EYES ON DC
From another OLA audit to the federal government investigating more and freezing more funding, the weight of the politics and the pragmatic view of fraud continues to pile on the Walz administration. Today a Congressional hearing, the fallout of “backdated documents”, and the Centers for Medicaid and Medicare will only raise tougher questions about the function and practices of Gov. Walz let state departments.
Add an ICE agent surge and the noise continues to overtake the signals for coverage, and social media. When you dig in, the question is does the era of accountability only apply to state government? That may be a thread to watch as the mood of Minnesota takes shape for 2026. T
Anoka-Hennepin Schools have avoided a strike with their teachers - they announced a tentative agreement this morning.
Timberwolves win. Gopher MBB beats Iowa.
WalletHub’s list of the best U.S. cities for job hunters ranks Minneapolis at 23rd and St. Paul at 41st. LIST: https://fluence-media.co/44YrD3Z
Across the state, Minnesotans’ thoughts on the economy are mixed at best. MPR: https://fluence-media.co/49J2WLp
CBS News’ new anchor will visit Minneapolis Tuesday and interview Mayor Jacob Frey. STRIB: https://fluence-media.co/45IjFvY
The MNSider Brief on “Team Tim’s Rise and Fall: Political Malpractice or Misjudgment?” is coming out tonight.
The Fluence Forum - The State of Energy is Jan. 21.
It’s National Bobblehead Day to those who collect.
Blois - tips: bloisolson@gmail.com
DEED Commissioner Matt Varilek discussed the state’s new paid leave program on Sunday Take. LISTEN: https://fluence-media.co/3NuT7Ig
Health Care will remain a top issue into 2026, the State of Health Care Fluence Forum panels from last week are now available in podcast form. LISTEN: https://fluence-media.co/FluenceForumPodcast
Want to manage your subscription to TheDailyAgenda.com ? HERE: https://fluence-media.co/managesubscription
The latest insight from Fluence Advisory on the loss of institutional knowledge from the Minnesota Legislature. READ:https://fluence-advisory.com/insights/
FIRST
IAfter yesterday’s news conference and release of the audit, Gov. Tim Walz has no public events today. Republicans have started to direct attacks at Sen. Amy Klobuchar, and sources say that Klobuchar’s decision and entry into the race is “not imminent”. Meanwhile, if Klobuchar doesn’t run – sources confirm Attorney General Keith Ellison will certainly get into the race.
In a new release from Demuth for Governor campaign this morning – “With Governor Walz out of the Governor’s race and with speculation swirling about the potential entrance of Senator Amy Klobuchar, the Demuth/Wilson campaign announced Wednesday the launch of WalzThirdTerm.com - a website dedicated to holding Klobuchar accountable for her record and disastrous policies, many of which mirror those of Governor Walz. DEMUTH: “Minnesota desperately needs a new direction after years of failure under Governor Walz. Billions of dollars in fraud, a disastrous decline in our reading scores, runaway spending, and more. Amy Klobuchar supported taxpayer funded health care for illegal immigrants, trillions in tax increases, extreme energy mandates, and helped create federal programs that were ripe for abuse by criminal fraudsters. If Amy Klobuchar runs, I am ready to prosecute her record, hold her accountable, and make sure she can’t bring a third term of Tim Walz’s failures to Minnesota,” said House Speaker Lisa Demuth.”
Allison Kite of the Star Tribune writes, VERBATIM: “Minnesota House Speaker Lisa Demuth, R-Cold Spring, a frontrunner in the Republican field for governor, and her running mate, Ryan Wilson, are already testing a message that that electing Klobuchar would be tantamount to giving Walz a third term. Demuth told the Star Tribune on Monday that any Democrat who runs for governor will have to contend with headwinds Walz may have faced. DEMUTH: “The Democrats have never separated themselves from Walz whatsoever,” she said. “So really, whichever Democrat ends up running for governor is going to be running for Gov. Walz’s third term.”
Gov. Tim Walz and Attorney General Keith Ellison have been called to testify on February 10th.
A review of various private polls since last summer show that Gov. Walz’s approval rating began to sink in late-summer and sunk further once he announced he was running for a third term. Public polls showed that event 50 percent of DFLers didn’t think Walz should seek a third term. The combination of Walz fatigue, and fraud reports led to approval ratings in the low 40’s in the past month in two polls done by Fluence Advisory.
