The President's Daily Brief - PDB Situation Report | December 6th, 2025: What Maduro Asked For Before Leaving Power & The Welfare Scandal Rocking Minnesota

Episode Date: December 6, 2025

In this episode of The PDB Situation Report: Maduro’s possible terms for stepping aside are coming into focus. We’ll walk through what he reportedly wants in exchange for leaving power — from personal protections to international exile options — and hear analysis from Joshua Philipp, Senior Investigative Reporter for The Epoch Times. Minnesota’s massive welfare-fraud investigation continues to widen. New reporting reveals overseas financial networks under scrutiny, and growing concerns that some stolen taxpayer funds may be making their way into the hands of terrorists. We’ll talk with Ryan Thorpe from City Journal, one of the investigative reporters who helped break this story. To listen to the show ad-free, become a premium member of The President’s Daily Brief by visiting https://PDBPremium.com. Please remember to subscribe if you enjoyed this episode of The President's Daily Brief. YouTube: youtube.com/@presidentsdailybrief Masa Chips: Ready to give MASA or Vandy a try? Get 25% off your first order by going to http://masachips.com/PDB and using code PDB. DeleteMe: Get 20% off your DeleteMe plan when you go to https://joindeleteme.com/BRIEF and use promo code BRIEF at checkout. BUBS Naturals: Live Better Longer with BUBS Naturals. For A limited time get 20% Off your entire order with code PDB at https://Bubsnaturals.com Learn more about your ad choices. Visit megaphone.fm/adchoices

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whether it's the funds fueling AI or crypto's trillion dollar swings. There's a money side to every story. Get the money side of the story. Subscribe now at Bloomberg.com. Welcome to the PDB Situation Report. I'm Mike Baker, your eyes and ears on the world stage. All right, let's get briefed. First up, Maduro's possible terms for stepping aside are coming into focus,

including his requested demands and security protections, exile options. We'll examine the details with Joshua Phillip, senior investigative reporter for the Epic Times. Later in the show, a deeper look at Minnesota's widening welfare fraud investigation, including the overseas money networks now under scrutiny and concerns that some of the cash, and there's a lot of it, may be ending up in the hands of terrorists. We'll talk with Ryan Thorpe from City Journal, one of the investigative reporters who helped break the story. But first, today's Situation Report's spotlight. We're learning far more about that phone call between President Trump and Nicholas Maduro,

and the picture that's emerging suggests that Maduro may have been preparing for an exit. New reporting indicates the Venezuelan leader floated a deal that would allow him to step aside, asking for broad legal protections, safety for his inner circle, and a destination for exile, and, of course, a very large suitcase full of cash. The discussion reportedly even touched on where he might flee with options ranging from China or Russia to Cuba, and now Qatar, being floated as a possible compromise host. Here to help us break it down is Joshua Phillips, senior investigative reporter for the Epic Times, an host of Crossroads, which you can find on YouTube and you should find on YouTube. Just go to At Crossroads with Joshua Phillip. Man, listen, thank you very much for joining us here today on the Situation Report.

Hey, real pleasure being here. Tell us about this phone call. Well, Donald Trump seems to have given Nicholas Maduro a, an ultimatum, leave or die. And it seems that Nicholas Maduro came back with it and said, well, how about you give me like $200 million and make me also so I can't be criminally charged anywhere else in the world? And Trump seems to suggest, you know what? I think you're asking a little too much here, buddy. I don't think you realize the predicament you're in. But what I will say is this.

the policy to remove Maduro from office was a Biden policy. It was a Trump first term in office policy. It was even before that because what Maduro represents is not just, you know, everyone's paying attention to the drug boats, right? And they're blowing up the drug boats and whether you agree with it or not, right? The deeper context of it is that Venezuela was kind of the beach front used by a partnership with Cuba, Fidel Castro and Chavez working together on it, to bring in Chinese Communist Party Belt and Road debt traps through all of Latin America

to create what they called the pink wave of socialist governments. It took over almost every country and to push the United States out and to reject the Monroe Doctrine. So Venezuela is like more than just a drug problem. They're an ideological threat to the United States in terms of the influence operations they've been doing throughout the entire region, creating organizations designed to exclude the United States in interregional diplomacy and to instead bring in crazy the sounds, Iran, Russia and China. What's old is new again, Joshua.

It's the domino theory. But, yeah, look, I think you're right. There's obviously the relationships with Cuba, Russia and China in particular, are fascinating. And I think people lose track of that because they are, you know, the way this is being reported is very myopic, right? So it's it's just this struggle between the U.S. And in most narratives, it's Trump.

