Garage Logic (Gamut Podcast Network)

Episode: CRABBY : Will ICE Be Kicked Out Of Minnesota?

Date: January 15, 2026

Episode Overview

This lively and revealing episode finds the Garage Logic team (Jay, Kenny) joined by constitutional law expert David Schultz and seasoned attorney Dave Finewalks. The team dives into explosive recent news: Minnesota’s lawsuit to halt ICE operations, a major exodus at the Minnesota U.S. Attorney’s office, and the federal government’s unprecedented threat to withhold $2 billion in Medicaid funding over rampant fraud. The tone is classic Garage Logic—irreverent, blunt, but deeply informed and passionate about government accountability.

Key Discussion Points & Insights

1. Minnesota’s Lawsuit Attempting to Curtail ICE Operations

• Summary of Legal Maneuvering:
  The state, via Minnesota Attorney General Keith Ellison, recently sought a federal temporary restraining order to stop ICE operations in Minnesota, arguing violations of equal protection, political targeting, and, most notably, interference with “states' rights” under the 10th Amendment.
• Judge’s Response (03:07):
  • The federal judge (Menendez) did not immediately grant the restraining order, instead scheduling further argument for the following week so the federal government can respond.
  • Quote:

    “The judge punted for now... you don’t get those kind of orders unless the judge... can conclude you’ve got a pretty good chance of winning at this point.”
    —David Schultz, 03:07

• States’ Rights vs. Federal Supremacy (08:13):
  Discussion centered on whether federal immigration enforcement can override Minnesota’s claimed sovereignty.
  • Quote:

    “Do we want the federal government... strong arming states into doing a variety of things?”
    —David Schultz, 08:17

  • The “Supremacy Clause” means federal law generally trumps, but compulsion of states is questionable.
• Precedent-Setting Potential:
  If Minnesota prevailed, it could create significant new legal precedent on state-federal boundaries, especially for immigration.

2. Resignations at the Minnesota U.S. Attorney's Office

• The Sudden Exodus (11:26):
  Six top attorneys, led by Joe Thompson (the office's white collar/fraud chief), abruptly resign amid reports of D.C. pressure to investigate the widow of Renee Goode, who was killed by ICE agents. The team compares this "protest" resignation to the Watergate era’s "Saturday Night Massacre."
  • Quote:

    “Back to Watergate? It sounds like echoes of Watergate.”
    —Jay, 14:55

  • Resignation likely driven by legal ethics: refusing to pursue a case they viewed as improper.
  • Loss of institutional memory is a disaster for ongoing fraud investigations.

    “You just can’t move a bunch of attorneys from one part over to somewhere else.”
    —David Schultz, 20:02

3. Escalating Federal-State Conflict Over Medicaid & Fraud

• $2 Billion Medicaid Threat (30:00):
  Joined by Dave Finewalks (Minnesota Hospital Association attorney), the team unpacks the federal threat to withhold billions in Medicaid funding due to what they call Minnesota’s total failure to police fraud, particularly in “waivered” experimental programs.
  • Quote:

    “It looks to us like you’re not even trying to prevent fraud.”
    —Dave Finewalks, 31:33

• Scope and Impact (34:20):
  • Fraud is ballooning to estimates of $9–20+ billion, affecting over 1 million Minnesotans—particularly “innocent bystanders” such as the elderly and disabled.
  • The most egregiously compromised services: “housing stabilization” and other waivered programs, allegedly designed for easy fraud.

    “Looks like the program was set up just to bleed federal money.”
    —Dave Finewalks, 35:56 “90% or greater of housing stabilization was fraud.”
    —Jay (relaying Joe Thompson), 36:05

• State's Response Deemed Inadequate (38:00):
  • Federal review called responses from Governor Walz’s administration “babbling bullshit” (citing plans to hire consultants as insufficient).
• Why It Matters:
  Not only is real aid at risk, but new concerns have emerged—evidence suggests fraud proceeds may be funding terrorism, prompting the federal clampdown.

4. Constitutional and Civil Liberties Angles

• ICE Enforcement Methods Under Scrutiny (24:26):

  • Allegations that ICE carried out home raids and arrests without proper judicial warrants—raising red flags among all sides.

