Federal Action on Minnesota Child Care Funds Amid Fraud Allegations
The Trump administration has announced a suspension of child care funding to Minnesota, accompanied by a demand for a thorough audit of several daycare centers in the state. This decision follows a series of alleged fraud schemes tied to government programs over recent years.
Deputy Secretary of Health and Human Services, Jim O’Neill, addressed the issue on the social platform X, citing “blatant fraud that appears to be rampant in Minnesota and across the country” as the catalyst for this action.
Minnesota Governor Tim Walz responded on X, acknowledging the seriousness of fraudsters but criticizing the federal move as part of “Trump’s long game.” Walz stated, “He’s politicizing the issue to defund programs that help Minnesotans.”
O’Neill highlighted a recent video by a right-wing influencer, alleging that daycare centers run by Somali residents in Minneapolis engaged in up to $100 million in fraudulent activities. He has requested an audit from Gov. Walz that encompasses attendance records, licenses, complaints, investigations, and inspections for these centers.
“We have turned off the money spigot and we are finding the fraud,” O’Neill declared.
This announcement follows a visit by U.S. Homeland Security officials to Minneapolis, where they conducted a fraud investigation at undisclosed businesses and questioned employees.
In past investigations related to fraud, a $300 million pandemic-related food fraud scheme involving the nonprofit Feeding Our Future has been prominent, with 57 defendants in Minnesota convicted. Prosecutors identified this as the largest COVID-19-related fraud scheme in the U.S., linked to a state-run, federally funded program intended to provide food for children.
A federal prosecutor recently claimed that since 2018, possibly half of the $18 billion in federal funds supporting 14 programs in Minnesota could have been misappropriated. According to the U.S. Attorney’s Office for Minnesota, many defendants in child nutrition, housing services, and autism programs fraud cases are Somali Americans.
Jim O’Neill, acting director of the Centers for Disease Control and Prevention, also mentioned on social media that future payments through the Administration for Children and Families, part of the U.S. Health and Human Services Department, would now require “justification and a receipt or photo evidence” before disbursement. Additionally, a fraud-reporting hotline and email have been established.
The Administration for Children and Families provides $185 million annually in child care funds to Minnesota. Assistant Secretary Alex Adams emphasized, “That money should be helping 19,000 American children, including toddlers and infants. Any dollar stolen by fraudsters is stolen from those children.” Adams noted that Minnesota’s child care services director could not confidently confirm whether the fraud allegations were isolated or widespread.
President Trump has leveraged these fraud cases to criticize Gov. Walz’s administration and to address the Somali diaspora in Minnesota, which hosts the largest Somali population in the United States. Gov. Walz, the Democratic vice presidential nominee for 2024, stated that an audit due by late January would provide greater clarity on the fraud’s scope. He assured that his administration is aggressively working to prevent further fraudulent activities.
Prominent Somali American, Democratic U.S. Rep. Ilhan Omar, has urged the public not to generalize or hold an entire community accountable for the actions of a few individuals.
