D.C. Memo: Fraud czar Vance targets unemployment benefits

WASHINGTON – As the nation’s fraud czar, Vice President JD Vance announced a new target this week — the unemployment benefit programs run by Minnesota and all other states but funded in part by the federal government.

Acting U.S. Secretary of Labor Keith Sonderling issued formal letters to the governors of 53 U.S. states and territories Wednesday saying his department will “use every enforceable tool” to crack down on what he said were “improper payments and corruption” in state unemployment insurance programs.

Sonderling, a member of President Trump’s Task Force to Eliminate Fraud, which is led by Vance, said some of the “tools” he would use on states that don’t eliminate “mismanagement, improper payments and corruption” in their unemployment benefits programs include withholding administrative funds “for the first time in history.”

“We are officially putting governors on notice,” Sonderling said in a statement. “The American people will no longer tolerate the blatant waste, fraud, and abuse of their hard-earned tax dollars — no state should allow it either. If states allow it, they will suffer the consequences. This department is no longer afraid to use every lever available to ensure taxpayer money is protected.” 

Minnesota’s Department of Employment and Economic Development (DEED), which runs the state’s unemployment insurance program, seemed nonplused by the threats.

“This is not a new federal requirement — all states have been required to maintain program integrity in their Unemployment Insurance systems since the Social Security Act of 1935,” DEED said in a statement. “Minnesota’s UI program is a top performer in program integrity and will continue to follow and update its effective processes as validated by the Office of the Legislative Auditor, to detect fraud and act on attempted fraud.”

DEED also said all state unemployment insurance programs must report to the U.S. Labor Department on their “integrity work” and work with the federal government to review and upgrade fraud preventive measures.

Minnesota’s unemployment rate in May, the latest month for which there is data, dropped slightly to 4.4%. That’s just a bit higher than the national unemployment rate for May, which was 4.3%.

The state’s current unemployment rate, however, was much higher than it was a year before. In May of 2025 it was 3.3% while the national rate was 4.2%.

An end to the war?

President Donald Trump signed a document aimed at ending the hostilities with Iran at Versailles Wednesday night, a palace whose gold-covered walls and furnishings the president said were not just “gold leaf” but “the real deal.”

But there are questions, among Democrats and some Republicans, as to whether the memorandum to end the war with Iran is the “real deal.”

The United States and Iran agreed to “refrain from the threat or use of force,” something Trump seemed to immediately violate as he warned attendees of a Group of Seven meeting in France that he was “prepared to resume shooting” at Iran, “dropping bombs on their heads.”

The United States also agreed to begin removal of its naval blockade in the Strait of Hormuz, which prevented Iranian ships laden with oil and other goods passage. Iran, meanwhile, will remove its blockade of the strait.

The United States also agreed to remove all of its military forces from the area within 30 days.

The MOU also says the United States and Iran pledge to “undertake” steps in search of a lasting peace and has a two-month timeline to solve other thorny issues.

It also said Washington and Tehran have agreed to resolve the “disposition of Iran’s stockpiles of highly enriched uranium” and, at the very least, “downgrade” those stockpiles to levels far below what is needed to build nuclear weapons.

The United States also agreed to unfreeze $300 billion in Iranian assets, mostly held in U.S. banks. The Obama-era nuclear deal with Iran, which Trump ended and repeatedly criticized, also unfroze Iranian assets.

The deal was scorched by congressional Democrats — and also some Republicans. Sen. Bill Cassidy, R-La., for instance, called the 4-month war and its outcome “the worst foreign policy blunder in decades.”

“Ronald Reagan is rolling over in his grave,” Cassidy said in a post on X. 

“Iran’s nuclear ambitions were not curbed, and they have learned that threatening the Strait of Hormuz works and will undoubtedly leverage it in the future. Now, Iran gets to build brand-new infrastructure under this deal.”

Sen. Roger Wicker, R-Miss., said “since day one” he supported Trump’s actions against Iran. But he condemned the peace agreement.

“I am concerned that the memorandum of understanding negotiates away the victories of Operation Epic Fury in ways that are completely out of step with the president’s goals,” Wicker said in a statement.

The Mississippi Republican also said the agreement’s $300 billion fund for the reconstruction and economic development of Iran “would make President Obama’s 2015 deal look like a pittance in comparison.”

The Obama administration unfroze $1.7 billion in Iranian funds as part of its agreement.

Meanwhile, former White House adviser Steve Bannon urged Trump to “just walk away, but keep the money.”

Democrats have been nearly unanimous in their opposition to the war.

Rep. Betty McCollum, D-4^th District, has been among the strongest critics.

“President Trump’s reckless decision to take the United States to war with Iran without congressional authorization has been a disastrous failure,” McCollum said in a statement. “Not only has the president’s war of choice utterly failed to deliver on his own shifting military goals, but it has also cost the American people directly by increasing prices for necessities like groceries, housing, health care, utilities, gasoline, and more.”

She said the effort to reopen the Strait of Hormuz was just a reversion to what the situation was before the war, when the strait was not blocked.

“The war has left the U.S. in a precarious geopolitical position, and it has made the world a more dangerous place,” McCollum said.

In other news:

▪️Andy Steiner writes about how the upheaval in Minnesota’s Medicaid programs caused by Trump administration initiatives has thrown some moms, kids and a whole town in limbo.

▪️Maddie Robinson had a story about how a community garden in St. Paul outside a doctor’s office represents a more holistic approach to care. 

▪️When it comes to personal wealth, not all of Minnesota’s members of Congress are equal and their party affiliations don’t matter. Rep. Kelly Morrison, D-3rd District, appears to be the wealthiest Minnesota lawmaker, according to personal financial disclosure reports, while Reps. Tom Emmer, R-6th District, and Ilhan Omar, D-5th District, reported the fewest assets.

This and that

I usually keep the comments I receive on our stories anonymous, but today I want to talk about one of my most thoughtful, and prolific, commenters.

I was very saddened to hear of the passing last week of Joel Stegner, one of the most thoughtful and prolific commenters. His obituary said he lived in Edina, had a career as a health care data specialist and “was also a person who loved and supported others, and truly felt joy in witnessing other people’s accomplishments.” 

I knew him as a politically savvy and extremely intelligent reader whose comments on our stories were always spot on and who really cared about public policy and how what’s happening in Washington, D.C., impacts Minnesotans, and the nation and the world. He was even on point (mostly) in his infrequent critiques of my stories.

I will really miss hearing from him in my in-box and offer my condolences to those who loved this very kind man.

Please keep your comments, and any questions, coming. I’ll try my best to respond. Please contact me at aradelat@minnpost.com.

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