The blame for alleged fraud in Minnesota belongs to conservatives
Privatization and a lack of oversight creates a vicious cycle.
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The internet is currently awash in right-wing propaganda about alleged fraud in Minnesota’s social services programs.
Unsurprisingly, you can thank a mendacious right-wing influencer for kicking off this hysteria. Also unsurprisingly, the Trump administration is making the most of this opportunity to kick a blue state in the teeth.
Nick Shirley, a 23-year-old conservative YouTuber who specializes in anti-immigrant videos, went to multiple daycare facilities in Minnesota — but only ones run by Somali folks, of course — and filmed himself “investigating.” He alleged that several were essentially non-operational and were instead fronts for fraud and siphoning Child Care Assistance Program funds.
This video then became the basis for the Trump administration to freeze Small Business Administration funding, taking $5.5 million away from Minnesota’s small business development centers, women’s business centers, a microloan program, and more.
You might be confused about how this relates to daycare facilities, but don’t worry — the administration is directly attacking those too.
On Tuesday, the government froze all childcare funds to Minnesota, a move that leaves 30,000 lower-income families without childcare assistance, which functionally means that many of those families will not be able to access childcare at all.
The administration is taking these actions even though it took less than a week for the wheels to come off and for Shirley’s video to be largely debunked. Even CBS News, which these days is known more for protecting the administration rather than ever criticizing it, found that of the 12 centers, 10 had active licenses.
Two facilities Shirley targeted for his big fraud reveal had already shut down earlier this year, which would make doing a bunch of fraud sort of hard.
KSTP — the ABC affiliate in Minnesota that is so right-wing that it once pushed the story that the then-Minneapolis mayor, Betsy Hodges, was flashing a gang sign when she was merely pointing at someone — also did some actual investigating. They found the same thing CBS did — all but two of the facilities have active licenses and all were visited this year. KSTP’s review of state records found that the centers had been cited for safety violations, but no allegations of fraud.
None of these facts matter, of course, because the point of Shirley’s video is to give cover to the administration’s attack on Minnesota for being a blue state and Somali immigrants for, well, being Somali immigrants. The state was already under siege by Immigration and Customs Enforcement. This was an inevitable next step.
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It’s grimly hilarious that, as Shirley’s viral video has come under scrutiny. his mother went on Newsmax to declare that “the people of Minnesota are thankful” for his efforts and that she and her son are “out there showing what’s going on because people are too afraid.” Nothing says “legitimate journalist” like having your mommy defend you while also implying that she, too, is somehow part of his investigative effort.
The problem here, of course, is that the administration is run by hyper-online trolls just like Shirley. A normal federal government would not take its cues from a random YouTuber and make a viral video the basis for a whole-of-government effort to crush a state. A normal federal government also wouldn’t use a random video from a 23-year-old with no background in government funding, investigations, or, well, anything really, as positive proof of fraud.
Normal fraud investigations conducted by the federal government take months, or even years, to complete. Even in the first Trump administration, investigations led to reports like this 66-pager from the Office of the Inspector General for the Department of the Interior detailing an audit of costs claimed by Pennsylvania’s Game Commission under grants from the Fish and Wildlife Service. That audit reviewed grants from 2016 to 2018, and the report came out in December 2020. The report covered the objective, scope, and methodology of the audit, detailed every ineligible cost down to the penny, and made 29 specific recommendations to the FWS.
In contrast, the second Trump administration has decided to act as judge, jury, and executioner. The Department of Homeland Security boasted on X that it was “going DOOR TO DOOR to suspected fraud sites.” It’s not really clear why alleged daycare funding fraud is the purview of Homeland Security, but it’s not like it matters to them.
Alleged daycare funding fraud probably isn’t the purview of the Department of Labor either, but the agency is nonetheless posting on its official account that it will “bring an end to the Somali fraud network.” Assistant Attorney General Harmeet Dhillon is using her official account to threaten anyone who dares cross Shirley with federal criminal charges, but took to her personal X account to mock a Somali daycare that was burgled.
The worst online troll, of course, is the president himself. The fraud allegations gave him the perfect opportunity to spew deeply racist garbage on Truth Social:
Much of the Minnesota Fraud, up to 90%, is caused by people that came into our Country, illegally, from Somalia. ‘Congresswoman’ Omar, an ungrateful loser who only complains and never contributes, is one of the many scammers. Did she really marry her brother? Lowlifes like this can only be a liability to our Country’s greatness. Send them back from where they came, Somalia, perhaps the worst, and most corrupt, country on earth. MAKE AMERICA GREAT AGAIN!!!”
The Somali-run daycare centers at the heart of all this are alleged by Shirley to have committed up to $100 million in fraud. A staggering (albeit unconfirmed) number to be sure, but peep the numbers that stack up when you look at how many fraudsters Trump has not only pardoned, but eliminated their fines and restitution costs.
One lucky duck, Trevor Milton, was facing the possibility of having to repay $660 million to investors for defrauding them with promises of a hydrogen truck that didn’t exist. Trump swooped in with the pardon and wiped the requirement to repay investors off the books.
The Washington Post found that at least 20 people Trump pardoned also received the gift of not having to pay any of their financial penalties, to the tune of tens of millions of dollars. Remember George Santos? He doesn’t have to pay the $370,000 in restitution from his wire fraud conviction. Carlos Watson, the founder of Ozy Media, who was convicted of conspiracy to commit securities and wire fraud, got the gift not only of a commutation of his sentence, but also of getting rid of the $96 million he owed in restitution and forfeiture.
