WASHINGTON, D.C. –  The first weeks of the 119th Congress are Democrats bringing a new fight, this time over immigration enforcement and how the federal government protects taxpayer dollars. Sen. Marsha Blackburn (R-Tenn.), joined by several Republican senators, has introduced the Fraud Accountability Act, a bicameral proposal that would tighten immigration penalties tied to fraud in federal programs.

The bill would treat fraud convictions as clearly deportable offenses under the Immigration and Nationality Act (INA). It would also allow the federal government to revoke naturalized citizenship for people convicted of fraud or other deportable crimes.

The push comes as federal investigators continue to unravel an alleged fraud network in Minnesota. Prosecutors say the losses could top $9 billion, tied to operations that presented themselves as child care centers, food programs, and health clinics. Reports have also pointed to involvement from parts of Minnesota’s Somali community, which has added fuel to Republican claims that oversight has been weak for years.

What the Fraud Accountability Act Would Do, and Why Republicans Say It’s Needed

Blackburn introduced the bill in early January 2026 with Sens. John Cornyn (R-Texas), Tom Cotton (R-Ark.), and Ted Budd (R-N.C.). The Fraud Accountability Act would update the long-standing INA by adding fraud, including fraud aimed at government programs, private people, or businesses, to the list of deportable offenses.

Supporters say the goal is simple: deter abuse, protect taxpayer funds, and make clear that immigration benefits come with obligations. Blackburn has framed the issue in blunt terms. In a press release, she said people who come to the United States and steal from taxpayers through fraud should be deported.

She has also linked the bill directly to the Minnesota fraud scandal, pointing to Trump administration actions tied to ongoing investigations. That includes freezing over $10 billion in federal grants to states under fraud review, including Minnesota, California, Colorado, Illinois, and New York.

Republicans also argue the bill responds to policy choices that they believe opened the door to abuse. They often cite a 2024 move to drop attendance verification requirements tied to child care funding. Blackburn has described the Minnesota case as a betrayal of taxpayers, pointing to allegations that empty or barely operating sites still collected millions in federal dollars.

In the House, a matching bill is led by Rep. Earl “Buddy” Carter (R-Ga.). The effort has also drawn backing from immigration enforcement groups, including NumbersUSA.

Democrats’ Response, and Why They Say the Bill Goes Too Far

Democrats have moved quickly to criticize the proposal. They describe it as too harsh, vulnerable to misuse, and aimed more at politics than policy. No major Democratic replacement bill has been introduced yet. Still, party leaders and progressive groups have pushed back on the idea of making deportation and denaturalization a central tool for dealing with fraud.

A common Democratic argument is that fraud should be punished, but the solution should focus on stronger safeguards across federal programs, no matter who commits the crime. They say the bill puts a heavy focus on immigration consequences while skipping broader steps that could prevent fraud in the first place.

Some Democrats also warn that the messaging around the Minnesota case has been reckless. They point to public references that use phrases like “Somali scammers,” and say that kind of language can stir anti-immigrant anger and paint entire communities with a broad brush.

They argue Minnesota’s alleged fraud points to deeper problems in how programs are managed and monitored, and they blame years of weak controls from both parties. They also say oversight offices have not had enough funding or staff to keep up.

Blackburn, for her part, has accused Democrats of ignoring fraud concerns for years, including during the Biden era. A Fox News segment highlighted “pushback from Democrats” against the bill and suggested it may face steep resistance in a closely divided Senate.

Immigration reform advocates aligned with Democrats have called for a more balanced approach, one that improves program integrity without widening the grounds for deportation or opening the door to more citizenship revocations, which they view as extreme.

The fight fits a familiar pattern in the early Trump administration era. Even when both parties agree fraud is a problem, they clash over whether immigration penalties should be central to the solution.

What This Could Mean in 2026

The Fraud Accountability Act is now waiting for committee action, and its path forward is unclear. Immigration votes are still tough, and bipartisan deals remain rare. Supporters may try to attach the bill to a larger must-pass package. Opponents are signaling they’re ready for a long debate.

The proposal has sparked a wider discussion about how Washington handles federal spending fraud, whether white-collar crimes should trigger stronger immigration penalties, and how enforcement debates intersect with national origin and community trust.

With the Minnesota investigation still unfolding, and with probes underway in other states, the Fraud Accountability Act may become a major test of how this Congress plans to talk about taxpayer protection and border security at the same time.

