Elk River leaders are moving to keep Minnesota’s retired state flag flying in the city after residents backed the idea in a survey.

The Elk River City Council voted 5-0 on Monday night to draft a resolution to display the old flag instead of the new design adopted two years ago.

The move came after more than 1,000 residents responded to an online survey posted by the city. In that survey, the city says almost 75% supported displaying the old flag.

A final council vote is expected at its next meeting on the 20th.

Minnesotans hold onto old habits when buying a state flag

Other cities across the state have taken similar steps to fly the retired flag, including Champlin and Zumbrota.

The flag design turned into a political dispute when planning for a new design first began. Two years later, debates continue, with some believing the old flag celebrated the displacement of Native Americans and others embracing it due to its history.

Lawmakers, commission member discuss new legislation for state flag, seal designs

The $100 million grant program intended to help Minnesota small businesses is facing renewed scrutiny after 5 INVESTIGATES identified grant recipients that may not have been eligible for the money.

Lawmakers passed the Minnesota Promise Act in 2023 to support businesses impacted by civil unrest, racial discrimination, and other barriers to funding. The taxpayer-funded grants offer awards of up to $50,000 to eligible recipients.

But a months-long review of public records revealed that several recipients appear to be operating miles outside of eligible neighborhoods, and that other businesses may not be operating at all.

No one has been charged with fraud related to the program. 

One of the eligibility requirements for a Promise Act grant is that a business operate in a qualifying area — neighborhoods designated by the state as having experienced significant civil unrest or economic harm. Those areas include corridors such as Lake Street in Minneapolis.

The new findings related to participants’ eligibility follow a 5 INVESTIGATES report last month that revealed grant money from the Promise Act going to dozens of questionable recipients. At the time, DFL State Senator Bobby Joe Champion, who helped launch the program, said in an interview that “we know there is no fraud in the program.”

State officials have not released the actual grant applications, so 5 INVESTIGATES relied on tax filings, public databases, court records, mortgage documents, parking citations and on-the-ground reporting to verify business locations and activity.

Eligibility Concerns

Paradise Assisted Living received more than $21,000 in Promise Act funds. The business is located in Bloomington, approximately 10 miles outside any eligible neighborhood. 

State records show inspectors visited that home as early as 2022.

5 INVESTIGATES contacted the business multiple times by phone and text and visited both the business location and the owner’s residence in Lakeville. The owner, Abdisalam Ahmed, did not respond to requests for comment.

Another recipient, CCG Cargo, a transportation company that received nearly $11,000, appears to have used an address at a multi-tenant building on Lake Street. 

But the property owner said he could find no record of the company operating there. When contacted by phone, the grant recipient hung up after being asked about the Minnesota Promise grant.

MSCADDE LLC received more than $16,000 despite not being registered with the state for several years. Federal Department of Transportation records show the carrier has been out of service since 2021 for failing to pay a safety-related fine.

The owner did not return multiple calls and texts and did not answer his door.

‘Stop for a Minute’

Rep. Dave Baker, chair of the Minnesota House Jobs Committee, said the findings raise serious concerns about vetting and oversight.

“Governor Walz ought to say, ‘Stop for a minute. Stop any more going out. We have to check into what’s going on.’ There’s no reason why this should not be just immediately suspended,” he said.

Baker, a Republican from Willmar, pressed for answers after 5 INVESTIGATES first uncovered a list of questionable promise grant recipients. 

He said he intends to raise these new findings at a hearing yet this session.

“This should be embarrassing, and it should enrage many taxpayers about how did all this money get out with such low accountability,” he said.

In the Twin Cities region, the applicant review process was handled by the Neighborhood Development Center (NDC), a nonprofit contracted by the state. 

In promotional materials, the organization emphasized that the application process was designed to be simple and accessible, with minimal paperwork.

“This isn’t meant to be a super complicated grant program. So you’re not going to have to write a life story and narrative on why you’re eligible,” an NDC employee said in one YouTube video.

The Neighborhood Development Center declined multiple interview requests. In a written statement, its president emphasized the good that the program has done for businesses and alluded to some tweaks.

“We are applying what we learned from round one to the review of applicants in round two,” said Renay Dossman, NDC’s president and CEO.

Under Review

The Minnesota Department of Employment and Economic Development (DEED), the state agency responsible for overseeing the program, also declined interview requests. 5 INVESTIGATES attempted to speak with the agency’s commissioner following a recent public event.

“I need to check with my team,” said Commissioner Matt Varilek, before walking out of the building.

Since that interaction, a DEED spokesperson sent a statement to 5 INVESTIGATES but did not answer any questions about how the businesses in question qualified.

“We take your questions seriously and are currently working closely with our grantee, NDC, to gather additional information,” said Mary Haugen, a DEED spokesperson. 

“We have a strong process in place to mitigate risk, and we continue to refine and strengthen it as we learn. If we were to identify any misuse of funds, we would take immediate and appropriate action with our grantee to recover the funds.”

Following the initial reports in March, DEED submitted its required annual report on the Promise Act program to the Legislature. The report includes a section on fraud and states that “the agency is also bringing on new technologies to add extra layers of investigative tools to confirm the identified and business information of promise grant applicants.”

That disclosure marked the first time DEED mentioned new fraud-detection tools following repeated questions about the program.