Bessent alleges anti-fraud guardrails are ‘loosest’ in blue states

Treasury Secretary Scott Bessent accused Democratic-led states Friday of having poor fraud prevention mechanisms while at a Minnesota press conference.

The state has been at the center of a healthcare fraud scandal for much of this year after the Justice Department indicted more than a dozen people on accusations of defrauding taxpayers, using funds for improper billing and childcare fraud, among other allegations.

And while Minnesota is not the only state the Trump administration targeted with fraud investigations, it has become a focal point of its anti-fraud agenda.

“In Minnesota, alongside other senior U.S. officials, U.S. Secretary of the Treasury Scott Bessent today announced several initiatives to combat the rampant fraud that has wasted billions of dollars in Minnesota,” a release from the Treasury Department’s Financial Crimes Enforcement Network said.

Bessent accused Democrats of letting fraud happen in states they govern, though he acknowledged such crimes also occur in red states.

“The Democrats [have] let this happen on their watch,” Bessent said. “It’s going on everywhere, and we’re going to track them down. But I can tell you that the guardrails tend to be loosest in the Democratic states.”

A congressional study published in 2023 found that Texas, a red state, had the most Medicaid fraud dollars in 2022 with $219.9 million, followed by California, Florida and Louisiana.

Bessent responded to a question about why they were singling out Minnesota, saying that per capita, the state has been one of the worst at fraud oversight. He placed the blame for this “lack of oversight” on Gov. Tim Walz (D) and his administration.

“The kind of egregious nature of this and the lack of oversight from the AG’s office and from the Walz administration is shocking,” Bessent said. “Minnesota, unfortunately, because of the lack of oversight, likely has as a percent of the dollars one of the largest in the country.”

A Walz spokesperson did not immediately respond to The Hill’s request for comment.

The Trump administration has punished blue states over fraud accusations, freezing more than $1 billion in Medicaid funds for Minnesota and California this summer.

Earlier this year, Vice President Vance began chairing the White House’s anti-fraud task force, aiming to coordinate a national response to fraud at the local and state level. Trump said Vance would focus primarily on blue states in his role as “fraud czar.”

“His focus will be ‘EVERYWHERE,’ but primarily in those Blue States where CROOKED DEMOCRAT POLITICIANS, like those in California, Illinois, Minnesota (Somalia beware!), Maine, New York, and many others, have had a ‘free for all’ in the unprecedented theft of Taxpayer Money,” Trump wrote on Truth Social in April.

Last week, Trump announced a $25 million whistleblower program promising cash payments to those whose tips about fraudsters lead to convictions.