HHS freezes all federal child-care payments to Minnesota over anti-Somali fraud claims

On December 30, 2025, the U.S. Department of Health and Human Services announced it was freezing all federal child-care payments to the state of Minnesota, effective immediately, pending proof that the funds were being spent legitimately. Deputy Secretary Jim O'Neill announced the freeze in a post on X, writing that "blatant fraud ... appears to be rampant in Minnesota and across the country" and that the department had "turned off the money spigot." He asserted that Minnesota "has funneled millions of taxpayer dollars to fraudulent daycares" over the past decade and demanded that Gov. Tim Walz carry out a comprehensive audit of the centers named in a viral video by conservative content creator Nick Shirley — whose work has been described as anti-immigrant and anti-Muslim — purporting to expose fraud at Somali-run child-care centers. HHS sends roughly $185 million a year in child-care funds to Minnesota, supporting day care for tens of thousands of children from low-income families. At the same time, the department imposed a new nationwide condition requiring every state to submit a justification plus a receipt or photo evidence before receiving Administration for Children and Families payments.

Minnesota officials disputed both the premise and the method. State child-and-family officials said they took fraud concerns seriously but questioned the methods used in the video, and CBS News's own review of the day-care centers Shirley named found that all but two held active licenses and had been visited by state regulators within the prior six months, with citations for training, safety, and cleanliness issues but no recorded evidence of fraud. Gov. Walz called the freeze a politicization of fraud enforcement designed "to defund programs that help Minnesotans," and Attorney General Keith Ellison said he was "outraged" that essential child-care funding was being threatened "all on the basis of one video on social media," while affirming that genuine fraud should be prosecuted. The freeze came one day after Department of Homeland Security agents visited dozens of Minneapolis sites in what Secretary Kristi Noem called a "massive investigation," and amid Operation Metro Surge — the ICE deployment that had been targeting Minnesota's Somali community since early December. The next day, December 31, HHS escalated the action into a freeze of child-care funding to all 50 states.

The Standing records this as the state-targeted opening beat of the late-2025 child-care-funding freeze. The unilateral withholding of congressionally appropriated grant funds from a single state, conditioned on satisfying the administration and justified by an anti-Somali video, reaches beyond lawful spending authority and singles out a community already under federal enforcement pressure — which is why it is archived as executive overreach alongside the targeting of marginalized communities and discriminatory policy.