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WASHINGTON, D.C. –  U.S. Attorney for the District of Columbia Jeanine Pirro spent the week defending her office’s criminal investigation into Federal Reserve Chair Jerome Powell and the Fed’s headquarters renovation project.

The inquiry has rattled financial markets and sparked a fight on Capitol Hill. It focuses on reported cost overruns topping $1 billion and whether Powell misled Congress in sworn testimony.

Pirro, a former Fox News host and a long-time ally of President Donald Trump, said the case is standard oversight, not payback. She was confirmed as U.S. attorney in August 2025 after an interim appointment in May. In an appearance on Fox News’ Hannity on January 14, she said her office tried several times to contact the Federal Reserve over the winter holidays and got no response.

In a post on X late January 13, Pirro wrote that the U.S. Attorney’s Office reached out “on multiple occasions” to discuss cost overruns and Powell’s congressional testimony, then moved to legal process after being ignored.

She added that the legal process “is not a threat.” In interviews, she repeated the same point and said the situation could have been avoided if the Fed had responded to outreach.

The investigation received approval in November 2025. It escalated on January 9, when prosecutors issued grand jury subpoenas seeking documents and testimony tied to Powell’s June 2025 appearance before the Senate Banking Committee.

The renovation of the Federal Reserve’s historic headquarters buildings on the National Mall reportedly rose from about $1.9 billion to $2.5 billion, raising concerns about management decisions and the accuracy of public disclosures.

How the Investigation Started: Missed Replies and Spending Concerns

Pirro has described the probe as a basic push for accountability around taxpayer dollars. In media appearances, she stressed the scale of the overspending, saying it was not “a million” or “ten million” but “a billion dollars” in overruns. She said a gap that large can point to serious problems, including possible fraud or embezzlement, and she pressed for answers on where the money went.

People familiar with the outreach said the U.S. Attorney’s Office sent two emails during the December holidays. Those messages did not include a stated deadline or clearly signal a criminal investigation. After no reply, prosecutors quickly moved to subpoenas.

Pirro has said the steps her office took were based on the facts, and she rejected claims that the probe is tied to the Trump administration’s long-running complaints about Powell and interest rate policy.

Powell Pushes Back, Warns About Fed Independence

Powell responded on January 11 with an unusual video statement, calling the subpoenas “unprecedented” and describing them as an attempt to intimidate the central bank. He linked the investigation to pressure from the White House over monetary policy, saying the threat of criminal charges followed the Fed’s choice to set rates based on its best judgment rather than presidential preference.

Powell said he respects the rule of law and agreed with the idea that no one is above it, including the Fed chair. He also said the Federal Reserve kept Congress fully informed about the renovation project.

Capitol Hill Reaction and Wider Blowback

The investigation has drawn criticism from both parties. Republican senators on the Senate Banking Committee, including Lisa Murkowski and Thom Tillis, have condemned the probe and described it as an effort to push the Fed.

Murkowski called for a congressional review of the Department of Justice. Former Fed Chairs Alan Greenspan, Ben Bernanke, and Janet Yellen, along with other economists, issued a joint statement warning that the case could weaken the central bank’s independence.

Reports have also pointed to frustration inside the Trump administration, with some officials said to be surprised by the subpoenas and upset about a lack of coordination. President Trump has publicly distanced himself, telling NBC News he did not know about the action in advance and that his main concern remains high interest rates.

Pirro has not backed down. On Hannity, she said her office is not attacking the Fed’s independence; it is doing its job. She also pushed back on critics, including some Republicans, arguing that no public official should be treated as off limits to investigators.

What It Could Mean for the Federal Reserve and Economic Policy

The dispute highlights the strain between the executive branch and the Federal Reserve, an agency designed to operate with independence so that monetary policy remains credible. Legal experts have noted that charges such as perjury generally require strong proof that a false statement was intentional, which can be difficult to establish.

As the investigation continues, attention remains on whether the Federal Reserve cooperates in ways that prevent further escalation. Pirro has said she expects Powell’s full cooperation, and she has returned often to her central message: no one is above the law.

The story is moving quickly, with potential effects on financial markets, Fed governance, and the ongoing debate over political influence on economic policy. Lawmakers and market watchers are now waiting to see whether Congress schedules hearings or the Justice Department takes additional steps in the weeks ahead.

