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Minnesota businesses resisted ICE, and now face DHS audits

Saijel Kishan and Alicia A. Caldwell, Bloomberg News on

Published in Business News

Employment records of at least two Minneapolis-area businesses are being audited by the Department of Homeland Security, in what state and local officials describe as retaliation over the fallout from the Trump administration’s immigration crackdown in Minnesota.

Hennepin Healthcare, which operates the state’s largest safety-net hospital, and Mischief Toy Store, a small retailer in St. Paul, both got notices from DHS demanding records to verify their employees are authorized to work in the U.S.

At a court hearing this week, Lindsey Middlecamp, a lawyer with the Minnesota Attorney General’s office, described the audits as retaliatory, according to John Stiles, deputy chief of staff at the AG’s office. He said Middlecamp had no additional comment.

Hennepin said in a statement that it provided records to ensure compliance with federal employment-eligibility laws after receiving a Jan. 8 subpoena. Mischief Toy Store employs five U.S. citizens and has complied with requests by authorities to examine its employee records, Dan Marshall, a co-owner of the store, said in an interview.

Marshall said the request for documents came shortly after his daughter, a co-owner of the business, appeared on television criticizing the government’s immigration enforcement tactics. The DHS disputed that there was a connection.

“Any allegation that DHS inspected Mischief Toy Store in response to the owner’s daughter doing an interview is FALSE,” department spokesperson Tricia McLaughlin said in an email. She said there’s an active Homeland Security investigation involving the business that’s unrelated to the owners’ political views.

The audits come amid heightened tensions in Minnesota over stepped-up federal immigration enforcement and the fatal shooting of two U.S. citizens this month, which sparked nationwide protests and disrupted daily life across Minneapolis. While employment audits are routine under U.S. law, business groups and state officials say the timing has added pressure on Minnesota employers already dealing with safety concerns and hits to their sales.

The audit notices were issued before President Donald Trump made changes this week to the leadership overseeing the Minnesota operation and signaled a willingness to try working with local and state officials to deescalate tensions.

Tom Homan, the administration’s “border czar,” said at a press conference Thursday in Minneapolis that the White House is seeking to scale back the number of federal officials in the city.

Matthew Webster, a senior immigration attorney at Fredrikson & Byron in Minneapolis, said his practice has seen the number of DHS audits of business clients more than triple since December.

In previous years, such audits were typically focused on industries that employ seasonal workers, such as hospitality, and usually triggered by referrals from other government agencies. Now “we’re seeing both indiscriminate and retaliatory audits,” said Webster. “That’s the upshot of having 3,000 ICE officers in town.”

Federal law requires employers to verify workers’ identity and employment eligibility in the U.S., confirming the workers’ documentation using I-9 forms. Employers must make this paperwork available for inspection if asked by officials from the DHS, Department of Labor or Department of Justice.

The Minneapolis Regional Chamber of Commerce hasn’t received specific reports of DHS audits being used as retaliation against businesses speaking out against the raids, said Mike Logan, president of the business group. But there’s widespread concern among the chamber’s 800 members that protesting the crackdowns could draw unwanted scrutiny, and some members have seen their revenues halved amid the unrest, he said in an interview.

 

Tactics used by immigration agents “are putting the survival of these businesses at risk,” the chamber said in a statement on Tuesday. Workers are afraid to travel to their jobs, while residents are afraid to move freely as both U.S. citizens and legal residents are being racially profiled, harassed and detained, it said.

Businesses located near this month’s shootings faced disruptions to their operations, prompting some to reduce business hours or close for days. A pair of downtown St. Paul hotels closed indefinitely on Sunday, citing safety concerns for their staff and guests. The DHS said the closures were prompted by threats from anti-ICE protesters.

Wrecktangle Pizza, in the heart of busy Lake Street in the Lyn-Lake neighborhood, was visited by federal agents a day after posting on social media that it would accept contributions and donate food to locals affected by the crackdown. Co-owner Jeff Rogers said the restaurant was closed at the time and that staff members inside reported the agents tried multiple doors.

The pizza shop has since cut back its hours, limited access to a single door monitored by a staffer and made clear that anyone is welcome, except immigration agents.

“It’s just all safety concerns,” Rogers said.

Hennepin’s audit request came after state officials showed up at one of its facilities to tell immigration agents to leave the bedside of a patient they were guarding because they didn’t have a warrant, according to a Jan. 15 report in the Minnesota Reformer. The newspaper reported that the patient was shackled, denied family visits and that federal Immigration and Customers Enforcement agents remained in the facility despite staff objections.

Hennepin County Commissioner Angela Conley said at a news conference earlier this month that she believed the hospital audit was a retaliatory move. A spokeswoman for Hennepin Healthcare declined to comment beyond the statement or say why the hospital was audited.

Mischief Toy Store’s Marshall said his business is working with lawyers to provide additional employment verification records. The Independent reported on the retailer’s audit notice on Jan. 21.

More than 60 business leaders at some of Minnesota’s biggest companies, including Target Corp. and Best Buy Co., called for an immediate “de-escalation of tensions” between local and federal authorities in a public statement last weekend.

A coalition of immigrant-rights groups is calling for a national day of action on Friday, urging people to stay away from school, work and shops in an effort to push ICE out of U.S. cities and curb funding for DHS. The call follows last week’s protests in Minneapolis, where tens of thousands of people took to the streets.

(With assistance from Myles Miller and Marie Monteleone.)


©2026 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.

 

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