So it's the struggle between Trump and Nicholas Maduro, right? So I'm glad that you pointed out the wider context here. It's interesting. It sounded from the reporting that's come out of that phone call, where Maduro was essentially laying out his conditions for giving up power and leaving Venezuela. Sounds like when it was talking about the 200 million or so, that it wasn't so much you give me 200 million.

It was that let me keep at least 200 million of my money, of my personal wealth. Yeah. That's crazy. What you're watching on that side goes back to about 2018 with the Venezuelan elections, right? So let's go back in time, 2018, Trump's first term in office,

Venezuela has its presidential elections. The opposition leader wins. That was Juan Guido. Now, the platform of the opposition leader was, as I mentioned, you know, that they have a big problem of Cuban infiltration, working together with the Chinese Communist Party. His presidential platform was to push out Cuban influence to get rid of the influence the Cuban regime was exerting over to control Venezuela, right? Which was established under Chavez. Juan Guido won the election, and then Maduro overturned it. Trump noted this.

he said Maduro is stolen the election. America recognizes Juan Guido as the official winner of the 2018 elections. That was, by the way, a position maintained even under the Biden administration. The Biden administration recognizes Juan Guido as the government in exile and he's currently in Florida, right?

What happened was this, though. Trump's first term in office, Trump was talking about intervening militarily in Venezuela. We were going to send troops there. Because what Maduro was doing was there were large-scale protests throughout the country. People were mad at him. They were rioting on the streets.

He then started using paramilitary groups tied in with FARC, which is a narco-terrorist organization. And of course, you know, he's with the cartel of the sons. They started using narcos, gangs, to shoot people point blank, to raid people's apartment buildings to arrest people and was just crushing brutally the uprising and protests because they, They knew that Maduro stole the election. And again, it's controversial here, but Biden, even Biden recognized this. Even a policy of the Biden administration. Then what happened was Trump talking about intervention. As you have happening now, Maduro called for foreign help.

He asked for help from China. He asked from help from Iran. He asked for help from Russia, which he's now done and they've already denied him. But at the time, they did come to his rescue. China went to the diplomatic stage, started calling. for other countries to like reject American diplomacy and how dare America make threats. And then Russia deployed two strategic bombers nuclear capable to Venezuela and then issued a statement to the United States that if we intervene, if we intervene, the results will be

catastrophic and there will be bloodshed. They made an indirect nuclear threat to the United States and Trump actually backed down. Nobody's better at rattling the nuclear saver than Dimitri Medvedev. former president there in Russia. That guy, he has never, never lost an opportunity to talk about how, you know, anything we do could result in catastrophic nuclear results. So the position that we're in right now, though, it's interesting because I've had conversations,

right, and this is not going to surprise you, but I've had conversations with folks who are on the side of saying, well, this is simply the U.S. creating an opportunity, right? That they're saying, look, the cartel, you know, that doesn't exist. Well, you know, it doesn't exist kind of in the way that people typically think of a cartel, but it is a network.

It is a structure in a sense, right? But they'll look at that and go, that's an invention of the U.S., and we're doing this purely for oil, right? What do you say to people who have that? Not true. So this is the reality of that. The oil interests are already there.

And if America just wanted a war, we would have let it happen. Because actually, this is what a lot of the big media are not telling anybody. And I don't know why, because they all acknowledged it when it was happening. We might have avoided World War III through this. Because what was happening just prior, I'm talking a few months before Trump blew up the first drug boat. Venezuela working with Brazil was preparing to invade Guyana. So Guyana just north of Venezuela, a little tiny country. I think they used to be a French colony way back in the day.

Very small country, they discovered one of the largest oil reserves in the entire world. Like they're going to be the Saudi Arabians of Latin America. These are the Saudis of Latin America because they discovered so much oil. many companies were down there doing oil exploration. ExxonMobil is working there. If you want to talk about American oil interests, we're already there. We're already there. Then what happens, Venezuela claims it has historical ownership over the,

over half, like part of the country. Venezuela claims it has historical ownership over the part of Guyana that has all the oil rights. And so the international court already rejected Venezuela's claims. no basis to this. Venezuela just a few months ago, right, not even that long ago, declared, they passed a law on it, they did a vote, and they declared that they will reject the conclusion of the international court, and they have a historic right to invade and seize all the oil rights in Guyana. Maduro, just a few months ago, moved his military, and they

were doing military drills on the border of Guyana, and then they moved their Navy, and they were doing naval exercises right next to the EEZ, the exclusive economic zone of Guyana, and right next to notably the Exxon Mobil station. So you could argue maybe there was some oil interest more in protecting American interest. They were preparing to invade Guyana. And then actually, it was Marco Rubio. Secretary of State went down there and he warned them. He warned Venezuela. Look, if you do this, you don't know, you're playing with fire. We're going to destroy you if you try to invade. The broader picture of it is this, though.