And hey, if we want to talk about real, documented fraud resulting from misuse of federal money, look no further than Florida GOP Sen. Rick Scott. Before Scott ascended to office, he oversaw a private hospital chain that ripped off Medicare and Medicaid to the tune of $1.7 billion.
So it sure looks like fraud is absolutely, enthusiastically embraced by Trump as long as the people doing the defrauding are his supporters.
If conservatives want someone to blame for the conditions that allowed for massive alleged fraud in Minnesota, they need only look in the mirror. They built this, and they spent years doing it.
Good government matters
Conservatives have long pushed privatization as the solution to all government problems. Rather than the far more efficient process of having government agencies provide services, we now have a Byzantine, easily exploited system in which grants are funneled to private companies, which have every incentive to cut corners and reduce costs.
The promise of privatization is that private entities can somehow provide services at a lower cost than the government, but there’s never any real explanation as to how that is supposed to happen. Private companies — even nonprofits — need to make a profit to continue operating.
At the same time conservatives have overseen a massive transfer of taxpayer dollars from the government to private entities, they’ve also gutted the ability of government agencies to have sufficient staff to investigate those same private entities. Trump’s massive cuts to the Departments of Education and Health and Human Services have targeted programs that serve children, closing regional offices that had been tasked with overseeing Head Start programs to ensure the premises were safe and the program had enough staffing. Trump’s efforts to shutter USAID also meant shuttering the agency’s Office of the Inspector General, which was responsible for investigating fraud and misuse of foreign aid funds.
When Republican Tim Pawlenty was governor of Minnesota, his signature initiative was Job Opportunity Building Zones (JOBZ), which threw massive amounts of money at private companies to relocate to rural areas and therefore provide higher-paying jobs. The program had such weak oversight that private companies got oodles of cash for low-wage service jobs instead, and relied on these companies’ self-reporting their hiring data. The reports provided by businesses were not audited by the state. After 77 companies were kicked out of the program for not meeting the required hiring goals, they had to repay $285,000 to the state, a tiny fraction of the $7 million in tax breaks they received.
While Pawlenty and Minnesota’s GOP had all the money in the world to give to private companies, they were far less willing to fund oversight efforts. By 2009, the state was so short on auditors that fraud by government agencies ran rampant. Nine workers at the Minneapolis Veterans Home managed to get $2 million in overtime pay in just one year by lying about how many extra hours they were working. The Department of Natural Resources spent a wildly inappropriate $300,000 for a wildlife officer conference. A supervisor in the Department of Health and Human Services filched almost $1 million by manipulating the computer system.
Pawlenty’s solution? To hold a financial management seminar for state agencies. Sure, that definitely takes the place of robust oversight.
This double-barrel approach — give money to private entities and then refuse to provide funds for the government to oversee that — always ends up where we are today: with the problem of loose government controls that allow grant funds to slip away unnoticed.
Republicans are never going to fix that problem because they don’t want to. Their policies have created a perfect vicious cycle: Privatize services, let private companies run amok, and then declare that the government is the problem. Then, they — you guessed it — privatize more services, cut government agencies even more, and when issues inevitably arise, declare that the government is the problem.
While that’s been a usual state of affairs for years, the Trump administration is turbo-charging it. Somehow, the alleged daycare fraud in Minnesota — alleged fraud that the federal government has in no way investigated yet — is now the basis for freezing all childcare funding. As in everywhere in the country. On Wednesday, the administration announced that until states provide some as-yet-undefined additional verification and data, they don’t get any funds. Sure is convenient that one random YouTuber managed to manufacture a scandal that allowed the administration to do what it loves best: take money away from people who need it.
It also allows the administration to engage in attacks on other blue states. Harmeet Dhillon is already reposting randos on X with vague assertions of fraud in California. The Somali community in Ohio is already under attack from a self-described “Trump surrogate” who alleges that Somali healthcare providers are defrauding Medicaid. Meanwhile, Washington state looks to be the next target of rabid conservative YouTubers engaging in “journalism” by showing up at Somali-run daycare centers, a development Dhillon is hella excited about.
This is going to be catastrophic, and not just in terms of lost funds. As Ben Collins of The Onion put it, “Trump guys are about to Comet Pizza every third daycare center because they think they are all fronts for Somali money laundering. They’re only doing this near cities with progressive mayors. This is straight up Government by LibsOfTikTok.”
The administration was always going to find a way to target Somalis across the country, given Trump’s deep and abiding racist hatred for Somali people. This administration is nothing but a bunch of wreckers who want to tear down every safety net and eliminate every immigrant.
If it wasn’t Shirley’s video, it would have been something else. If it wasn’t Minnesota, it would have been somewhere else. If it wasn’t about daycare fraud, it would have been something else. Everything this administration does is about creating a fig leaf to justify its violent dismantling of democracy, and blue states will continue to be under siege, and immigrants will continue to be under attack.
That’s it for this week
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This is why they want the women barefoot and pregnant. No need for daycares…😡 There’s no shame with these morons.
As always Lisa Needham is easy to follow and full of important info, not just on the latest ridiculous knee jerk reaction to a 23yo ‘influencer’ but on the hands off oversight leading to fraud across private business.