Mr. Talcove was going through four different ideas here: front-end identity verification, recertification, third-party audits, federal law enforcement. Did I get that right? You know, just wanted to get your response, you know, if there's anything else that you want to add, any other things that this committee should be thinking about. Yes, so all of the recommendations that Mr. Talcove laid out there sound perfectly reasonable to me. I would add to build a little bit on the usaspending issue. That is supposed to be the primary interface through which the American people can verify, can trust but verify what is happening with their tax dollars. The problem is that usaspending right now is, it's outdated and it doesn't require enough information to make it truly useful in the way that it needs to be. As a prime example of that, for you know, we are required, each program is required to submit award descriptions, which is exactly what it sounds like. It's supposed to tell you what that federal award is. But right now there are no standards or no guidelines around what has to be contained in an award description. So if you go on usaspending and you try to look up what a program is, how much money is being spent, you know, and you look in the award description field, you're often going to see a bunch of gobbledygook that makes no sense and doesn't give you any information. And that could be easily fixed by just saying to OMB, to agencies, hey, you have to provide meaningful information when you're entering in these award descriptions in the usaspending. So there are a ton of pretty low-hanging fruit fixes like that that would really help as far as the sort of transparency and trying to actualize the fact that sunlight truly is the best disinfectant. No, look, thank you for that. I just want to end here just saying, you know, we take all of this effort that we're doing right now mindful of the fact that, you know, we live in the time of the greatest amount of distrust in government in modern American history. And there's a lot of reasons for that, but I think a lot of what we heard today is a big part of that. You know, is the sense that we can't manage our money, in fact, you know, that we're seeing us being taken advantage of by others. And I again, I hope we can just in a unified way be able to say enough. Like we're tired of this and we need to have that end and work earnestly to be able to address it. What I worry though, again, is if we're sniping at each other and continuing to point attacks at each other, especially politically, the only people that benefit from that are the criminals. They're the ones that are getting away with this as we're wrestling with each other and fighting each other, whereas if we are seriously being targeted in such a direct and malicious way by actors, then we need to make sure we are unified in terms of being able to address that and be able to do this with a clear mind because again, I think restoring trust is so important right now. We think about just how many legitimate beneficiaries are being taken advantage of and not getting how the taxpayer dollars are being diverted and how all of this is just going to continue to make it harder for us to be able to push forward. So Mr. Chair, again, I am grateful that we have an opportunity to shine a light on this. You know, I know we will have some disagreements in terms of, you know, some of the priorities and some of the words that we're using, but again, I am ready to be able to engage. I think many people on the Democratic side here in the Senate would be willing to engage in this in a legitimate discussion of how we take this on nationally in a systemic way. And I just urge you and others, hopefully we can find an opportunity to do that. And with that, I yield back.

Senator Johnson.