The Chinese Communist Party had, so the main advisor, one of the main advisors to Xi Jinping, the head of the CCP, is a guy named Chin Kan Rung. Several years back, I'm talking before the Russia-Ukraine war, before the whole Israel conflict, several years back, Xi Jinping's main advisor said that if China is going to invade Taiwan and possibly get involved in a war with the United States,

they will not win unless they can make America get busy with too many other wars. They acknowledge the U.S. military is designed to fight and win two wars simultaneously. So they said if we're going to win against America, we need to get them involved in at least four wars. They said we need a war with Russia and not long after that you had the Ukraine war start. They said we need a war in the Middle East and we need a war with terrorism. Then you had Iran. Then you had, of course, Israel and, you know, guys. Gaza. And then they also said they need a war in Latin America. They wanted at the time

Brazil to start a war during Lula, Lula Silva's first term, who's now back in and currently working with Maduro on the plan to take over Guyana. And that was going to be the trigger as soon as they had that to invade Taiwan. And that would be World War III. That has been averted by just basically locking down, you know, airspace over Venezuela and just blowing up targeted strikes Venezuelan leaders. So if America wanted a war, we would have let it happen. That would have been the big war and the whole military industrial complex. If that was the objective, they would have let that happen. I want to pick up on that. But first, Joshua, we need to take a quick break. So if don't move, don't leave from where you are, we're going to take a quick break. We'll be back with more from Joshua Phillip. And the situation report. So stick around. Hey, Mike Baker here, the PDB host and well-known snack expert. Now, let me ask you a question. Have you ever read the label on a typical bag of chips? You haven't give it a try. It's a science experiment of seed oils and MSG and artificial dyes and mystery ingredients. But let me tell you about a company that's doing things differently. And that company is MASA, M-A. They're redefining snacking with real food. Imagine that. Their chips have three ingredients, just three. Organic corn, sea salt, and 100 percent grass-fed beef tallow. Masa chips, they lead to satisfied and energized without the crash or the

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Joining me once again is Senior Investigative Reporter for the Eppoc Times, Joshua Philip. Joshua, thank you very much for staying with us. I know this is speculation, but we do love speculation here on the Situation Report. are we close to seeing some type of kinetic event on the ground in Venezuela? Do I mean a direct conflict with the U.S. military? Well, let me give my prediction of what's going to happen. This is a Trump policy and a Biden policy.

Trump acknowledged his first term in office as well. Nicholas Maduro is the leader of the cartel of the Sons. They work together with FARC, an arco-terrorist organization. they also work with Trenda, Trenda Iaragua, which then works with the Mexican cartels and everybody else. They're kind of, you know, with any gang, there's go-betweenings of territory. That's just how they work, right? Gangs work with gangs. Joshua, could I interrupt you just for a second?

I apologize, but for those watching, for their benefit, could you give us just a quick summary of this cartel to Los Souls, the Cartel of the Sons that's being talked about? Because I think there is confusion of what this is. Well, so basically you have to understand what the Venezuelan economy is. The Venezuelan economy, they were one of the top rising economies in the entire world, wealthiest country in Latin America. Chavez came in basically destroyed it all, right? And then Maduro dealt with the final impact when the thing finally hit the ground.

You know what I mean? They went from being, it was, I think, the fifth largest economic collapse without a war like we've ever seen. they were a wonderful country decimated by dumb socialist policies but a lot of their economy was in oil so they were an oil they were an oil tycoon country like you know the Saudis of the south basically you know

bad business deals socialist policies wrecked all of it the other core part of their economy is drugs and between drugs and oil that's about all they got right the US sanctions on again, Venezuelan oil, they do a lot of stuff with China

and they have like black ships. They call them black ships. They turn their trackers off and they go dark and help, you know, they violate sanctions, basically. It's like the Russian shadow fleet. Same I do. The same thing. So they do that to kind of get around the sanctions,

but they can only do it so much. Drugs are a huge part of their economy. Drugs are part of the business. And drugs is also a government operation. So the cartel of the sons, If you want to talk about like what it really is, it's basically the Venezuelan military. And they don't have like a full standing military. They have more like a paramilitary.

