“The magnitude of the fraud in Minnesota cannot be overstated.”

Those words, spoken in December by the top federal prosecutor in the state at the time, hung in the air at a memorable news conference. Republicans slammed the state as a fraud cesspool, and Democrats could hardly push back because of the scale of fraud at a food charity during the pandemic.

But since then, the blame for fraud directed to Minnesota’s nonprofit organizations has clearly been too much.

Only one nonprofit organization, the food-distribution charity Feeding Our Future, has been embroiled in a major fraud against the federal and state government this decade. It’s the big one, to be sure.

Feeding Our Future funneled or coordinated around $ 300 million in federal pandemic-relief funds chiefly to for-profit businesses feeding poor children during the pandemic, including at least $128 million that was allegedly fraudulent. The woman at the center of it, Aimee Bock, ran another food distribution nonprofit that is also being investigated for helping other people obtain government funds fraudulently.

All the rest of accusations of major fraud in Minnesota, chiefly around the provision of services paid for by Medicaid, have come against privately owned, for-profit businesses.

When law enforcement agencies raided 22 child care centers, autism centers and senior service providers on fraud suspicions this past week, most appeared to be for-profits. A complete list was unavailable, but of more than a dozen identified, only one was clearly a nonprofit organization.

One remedy would be for the Legislature and Congress to require private companies that receive government funds to openly disclose their finances, as nonprofit organizations already must do.

In the meantime, Minnesotans should be a little bit more charitable to the charities in their midst.

In late January, I wrote that overblown reactions to government fraud and illegal immigration had led to "the Great Wrecking of Minnesota.” U.S. President Donald Trump sent immigration agents into Minnesota in search of what he claimed were Somali immigrants who had spearheaded the fraud.

The Operation Metro Surge dragnet extended far beyond undocumented immigrants and became a violent, racist overreach of federal power. Meanwhile, the state government overreacted late last year by halting funds to human services providers as it tried to sort out fraud accusations and find bad actors.

The feds have since pulled most of their immigration enforcers back out, and the state resumed its funding pipeline to service providers. Yet Minnesota is still being wrecked.

The worst effect is that several thousand Minnesota families were broken apart as one or more parents were arrested and sent out of the state or country. Another one is a backlash against nonprofit organizations and charities.

At best, donors are seeking more financial information and records from the nonprofits that offer human services with government funds. Some, however, are scaling back donations in knee-jerk fashion for fear of appearing connected to any activity where fraud occurred.

Larissa Laramee, senior director of program services for Minnetonka-based Reach for Resources, said her organization relies on foundations and other donations to partner with it when government funds don’t fully cover its services to people with disabilities in Hennepin County.

“If they’re not going to be willing to partner with disability service organizations, or human service organizations, we are afraid of what’s going to happen,” Laramee told me. “It makes it hard to continue to invest in those services that we need to provide to the community.”

Laws governing nonprofits make it harder for them to commit fraud with government money, compared to for-profit businesses.

Nonprofits lay bare their finances in tax filings that are publicly available. The IRS has a website that allows people to look up the main filing, called a Form 990, of nonprofits. Other organizations, such as the nonprofit online news outfit ProPublica, take those filings and make them even easier to use online.

Also, nonprofits with annual revenue of more than $750,000 must provide financial audits to the state Attorney General’s Office. Typically, those audits are done by third-party accountants.

On top of that, many state and federal agencies directly monitor recipients of government grants.

Sam Amundson, controller of the Mahube-Otwa Community Action Partnership in Detroit Lakes, said the group manages 60 to 80 government grants each year. Those grants tend to overlap to pay for its services, she said, but the nonprofit organization still gets about 20 or so monitoring visits from government officials annually.

“I think the majority of people are trying to do good, right? Trying really hard,” said Amundson, who is also co-chair of the board of the Minnesota Council of Nonprofits.

During the council’s annual meeting of nonprofit finance directors last month, Amundson and other leaders discussed the increasing scrutiny they are facing from donors. Another point of confusion: The fraud alleged or proven so far has mainly happened in claims-based programs, rather than those funded by grants, where lawmakers’ attention has been concentrated.

Back in December, the then-top federal prosecutor, Joe Thompson, held the news conference most remembered for his estimate that fraud may have consumed half of the federal funds spent on 14 Medicaid programs in Minnesota since 2018. About $18 billion was spent in those programs up to that time.

But I also remember Thompson’s chilling assessment that fraud could change the very nature of Minnesota.

“We have a state that has always long taken pride in having a strong economy, good schools, beautiful lakes, many parks and a sense of community spirit and civic-mindedness,” Thompson said. “This fraud really calls into question all of that.”

A month later, Thompson and several colleagues quit the Justice Department after it redirected the work of Minneapolis prosecutors away from fraud during Operation Metro Surge. The mess in the U.S. Attorney’s Office is still sorting out. Eventually, they’ll pursue more fraud cases again.

Before giving up on Minnesota’s “sense of community spirit and civic-mindedness,” let’s see how many of those future cases involve for-profit businesses compared to nonprofits who built that spirit.

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