A new level of insight and information….
Fluence Media introduces more - Insider Analysis & Insight from TheDailyAgenda.com
Regular deep-dive political analysis and breaking news
Monthly insight-filled briefing memo on Minnesota and Midwest economy
Early access to our Fluence Forum audio and video assets.
A morning take mug
PILING ON
TODAY: GOP Reps. Kristin Robbins, Marion Rarick and Walter Hudson will testify before the U.S. House oversight committee during a hearing on fraud in Minnesota. The event is at 9:00 a.m. central. WATCH: https://fluence-media.co/4pwspfY
LASTNIGHT: via Centers for Medicare and Medicaid Administrator Dr. Mehmet Oz video and letter to Gov. Tim Walz last night.
FULL LETTER: https://fluence-media.co/4jv0prG
HEARINGS: via Pioneer Press, VERBATIM: “Oversight Committee Chair Rep. James Comer, a Kentucky Republican, has issued requests to multiple state officials to testify before the Oversight Committee. … Former Department of Human Services Commissioner Jodi Harpstead, who resigned last January, got a letter from the chairman in December requesting she provide testimony in an in-person transcribed interview on Feb. 6. Comer said the committee will have to ‘evaluate the use of the compulsory process’ if she did not testify voluntarily. A similar letter went out to Eric Grumdahl, the former assistant commissioner of Homelessness and Housing Supports at DHS. … Other officials with DHS and the Minnesota Department of Education also got letters from Comer.” READ: https://fluence-media.co/4qEHzR0
PILING UP
BHSAUDIT: The Office of the Legislative Auditor found widespread noncompliance in the Dept. of Human Services’ handling of certain health grants. Notable findings included documentation produced after the audit began, unresolved issues from previous audits, and a manager who approved a large grant before leaving the department to work for the grant recipient. EXCERPT: “The Behavioral Health Administration did not comply with most requirements we tested and did not have adequate internal controls over grant funds. … Some [BHA] staff described poor leadership practices within the administration, and many staff indicated that they did not receive sufficient training.”
REPORT: https://fluence-media.co/3L2RD7B
SUMMARY: https://fluence-media.co/4qdakom
DETAILS: via Fox 9, VERBATIM: The audit also found issues with 11 of 18 payments the BHA made to grantees stemming from “insufficient documentation, costs not incurred, costs incurred outside the reimbursement period, or costs inaccurately reported on reimbursement requests.”
Throughout the audit period, 18 providers had grant percentage allocations increase during the audit period by more than 100% — with one grant recipient increasing from $600,000 to a final grant total of $5.6 million, or an 830% increase…The grant was said to have utilized 14 subcontractors, but when two were visited by OLA auditors, neither could provide sufficient documentation regarding how the funds were used.
The report alleges that one of the subcontractors said the grantee told them they did not need to keep detailed participant records, such as sign-up sheets. However, without such documentation, the OLA could not verify what they were paid for.” READ: https://fluence-media.co/4qGDRq6
MORE: via Star Tribune, VERBATIM: “Legislative Auditor Judy Randall [told] lawmakers at a Jan. 6 meeting of the Legislative Audit Commission that there were ‘systemic’ issues where staff failed to do proper documentation and, when auditors sought information, they created documents and backdated them to look like they had been done earlier. … Randall said [this] was ‘frankly unacceptable’ and that she had not previously seen it in her more than 27 years doing the work.” READ: https://fluence-media.co/45HzPFT
REACTION: via GOP Sen. Mark Koran, member of the Legislative Audit Commission, KORAN: “The finding that a DHS manager approved a large grant and later became a paid consultant for that same grantee is a blatant conflict of interest. … The audit makes clear that DHS leadership has failed at every level. Employees were not properly trained, oversight was ignored, and accountability was missing. … DHS needs a full reset, starting with leadership, training, ethics, and oversight.”
TIMELINE: At 2PM yesterday, the Office of Legislative Auditor held a hearing on the Behavioral Health Administration audit.
According to the OLA office they first provided a copy the audit to DHS and BHA the first week of December, and briefed DHS and BHA staff and Commissioner on December 18th, and briefed Governor’s office staff on Monday.