You know what I mean? It's not like we normally think of it. They're like a militia. You'd call them like a militia, right? They're a cartel. They're basically a cartel. So the leaders of the cartel of the sons, it is Nicholas Maduro, was the guy on top. He's the El Chapo of the Carto of the Sons.

A lot of his cadres are deemed. leaders of the cartel of the Sons and the military in Venezuela is basically also the cartel. And so, you know, you call it what you will, call it a cartel or call it the Venezuelan government and military. But that's basically what it is, right? And that's the economy. How good is the intelligence that ties Maduro and his senior military and other members of the military to this sort of activity? How good is that intelligence? And let's put it this way, About as good as we know that most leaders in Latin America are also involved in the same type of thing. But Trump's not going after all of them just yet.

Remember when Trump was running for office? What he was saying? He was saying that he is going to destroy the cartels. And if any leader in any country tries stopping us, that he will expose their connections to the cartels. The unfortunate reality with a lot of Latin America is most of their governments are narco governments. and most of their governments are compromised by the cartels, and very few of them do not have ties to it because it's very hard to get to power otherwise.

I don't want to do a left turn here, but I'm about to, I think, Josh, we can talk about this particular issue another time, because I'd love to have your back on because there's an awful lot here to digest. But when we talk about this, this is why I am so confused over the past week or so over the White House Trump pardoning at basically at the request,

at the constant lobbying of Roger Stone, and then we don't know what's behind Roger Stone. So that is something that I'd love an investigative journalist to get on, is the pardon of Juan Hernandez, the former Hunter and President, convicted in the U.S., 45 years, evidence was there. It's not like, oh, perhaps it's political persecution. There's solid evidence, and he's just been pardoned, a full and complete pardon. So there's a conflict there that I'm having a hard time understanding.

Again, we can talk about that another time. Let me give you my take on it. Sure, sure, please. What's you're watching in Venezuela and most of Latin America? Drugs are part of it, but it's not really about drugs. It's about the Monroe Doctrine. And it's about which country basically is the unofficial regional leader of Latin America. Because what Chavez did prior to Maduro, he got rid of the Monroe Doctrine.

So the Monroe Doctrine, 1800s, it was basically the U.S. policy, Latin America, the global south is America's backyard. Europe is not allowed to have new colonies there. If they do, they're, you know, we'll fight them, basically. That was maintained through the Cold War. You know, that's where we had the Cuban Missile Crisis and everything else and so on and so forth, right? That was America's backyard, no outside intervention. And of course, you know, for our security, for everything else, it is important to us. America basically has not been

We've not had that And we haven't had it for a long time And a big part of that is because of the Different coalitions that were established Between Venezuela and Cuba That was again under Chavez They created or And somewhat through Brazil as well

For example, the Forourois, Sao Paulo The Forum of Sao Paulo And these regional organizations Basically facilitated a lot of the very far-left policies the socialist governments in the bringing in of the Chinese Belt and Road Initiative as the replacement

for what America used to represent for the entire region. They pushed America out, they brought in China. And so America is really kind of battling for like for what you would call

the Pax Americana, right, the peace under America or what the enemies of America would call the unipolar world order, right, as opposed to what they call the multipolar world order,

which is the global shared governance led by, China. My interpretation of why Trump is pardoning this guy is because in Trump's eyes, most of the governments, they're corrupt. They're all corrupt. Name one that isn't, and I'd be surprised. He knows they're all corrupt, but he needs guys who are loyal to the United States and willing to play ball with us and are going to be more in favor. That's the same reason we gave all this crazy amounts of money to Argentina, and people are saying, why are we giving all this money Argentina. Same reason. Here's my point is that I agree with you, right? And that's why, you know,

I kind of refer to real politics and being pragmatic in the way that you view the world and all of that. But then fine, then be transparent about it and say, I'm pardoning Hernandez. Yes, he was guilty. Because the lack of consistency in saying we've got this war on drugs and we're going to, we're going to go after him because he's running a narco state, meaning Maduro. And then we pardon Hernandez because, well, yeah, he's guilty of aiding and abetting cartels, but, you know, he's kind of our guy. I mean, at least he's on our side of the political spectrum. At least say that, be transparent about it, because otherwise, you can't square those two actions. There's just no way to do it. And what I would love to frame this is, and again, I'm putting this out there

hoping someone will pick it up and run with it. If you don't like it, just throw it right back, as they say, an increment. But let's find out, you know, who was paying, you know, the lobbying effort, on Hernandez's behalf. And that's public information, you know, assuming that the person was registered as a lobbyist and he should be if they were running lobbying efforts on behalf of foreign entities. Then let's dig into that. But Joshua, I'm sorry for disappearing on that rabbit hole. I just find it fascinating.

