Stauber Introduces FRAUD Act to Crack Down on State Leaders Who Fail to Report Taxpayer Theft

July 2, 2026
Press Release

WASHINGTON, D.C. – This week, Congressman Pete Stauber (MN-08) introduced the Federal Responsibility and Accountability for Unchecked Dereliction (FRAUD) Act to strengthen accountability when state officials become aware of significant fraud involving federal funds. This legislation comes on the heels of the House Committee on Oversight and Government Reform’s bombshell report finding that high-level Minnesota state officials – including Governor Tim Walz and Attorney General Keith Ellison – knew of widespread fraud in Minnesota since 2019 and repeatedly failed to act. 

“Billions of taxpayer dollars were stolen in Minnesota because state leaders like Tim Walz looked the other way and even threatened to retaliate against state whistleblowers who tried to sound the alarm," said Congressman Pete Stauber. "To this day, none of these so-called leaders have been held accountable for this stunning failure of public trust. My FRAUD Act will change that by ensuring any official who knowingly fails to report fraud faces criminal prosecution and is never able to oversee the distribution of federal funds ever again. Turning a blind eye to fraud is just as bad as committing it, and it’s time the consequences reflect that.”

Congressman Stauber was joined by his Minnesota Republican delegation colleagues in introducing this legislation. 

“Fraud is wrong, plain and simple. Unfortunately, we have state leaders who ignored and enabled the problem, resulting in billions of dollars in fraud," said Congressman Tom Emmer. “The House Oversight Committee confirmed what we all knew: Governor Walz and other state officials were aware of the fraud and yet did nothing. The FRAUD Act will ensure accountability and protect taxpayer funds.”

“In Minnesota, and across the country, a state’s highest elected officials – those responsible for safeguarding taxpayer dollars – have an obligation to take action against fraud when it’s reported," said Congressman Brad Finstad. "I am committed to bringing accountability to Gov. Walz and Attorney General Ellison for ignoring the rampant fraud that’s robbed our fellow Minnesotans of billions of dollars, and am proud to support the FRAUD Act to restore transparency and accountability in federally funded, state administrated programs.” 

"The scale of fraud we saw in Minnesota is flat-out unacceptable, and it’s infuriating that Governor Walz and other state leaders looked the other way while billions were stolen," said Congresswoman Michelle Fischbach. "They need to be held accountable. We need the FRAUD Act in place so the next Minnesota governor, or any future leader, will never be allowed to let something like this happen again. Taxpayers deserve to know their hard-earned money is actually being protected."

Specifically, the FRAUD Act will do the following: 

  • Require a Governor, state agency head, or State Inspector General who receives a credible fraud warning involving federal funds to report it to the FBI within 180 days. 
  • Require states to annually certify compliance with these reporting requirements in order to remain eligible for certain federal funding. 
  • Impose criminal penalties on covered officials who knowingly fail to report fraud or obstruct federal, state, or inspector general investigations. 
  • Allow federal agencies to prohibit or debar convicted officials from overseeing the distribution of federal funds. 

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