The Walz team scheduled the Paid Family Medical Leave news conference at 11:30 before the OLA Audit would be out, and before he could face questions on Tuesday.
Walz has no public events scheduled today and requests for statement about the audit were not responded to.
CLEAN | RELIABLE | AFFORDABLE: via Xcel Energy, VERBATIM: “We’re powering the Upper Midwest with clean, reliable, and affordable nuclear energy. For more than 50 years, our Prairie Island Nuclear Plant, located near Red Wing, MN, has been a workhorse of reliable, carbon-free energy. With two pressurized water reactors producing about 1,100 megawatts, Prairie Island generates enough electricity to power 1.5 million homes across the Upper Midwest. Unlike sources that depend on weather, nuclear energy delivers 24/7 reliability — providing the power we need today while protecting the environment for tomorrow.” LEARN MORE: https://fluence-media.co/4oCHdK9 (SPONSORED: Xcel Energy)
MNGOV
GOV RACE: via Star Tribune, VERBATIM: “In the congressional delegation, most of the Democrats, with the exception of Rep. Ilhan Omar, have indicated that [Amy] Klobuchar would be the strongest candidate if she does decide to run for governor. Rep. Angie Craig [said] ‘I hope that she decides to run. I will support her immediately.’ … Sen. Tina Smith [wouldn’t] say if she’s personally encouraged her to run. Smith herself is not interested in running for governor. … ‘Klobuchar would be a great leader for our state if she chooses to run for governor,’ Rep. Betty McCollum said.” READ: https://fluence-media.co/4sLlpPh
MORE: Sen. Amy Klobuchar confirmed to CNN on Capitol Hill that she is “seriously considering” a run for governor. KLOBUCHAR: “I love my job, I love my state and I’m seriously considering it.” READ: https://fluence-media.co/4ssHuBT
SENATE RACE: Speaking to the Star Tribune, Rep. Angie Craig said she should be the DFL’s Senate nominee for the same reason she thinks Sen. Amy Klobuchar should be the gubernatorial nominee: they’re both federal lawmakers with no connection to state fraud scandals. CRAIG: “I think the impact more broadly to the Senate race is that Peggy Flanagan will have many of the same issues [on fraud]. We absolutely can’t afford to let her be the nominee.” … A Flanagan spokesperson said Craig is “choosing to lean into Republican attack lines to distract from her pro-Trump record.” READ: https://fluence-media.co/4sLlpPh
LAME DUCK?
WALZ: via MPR News, VERBATIM: “Taking his first questions on a decision this week to end his reelection campaign, [Gov. Tim] Walz let loose. … He blasted the ‘war being waged against Minnesota’ by President Donald Trump…a new wave of federal immigration enforcement officers spilling into the state…Trump’s spread of a debunked conspiracy theory about the assassination of the late House Democratic leader Melissa Hortman…Minnesota Republicans who he said hadn’t stood up to the president over that post or other abrasive comments, [and more]. … It’s not clear whether Walz will make this the end of his political career, [but] Walz suggested he might return to his roots teaching geography.” READ: https://fluence-media.co/44XHmAd
US ATTY: via MinnPost, VERBATIM: “[Gov. Tim] Walz has mostly spoken respectfully about acting U.S. Attorney General of Minnesota Joseph Thompson. But while Walz said that he will continue to cooperate…he accused Thompson of ‘defamation’ for suggesting that the state has handed out over $9 billion to providers in fraudulent payments. Walz said that Thompson ‘would have been let go by another administration’ and is ‘speculating about things.’ … Walz also criticized the Republican-led state House Fraud Prevention Committee for not sharing data with his administration.” READ: https://fluence-media.co/49yBe30
EXPECT: More questions and reports about Walz’s comments at the news conference yesterday including his claim that he was “defamed”. morning take has also requested back up documentation to Walz’s claim that he has done more media availabilities than any Governor in Minnesota history.