As I do this conversation we're having, I hope when we call you here in the very near future, you'll come back on because there is a lot to talk about. Well, thanks again to Joshua Phillips, senior investigative reporter at the Epic Times. fascinating stuff. And I'm sure we'll have them back on here very shortly because I don't think this Venezuelan situation is going to be resolved in short order. Coming up next, we're going to take a look at Minnesota's growing welfare fraud scandal. Have you heard about this?

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Welcome back to the PDB situation report. I want to turn to a troubling investigation coming out of Minnesota. According to an expose from City Journal, large-scale welfare fraud networks exploited the state's social services programs, siphoning millions, not billions of taxpayer dollars through Somali money transfer systems known as Hualas. Now, these informal networks operate largely outside of traditional banking. And investigators say that once the money reached Somalia, portions may have been skimmed off by the terror group al-Shabaab, which controls much of the local economy. Now, it's important to note not all these allegations are confirmed, and federal cases are still

unfolding. But the scale of the fraud and the potential national security implications have raised arms well beyond Minnesota. Joining us for more on this is Ryan Thorpe. He's an investigative reporter at the Manhattan Institute and one of the authors of the expose. Ryan, thanks very much for joining us here on the Situation Report. It's a pleasure to be here. Well, hopefully you think that way by the time we finish talking. Listen, I am shocked and I know a lot of people that are watching will be shocked to hear that there's fraud in a government program. But starting from, say, the 30,000 foot level, give us an overview. What are we talking about here? There is a massive problem with systemic fraud in the state of Minnesota when it comes to government welfare programs. We're talking about billions of

dollars that have been defrauded in, you know, recent years. The situation has gotten so bad that there are entire government programs where the U.S. Attorney's Office has indicated the fraud outstrips, the legitimate claims. When it comes to the fraud rings that have been exposed to date, these crimes have been heavily concentrated in Minnesota's Somali community. And this has kind of been an open secret in the state for quite some time, but something that, you know, progressive politicians, kind of progressive media was really loath to admit in terms of what was going on. And then as part of our investigation at City Journal, we spoke to a number of political sources, law enforcement sources, counterterrorism sources, and people indicated to us that, you know,

millions of dollars in stolen American taxpayers have been sent abroad and that some of this money had inadvertently ended up in the hands of al-Shabaab, the al-Qaeda affiliate. Well, inadvertently, perhaps, right? I mean, because those that are siphoning off this money and then sending it back to Samalia, we don't, I'm assuming, I don't want to put words in your mouth, but I'm assuming we don't really know their intent or motivations. And so some of those individuals may well have known that al-Shabaab would then be taking a portion of this money. They would be taking basically a tax on that money. That's fair to say, you know, I wouldn't be able to prove we weren't,

we didn't include it in our article the claim that, yes, this money was specifically defrauded with the express purpose of fundraising for Al-Shaba. Bob, you know, we can't justify that claim. But regardless, you know, we can't rule it out as a possibility. And the bottom line is either way Al-Shabaab's getting a cut whether or not they're intending that for that to be the case or not. Right. No, I appreciate the objectivity there. You don't see that very often. So, well, okay, so what are we talking about in terms of dollars? Do we know yet? So we don't know the total dollar figure here. You know, there are. are whistleblowers in the DHS in Minnesota who say, you know, could be as bad as $6.5 billion,

but I think what's safe to say is we're talking about billions of dollars. And on numerous occasions, the U.S. Attorney's Office has indicated, you know, these three major fraud rings that have been exposed to date, we're talking about a billion dollars there. And when it comes to the true scope of the fraud, it is in the billions. But in terms of, you know, what is the exact final dollar figure going to be here? We don't currently know. We might not ever know. And there's so many questions here to ask, Ryan.

So I apologize if I seem to be all over the map here. But again, kind of looking at a distance and saying, okay, tell us the infrastructure of this. When does it appear that this started? Is there a way to say, look, it appears as if this scheme, although I don't know that scheme gives it a fair enough sort of context. But when did it start? Well, I mean, fraud in government welfare programs would have been going on for, you know, decades. It's certainly a longstanding problem. But at least what sources told me was that they felt like it started to get much worse around 2010.

