The Democrats’ Fraud Problem

Ignoring it will not make it go away.

The specter of welfare fraud haunts the Democrats once again. Concerns about abuse of generous government programs helped power the rise of Reagan-era conservatism in the 1970s and ’80s. Could the criminal abuse of hundreds of millions of dollars in welfare costs in Minnesota, which has brought down the state’s Democratic governor, Tim Walz, be leveraged to similar broad political effect today?

Recall that Democrats’ standard approach to warnings about welfare fraud during the rise of Ronald Reagan was to minimize the problem and characterize the issue as exaggerated and racially charged. Democrats had fallen into a trap: They responded to a serious issue by standing by their ideological priors to placate their base.

Until Bill Clinton and his invocation of Americans who “work hard and play by the rules” finally allowed the Democrats to escape from the Republicans’ fraud trap, the Democrats spent years in the political wilderness.

Early signs suggest the Democrats are embarking on a similar trajectory.

Before announcing that he would no longer seek re-election, Walz admitted that some fraud happened on his watch but deflected, saying that Republicans are appealing to racism, xenophobia, and the ever-reliable bogeyman of “white supremacy.”

Walz’s departure indicates this is no more effective than Democrats’ response to welfare fraud accusations in the Reagan era. Americans detest people getting something for nothing—the very essence of fraud. As the party that typically wants more and more generous social programs, Democrats have a special responsibility to ensure that these programs are clean as a whistle and reward only those who “work hard and play by the rules.”

Democrats are also the party that positions itself as the friend of immigrants and immigration. As such, they have a special responsibility to ensure that those admitted to the country assimilate, follow the rules and contribute—rather than take—from the community. The Center for Immigration Studies estimates that 81 percent of Somali-headed families in Minnesota use at least one welfare program (vs. 21 percent of native-headed households).

Therefore, the first response of Democrats to instances like the Minnesota fraud findings should not be to criticize the other side for attacking them and wave the bloody shirt of racism against President Trump but rather to stress the seriousness of the problem and how it will not be tolerated. The rules apply to everyone, including Somali immigrants, and will be rigorously enforced. No more will we tolerate lax oversight of a community because of worries about accusations of racism or the withholding of political support.

As noted in the New York Times article on the Minnesota fraud:

In 2020, Minnesota Department of Education officials who administered the program became overwhelmed by the number of applicants seeking to register new feeding sites and began raising questions about the plausibility of some invoices.

Feeding Our Future, the nonprofit group that was the largest provider in the pandemic program, responded with a warning. In an email, the group told the state agency that failing to promptly approve new applicants from “minority-owned businesses” would result in a lawsuit featuring accusations of racism that would be “sprawled across the news.”…

Kayseh Magan, a Somali American who formerly worked as a fraud investigator for the Minnesota attorney general’s office, said elected officials in the state—and particularly those who were part of the state’s Democratic-led administration—were reluctant to take more assertive action in response to allegations in the Somali community.

“There is a perception that forcefully tackling this issue might cause political backlash among the Somali community, which is a core voting bloc” for Democrats, said Mr. Magan, who is among the few prominent figures in the Somali community to speak about the fraud...

Ahmed Samatar, a professor at Macalester College who is a leading expert in Somali studies, said a reckoning over the fraud and its consequences for Minnesota was overdue.

“American society and the denizens of the state of Minnesota have been extremely good to Somalis,” said Dr. Samatar, who is Somali American.

Dr. Samatar said that Somali refugees who came to the United States after their country’s civil war were raised in a culture in which stealing from the country’s dysfunctional and corrupt government was widespread.

Minnesota, he said, proved susceptible to rampant fraud because it is “so tolerant, so open and so geared toward keeping an eye on the weak.”

This dynamic is as clear as it is unacceptable. It must be stopped unequivocally and without apology to Democratic-supporting groups and those whose cry “racism” at the drop of a hat.

Failing that, Democrats are likely to once again find themselves in a Republican fraud trap. As more examples of fraud come to light, both in Minnesota and elsewhere (up to $233 billion to $521 billion annually across the country according to GAO), Democrats will find themselves continually backfooted by Republican accusations of negligence if not outright complicity. Continued invocations of racism and xenophobia by Democrats will serve only to reinforce the impression that Democrats are primarily motivated by identitarian concerns and their ideological commitment to large government programs, rather than effective governance—which, of course, is exactly what Republicans want.

The latter point is crucial, fraud is merely a part, albeit a glaring part, of the overall problem of poor Democratic governance. As I have previously remarked, you’ve got to run the government well and get things done voters care about if you want voters to stick with you. And that’s where Democrats have been running into problems—big problems. Commonly, ideological commitments and interest group ties have outweighed the simple, inescapable realities of good governance. Voters just don’t care about the supposedly noble motivations that lead Democrats to ignore these realities.