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MINNESOTA – A new report from Minnesota’s nonpartisan Office of the Legislative Auditor (OLA) is putting Governor Tim Walz’s administration under fresh pressure.  The audit, released earlier this month, reviewed the Department of Human Services (DHS) Behavioral Health Administration (BHA) and found that state staff created and backdated documents during the audit process.

Auditors say the records appear to have been made to cover for weak oversight and questionable grant payments tied to more than $425 million in taxpayer funds.

The report adds to a growing list of concerns around fraud and waste in Minnesota social services. Walz announced on January 5, 2026, that he will not run for re-election. Many critics link that decision to the string of scandals and investigations that have followed his administration.

Major Problems With Grant Oversight

The OLA report runs about 70 pages and focuses on behavioral health grants paid out from July 2022 through December 2024. Auditors listed 13 key findings, including several problems flagged in earlier reviews. The report described repeated breakdowns, such as:

• Missing required progress reports from grantees
• Payments were approved even when the paperwork was late or incomplete
• Weak monitoring, including site visits that were not done or not documented
• Heavy use of non-competitive single-source grants without clear support for the decision

Over the period reviewed, BHA awarded more than $425 million to about 830 organizations, mostly outside government. The money was meant to support mental health care and substance use disorder services. Auditors said BHA lacked basic internal controls to track performance and confirm proper use of funds, which increased the risk of fraud and misuse.

One example in the audit drew sharp criticism. A grant manager approved a payment of nearly $680,000 to a single grantee for one month of work, and the file did not show proof that the services were delivered. The employee left state service days later and took a consulting job with the same organization. That sequence raised serious conflict-of-interest concerns.

Audit Says Walz Staff Fabricated and Backdated Documents

The most serious finding involved the audit itself. Legislative Auditor Judy Randall said the office saw signs of a “systemic effort” to alter the record, something she described as unheard of during her 27 years with OLA.

Auditors found cases where records were created after the audit began and then dated to look older. In one example, documents claimed monitoring visits happened in May 2024, October 2024, and January 2025. Auditors concluded those records were actually created in February 2025, after the audit was already underway and information requests were out.

Randall called the practice unacceptable and said it damaged trust in the review process. The report suggests the altered paperwork was used to make long-running oversight problems look fixed after the fact, instead of addressing them in real time.

Part of a Larger Wave of Fraud Claims

The DHS audit lands during a broader crackdown on alleged fraud in Minnesota’s public programs. Federal and state investigators have been looking into suspected wrongdoing that could add up to billions of dollars across Medicaid, child care, housing stabilization, and nutrition assistance programs. More than 1,000 current and former workers have come forward as whistleblowers, alleging retaliation, deleted data, and pressure to stay quiet about fraud reports.

Congress has also taken an interest. The U.S. House Committee on Oversight and Government Reform, led by Rep. James Comer (R-Ky.), has expanded its review of Minnesota’s handling of these programs. Comer has publicly blamed Walz for ignoring warning signs and has called on Walz and Attorney General Keith Ellison to testify in February 2026. He has also pushed for cooperation with document requests.

Minnesota Republicans, including Rep. Kristin Robbins, say the state ignored auditor warnings and whistleblower complaints for years, with some concerns dating back to 2009.

DHS Response and Growing Calls for Accountability

Acting DHS Commissioner Shireen Gandhi said she was alarmed by the findings about backdated records and promised a full internal review. She also said DHS plans to tighten training, supervision, and internal controls.

Critics say those steps should have happened long ago. House Speaker DeMuth described the report as proof of a culture marked by fraud, negligence, and deception, and called for immediate reforms and possible prosecutions. Some federal lawmakers have warned that funding could be at risk if the state cannot show stronger accountability.

Walz has defended his administration in past disputes by pointing to third-party audits, paused payments in higher-risk areas, and new anti-fraud efforts. Still, the latest audit raises hard issues about who knew what, who allowed weak controls to continue, and whether anyone will face criminal charges for falsifying public records.

What This Means for Public Trust

This audit is not just about paperwork problems. It goes to public trust in the state government. The grants were meant to help Minnesotans dealing with mental illness and addiction. Auditors say the funds went out without strong safeguards, and when oversight finally arrived, staff allegedly tried to recreate a paper trail to show compliance.

With investigations still active at the state and federal levels, the fallout could shape the final chapter of Walz’s time as governor. For many Minnesotans, the biggest issue is simple: they want clear answers, real consequences, and proof that taxpayer dollars will be protected going forward.

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