You know, not to the kind of crisis level that we've reached now, but things had started to pick up a bit of esteem. And then I think a real kind of critical moment is COVID, where you just have more money flying out the door than ever before. And you have some of these programs that are, you know, specifically designed to have very few guardrails under the, you know, idea that, look, it's an emergency. We have to have low barriers to entry. We're going to get money into the hands of people who need it. So the programs, when you take a look at them, some of them almost seem to have been specifically designed in order to facilitate fraud. And so I think the, you know, the fraud predates COVID, but then it, that it accelerates in that point in time. And in it, it. continues. Yeah, I have heard some comments. I think there are probably initial comments from Representative Ilhan Olmore. And I believe they were yesterday at some point in the past day or two. She was addressing this issue. And her response, which was very wordy, was essentially, well, it was the pandemic. And essentially saying what you're saying, we had no guardrails because, well, we had to work so quickly.

And thinking, you don't know, you can work quickly and you can work efficiently and you can work effectively. Those things are not mutually exclusive. Of course. You know, and again, I'm not saying that that's an uncommon response from government. And I know, I think the problem here will be that when you talk about something like this, defrauding the taxpayers, fraud within the government programs, there's a danger, and correct me if I'm wrong, there's a danger that people just roll their eyes and go, well, of course. Yeah.

Yeah. I think that is, look, are we ever going to be able to completely stamp out fraud when it comes to government welfare programs? Likely not, you know. But when we're talking on the level that we are here, billions of dollars over the course of a handful of years, like this is a five alarm fire in the state of Minnesota. And Minnesotans should be utterly.

outraged. Like, they have been failed by their government officials, by the people who are supposed to keep their eyes on the public purse. They have been exploited by their fellow residents in the state. And, you know, ultimately, this money, you know, we can talk about whether or not government welfare is, you know, what we think about that politically. But this money was earmarked for, you know, people who had some needs. And as a result, those needs went unmet and the taxpayer still got hit with a bill, and it went to fund, you know, lavish lifestyles and luxury vehicles and real estate purchases in Africa and across America. Yeah, no, I didn't look.

I agree that the programs themselves, setting up these programs, the needs are very legitimate, right? And yet, well, let me, before I go down that, that road, you mentioned that, you know, the people of Minnesota should be outraged. Do you get the sense that they are? I get the sense that there is, you know, a lot of anger in the state. Now, I can't speak for everyone, but I've been, you know, pretty consistently working the phones since this story broke, keeping in touch with the context that I've developed to try and, you know, get a sense of what they're hearing and what the situation is on the ground. You know, I also spend time in Minnesota while reporting this piece. And, you know, I definitely think that a lot of the people I'm speaking to at least are one, outweigh. But two, they're also happy that this is now a national conversation. There have been people at the state level who have been, you know, trying to raise alarm bells

by this about this for a while. And I think they felt like, you know, this is a huge scandal. Why is no one paying attention? And now it's finally kind of broke through on the national level. This is, there's all sorts of layers to this question, I suppose. But you mentioned early on in our conversation that for whatever reason, politicians, or whomever, just failed to act on these concerns. Why do you think that was the case?

Well, I mean, I have a few ideas, I suppose. One would be, you know, I think that there was a real political risk admitting how bad the situation was for the people that were overseeing it, right? So that's not in their immediate political interest to kind of admit, hey, we totally dropped the ball here. We're out billions of dollars, but don't worry, trust us, the people who oversaw the mess to now clean it up. In addition, you know, the Smalley community has become a sizable voting block in that state. One person I spoke to for the piece indicated to me like, you know, look, you don't win the Smalley community, you don't win Minneapolis, you don't win

Minneapolis, you don't win the state. Is that true? I mean, that's what I've been told this individuals plugged in in politics. So, you know, I took him at his word on that, but at minimum, the Somali community is like a significant voting block. And it is also established, you know, ties with, you know, significant political actors in the state. So, you know, whether or not you could potentially carry Minnesota without winning the Smalley community, you know, let's put a pin in that. At minimum, it's a sizable voting block you have to take into your political calculations. Is it, is it fair to say that perhaps there was some concern that if, if they raised this issue, and again, you know, we're not profiling any particular group, right? We're just saying

there appears to be a significant portion of this fraud in a particular community. But do you think that that led to a desire to not bring it up either because, oh, my God, we're going to be labeled as racist? 100%. And, you know, we know this definitively. So one of the major fraud rings was feeding our future, hundreds of millions of dollars that had been earmarked for feeding hungry children during the pandemic that was just totally ripped off by a very large, primarily smally fraudering. And the state bureaucrats, state officials who were overseeing this program had noticed some concerning signs, some concerning trends just in terms of how put this non- profit was expanding during COVID. And so they were going to put a halt on payments until they could kind of figure out what was going on because there were some suspicions that fraudulent activity might be happening.