MORE: via Pioneer Press, VERBATIM: “Asked about Republican calls for his resignation, [Gov. Tim] Walz told reporters: ‘You can make all your requests for me to resign over my dead body.’ … Asked if he recommended [Amy] Klobuchar run, Walz said he spoke with ‘all’ of the Democratic Congressional delegation and ‘let them know’ of his plans. … The governor described his decision as personal.” READ: https://fluence-media.co/3Ysqga4
FIRED? via KSTP, VERBATIM: “During Monday’s surprise announcement that he would not seek reelection, Gov. Tim Walz rattled off a list of actions he has taken to fight fraud, including a claim that he’s fired people in his administration. … That statement seems to contradict one of the main arguments from critics who say no one has lost their job due to fraud. There have been significant departures in the administrations, but many have been labeled as resignations or ‘separations.’ It remains unclear who has been fired.” READ/WATCH: https://fluence-media.co/3NefB07
RESPONSE: Former Rep. Dean Phillips told MPR he thinks Gov. Tim Walz’s political career will likely be over once his term ends. PHILLIPS: “American politics can make you a prince one day and a pauper the next, and I’m afraid that’s what’s transpired with Governor Walz. He was a good man, but he’s also been subject to what happens in politics: It compromises principles and the focus becomes on maintaining power rather than improving lives. I know he did both, but I don’t see much of a future in Minnesota or federal politics for Governor Walz — or, frankly, for myself.” READ: https://fluence-media.co/3NjPvsF
MORE: Former Gov. Arne Carlson spoke to WCCO Radio about his thoughts on Gov. Tim Walz ending his reelection campaign, calling it the right decision. LISTEN: https://fluence-media.co/4qdhLvM
ICE
ICE: via MPR News, VERBATIM: “The federal Department of Homeland Security said Tuesday that Secretary Kristi Noem was in the Twin Cities, as a federal immigration crackdown continues. The agency posted a video to social media on Tuesday morning, showing Noem accompanying federal agents as they detained a man. The agency and Noem, in separate social media posts, labeled the video as being taken in Minneapolis — but it appeared to show the operation taking place at a building on Payne Avenue in St. Paul.” READ: https://fluence-media.co/3NzbxHS
DETENTION: via Pioneer Press, VERBATIM: “The Washington County Board on Tuesday voted to have staff draft a letter to federal officials regarding rumors that the city of Woodbury is being considered for one of 23 Immigration and Customs Enforcement detention centers across the country. The agency reportedly is planning to develop detention centers to house more than 80,000 immigrants, and county officials want to get their opposition to a Woodbury center on the record.” READ: https://fluence-media.co/4sLtinR
THE FEED…
AUTISM: via FOX 9, VERBATIM: “After the Minnesota Department of Human Services (DHS) implemented a pre-payment review of autism centers seeking funding, providers will start to see that money by the end of January. DHS says the first round of claims is going through the pre-payment review process currently, and unflagged claims will be paid after ‘initial analysis.’ … DHS says unflagged claims in this first round are set to be paid by Jan. 27. After that, DHS will send payments for unflagged claims to providers every two weeks.” READ/WATCH: https://fluence-media.co/4992HJs
PAID LEAVE: via Office of the Governor, VERBATIM: “Governor Tim Walz and the Minnesota Department of Employment and Economic Development (DEED) today provided an update on the rollout of Minnesota’s Paid Leave program. Since applications opened, 17,983 people have applied to the program and 3,510 people have started their leave.” WALZ: “We built this program carefully with employers and launched it on time and under budget. Paid Leave is one of the most important investments we’ve made in working families.” READ: https://fluence-media.co/3LnTl3s
MOVE: The House DFL hired Lindy Sowmick as its new press secretary and director of communications. She will be the primary point of contact for reporters.
