When fraud flourishes

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MYRNA BROWN, HOST: Good morning! This is The World and Everything in It from listener-supported WORLD Radio. I’m Myrna Brown.

MARY REICHARD, HOST: And I’m Mary Reichard.

Yesterday, a surprise announcement from the 2024 running mate of Democratic presidential nominee Kamala Harris, Minnesota Governor Tim Walz:

WALZ: In September, I announced that I would seek a historic third term as Minnesota’s governor, and I have every confidence that if I gave it my all, we would win the race. But as I reflect on this moment with my family and my team over the holidays, I came to the conclusion that I can’t give a political campaign my all.

BROWN: Walz will finish out his term as a lame duck and leave it to someone else to succeed him.

Oddly, the governor thanked the assembled press at the end of his remarks and said he would take questions—not then, but sometime today.

REICHARD: It took him just three sentences to arrive at what is widely believed to be the real reason for the withdrawal.

A massive public-spending scandal involving nonprofit groups and taxpayer money, and how the governor says Republicans are taking unfair advantage.

Here’s WORLD Opinions commentator Hunter Baker.

HUNTER BAKER: Governor Walz did not step out of the race quietly.

He stepped out swinging.

Within moments of announcing he would not seek re-election, Walz turned from his own decision to assign blame.

WALZ: For the last several years, an organized group of criminals have sought to take advantage of this state’s generosity. And even as we make progress in the fight against the fraudsters—we now see an organized group of political actors seeking to take advantage of a crisis. I don’t wanna mince words here. Donald Trump and his allies in Washington and in St. Paul and online, want to make our state a colder, meaner place.

That framing is revealing.

Because Minnesota is not dealing with a routine partisan fight or a disagreement over policy priorities. It is dealing with what investigators describe as one of the largest public-spending fraud scandals in recent memory.

Networks of nonprofit organizations received enormous sums of taxpayer money. Many of the nonprofits claimed to provide social services. In some cases, reporters found empty storefronts where functioning programs were supposed to exist.

Federal authorities are now involved. And now under intense pressure, the governor has decided, probably wisely, not to ask voters for another term.

That is the immediate news and there’ll be more parsing of his rationale later today. But the deeper story is why scandals like this happen at all—and why they keep happening.

Political scientists have long warned that democratic systems have a built-in vulnerability. Small, organized groups can pursue large, concentrated benefits, while the cost is spread thinly across millions of taxpayers.

No single citizen feels enough loss to monitor every grant, every program, every line item.

That gap is where abuse flourishes.

And once it does, it is often shielded by appeals to compassion, by political loyalty, and by accusations designed to shut down scrutiny before it begins.

In Minnesota, those defenses appear to be weakening. There’s probably no single cause, but I know what it isn’t. It isn’t because the system suddenly became vigilant. This story started getting attention because the scale of the abuse became impossible to ignore.

Walz himself acknowledged the stakes.

WALZ: We cannot effectively deliver programs and services if we can’t earn the public’s trust … A single taxpayer dollar wasted on fraud should be intolerable. And the buck does stop with me.

Now that’s actually true.

But it also points to the heart of the problem.

Modern government does far more than fund police, courts, and national defense. It redistributes vast sums of money through thousands of programs—often with limited, delayed, or purely bureaucratic oversight.

To take a tax dollar is to make an implicit promise: the government can spend this better than the citizen can.

When that promise is broken fraudulently, it is not a victimless crime.

It is a crime against everybody.

Against families who pay in good faith.

Against communities meant to be served.

And against honest organizations now viewed with suspicion because others cheated.

These scandals usually produce an initial surge of outrage—then fade.

If that happens again, the lesson will be unmistakable: fraud works.

Unless it doesn’t. We have an opportunity to see something rare in political life: sustained attention, real monitoring, real penalties, real reform.

Integrity might finally catch up to compassion.

Governor Walz’s decision to step aside does not resolve Minnesota’s crisis. But it does suggest this one cannot simply be managed away.

And that, at least, is a start. 

For WORLD, I’m Hunter Baker.

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