Think about it. If you wanted safe streets and public order would your first impulse be to turn to…the Democrats? Or if you wanted a secure, actually-enforced border? How about efficient, effective delivery of public services? Or rapid completion of public projects and infrastructure? Or nonideological public administration?

I don’t think on any of these fronts the reaction of a typical voter would be: “The Democrats! Of course, I need Democrats to do all these things because they’re so good at them!” On the contrary, it seems like over time Democrats—both nationally and in many localities where they dominate (like Minneapolis!)—have become worse and worse at delivering in these areas. That’s a huge problem because why should voters take Democratic plans to improve their lives seriously if Democrats persist in running government so poorly? Democratic governance is their advertising and that advertising makes the Democratic “product” look pretty bad. So voters don’t want to buy it.

Alicia Nieves, a former Texas Democratic operative, puts her finger on a key dynamic crippling Democrats’ governance practices in an excellent Compact article, “Why the Democratic Party Can’t Moderate.” She points out:

[P]rogressive groups have come to increasingly influence and shape the direction of Democratic governance at the local and state level in ways that are now more visible to voters than any action by the party in Washington.

The Democratic Party cannot moderate as long as progressive groups are able to exert control over the state and local party, pushing out moderates like Shawn Thierry [Texas]and Jason Pizzo [Florida]. Progressive policies have led to rising crime, uncontrolled spending, recurring fiscal shortfalls, higher taxes, and visible mismanagement. These outcomes do not remain siloed in one particular Democratic-controlled city or state. Instead, they are synthesized in the minds of voters as reflections of Democratic governance as a whole.

Exactly. The only way around the dreadful image of Democratic governance is through: by directly attacking the dynamic that leads to dysfunctional governance outcomes. However, the revealed preference of most Democrats these days is not to do this. Here are several ways Democrats are avoiding dealing with this problem.

First, Democrats are inclined to dismiss the potential political effects of the fraud and general governance issue because of their recent success in wielding affordability concerns against Republicans. The theory is that voters are so dissatisfied with their personal financial situations and the failure of the Trump administration to improve them that people won’t really care about a problem like program fraud. But people who are financially pressed are especially likely to be incensed at others gaming the system. This is a longstanding feature of American politics, and there is little reason to believe it doesn’t apply today.

Second, Democrats hope to turn the tables on Republicans by bringing up examples like the Mississippi welfare fraud scandal and others, in which more Republicans than Democrats were implicated. That won’t change the fact that voters identify Democrats as the party of welfare programs and react negatively to abuse on Democrats’ watch. “What about…?” is unlikely to work in this case.

Third, Democrats deflect this concern by pointing to the recent success of unapologetic progressives like Zohran Mamdani, who wants to protect immigrants and expand government programs. But his success, and the political dynamic it is sparking, will make it more difficult to deal with the fraud issue.

Mamdani in his victory speech when elected mayor of New York City declared that “there is no problem too large for government to solve and no concern too small for it to care about.” While acknowledging in his inauguration speech that mediocrity has become accepted in the public sector and excellence is the exception, he denounced “those who insist that the era of big government is over.” He promised to “govern as a democratic socialist” and to “replace the frigidity of rugged individualism with the warmth of collectivism.”

One can scarcely imagine an approach less likely to resonate with the average American, particularly the average working-class American, who tends to be suspicious of big government, hostile to collectivism and completely OK with rugged individualism. It’s unlikely to convince such voters that Democrats will eliminate fraud in government programs and ensure that only those who work hard and play by the rules benefit.

Of course, not everyone in the Democratic Party shares Mamdani’s views or those of other progressives. But the influence of their political strain has only grown during the first year of Trump’s new term. This will act as a check on any Democrat hoping to escape the fraud trap, because attempting to do so will probably generate the same accusations of racism and xenophobia from progressives that are currently directed toward Republicans.

Finally and overarchingly, Democrats are riding the sugar high of the thermostatic reactions against Trump administration excesses. Why worry about fraud and incompetent governance when you can mobilize the masses against Trump and his outrages? Nowhere is this more obvious than in Minnesota itself where the ICE raids and accompanying street resistance, including two tragic deaths, has displaced the massive fraud scandal as a central concern for Democrats. ICE out! We’ll worry about fraud later.

These are all excuses and egregiously short-sighted political assessments, mixed with the Democrats’ now-standard cowardly approach to coalition management. The fact remains that the fraud scandal in Minnesota should serve as a wake-up call for Democrats that the issue and its association with wide-ranging Democratic governance failures could hurt their prospects for years to come. But the internal dynamics of their party may not allow the Democrats to mount an effective response. There is no Clinton-like figure out there so far to lead the party in the right direction. That could be a problem—a big problem.

Editor’s note: this is an extended version of an article that originally appeared in The New York Times on January 7, 2026.