BUSINESS EXCELLENCE: Flint Hills Resources was just awarded the 2025 Large Business of the Year award from the Dakota County Regional Chamber of Commerce at their annual Business Excellence Awards celebration. The award celebrates the outstanding achievements of businesses that exemplify the thriving and growing spirit of Dakota County. The businesses honored make an impact and contribute to the continued success of our community. LEARN MORE: https://fluence-media.co/46lTpIs (SPONSORED: Flint Hills Resources)
AROUND MN
HENN CTY: via Hennepin County, VERBATIM: “The Hennepin County Board has reappointed District 2 Commissioner Dr. Irene Fernando as chair. … District 5 Commissioner Debbie Goettel will serve again as vice chair of the board.” READ: https://fluence-media.co/3LiiD2Y
MPD: via Star Tribune, VERBATIM: “In a surprise shake-up of his senior staff, Minneapolis Police Chief Brian O’Hara has replaced two sitting deputy chiefs and ordered a department restructuring that consolidates several specialized investigative outfits under one umbrella. A newly created Major Crimes Division will now house the Homicide Unit, the nonfatal shooting response team and the Violent Criminal Apprehension Team.” READ: https://fluence-media.co/45Ix7Qv
MPS: via Minnesota Reformer, VERBATIM: “Three senior leaders in the finance department of Minneapolis Public Schools have been placed on administrative leave, according to two people with knowledge of the personnel decisions, just as the district begins its annual budget process. … The district’s auditors have warned for years that the district lacks sufficient finance department staff to appropriately segregate its accounts payable and accounts receivable functions.” READ: https://fluence-media.co/4jr8ihE
SPPS: via Pioneer Press, VERBATIM: “St. Paul Public Schools board member Jim Vue will resign effective Feb. 17, he announced during the board’s annual meeting Tuesday. Vue, whose term was to expire in December, has served on the board since 2020. … Vue did not share the reasoning behind his resignation, [but] the announcement comes following the board’s December vote to keep a district school focused on Hmong culture and language at its current East Side campuses. … Vue was the sole vote approving the temporary move.” READ: https://fluence-media.co/4jsTDCF
LITTLE FALLS: via Bring Me The News, VERBATIM: “Wabash National, one of North America’s largest semi-trailer and truck body producers, will end operations at its Little Falls manufacturing plant this spring. The Lafayette, Indiana-based company has informed state officials that the plant will close permanently on April 16, resulting in approximately 56 layoffs. … Little Falls Mayor Greg Zylka said he’s devastated by the closure.” READ: https://fluence-media.co/3N9VsID
ST CLOUD: via St. Cloud Live, VERBATIM: “Two candidates vying for the DFL endorsement to challenge U.S. Rep. Tom Emmer, R-Minnesota, during the 2026 midterms will face off during a debate Saturday, Jan. 10, at St. Cloud’s Great River Regional Library. The debate between candidates Anson Amberson and Doug Chapin is scheduled to begin at 11 a.m.” READ: https://fluence-media.co/4pw6zJB
AHEAD
TODAY: The Advisory Committee on Capitol Area Security is scheduled to meet at 2:00 p.m. and discuss updates from the Dept. of Public Safety and the Sergeant-at-Arms.
TOMORROW: Axios Live will host conversations with Speaker Lisa Demuth, Senate Majority Leader Erin Murphy, and UnitedHealth Group VP Margaret-Mary Wilson regarding the future of public health. The event is in Eden Prairie at 9:30 a.m.
TOMORROW: The Economic Club will host a luncheon with Treasury Sec. Scott Bessent in Golden Valley at 11:00 a.m.
FRIDAY: via Mpls. Fed, VERBATIM: “The Federal Reserve Bank of Minneapolis will host its annual Regional Economic Conditions Conference on Friday, Jan. 9 from 9 a.m.-12:05 p.m. … Hear insight on the energy sector from Xcel Energy Chairman, President, and CEO Bob Frenzel [and others].”
JAN 14: Clean Elections MN will host a webinar with Sec. Steve Simon and Atty. General Keith Ellison discussing “what’s being done to keep our elections safe, fair and secure,” per a release. The event is at 7:00 p.m.
BDAYS: communications pro Jennifer Steingas, capitol photographer John Kaul
SPEAKER: If you’re looking for a speaker about the “Signal vs. Noise” dynamic of today’s politics and the 2026 election. EMAIL: BloisOlson@gmail.com.
SPONSORS: Sponsorships are available to reach over 30,000 readers per day on Fluence’s tip sheets and website, TheDailyAgenda.com – email BloisOlson@gmail.com.
Send us your tips at BloisOlson@gmail.com
IN MEMORIAM: morning take from now to the future is in memory of Melissa Hortman her accessibility, leadership and commitment to public service.
Fluence Media curates, produces and distributes specialized media products to thought leadership audiences across the Midwest and about the region. Our publications cover, politics, public policy, health care, agriculture, business, real estate, sports and more. Visit www.fluence-media.com to learn more.
about morning take: Founded in 2010, morning take has grown to become the leading Minnesota morning newsletter on politics and news of the day. Published by Fluence Media since 2012 the mission is to “make you smarter” before breakfast.
Copyright © 2026 Fluence Media, All rights reserved.