Does the alleged Feeding Our Future scandal cast doubt on new spending plans?
Not one person has been arrested or charged in the scandal as of yet. But the seriousness of the allegations is complicating efforts to launch ambitious new spending programs in Minnesota.
The alleged scandal involves two networks of nonprofits, who collectively have received nearly a half-billion dollars in federal COVID relief money to provide free meals to low-income Minnesota children. The FBI alleges that “tens of millions” of that money was diverted for the personal use of the nonprofits’ operators.
For certain interests at the state capitol, the timing could not be worse. The state legislature reconvenes next week for its 2022 session and the top item on the agenda is what to do with the projected $7.7 billion budget surplus. Every day, another press conference is being held to unveil another ambitious, multi-billion dollar spending proposal. Governor Walz’s spending plans include, of all things, an additional $183 million for free meals for school children. (Update: Minnesota charities are concerned that the alleged scandal reflects badly on the entire nonprofit sector.)
What could go wrong? Well, as one example, Sahan Journal notes that one nonprofit named in the current scandal was claiming to be feeding more than a third of the children in the Minnesotan city of Willmar, singlehandedly, every day. Local political commentator Blois Olson writes this take in his daily Morning Take newsletter,
It’s commendable that the Department of Education raised questions and tried to stop payments to Feeding our Future, however, the scale of payments and claims should have been stopped by someone before they got to a level that is head scratching. As the Governor and others keep advocating for more investment and money in public programs, there must be some mechanisms to ensure better oversight or at least a realistic census of what’s possible in people served. A recognition that post COVID, the supports can’t remain at COVID levels. The list of supports in childcare, housing, food quickly devalues work and self-reliance. Those elements are critical for our economy to recover. Trust in a system of safety net programs is deeply damaged by this investigation, and the lack of comment by elected officials who supported the organization is inexcusable. Blois Olson, Morning Take
The alleged Feeding Our Future scandal is the perfect illustration of this principal. The federal program involved was an outgrowth of the once modest and widely supported “free and reduced price” school lunch program, which dates back to the 1940’s,
Federal data show that, pre-pandemic (2019), most U.S. public school children were eligible for the free and reduced lunch program, originally designed to serve only children from the lowest-income households. Some 36.4 percent of Minnesota’s schoolchildren were eligible in 2019, well below the national average of 52.4 percent.
Minnesota was tied at 36.4 percent with the states of Vermont and Wyoming. Only four states (DE, NH, ND, and UT) had lower shares. The national average of 52.4 percent in 2019 was up considerably from the 2001 average of 38.3, as eligibility standards relaxed over the years.
During the pandemic, for all practical purposes, all children in America were eligible for free lunches. Now that the end of the pandemic is in sight, there are efforts to resist the return of eligibility requirements.
Other federal COVID relief programs have been subject to widespread fraud. A recent column by Kyle Smith of the New York Post drew national attention to an effort by the large law firm Arnold & Porter. The firm is tracking fraud against the CARES Act relief program. Smith picks out the most colorful examples and includes pictures.
The Arnold & Porter database lists four cases in Minnesota, totaling $3.8 million.
When well-intentioned government programs grow out of control, especially during “emergencies,” the usual due-diligence and oversight go out the window. Minnesota should tread cautiously before throwing good money after bad.