Shocking Blue State Betrayal: $81 Billion Gone—Who’s Watching the Money?

Paul Riverbank, 12/30/2025Blue states Minnesota and California face massive fraud scandals, with billions in taxpayer funds lost to scams and waste. The crisis exposes critical oversight failures, fueling public outcry and demands for accountability—and challenging the nation’s trust in government stewardship of public money.

Let’s start with Minnesota. Over $9 billion—yes, that’s billion, with a ‘b’—has vanished. Not trickled away, not misfiled, but seemingly siphoned off in scams authorities are still scrambling to untangle. It’s wild, bordering on the cinematic: child care and health care centers, supposedly serving needy families, running operations on paper while their real-world locations stand empty or unlocked for nobody in particular. Walk down certain blocks in Minneapolis and you might pass places like Mako Childcare or Mini Childcare Center, both of which raked in enormous sums, yet, according to investigator Nick Shirley, had all the charm of abandoned storefronts. “No lights, no laughter, but plenty of cash flow,” Shirley told me after trudging through these buildings, bounced out when his questions got too close to the point.

Here’s the kicker: it took independent digging to draw this into daylight. Years of routine state audits seemed to miss what was hiding in plain sight—multiple shadowy “healthcare” outfits sharing cramped office suites, funneling tens of millions apiece, no sign of actual services rendered. Only when outside pressure mounted did politicians take notice. Representative Tom Emmer, so furious he sent a letter to Governor Walz comparing the losses to the GDP of Somalia, didn’t mince words. “The amount stolen on your watch... is a national disgrace,” he wrote, demanding thorough accounting and quick, visible action.

Minnesota isn’t alone. Down the coast, California’s troubles dwarf even those mind-bending figures. A recent audit there unearthed slips, errors, and outright fraud that add up to a stomach-churning $72 billion. The errors weren’t tucked away in obscure line items, either—food benefit blunders and project overruns accounted for a staggering share. Even lawmakers like Ro Khanna, a California Democrat, stopped short of spin: “The scale in Sacramento is staggering. We need real change, now.” In both states, the issue wasn’t simply that money went missing; it’s that the systems designed to prevent this seemed asleep—or willfully looking the other way.

There’s a pattern here that’s difficult to ignore. Large budgets, ever-expanding social service programs—both states pride themselves on it. But with that growth, the guardrails didn’t keep up. Critics, not just political opponents but watchdogs and even some insiders, frame it bluntly: “Nobody’s watching the pot of taxpayer gold.” And it isn’t only major scandals that get under people’s skin. When funds are handed out for, say, nonprofit “anti-racist PowerPoint presentations,” it begs the question—is this good use of public money, or just another soft spot in oversight? Technically, it’s not fraud, but in times like these, definitions sometimes feel beside the point.

Contrast all this with states like Florida and Texas, which don’t spend nearly as much per resident. Some point to these states’ “lean governance”—Florida, for example, spends thousands less per person compared to California—and suggest that tighter budgets act as a built-in safeguard. There’s more—populations are actually growing in those red territories, with a perception, fair or not, that they’re better-run. The vote-with-your-feet phenomenon isn’t just a slogan; people are actually moving, and some cite government reliability as their reason.

Unsurprisingly, backlash is brewing. Taxpayers, stung by headlines, demand to know: where’s the accountability? Federal agencies have started probing, hinting at possible cuts to Minnesota’s funding if things don’t shape up. Governors, mayors, even federal departments like the Treasury and Transportation have fired off warnings. The issue reached as far as Washington: during the Trump administration, programs linked to suspected fraud saw the axe, including rolling back Temporary Protected Status for certain migrants—a move with its own politics but undeniably tied to broader concerns over public trust.

And still, not everyone is focused on government. Local media, accused of dragging their feet, shares some of the blame, at least according to frustrated residents and a handful of reformers. For years, investigative pieces trickled out only sporadically while the heist continued unimpeded.

So, what comes next? Anyone who’s spent time watching political scandals knows there’s rarely a neat ending. Israel Durham, a hard-nosed Philadelphia boss from another era, once quipped that if all the dirt came out in a hurry, the public would be so shocked, they’d just give up. Maybe he was right, maybe not; this time, at least, the outrage feels persistent. Audits keep rolling in, politicians keep promising reforms, and that elusive thing—confidence in government—remains very much up for grabs.

In the end, this isn’t just a Minnesota or California story. It’s about a basic promise in a democracy: that those entrusted with public funds keep their hands clean, or at least, get caught when they don't. For other states and voters everywhere, the message is clear—when the system breaks down, the only thing more dangerous than fraud is the sense it can’t be fixed. And right now, no one is ready to throw in the towel just yet.

