[patio11]

The Swanson memo memorializes the consensus of his investigatory group and, put to question by OLA and legislators, they stick with that story:

Page 14 of PDF:

[The OLA] did not find evidence to substantiate Stillman’s allegation that there is $100 million in CCAP fraud annually. We did, on the other hand, find that the state’s CCAP fraud investigators generally agree with Stillman’s opinions about the level of CCAP fraud, as well as why it is so pervasive.

(Stillman is a line level investigator who gave a media statement which was explosive. Swanson, who authored in the internal memo, was his manager.)

I do mention that other officials only agreed to characterize as fraud fraud which had resulted in convictions. We now, years later, have nine figures just from the convictions (and guilty pleas). These officials pointedly refuse to put any number on fraud other than the number incident to convictions.

Moreover: you should be very clearly correct if you accuse someone of citing a document as making claims it does not say. That is a serious accusation. BAM's citation of this piece is "the state’s own investigators believed that, over the past several years, greater than fifty percent of all reimbursements to daycare centers were fraudulent." This is _absolutely true_ and _is in the report as claimed_.

[refulgentis]

I'm very amenable to the argument made in the blog post, but the tone and sidecars attached made it feel quite off, like if I looked into it, it'd turn out there was a rush to get the main idea down so we could get the sidecars attached.

Spent about 30 minutes consulting the report you mention, OP's post, and your reply, and there's clearly issues.

In the essay, you wrote that industrial-scale fraud is "beyond intellectually serious dispute," cited the OLA report, and presented the 50% figure as the finding that "staggers the imagination." (this should have been a tell)

When challenged, you retreat to: "My citation that investigators believed this is absolutely true."

Those are completely different claims. "An investigator believed X" is not "X is beyond intellectually serious dispute" — especially when the same report on the same pages says:

- The OLA itself: "We did not find evidence to substantiate the allegation" (p. 5)

- The DHS Inspector General: "I do not trust the allegation that 50 percent of CCAP money is being paid fraudulently" (p. 12)

- The investigators themselves had "varying levels of certainty — some thought it could be less, and some said they did not have enough experience to have an opinion" (p. 9)

- Swanson explicitly used "a view that does not require the kind of proof needed in a criminal or administrative proceeding" (p. 10), counting the entire payment to any center with poorly-supervised kids as "fraud"

That's not "beyond intellectually serious dispute." It is, literally, a documented dispute, inside the very report you cite as settling the matter.

And "nine figures from convictions"? That's Feeding Our Future, a federal food nutrition program. The OLA report is about CCAP, a state childcare program. Proven CCAP fraud remains at $5-6 million. You're retroactively validating a CCAP claim with convictions from a different program.

[patio11]

FoF claimed to supply meals at the same physical locations as CCAP and paid the same owners. As mentioned, one of nine of the operators profiled, who was previously raided in an investigation into alleged overbilling of CCAP, received $1.5M from FoF. FoF is in fact not a federal nutrition program but actually the name of a non-profit which received grants from a federal nutrition program for forwarding to third parties. CCAP is also funded by federal block funding.

[refulgentis]

The operator overlap is real, and the correction that FoF is a non-profit rather than a federal program is fair. I'll take both points.

But look at what's happened across this exchange:

Essay: Industrial-scale CCAP fraud is "beyond intellectually serious dispute." The evidence: the OLA report shows investigators believed 50%+ of reimbursements were fraudulent.

When challenged that the OLA explicitly could not substantiate $100M and proven fraud was $5-6M: you retreat to "my citation that investigators believed this is absolutely true and is in the report as claimed."

When challenged that "investigators believed X" ≠ "X is beyond intellectually serious dispute" — especially when the same report documents the IG saying "I do not trust the allegation," DHS leadership calling $100M "not credible," investigators having "varying levels of certainty" with some having "not enough experience to have an opinion," and the OLA itself saying "we cannot offer a reliable estimate": you pivot to FoF operator overlap.

You still haven't addressed the actual critique. The overlap proves that some fraudsters work across programs. Not disputed, not surprising, and consistent with your essay's point about fraud lifecycles. What it doesn't do is retroactively substantiate Swanson's 50% CCAP figure. His methodology, spelled out in the very email the OLA appended, counted all payments to any center where children were poorly supervised as 100% fraudulent, a standard he himself distinguished from "the kind of proof needed in a criminal or administrative proceeding." FoF fraud was fabricating meal claims for meals never served. CCAP fraud is billing for children not present. Different programs, different billing mechanisms, different oversight bodies (MDE vs. DHS), different proven scales by orders of magnitude. That some of the same people ran both doesn't collapse the distinction.

"CCAP is also funded by federal block funding" seems designed to blur a line that matters. Many programs are federally funded. That doesn't make convictions in one program evidence of the fraud rate in another.

Here's what's frustrating: I think the essay's core argument is genuinely strong, and it doesn't need the overclaim. The OLA report is already damning on its own honest terms: proven fraud of $5-6M in a program with paper sign-in sheets prosecutors called "almost comical," no electronic attendance verification, 60-day billing windows, a certification statement removed from billing forms in 2013, and the investigators themselves saying centers "open faster than they can close the existing ones down." The report makes it clear fraud was likely substantially higher than proven convictions. That's already a devastating indictment of program oversight. Your argument about base rates, weak controls, and Shirley fishing in a troubled pond all follows from that, from the report as it actually reads.

