Minnesota Gov. Tim Walz removed Shireen Gandhi from the top job at the state Department of Human Services on Monday, exactly one day before she was scheduled to face an official confirmation hearing that critics had described as a "gauntlet." The move came after months of mounting pressure over a fraud scandal involving hundreds of millions of dollars in social services funds, Fox News Digital reported.
Gandhi did not leave state government entirely. Walz returned her to a deputy commissioner role within the same agency she had been running, a decision that drew immediate fire from Republican lawmakers who called it an insult to Minnesota taxpayers.
The timing tells the story. Rather than let Gandhi sit before legislators and answer questions under oath about how a program originally budgeted at under $3 million ballooned into more than $100 million in disbursements, the "vast majority" of which federal officials considered fraudulent, the governor pulled her out of the chair the night before.
At the center of the controversy is Minnesota's Housing Stabilization Services program, or HSS. The Department of Human Services shut HSS down in October after it became clear the program had been exploited on a massive scale. A Minnesota House probe found that providers used the names of eligible beneficiaries to obtain funds through inflated or fake reimbursement claims.
HSS disbursements topped $100 million in 2024 alone. The program had originally been estimated to cost less than $3 million. Federal officials determined that the vast majority of those 2024 payments were fraudulent.
The fraud extended beyond housing services. Fox News Digital noted that businesses connected to a network in Minneapolis were taking state funds without evidence that actual childcare or other services were ever provided. The state auditor reportedly raised concerns about fabricated or backdated documents as well.
This was not a case of a few bad actors slipping through the cracks. It was a systemic failure, one that unfolded on Walz's watch, inside an agency he oversaw, under a commissioner he personally selected.
Gandhi had served as acting commissioner since early 2025. Walz tapped her as the official head of the department in February. He previously called the DHS commissioner role the "hardest job" in the state and praised Gandhi for staying on rather than retiring.
But Gandhi herself acknowledged problems. In an interview with Minneapolis' NBC affiliate, she admitted the department had not acted fast enough to address the HSS scandal. That concession did not save her job, though it did not cost her a state paycheck, either.
After her removal, Gandhi issued a statement highlighting what she described as her record of work. She pointed to her efforts in "aggressive and proactive work to protect Minnesota's Medicaid program for Minnesota's most vulnerable people, to detect and prevent fraud, to prevent federal cuts to funding, and to improve internal culture at the agency."
The claim of aggressive fraud detection sits uneasily beside a program that hemorrhaged over $100 million before anyone shut it off. It also sits uneasily beside reporting from the Washington Examiner, cited by Fox News Digital, that the department created a fraud "fact-check" website that at times tried to dispute the very existence of a fraud problem in the state.
A former DHS investigator has separately alleged that state officials suppressed child care fraud findings before Walz dissolved the investigative unit, raising further questions about whether the administration's posture was detection or denial.
The governor's own characterization of Monday's move strained credulity. Walz said his administration is "focused on stability and results." He went further in a separate statement:
"Today, we're building on our success by putting an even stronger structure in place; adding leadership, improving oversight, and ensuring these programs are managed with the discipline and accountability Minnesotans expect. That's how we protect care and deliver for families."
"Building on our success" is a remarkable phrase to deploy in the middle of a scandal involving hundreds of millions of dollars in stolen public funds. The success, such as it was, consisted of eventually shutting down a program that should never have been allowed to grow unchecked in the first place.
John Connolly, the department's deputy administrator in charge of Medicaid, will fill Gandhi's old role. Walz offered no detailed explanation beyond his public statements for why he chose to remove Gandhi the day before her hearing rather than let the confirmation process play out.
Walz also used the moment to shift blame to Washington. He accused Dr. Mehmet Oz, the federal Medicaid administrator, and President Donald Trump of playing "politics with Minnesotans' health care." That pivot drew ridicule from critics who noted the fraud predated any federal intervention and occurred entirely under state management.
The governor has previously tried to claim credit for FBI fraud raids that his own administration failed to prevent, a pattern of retroactive accountability that looks less like leadership and more like damage control.
State Sen. Paul Utke, a Republican from Park Rapids, laid the blame squarely on Walz's original decision to elevate Gandhi in the first place:
"We could have avoided this entire circus had Gov. Walz seriously considered who was best-equipped to lead DHS in the first place; someone who [denies the existence of fraud] was never fit to lead the agency experiencing the most fraud our state has ever seen."
Utke reserved particular criticism for the decision to keep Gandhi on the state payroll as a deputy commissioner rather than removing her from the agency altogether:
"Keeping [Gandhi] on board as a deputy commissioner does a disservice to every single taxpayer that has lost money to the [fraud she has totally failed] to address."
Minnesota Republicans more broadly accused Walz of "shuffling the deck" rather than providing the steady leadership the fraud crisis demanded. The criticism carries weight. Removing a commissioner the night before a confirmation hearing avoids the spectacle of public questioning, but it also avoids the accountability that comes with it.
Some Republican lawmakers have pushed for far more aggressive consequences. U.S. Rep. Tom Emmer has called for jail time for Walz and Attorney General Keith Ellison over their handling of the fraud scandal, arguing the failures rise to the level of a cover-up.
Monday's removal fits a broader pattern. Walz has repeatedly found ways to sidestep direct confrontation over the fraud crisis. GOP lawmakers have noted that the governor skipped a Minnesota fraud hearing while he was physically inside the Capitol, according to the Republican committee chair who organized the session.
The governor testified at a House hearing in Washington on March 4, 2026, regarding alleged misuse of federal funds for Minnesota social services and Medicaid programs. But back home, the accountability trail has been harder to follow.
When Minnesota legislators attempted to open an impeachment investigation into Walz's handling of the fraud losses, Democrats voted in lockstep to block the effort, even as estimated fraud losses continued to climb.
Fox News Digital reached out to Walz and the Department of Human Services for additional comment. The article did not indicate whether either responded beyond the public statements already released.
Several questions hang over the shakeup. What specific findings, if any, prompted Walz to act on Monday rather than any earlier point in the months-long scandal? What role, exactly, will Gandhi play as deputy commissioner, and will she have any continued oversight of the programs she failed to protect? Will John Connolly face a confirmation process of his own, and will legislators get the chance to ask the questions they were prepared to put to Gandhi?
The scale of the fraud is staggering. A program designed to cost under $3 million consumed more than $100 million in a single year, with federal officials concluding the vast majority of it was stolen. Providers filed inflated and fabricated claims. The department's own "fact-check" website tried to wave away concerns. And the person Walz chose to lead the agency through the crisis now sits one rung lower on the org chart, still drawing a state salary.
Minnesotans lost hundreds of millions of dollars. The governor calls it success. The commissioner who presided over the failure calls her work aggressive and proactive. And the hearing that might have produced real answers never happened.
In Minnesota, accountability doesn't get fired. It gets reassigned.
