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ND secretary of state candidate drops out, raising questions about GOP's next steps

Child care fraud-terrorism connection report bothers Minnesota lawmakers

Former state emloyee Scott Stillman testifies about day care fraud in front of a Minnesota Senate committee Tuesday, May 15, 2018. Don Davis / Forum News Service1 / 3
Omar Jamal tells a Minnesota Senate committee on Tuesday, May 15, 2018, that child care money fraud is a major concern in the state's Somali community. Don Davis / Forum News Service2 / 3
Minnesota state Rep. Mary Franson of Alexandria, joined by Rep. Nick Zerwas of Elk River, talks Tuesday, May 15, 2018, about what the state can do to people who steal child care money. Don Davis / Forum News Service3 / 3

ST. PAUL—There is no proof that state money to help low-income Minnesota families afford child care ended up in the hands of terrorists, but the mere mention of it causes concern among many legislators and the Somali community.

"I think it has a national security implication, I really do," former state investigator Scott Stillman told a Senate human services committee Tuesday, May 15.

The committee was looking into comments Stillman earlier made to Twin Cities television station Fox9. The story indicated money paid to child care centers ended up in suitcases headed to Somalia and elsewhere, and then at least some ended up in the hands of terrorists.

Even without solid proof, lawmakers quickly reacted to Stillman's comments with concern and proposals for action as the 2018 Legislature winds down.

"Where there is a lot of smoke, there is fire," said Sen. Jim Abeler, R-Anoka, chairman of the health and human services committee looking into the situation.

Stillman was the one who investigated money stolen from a child care fund designed to help low-income people.

Stillman said he found that some people spent months overseas while collecting state money for supposedly caring for children in Minnesota.

"'Most of that money is going to extravagant lifestyles, drugs," he added.

The most interest came in Stillman's comments that hinted at money being used for terrorist attacks.

Whenever he heard of an attack, he said that he and other investigators wondered how much of the money behind it came from Minnesota.

Sen. Bill Ingebrigtsen, R-Alexandra, said that because some of the child care money comes from the federal government and because international terrorism is a federal issue, the Department of Homeland Security and the FBI should investigate.

"In none of our cases have we had specific evidence of terrorism," Inspector General Carolyn Hamm of the Human Services Department said. "If we did, we would immediately share it with the Department of Homeland Security."

Ingebrigtsen, a long-time Douglas County sheriff, said what he heard in committee is "very serious."

The senator said the Somali community is concerned because much of the alleged fraud is connected to centers owned by Somalis.

Omar Jamal of the Somali Watch Group said that his community wants a crackdown on the problem because most child care providers are not involved in fraud.

"This is an epidemic, very serious," he said about child care funding fraud.

The Fox9 report indicated that about $100 million a year is placed in suitcases and flown out of the Minneapolis-St. Paul International Airport. That figure became connected with moving out money obtained by child care fraud, but Acting Human Services Commissioner Chuck Johnson said that not nearly that much money has been stolen.

In six cases his department has has obtained fraud convictions, the total about of money was $4.6 million, he said. "$100 million does not seem credible."

Jamar and Ham of the Human Services Department said money is shipped to countries like Somalia because American banks have no way to transfer it. Much of that money is sent to relatives of Somalis living in the United States.

Senators, short on facts, were frustrated.

"Now, our confidence is shaken," Sen. Scott Jenson, R-Chaska, told Johnson. "You need to restore my confidence in you."

Abeler said he is in no rush to enact legislation unless there are some simple, non-controversial measures. But a trio of Republican House members laid out a plan for legislation, some of which could pass before the constitutionally mandated Monday adjournment.

Reps. Matt Dean of Dellwood, Nick Zerwas of Elk River and Mary Franson of Alexandria are taking up efforts to increase enforcement.

Proposed legislation, which Dean said still can be inserted into an existing bill, includes:

• Giving Johnson's department authority to immediately suspend a child care license of a center under investigation that is not cooperating with investigators.

• Creating penalties of up to 25 years in prison for people who send public funds to countries on the U.S. State Department travel ban list, mostly countries likely to support terrorists.

• Adding more fraud-prevention measures in the Child Care Assistance Program and other welfare programs.

• Directing the Office of Legislative Auditor to investigate the child care funding program.

Franson said Johnson's department is spending time and money on the wrong priorities.

Many child care center operators this year have told legislative committees that the state is ordering them to fix what they consider minor problems. But, Franson said, the state has not done well in stopping fraud.

"Maybe a little less nitpicking and a little more creating accountability in the child care program," Franson said.

The Child Care Assistance Program is for low-income people who otherwise could not afford child care.

Franson convinced the House Tuesday to amend another bill to require county and private agencies dealing with child care licensing to be trained in identifying and preventing fraud.

House passes tax bill

Republican-written legislation to simplify how Minnesotans deal with new federal tax law passed the House 78-50 Tuesday, May 15.

It could get a Wednesday vote in the Senate. If it passes there, Gov. Mark Dayton says he will not sign it or even negotiate with lawmakers about it unless they agree to a $138 million "emergency" appropriation to Minnesota schools.

The Legislature has until midnight Sunday to pass bills.

Besides matching Minnesota tax law with new federal law, the legislative plan lowers some taxes. Dayton and other Democrats say the bill favors businesses, while Republicans say it gives the middle income Minnesotan a better deal.

The GOP claims 99.8 percent of individual taxpayers will not pay more.

"This bill targets tax relief squarely at middle-class families through the first income tax reduction in decades and by preserving important deductions Minnesotans rely upon as well as a state personal and dependent exemption," House Tax Chairman Greg Davids, R-Preston, said.

One change is that the bill cuts the first tier income tax rate from 5.35 percent to 5.25 percent in 2020 and the second tier income tax rate from 7.05 percent to 6.85 percent. The cuts, due in 2020, would affect all taxpayers.

Line 3 build backed

The House late Monday voted 74-51 to allow Enbridge to reconstruct its Line 3 crude oil pipeline even though the Public Utilities Commission has not given its approval.

House Speaker Kurt Daudt, R-Crown, delivered his first floor speech since taking office to promote the bill, saying the pipeline would create northern Minnesota jobs.

Dayton is expected to veto the bill if the Senate also passed the legislation.

Enbridge wants to replace its existing Line 3 with a bigger pipeline from Canada to Wisconsin.

The legislation approves the pipeline on Enbridge's preferred route, which differs from an administrative law judge's opinion that the PUC should allow the pipeline only along its existing route.

Bill sponsor Rep. Dan Fabian, R-Roseau, said the legislation has "very, very strong support in my part of the state."

Many Democratic representatives opposed the bill, saying that the PUC plans to make its decision in a month.

Handsfree bill dropped

Minnesota House leaders have told a lawmaker they will not allow his bill banning drivers from holding cellphones will not be taken up this session.

Rep. Mark Uglem, R-Champlin, told several reporters Tuesday that his bill is done for the year.

Committee members overwhelmingly have approved the Uglem bill.

Mowing changes approved

The House sided with farmers who say the Minnesota Department of Transportation needs more time to draw up rules governing ditch mowing.

Farmers have complained that MnDOT rules force them to mow so late in the season that the grass is not good to feed animals. MnDOT, meanwhile, says holding off on mowing gives animals more time to use high grass.

Farm-country legislators say ditch mowing has produced the most constituent comments the past couple of years.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.
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