But "likely substantially higher than $5-6M, in a program with terrible controls" is a very different claim than "50%+ fraud, beyond intellectually serious dispute." Your essay presents the latter. The report supports the former. And the gap matters, because the essay is being read right now, today. in a context where the president is calling Somalis "garbage," prosecutors are throwing out $9 billion estimates in press conferences, and five states just had billions in child care funding frozen. Overstating what the evidence supports isn't a minor rhetorical choice in that environment. It's exactly the kind of epistemic failure the essay warns about when it talks about "irresponsible demagogues" filling the vacuum.

[patio11]

The thing which is beyond intellectually serious dispute is industrial-scaled fraud.

You keep wanting to make me "own" the CCAP's estimate. I will not reciprocally try to make you "own" $5 million, because I am charitable and because history has been unkind to the officials who made it.

I do ask you to own: "Minnesota HAS NOT suffered industrial-scale fraud across several social programs." Otherwise this is judging a high school debate competition, and I've had better.

[refulgentis]

Of course Minnesota has suffered industrial-scale fraud. FoF alone clears that bar. I've never said otherwise.

But your essay doesn't just claim fraud exists: it presents the 50% figure as the evidence that "staggers the imagination" and makes the case "beyond intellectually serious dispute." That's not parenthetical color. The paragraph is load-bearing on that number.

You charitably won't make me own $5M. I never claimed it. I've said in every reply the real number is likely substantially higher. My point has been the same throughout: you presented a disputed estimate as settled, from a report that explicitly could not settle it - in which the IG rejected it, DHS leadership called it not credible, the OLA said it "cannot offer a reliable estimate.", and the source themself named their lack of a standard beyond a vibe.

The essay is 5,000 words on why epistemic standards matter in fraud investigation. The critique is the essay's own standard, applied to the essay. You should apologize for the high school debate comment.

[themacguffinman]

The essay reads to me as 5000 words on why epistemic standards should be lowered for effective fraud investigation. Requiring retrospective evidence - the highest epistemic standard - is too slow and expensive, so the government needs to copy the private sector's epistemic standards where a collection of solid heuristics and smart observations is sufficient to preemptively block payment.

It's an insightful point, but it seems consistent with those epistemic standards that it's unimportant whether the 50% figure is valid in retrospect. The observation of "industrial-scale fraud" is sufficient to act, it doesn't need a retrospectively validated 50% figure and he would like you to get all the way off his back about it.

[laidoffamazon]

This is genuinely pathetic, Patrick. You want to say it so bad but can’t!

No notes on the fraudsters pardoned by this current admin of course.

[tptacek]

Fraudsters pardoned by the current administration don't make public service and welfare fraud in Minnesota any less grave or important, and it's super weird that people across this thread keep implying otherwise.

[refulgentis]

The political sidecars attached are unnecessary.

[cynicalkane]

OP didn't claim you of misrepresenting facts in the document directly; OP claimed you of grossly mischaracterizing those facts in order to support claims the document does not support. The document is cited as supporting massive fraud "beyond intellectually serious dispute" while the scale of the fraud is disputed in the cited document.

But, on the other hand, I suppose intellectually serious dispute requires both sides to be intellectually serious. One good step in that direction would be to arrange one's citations such that they are supporting the claims you are citing them for.

I will also remark, as others have, that it's odd to make a big deal about this particular fraud when there's a lot more fraud happening a lot more obviously in a lot more of the nation. This is not to question Minnesota officials who are, rightly and appropriately, investigating suspected fraud in their zone of investigation; but it is worth questioning voices who have, apropos of nothing I can discern, made decisions about what's important to talk about and what isn't, and further made decisions to misrepresent allegations in alignment with people who very aggressively lie for evil reasons. As others have pointed out, the essay's core is seemingly cromulent, and it doesn't need you to do that.

[patio11]

<LLC voice> We have reviewed your feedback on our editorial choices, and are comfortable that we have characterized the claims in the report accurately. We stand by "Minnesota has suffered a decade-long campaign of industrial-scale fraud against several social programs. This is beyond intellectually serious dispute." This is editorial analysis, informed—as is stated in the plain text—by the experience of several programs. Feeding our Future, for example, is cited in the piece, with analysis. It has resulted in dozens of convictions and guilty pleas, and federal prosecutors characterize it as having defrauded the public of nine figures.

You are welcome to your own opinion as to what could motivate a publication which routinely writes about fraud and finance to write about fraud and finance. Past issues you may enjoy include a year-long investigation into a single incident of fraud in NYC, a topological look at the fraud supply chain in credit cards, discussions of how the FTX fraud was uniquely enabled by their partner bank failing to properly configure their AML engine, and similar. </LLC voice>

[zahlman]

Seriously, it's beyond amazing how much mud this thread has been flinging at you. If the analysis you've offered is somehow not above board, it seems impossible to point out the clear facts of the matter in a way that nobody would object to.

[bigstrat2003]

Agreed. I thought the article was an interesting look at how fraud in many ways acts like a real business, and how one can use fraudsters' tendencies in order to catch them. The discussion in this thread has been 90% partisan slap fights while ignoring the substance of the article. It's absolutely shameful.