Scandals come and go in American politics, but every so often, a story erupts that slices through the noise — not because of its novelty, but because of its sheer size. Lately, the spotlight has landed on Minnesota and California, two states with reputations for big-hearted spending and deep-blue politics. What’s different this time isn’t just another bureaucratic misstep; it’s the mind-boggling figures attached to government fraud and waste, numbers so large they’re giving even the most jaded taxpayer pause.Let’s start with Minnesota. Over $9 billion—yes, that’s billion, with a ‘b’—has vanished. Not trickled away, not misfiled, but seemingly siphoned off in scams authorities are still scrambling to untangle. It’s wild, bordering on the cinematic: child care and health care centers, supposedly serving needy families, running operations on paper while their real-world locations stand empty or unlocked for nobody in particular. Walk down certain blocks in Minneapolis and you might pass places like Mako Childcare or Mini Childcare Center, both of which raked in enormous sums, yet, according to investigator Nick Shirley, had all the charm of abandoned storefronts. “No lights, no laughter, but plenty of cash flow,” Shirley told me after trudging through these buildings, bounced out when his questions got too close to the point.Here’s the kicker: it took independent digging to draw this into daylight. Years of routine state audits seemed to miss what was hiding in plain sight—multiple shadowy “healthcare” outfits sharing cramped office suites, funneling tens of millions apiece, no sign of actual services rendered. Only when outside pressure mounted did politicians take notice. Representative Tom Emmer, so furious he sent a letter to Governor Walz comparing the losses to the GDP of Somalia, didn’t mince words. “The amount stolen on your watch... is a national disgrace,” he wrote, demanding thorough accounting and quick, visible action.Minnesota isn’t alone. Down the coast, California’s troubles dwarf even those mind-bending figures. A recent audit there unearthed slips, errors, and outright fraud that add up to a stomach-churning $72 billion. The errors weren’t tucked away in obscure line items, either—food benefit blunders and project overruns accounted for a staggering share. Even lawmakers like Ro Khanna, a California Democrat, stopped short of spin: “The scale in Sacramento is staggering. We need real change, now.” In both states, the issue wasn’t simply that money went missing; it’s that the systems designed to prevent this seemed asleep—or willfully looking the other way.There’s a pattern here that’s difficult to ignore. Large budgets, ever-expanding social service programs—both states pride themselves on it. But with that growth, the guardrails didn’t keep up. Critics, not just political opponents but watchdogs and even some insiders, frame it bluntly: “Nobody’s watching the pot of taxpayer gold.” And it isn’t only major scandals that get under people’s skin. When funds are handed out for, say, nonprofit “anti-racist PowerPoint presentations,” it begs the question—is this good use of public money, or just another soft spot in oversight? Technically, it’s not fraud, but in times like these, definitions sometimes feel beside the point.Contrast all this with states like Florida and Texas, which don’t spend nearly as much per resident. Some point to these states’ “lean governance”—Florida, for example, spends thousands less per person compared to California—and suggest that tighter budgets act as a built-in safeguard. There’s more—populations are actually growing in those red territories, with a perception, fair or not, that they’re better-run. The vote-with-your-feet phenomenon isn’t just a slogan; people are actually moving, and some cite government reliability as their reason.Unsurprisingly, backlash is brewing. Taxpayers, stung by headlines, demand to know: where’s the accountability? Federal agencies have started probing, hinting at possible cuts to Minnesota’s funding if things don’t shape up. Governors, mayors, even federal departments like the Treasury and Transportation have fired off warnings. The issue reached as far as Washington: during the Trump administration, programs linked to suspected fraud saw the axe, including rolling back Temporary Protected Status for certain migrants—a move with its own politics but undeniably tied to broader concerns over public trust.And still, not everyone is focused on government. Local media, accused of dragging their feet, shares some of the blame, at least according to frustrated residents and a handful of reformers. For years, investigative pieces trickled out only sporadically while the heist continued unimpeded.So, what comes next? Anyone who’s spent time watching political scandals knows there’s rarely a neat ending. Israel Durham, a hard-nosed Philadelphia boss from another era, once quipped that if all the dirt came out in a hurry, the public would be so shocked, they’d just give up. Maybe he was right, maybe not; this time, at least, the outrage feels persistent. Audits keep rolling in, politicians keep promising reforms, and that elusive thing—confidence in government—remains very much up for grabs.In the end, this isn’t just a Minnesota or California story. It’s about a basic promise in a democracy: that those entrusted with public funds keep their hands clean, or at least, get caught when they don't. For other states and voters everywhere, the message is clear—when the system breaks down, the only thing more dangerous than fraud is the sense it can’t be fixed. And right now, no one is ready to throw in the towel just yet.