Minnesota Senate primary tests Democrats on $300M fraud scandal

Minnesota's Democratic Senate primary pits Rep. Angie Craig against Lt. Gov. Peggy Flanagan over a welfare fraud scandal with losses estimated at $300 million to billions, testing the party's center after Michigan's left-wing upset.

"It pisses me off that you completely put all of the responsibility on the governor of Minnesota when you were the No. 2 elected leader in Minnesota during that period of time," Craig said at a recent debate, warning that "Republicans are going to have a field day with this with you."

The fraud, uncovered during Flanagan's tenure alongside Gov. Tim Walz, prompted Walz to abandon his bid for a third term. Total losses from fraudulent meal, housing and Medicaid programs remain unknown, with estimates ranging from $300 million to billions. The scandal echoes the Michigan primary last week, where Abdul El-Sayed, a firebrand for the socialist-leaning left, narrowly defeated Rep. Haley Stevens despite AIPAC spending over $30 million to help her.

The winner faces former sports broadcaster Michele Tafoya, the GOP front-runner, in November. The nonpartisan Cook Political Report rates the race "likely Democratic," but the GOP's Senate campaign arm views Minnesota among four pickup opportunities as it seeks to retain its majority.

Flanagan has tried to play down her role in the scandal, saying at the debate that "the governor has taken the lead" in addressing fraud fallout. Craig, who represents a swing district she flipped in 2018, has argued Democrats should rebuild their standing by nominating pragmatic candidates who can win competitive seats.

Attacks against Flanagan have appeared in ads run by a group backing Craig. "When Tim Walz trusted Peggy Flanagan to take the lead on housing programs, Flanagan failed," one ad claims. "She missed the fraud. Her work was called a dereliction of duty."

A report released early this year by Tim O'Malley, a former Minnesota Bureau of Criminal Apprehension superintendent and FBI agent whom Walz selected as the state's first director of program integrity, found that a "too trusting mindset" and a system biased toward facilitating payments contributed to the fraud. The swindling, perpetrated mostly by Somali immigrants, has jarred many longtime residents who had long clung to an unofficial Minnesota motto: Our taxes may be high, but we have good government and services.

Former Minnesota Gov. Arne Carlson, a Republican who served as state auditor for 12 years, said it was stunning how many officials missed major warning signs or looked the other way. "You've got to have a culture that is protective of the dollar, and that culture had long disappeared," he said.

Flanagan, who supports Medicare for All and taxpayer-subsidized child care, has argued Craig has vulnerabilities on immigration because she joined Republicans last year to vote for the Laken Riley Act, which requires detention of migrants in the country illegally who are arrested for nonviolent crimes. Craig has said she is opposed to President Donald Trump's "version of ICE" but warned Democrats could alienate independent voters if they go too far.

Michigan's one-point upset looms over Minnesota

The Minnesota contest is one of six state primaries Tuesday, including Wisconsin, where Democratic Socialists of America member Francesca Hong, a 37-year-old state representative and part-time bartender, has led in the polls for governor. Republicans have spent millions on the race because they believe Hong would be easier to beat in November, when the winner faces Republican Rep. Tom Tiffany in a state Trump won in 2024.

In Michigan last week, El-Sayed's narrow victory over Stevens — by less than one point after polls suggested a double-digit blowout — showed the left's momentum even as AIPAC poured over $30 million into the race. Minnesota's outcome will signal whether that wave extends to the upper Midwest or whether the center can hold.

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