In response, they filed a lawsuit against the state government alleging racial discrimination, saying that these payments were being stopped because they primarily serve the Somali community in Minnesota. And more recently, there was a report that looked at a number of scandals under the Walt's government. And in regards to feeding our future, one of the findings was that, like, concerns over how this would play in the press, concerns over being accused of racism, absolutely impacted how they responded to, you know, these trends, these situations where they knew something wasn't on the up and up. Okay. Yeah. Ryan, I've got a book here of more

questions for you, but we have to take a quick break. So if you could stay right where you are, We'll be back with more from investigative journalist Ryan Thorpe right here on the Situation Report. Stick around. Hey, Mike Baker here. Let me take just a moment of your time to talk about security, right? Specifically, your online security. That's extremely important these days. And I want to tell you about a great company out there called Delete Me.

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See full terms at mintmobile.com. Welcome back to the PDB situation report. Joining me once again is investigative reporter at the Manhattan Institute, Ryan Thorpe. We're talking about the growing scandal over the massive fraud that appears to have been happening in the state of Minnesota. Ryan, thank you very much for staying with us. Is it possible to quantify the number of organizations, NGOs, nonprofits, whatever, that were involved or have been involved in this? Well, what we can see for sure is that on a number of the major frauderings that have been exposed to date, it wasn't just a couple of bad actors. There's evidence to believe that this is extended out wider into the Somali community.

So when it came to the Feeding Our Future scandal, you know, various organizations were all tied up in this. There's also an ongoing autism fraud case. There's only been one indictment today, but the U.S. Attorney's Office indicates that more indictments are coming. And it makes clear that the accused in this case recruited smally parents in the community to sign their children up to get, you know, fraudulent autism diagnosis and then get fake autism services. So these aren't, you know, isolated schemes. These, this is like a network of fraud rings. Now, in terms of just how many organizations, no one really knows at this point because the true scope of the fraud remains unclear, you know, but what officials, prosecutors

are saying is like this, what's seen to date is the tip of the iceberg. Wow. Wow. They were using an autism program as part of the fraud scheme. Absolutely. Yeah. You know what? Normally, I'm never at a loss for words, but there you go. So is there a growing list of key perpetrators here? Because I think the danger is, and it's already happened a bit, and I will say in part because of comments from the White House, there's a danger that says, oh, my God, it's the entire Somali community, which, of course, it never is when you're talking about a fraud. I don't care whether it's Lutherans, right, committing to fraud in Minnesota, right? It's there you've got key. individuals and organizations responsible for it. And then, of course, the entire community gets painted

with that same brush. Yeah, I mean, of course, it's not, you know, every Somali in Minnesota. You know, many people in that community would be law-abiding citizens. And I know that there are elements of that community that are somewhat outraged because they feel like, hey, we have these bad actors in our community who are now making the rest of us look bad. How? How are, having so I mean, I take that point well. There's also a concern on the other side where I think we, you know, we're through this now, but for a long time, there was kind of a hesitancy to, you know, confront the facts that, hey, there's a pattern here when it comes to these cases. And if we're going to collectively going to try to address this, then we have to, you know, take the facts for what they are and start there and acknowledge the problem before we can seek to solve it. So there's a risk on both sides, I feel like. Yeah, you know what I really appreciate what you just said because, look, it's no different. What you do, right, as an investigative journalist, is really no different. I know I'm oversimplifying than an investigation that you would have in, say, law enforcement or, you know, a counterintelligence investigation.

The methodology tends to be the same. And at the end of the day, you build it on facts, right? You've been building on evidence. That's how, you can't build it on supposition or speculation. and so what you do and and what a law enforcement investigator would do in a sense has to be the same. So I appreciate what you're doing. And I guess what I'm trying to say is that it doesn't matter who's involved. And it's a bit disgusting that you would, that it's possible that Minnesota representatives, Minnesota politicians,

those who are responsible for that taxpayer money at the end of the day, that they would, essentially look the other way, right, because they're worried about the narrative, rather than saying, we clearly have a fraud problem. We need to uncover the facts. And wherever those facts lay, that's fine. We'll deal with that story. You know what? I realize now, Ryan, I didn't have a question for you.

I was just standing on a soapbox. I mean, but I agree entirely with what you're saying. And look, from the law enforcement side of things that counterterrorism people have spoken to, They basically said, like, look, we're playing whack them all over here with these fraud rings. It's like, yeah, we can whack them down. We can try and dismantle them. There is definitely a role for law enforcement to play here. But we need to figure out something on the policy side of things to stop.

