Suddenly, Democrats discover high energy costs
Minnesota’s only functioning legislative chamber, the state Senate, held a hearing in its Energy committee this afternoon, on a bill to provide energy cost assistance to low-income households.
S.F. 486, introduced by Sen. Scott Dibble (DFL-Minneapolis), would provide an unspecified $ amount of state tax dollars to supplement the Federal Low Income Home Energy Assistance Program (LIHEAP).
It’s yet another federal welfare program administered by a state agency, in this instance, the state Department of Commerce (DOC). Each year, DOC distributes roughly $125 million in benefits, according to testimony at today’s hearing. From experience, the demand for these grants, which usually amount to a few hundred dollars a year per household, exceeds the supply.
The benefits are paid directly to local utilities and energy providers on behalf of participating households, which reduces the opportunities for retail-level program fraud.
Most of the annual aid applications are processed by local nonprofits, under the banner of “community action” agencies. You will not be shocked by this headline from 2017:
Bill Davis gets 4 years for stealing from Mpls. nonprofit he ran
The nonprofit was the now-defunct Community Action of Minneapolis. MPR News reported on his four-year federal prison sentence:
Davis had pleaded guilty in June to taking cash from the nonprofit to buy and deck out a car, to travel to the Bahamas with his girlfriend, to travel to an out-of-town wedding and to attend a Democratic Party function in Puerto Rico.
Davis’ son, Jordan Davis, received a two-year prison sentence for his role in the scam. MPR News on the nonprofit’s business:
The public money that flowed to Community Action of Minneapolis was supposed to go to help the city’s low-income residents with heating costs, career assistance and other needed services.
The scandal involved a mere $387,000 in stolen funds, an amount too low to draw even an indictment in today’s fraud-all-the-way-down climate. But it was a big deal at the time.
An MPR News report on the Davis case back 2014:
Commerce analysts had grown increasingly alarmed that money meant to aid the poor was going to people who were not eligible to receive it. Those staffers, who requested anonymity because they aren’t authorized to speak, say the red flags raised in 2011 were the first alerting [Commerce Commissioner Mike] Rothman that Davis, his DFL political ally, was mismanaging money from the energy assistance fund run by Commerce.
The scandal, allowed to fester for more than three years at Community Action of Minneapolis even as the money kept flowing, touched on a number of prominent Democrats. At the time, then-Congressman Keith Ellison (now state Attorney General), then-state Sen. Jeff Hayden and several Minneapolis city council members served as members of the nonprofit’s board. The scandal reached all the way up to then-Governor Mark Dayton. Commissioner Rothman himself later made a failed bid to become state Attorney General (losing to Ellison).
But with the guilty pleas from the Davises, father and son, the scandal vanished.
In 2025, Sen. Dibble comes along and wants to throw another $12 to $15 million in state tax dollars at this same network, hopefully now fraud-free.
But Dibble’s bill, as was pointed out by Republican committee lead Sen. Andrew Mathews (R-27-Princeton), allocates a whopping 17.5 percent of the money for overhead and other goodies. An item from the bill:
up to five percent may be used to reimburse the reasonable costs incurred…by organizations the department has contracted with to provide outreach and assistance to households to complete grant applications
“Outreach and assistance.” Under questioning by Sen. Mathews, Department of Commerce officials were unable to explain what would be done with this money or who would receive it.
No action was taken on the bill today, but it’s worth noting that this was the first Energy committee hearing conducted in 2025 since senate Democrats unilaterally revoked the much-praised power-sharing agreement with Republicans in the chamber.
Before this week, the committee membership included 14 Senators, equally divided between the parties 7-7. Sen. Mathews served as co-chair, along with his Democratic counterpart.
Now the committee has shrunk down to just 11 members, with Democrats holding a 6-5 majority.
Before the Democratic takeover, committee Republicans had been busy bringing up bills that would roll back some of the onerous mandates put on energy suppliers when Democrats held monopoly power in Minnesota. As Republicans pointed out today, the need for more consumer energy subsidies, like SF 486, is fueled by the dramatic rise in energy prices, driven by state mandates like the 100 percent renewable energy law.
The brief era of bipartisan problem-solving may have come to an abrupt end.