Thank you, Mr. Chairman. I want to go back to NGOs. My assumption is NGOs are nonprofits, correct? Are there any for-profit NGOs? That is correct, Senator. How did they accumulate $14.1 trillion worth of assets? Where did that money come from? A great question. We've tracked over $100 million just in the last few years from the federal government. So entities in the Soros network, in the Rockefeller network, in the Tides network especially. I don't think Soros is, I mean, they get grants. It's $14 trillion. So again, that's one of the things my subcommittee is trying to investigate is we're trying to track that back and you know, go back in history and $14 trillion. Non-government, again, my assumption was these are nonprofits, they get money from government and they distribute to you know, worthy beneficiaries. Somehow they're pocketing $14.1 trillion. That's okay. So there's a project for both you researchers. The reason we focus on Minnesota is we need to learn what happened in Minnesota so we can widen our aperture and see okay, if they were able to do it in Minnesota, where else are they doing the same exact thing, okay? So it's not where we're not trying to penalize Minnesota or one particular population. It's like no, we have to learn from this obvious fraud and open up our aperture. Mr. Talcove, you mentioned steal at scale. Let me give you an example of one legalized stealing at scale that unfortunately one side of the aisle completely ignored. So when we passed the enhanced subsidies for Obamacare, the pandemic, the temporary one, right? We created a lot of zero-premium policies. Okay, prior to the pandemic there were about 10 million people on the exchanges and all of a sudden there's about 24 million supposedly. Now we've known because Paragon has looked at this and because of those zero-premium policies, probably about 6 million phantom policies. Okay, and again, no-claim policies went from 20 to 40 percent. I mean, this is obvious fraud, right? Probably about $30 billion a year. So anybody who wanted to just go ahead and clean extension of the enhanced policies, even though we were talking about this all the time, $30 billion a year. I would call that fraud at scale. Was happy to just look the other way and facilitate that fraud. Okay, so again, we can talk about bipartisanship, but the fact of the matter is we've got one side of the aisle that has no problem with this. Governor Walz had no problem looking the other way. They were fully aware of it. I mean, the first audit that I saw that was in I think March of 2019, a couple months after he had gotten into office. You know, fully aware of this. They're not really willing to do anything about it, which is why the GAO recommendations are not enacted. But I want to know, you describe stealing at scale. How do they do it? How could you funnel $14 trillion into NGOs? How does it happen? So go back to your Medicaid example, right? 40 percent of those policies, absolutely no claims. But that's just the tip of the iceberg. Once you're in Medicaid and you have a valid number, then you start manipulating the bad providers and you start getting durable equipment, a catheter, orthopedics, etc., that are never shipped. And all of a sudden you are losing literally hundreds of billions of dollars. And what happens in government is we don't get to the lowest common denominator. The lowest common denominator is the primary care physician that gets inundated with thousands and thousands of fake patients seeking fake services and products. But who, step aside for a minute, who's accumulating this? I mean, who is behind literally how many tons of dollar bills? In Minnesota, the 1.4, well I heard it's you know, $700 million, but it's $1.4 billion of cash. Yeah, in my experience doing this 15 years, it all ends up tied back to transnational criminal organizations that facilitate the fraud and move portions of it out of the country. Are there names? Are there names for these? Or are they just that shadowy? They're state-sponsored groups. They're groups such as APT41. These are well-known organizations that operate and their sole purpose is to steal from American taxpayers, destabilize our democracy, and use that money for other purposes. Mr. Bruner, again, you've I think part of writing a book on some of the foreign influences here. You know, we need data, we need information. We need flowcharts. We need to you know, break down the $14.1 trillion. Figure out where that came from. Figure out if it's a trillion or a trillion and a half dollars a year in fraud. We've got to break that down and go okay, here are the programs it's going through and here's who's sucking it up. Because again, there is some fraud of you know, people getting benefits that they don't deserve, okay? That's small-scale fraud. You're talking about fraud at scale that is being funneling money into, I don't know, al-Shabaab, whatever terrorist organization, maybe some of that $700 or $1.4 billion of cash that went out of Minneapolis. How do we get to the bottom of this? You know, how much research has already been done? Yeah, well in the example of the cash flowing out of Minneapolis, I mean it's really shocking because it goes through this hawala network, which is an ancient Islamic banking system. And we did a report, EBT Terrorism, and it's about how money makes its way to terror groups. What's I mean the figures we've talked about today, think about how much 9/11 cost. The investigation shows around $450,000. Many of the hijackers were on benefits with that. The Boston bombing, it's a pressure cooker, I mean a couple hundred bucks or they were on benefits. Same thing with New Orleans, the truck driver, I mean $19.99 a day from U-Haul. So the number of the amount of money that we're seeing go out, it needs to stop because of the amount of damage it could potentially do. Regarding the $14.1 trillion, we'll track it, but these are endowments. I mean it's legal to hold you know, the buildings and the things like that, but there's so much money it's hard for a human to comprehend $14 trillion in assets. Okay, well again, this is incredibly important. Again, this is way more than you know, fraud by individuals. These are organizations organizing this and again, I would argue for political purpose, right? Because you go back to Minneapolis, those protests, those people just you know, sprang out of their houses and something. No, this was highly organized and I don't know, was it literally organized to turn people's attention away from the massive fraud? I know people made claims, I don't know. But all I know is the only reason Americans are furious at ICE right now is because that was ginned up. Those activists were trained to put themselves in harm's way. They got a couple martyrs. It's been incredibly effective, but it's incredibly corrosive on our body politic. Thank you, Mr. Chairman. To your question, Senator Johnson, it's 14,000 pounds of $100 bills. 14,000 pounds of $100 bills that left the Minneapolis airport alone, alone. I want to end, by the way, just real quick, the fix to there is when you see again, they actually filled out the CBP forms. So it was all okay because they filled out the paperwork. Why wasn't the IRS all over their case going where did this money come from? So again, I hope this administration starts focusing and investigating where did that money come from? We've talked about some of the necessary steps that are needed here to deal with this sort of fraud and corruption that we've been talking about today and I want to add one.

...one more to that, and that is prosecution. As a former prosecutor, there's nothing like the power of prosecution. And when you've got $60 million in dark money flowing through at least 14 different groups just for the Minnesota protests alone, to say nothing of other protests, anti-law enforcement protests we've seen around the country, many of these groups using foreign money. By the way, no foreign entity has any rights to the First Amendment in the United States of America. And when you are funneling and funding activity that is in that is itself illegal. The assault of cops is illegal. Blowing up cars in the California freeway, that's illegal. Disrupting students trying to go to school on our campuses, that's illegal. And over and over again, we see this money through these same networks flowing in to create these riots, these protests, these divisions. There needs to be prosecutions here. So I just renew my call to the Department of Justice to investigate these groups, these dark money groups, untangle this web, and bring prosecutions wherever you can because the American people deserve to have control of their government, not some foreign billionaire or set of billionaires, not some shadowy group of American billionaires. It ought to be the American people, we the people, not we the billionaires who are trying to control our discourse and yes, our elections in many cases through their foreign money, their access, their influence. It's got to stop and one of the best ways to stop it is with prosecution. Thank you to all of the witnesses for being here. The record for this hearing will remain open for 15 days. That's until Wednesday, February the 25th of this year, for the submission of statements and questions for the record. And with that, this hearing is adjourned. [Gavel sounds.]