    “I don't want the government knocking on my door... Show me the warrant.”
    —David Schultz, 25:14

  • Discussion of the Fourth Amendment, Bill of Rights, and universal interest in government accountability.

• Political and Community Fallout:

  • Mayors, including Minneapolis' Jacob Frey, and public figures are denouncing ICE operations; episode notes rhetoric escalation isn’t helpful.
  • Concern that federal tactics are fueling community fear and could lead to unrest reminiscent of the post-George Floyd era.

5. The Bureaucratic Tangle & Institutional Paralysis

• Multiplicity of Investigations (19:03):
  • Now up to nine overlapping federal investigations, after the state’s systems failed.
  • Widespread worry about capacity to continue prosecutions after loss of expertise at the US Attorney’s office.
  • Lament that the state can’t or won’t “prosecute itself” due to deep conflicts of interest.

Notable Quotes & Moments

• On the State’s Legal Filing:

  "They wrote a B minus or a B, a B complaint. They could have written a better one... But it’s not a bad argument to say that [the Feds] can't push the state around."
  —David Schultz, 09:15

• On Legal Ethics and Attorney Resignations:

  “The threat of being investigated by the Office of Professional Responsibility... is so great that for 99 out of 100 lawyers, that’s enough to say, ‘that’s it, I’m done, folks.’”
  —David Schultz, 16:00

• On Medicaid Fraud:

  “It’s a buyer’s market for fraud in Minnesota at this point.”
  —David Schultz (coined phrase), 19:35

• On State’s Defense Against Federal Medicaid Cutoff:

  “Walz issued an executive order decreeing that fraud would stop.”
  —Dave Finewalks, 39:05
  “Here’s what the Walz administration says they’re going to do…With your permission, that’s some babbling bullshit.”
  —Dave Finewalks, 38:01/46:18

• On the Failure of State Oversight:

  “Our legislative auditor…said, ‘I’ve known this all along. I warned them.’”
  —Dave Finewalks, 32:38
  “A bunch of your people just created fraudulent documents and backdated them to give to our auditor. And you’re referring it to HR—why, to calculate their bonus for the year?”
  —Dave Finewalks, 41:23

• On the Unprecedented Nature of It All:

  “I have never seen anything quite like this before.”
  —Dave Finewalks, 46:51

Segment Timestamps

• 01:20–04:54: Introduction, missing guest, and breaking news on Minnesota v. ICE lawsuit
• 04:54–11:26: David Schultz explains legal fundamentals and the state’s complaint
• 11:26–20:31: US Attorney’s Office exodus & possible motivations; Watergate comparisons
• 20:31–23:39: Discussion on the limits of prosecutions, expertise, and institutional memory
• 23:39–29:13: Civil liberties concerns, ICE’s enforcement tactics, political rhetoric escalation
• 30:00–39:51: Dave Finewalks breaks down Medicaid cutoff, why the feds are acting, and state responses
• 39:51–46:51: Federal skepticism of Minnesota’s efforts; prospects for receivership and deeper federal intervention
• 46:51–50:02: What federal control could look like; underlying Medicaid structure and fraud prevention
• 50:02–53:38: Reflections on the magnitude of the crisis, closing banter

Memorable Closing

“If we get rich off this phrase, it’s a buyer’s market for fraud, we’ll thank you. But you’re not getting a cut of it.”
—Jay to David Schultz, 29:23

“Can you believe where we are in this state?”
—Kenny, 52:10

Takeaways

• Minnesota is at the center of an unprecedented state-federal showdown over immigration enforcement and Medicaid fraud, with massive practical and political stakes.
• Legal complexities abound: Cutting-edge arguments on states’ rights, federal supremacy, and constitutional protections have real-life consequences.
• Institutional breakdowns—from resignations of top prosecutors to failed state oversight—have prompted the federal government to intervene dramatically.
• Billions in fraud, potential links to terrorism, and basic governance failures are now under the harshest federal scrutiny.

Every day brings new developments in what may be the biggest government showdown Minnesota has seen in decades.