Minnesota's Child Care Fraud: What's Really Going On?
Minnesota's political landscape is abuzz with Governor Tim Walz's decision not to seek re-election. His focus now shifts to combating fraud within state programs, a move spurred by a viral video from conservative influencer Nick Shirley.
The Viral Video and Its Claims
The video, which has garnered significant attention, alleges that several day care centers in Minneapolis are defrauding the state's Child Care Assistance Program. It specifically highlights 10 centers purportedly receiving funds for children they do not have.
State regulators conducted investigations and found children present at nine of the centers. One center was not yet open, and another had already closed. Four centers remain under investigation as part of a broader probe into 55 day care providers.
The Scope of the Fraud Allegations
The Child Care Assistance Program supports 23,000 children and 12,000 families monthly, with an annual budget of $306 million in 2024. The nine centers featured in the video received $17.4 million from the program last year.
Republicans claim involvement in the video's creation, arguing that it exposes systemic issues within social service programs. Federal prosecutors have already charged over 90 individuals in fraud cases, warning of potential billions in fraudulent activity.
Governor Walz's Response
Governor Walz emphasizes his commitment to fraud prevention but accuses Republicans of exploiting the issue for political gain. The video, produced by Shirley and his partner David Hoch, depicts their attempts to visit the centers, often encountering locked doors or no response.
Discrepancies and Reactions
One center, Quality Learning Center, appeared empty and had a misspelled sign. Shirley revisited the location, but the reasons remain unclear. State regulators found no significant issues during their inspections. Two centers closed this year, with one reopening shortly after.
The Star Tribune's investigation revealed children present in four centers, while six were either closed or inaccessible. Ahmed Hasan, a center director, reported receiving threatening calls and visits, with some owners facing hundreds of death threats.
Background and History
Records indicate that none of the owners have been charged with fraud, though seven centers have faced violations. Six of these centers received funds from Feeding Our Future, a nonprofit embroiled in a major fraud scandal. Its leader, Aimee Bock, was convicted and ordered to repay $5.2 million.
Nick Shirley, a right-wing influencer with over 1 million followers, has faced criticism for previous false claims. He was present at the U.S. Capitol during the January 6 riot, and his media company is based in Utah. Shirley has not commented on the Minnesota case.
The Child Care Assistance Program
The program aids low-income families in covering child care costs, with an annual expenditure of $306 million. Minnesota has approximately 1,800 licensed child care centers, with 3,600 providers participating in the assistance program. Unannounced visits are conducted to deter fraud.
Historical Context
Fraud in day care centers is not new. In 2015, three centers were raided for overbilling, leading to the charging of 10 operators by 2017. Penalties were relatively light, with some receiving short jail sentences or restitution orders.
Since 2019, the state has intensified efforts to combat fraud, utilizing data to identify issues and increasing inspections. However, the transition to electronic attendance systems, which could mitigate fraud, has not been implemented. By 2019, 22 states had already adopted such systems.
