The United States Department of Agriculture has ordered the immediate suspension of more than $129.18 million in federal funding to the State of Minnesota and the City of Minneapolis, citing allegations of “widespread and systemic fraud” and failures in safeguarding taxpayer funds.
In a letter dated January 9, 2026, addressed to Minnesota Governor Tim Walz and Minneapolis Mayor Jacob Frey, USDA Secretary Brooke L. Rollins said the decision followed years of alleged fraud and mismanagement in federal benefit programmes administered in the state.
“It is my responsibility as Secretary of Agriculture to ensure sound stewardship of taxpayer dollars by eliminating fraud, waste and abuse in all programs funded by the U.S. Department of Agriculture,” Rollins wrote in the letter, which she shared on her X account (formerly Twitter) on Friday.
Rollins accused Minnesota and Minneapolis authorities of lacking sufficient oversight and accountability in the administration of federal resources, citing several high-profile fraud cases that emerged during the administrations of Walz and Frey.
She identified the Feeding Our Future scandal as the most prominent case, noting that a Minneapolis-based non-profit allegedly defrauded U.S. taxpayers of nearly $250 million in federal funds meant to feed children under USDA programmes.
“A federal prosecutor in Minnesota called it ‘a staggering, industrial-scale fraud,’” Rollins wrote, adding that the scheme involved USDA-funded programmes such as the Child and Adult Care Food Program and the Summer Food Service Program.
According to the letter, 78 defendants had been charged as of late November 2025 in what the U.S. Department of Justice described as “the largest COVID-19 fraud scheme in the country.”
Rollins also referenced other alleged fraud cases in Minnesota, including abuse of the Small Business Administration’s Paycheck Protection Program and schemes involving housing assistance. She said some state officials had dismissed fraud concerns as “racist,” a claim she criticised as an attempt to deflect scrutiny.
“While the full extent of fraud in Minnesota is not yet known, it is clear that, under your leadership or lack thereof, fraudsters can take advantage of federal funds and the American taxpayer with impunity,” she wrote.
The Agriculture Secretary further alleged that the Walz administration resisted federal efforts to tighten oversight of the Supplemental Nutrition Assistance Program (SNAP). She said Minnesota had asked courts to block USDA directives to recertify the state’s SNAP recipients and had repeatedly submitted incorrect SNAP participation data to the federal government.
Rollins said the suspension reflects the administration’s zero-tolerance stance on fraud, waste and abuse.
“Effective immediately, I am suspending payments on all active awards and any future awards from USDA to the State of Minnesota and the City of Minneapolis, currently totaling over $129.18 million,” she stated.
Under the directive, state and city authorities have 30 days to submit detailed justifications for all federal expenditures dating back to January 20, 2025. Rollins warned that failure to comply would result in the continued suspension of funds.
“Going forward, all transactions on awards to the State of Minnesota or the City of Minneapolis will require such payment justification. If those payment justifications are not received, awards will remain suspended,” she said.
