Gov. Ferguson claims WA ‘takes fraud seriously,’ creates fraud watchdog after Dems attacked journalists investigating taxpayer abuse

The initiative will coordinate oversight of agencies already scrutinized by independent journalists and state auditors over suspected fraud, improper payments and failures to account for public spending.

Ferguson’s order creates a Health & Human Services Chief Fraud Prevention Officer whose responsibilities include coordinating fraud prevention, detection, investigation and recovery efforts involving the Health Care Authority and the departments of Health, Social & Health Services, Labor & Industries and Children, Youth & Families.

“Washington takes fraud seriously,” Ferguson said. “As we continue to face challenging state budgets and devastating cuts from the federal government, it is more important than ever to protect every dollar. My executive order unifies our prevention efforts across state government and expands them.”

The announcement follows months of scrutiny of Washington’s childcare subsidy system, and attacks on the journalists asking where the money went.

Brown previously criticized “random vigilante people” visiting childcare providers and described independent journalists’ investigations as “racist” and “hate.” He directed providers reporting harassment to law enforcement, his office and Washington’s Hate Crimes & Bias Incident Hotline. Brown also said suspected fraud should be reported to the state and substantiated wrongdoing should result in accountability but claimed he hadn’t received any credible reports.

Wilson, meanwhile, answered “No” when KOMO News asked whether she had authorized Seattle police or the city’s Office of Immigrant and Refugee Affairs to investigate fraud allegations involving daycare providers.

“This whole issue is not really about fraud,” Wilson said. “It’s about dividing and conquering. It’s about making an immigrant community a target.” She argued that an operator’s identity provided no reason to assume wrongdoing.

The backlash intensified after The Post Millennial’s Katie Daviscourt investigated more than 20 Seattle-area daycare locations, raising questions about more than $5 million in taxpayer funding. Records cited in the reporting showed Daisy Family Childcare had received nearly $2 million and was collecting approximately $70,000 monthly. No children appeared to be present during Daviscourt’s visit. Other providers received approximately $40,000 and $30,000 per month. Those observations raised questions about services being provided but did not, by themselves, establish fraud.

In a September 22 email to lawmakers and early learning officials, SEIU 925 Political and Legislative Director Erin Haick accused Daviscourt of participating in a “sustained, racist attack” against immigrant childcare providers. Haick acknowledged that five programs mentioned in the reporting were union members.

The Center Square reported that the union urged lawmakers to act against what it characterized as harassment by reporters. Rep. Jim Walsh warned that the pressure was setting the stage for legislation restricting independent investigations. UnDivided host Brandi Kruse, who obtained the email, subsequently described SEIU’s push as an effort to criminalize Nick Shirley-style fraud reporting.

SEIU is a major financial force supporting Democrats.

Auditors could not adequately trace more than $1.3 billion in federal childcare spending at the provider level between fiscal years 2021 and 2024. That included approximately $416 million in 2024 alone. The findings exposed serious accounting failures, although they did not establish that those funds were stolen.

After accounting changes allowed auditors to examine provider payments, the State Auditor’s Office estimated approximately $37 million in questionable childcare payments in fiscal year 2025. Auditors identified missing attendance records, billing unsupported by attendance documentation, and missing parent or guardian signatures. DCYF emphasized that the audit did not uncover evidence of fraud and that the $37 million figure was an extrapolation from sampled payments.

Other agencies included in Ferguson’s initiative have faced similar scrutiny over financial controls. KVI’s Fraud Watch reporting detailed more than $5.6 million in improper Medicaid charges at the Health Care Authority, along with weaknesses in provider eligibility oversight and monitoring of managed care organizations. The outlet also documented a $160,206 federal funding overdraw at the Department of Health and weaknesses in financial safeguards.

Ferguson’s new officer will coordinate with these agencies and work alongside the independently elected state auditor. The governor says the position’s work will be implemented using existing resources.

The order also establishes a Public Funds Fraud Prevention & Accountability Workgroup, co-chaired by the Governor’s Office and Office of Financial Management. It must develop a statewide framework by June 30, 2027, covering prevention, detection, reporting, recovery, and accountability.

Its recommendations will address enforcement authority, contractor suspension and debarment, whistleblower protections and a possible public dashboard tracking recoveries and corrective actions. State agencies will also develop additional fraud awareness and financial crimes training.

Ferguson separately announced plans to seek legislation expanding Washington’s Medicaid False Claims Act to cover false claims across state government. Under the proposal described by his office, enforcement would proceed exclusively through private whistleblower lawsuits, with successful whistleblowers receiving a share of recoveries and the state receiving the remainder.

The proposal would formally enlist private individuals in recovering public money after journalists investigating suspected misuse faced accusations of racism and pressure over their reporting.

Ferguson’s initiative echoes the approach President Donald Trump promoted just one week earlier: coordinating fraud enforcement across government and financially rewarding private individuals who expose taxpayer abuse. Trump announced a $25 million Fraud Whistleblower Incentive Program on October 20 in the Oval Office alongside Vice President JD Vance, who leads the administration’s fraud task force, and independent journalist Nick Shirley. While Washington officials attacked independent investigations, Trump praised Shirley’s reporting on suspected daycare fraud, and Vance encouraged Americans to participate: “Your tax dollars are being stolen... If you want to help us stop it, you get to share in the rewards now.”