Faye Bernstein, a veteran employee of the Minnesota Department of Human Services, testified before the House Fraud Prevention and State Agency Oversight Policy Committee in March 2026 regarding allegations of professional retaliation. Bernstein claims the Walz administration targeted her after she flagged systemic fraud risks within the agency's Behavioral Health division.
The longtime employee asserted that her efforts to provide oversight for taxpayer funds resulted in a smear campaign and formal reprimands. These allegations surface as state Medicaid programs face ongoing federal and state investigations into widespread fraudulent activity.
"I would love to just say ‘I told you so!’" said Faye Bernstein, a longtime DHS employee.
Speaking with 5 INVESTIGATES, Bernstein explained that she first noticed high-risk practices involving mental health and substance use disorder treatment grant contracts seven years ago. She reported these concerns to multiple internal supervisors, but claimed leadership ignored the warnings.
"I was not aware at that time of any actual fraud, but I was concerned about the risk," she said.
Bernstein noted that the lack of oversight she observed was exactly the type of environment that invited illegal activity. In July 2019, after emailing 133 colleagues about her concerns, she was escorted from the building and reprimanded for failing to process contracts she deemed improper.
"I was reprimanded for not doing work, which was correct," Bernstein...
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