The administration of US President Donald Trump has taken the drastic step of suspending federal childcare funding to the state of Minnesota. This move, announced on Tuesday, comes alongside a demand for a comprehensive audit into alleged widespread fraud within government assistance programs, as reported by the Associated Press.
Federal Crackdown and State Pushback
Deputy Secretary of Health and Human Services, Jim O'Neill, declared the suspension on social media platform X. He stated the action was a direct response to what he called "blatant fraud that appears to be rampant in Minnesota and across the country." O'Neill, who is also serving as the acting director of the Centers for Disease Control and Prevention, referenced claims made by a right-wing influencer. The influencer's video alleged that daycare centers operated by Somali residents in Minneapolis were involved in fraud potentially worth up to $100 million.
In response, Minnesota's Democratic Governor, Tim Walz, strongly pushed back on the same platform. While acknowledging that prosecuting fraudsters is a serious issue the state has worked on for years, he framed the federal action as part of "Trump's long game." Walz, the 2024 Democratic vice presidential nominee, accused the Trump administration of politicizing the issue to defund programs essential for Minnesotans.
Details of the Allegations and Federal Demand
O'Neill has formally demanded that Governor Walz's administration submit a detailed audit of the childcare centers in question. This audit must include records of attendance, licenses, complaints, investigations, and inspections. "We have turned off the money spigot and we are finding the fraud," O'Neill asserted.
The announcement followed a visit by U.S. Homeland Security officials to Minneapolis just a day earlier to conduct a fraud investigation. Officials approached several undisclosed businesses and questioned employees as part of their probe.
This latest development is set against a backdrop of long-running federal investigations in Minnesota. Notably, these include a massive $300 million pandemic-era food fraud case linked to the nonprofit Feeding Our Future. In that scheme, 57 defendants in Minnesota have been convicted for exploiting a child nutrition program. A federal prosecutor recently suggested that half or more of the roughly $18 billion in federal funds sent to Minnesota for 14 programs since 2018 may have been stolen. The U.S. Attorney's Office for Minnesota noted that most defendants in these childcare, housing, and autism program fraud cases are Somali Americans.
National Policy Changes and Local Impact
O'Neill also announced broader policy changes. Payments made across the United States through the Administration for Children and Families (ACF) will now require "justification and a receipt or photo evidence" before funds are disbursed. The agency has also launched a dedicated fraud-reporting hotline and email address.
The financial impact on Minnesota is immediate and significant. According to Assistant Secretary Alex Adams, the ACF provides $185 million in childcare funds annually to the state. Adams emphasized that this money is intended to support approximately 19,000 American children, including toddlers and infants. "Any dollar stolen by fraudsters is stolen from those children," he stated in a video posted on X. Adams revealed that after speaking with Minnesota's childcare services director, she could not confidently say whether the fraud allegations were isolated or statewide.
Governor Walz has stated that an audit due by late January should provide a clearer picture of the fraud's extent. He maintains that his administration is taking aggressive action to prevent additional fraud and has long defended its response to these cases.
The political dimension is pronounced, with AP reporting that Trump has criticized Walz's administration over the fraud cases, using them to target the state's large Somali diaspora. Minnesota is home to the largest Somali population in the United States. Prominent Somali American Democratic U.S. Representative Ilhan Omar has urged people not to blame an entire community for the actions of a few.