Like, you know, we got to turn off the taps. And when it comes to that, I mean, the only way for that to really happen will be some kind of political reckoning, I would think. Like, ultimately, Minnesota voters are going to have to decide at the ballot box, you know, what they're going to do. and whether or not they trust, you know, the same people that were in government overseeing this to be the ones to fix it. But there's going to have to be a political solution here at some point because what they've been doing at the state level there is clearly not working. Well, from what I've seen so far from comments from folks like Ilhan Omar, the mayor of Minneapolis, Tim Walts. I think if the residents, the citizens of Minnesota expect that there will be a reckoning, expect that there will be. a resolution to something like this and that, you know, you do what you can to mitigate future

risk, I think it's a fool's errand because I think they've got the wrong people who would be leading this charge. Yeah, I mean, that's a, I would say that's a fair perspective, you know, the best predictor of future behavior is past behavior. Yeah. Well, can you take just a moment? I know it's complicated, obviously, but can you try to explain to us? the nature of the fraud.

I mean, underlying it was the same methodology time after time. How was this happening? Yeah. So what you would see, and this is what should have been setting off alarm bells for state officials, was you saw a rapid expansion in these particular programs. So there's one program that was targeted. It was called their Housing Stabilization Services Program. It was seeking to help people who were disabled, mentally ill, struggling with addiction.

help them get into, you know, stable housing. What the fraudsters were doing in this particular case is they were setting up totally fictitious companies that were operating out of, you know, dilapidated storefronts and run down office buildings. They primarily targeted people who were exiting drug and rehab facilities. They would sign them up for Medicaid services that they had no intention of ever providing. And then they would, you know, bill for this funding and completely pocket it. That was similar to some of these other schemes where, you know, one centered on providing meals to hungry children.

It's just like there were no children and there were no meals, you know. The autism services that have been defrauded, you know, these were let's get fake autism diagnosis for children and then let's sign them up for, you know, autism therapy services and then we'll give the parents a bit of a kickback. And the situation got so out of control that autism diagnoses in the Somali community were triple the state average. You know, the number of providers were just skyrocketing and the amount of money was too. So at least, you know, those kind of big ticket fraud rings to date, that's kind of what was going on in terms of the nuts and bolts of it. Okay. Yeah, I've read, and again, please jump in anywhere. I'm making mistakes.

but I've read that initially one program was set up with an estimated budget of 2.5, 2.6 million, and it didn't take long for it to get into the tens of millions. Those are alarm indicators that as an example of a private sector business would notice and act on. Now, I mean, one of the things that this is, I find this whole subject really fascinating, Ryan, and I'd love to have you back on because we're not going to do it justice in the time that we have for today. But, you know, in the real life, not just America's, you know, most beloved podcast host, I also run a company that is an investigations firm and strategic intelligence. And so we have done over years and years, countless fraud investigations.

There's not much new under the sun when it comes to fraud, right? You can say the tools change because in part of because of technology. So the way that you can work that. but the underlying structure of fraud and the indicators that exist don't tend to change over the decades. And it's shocking that state authorities couldn't identify this. Now, I get the impression that probably what's going to happen is the state's going to try to start in some fashion blaming the federal government. And I don't know where that's going to go. But has anybody been arrested?

Well, I mean, fraud, like the leaders of the fraud rings, they themselves have been arrested. They're certainly going to be more arrests to come. There is also, I think I should point out, you know, a group of whistleblowers within DHS in Minnesota who have been attempting to raise alarm bells about this for quite some time. And they're basically pointing the figure, you know, at the politician saying that like, hey, the bureaucrats that were in state government, Many of us did recognize that alarm bells were going off and did try to blow the whistle about what's been going on in terms of the fraud. But, you know, the response from the politicians was just to turn a blind eye. So, you know, there was some people that noticed. But for whatever reason, like the proper steps weren't taken to put an end to it.

Now, you know, we can all speculate as to why that might be. But I do think that's the next leg of this story is looking at the lack of action. from the government in Minnesota? Well, this is where I'm going to display my cynicism, because if anyone expects consequences on that level, I think we've got a real problem. Ryan Thorpe, Manhattan Institute, investigative reporter, this is fascinating.

I would love to have you back on if you've got the time. We've got a lot more we could talk about here and try to dissect this, and I'd love to get an update as to where this is in relatively short. order. So I wanted to say thank you very much. And thank you for the work that you're doing on this. It's incredibly important. I do hope people not just in Minnesota, but all over should be paying attention to this. Well, thank you, making. Yeah, I'd love to come back on sometime. Excellent. Thank you. All right. Well, that's all the time that we have for today's PDB situation report. If you have any questions or comments, you know, you know what to do with them. Send them to us,

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