The Trump administration has moved to suspend federal funding for childcare programmes in the state of Minnesota, citing allegations of widespread fraud. The dramatic decision was announced by a senior health official via social media, thrusting a long-running investigation back into the political spotlight.
Funding Halted Amid Claims of "Rampant" Fraud
Jim O’Neill, the Deputy Secretary of Health and Human Services, stated that the funding freeze was a direct response to what he described as "blatant fraud that appears to be rampant in Minnesota and across the country." In a video statement, O’Neill declared, "We have turned off the money spigot and we are finding the fraud." The announcement came just one day after homeland security officials visited businesses in Minneapolis to question workers, following a viral video posted by a right-wing influencer.
O’Neill credited influencer Nick Shirley, whose footage confronting workers at daycare centres operated by Somali Americans gained significant online traction. However, the allegations presented as new revelations in the video had been extensively reported by local and national media for years.
A Long-Running Investigation, A New Political Flashpoint
Despite claims on conservative social media that fraud was ignored, federal prosecutors have been actively investigating and prosecuting a major scheme since 2022. The cases began under the Biden administration, with initial indictments targeting 47 defendants for their alleged roles in a $250 million fraud that exploited a federally funded child nutrition programme during the Covid-19 pandemic.
To date, 57 people have been convicted for stealing funds granted to the non-profit Feeding Our Future. A federal prosecutor alleged earlier in December that half or more of the roughly $18 billion in federal funds supporting 14 Minnesota programmes since 2018 may have been stolen. A significant number of the defendants are Somali Americans.
Former President Donald Trump has used these allegations to promote calls to ban refugees from Somalia and to attack Minnesota Democratic Congresswoman Ilhan Omar, a prominent member of the Somali American community. Omar has urged the public not to blame an entire community for the actions of a few.
Political Repercussions and New Safeguards
In response to the funding freeze, Minnesota Governor Tim Walz, the 2024 Democratic vice-presidential candidate, accused the Trump administration of political manoeuvring. "This is Trump’s long game," Walz wrote on social media. "We’ve spent years cracking down on fraudsters. It’s a serious issue – but this has been his plan all along. He’s politicizing the issue to defund programs that help Minnesotans."
Walz has consistently defended his administration's response, stating that fraud will not be tolerated and that they continue to work with federal partners. An audit due by late January is expected to provide a clearer picture of the fraud's extent.
Concurrently, the federal Health Department has announced new nationwide safeguards. O’Neill stated that payments through the Administration for Children and Families will now require "justification and a receipt or photo evidence" prior to disbursement. The department has also launched a dedicated fraud reporting hotline and email address.
