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Category: Daily Caller

Trump has the chance to end the welfare free-for-all Minnesota exposed

By mfnnewsJanuary 9, 2026 Article

It’s the $1.2 trillion question.

The United States spends roughly $1.2 trillion every year on means-tested welfare programs — cash aid, food assistance, housing subsidies, and medical care. The list runs through a thicket of acronyms: SNAP, TANF, SSI, EITC, ACTC, WIC, CHIP, ACA subsidies, and CCDBG, plus school meals, Medicaid, and Section 8 housing.

States that eliminate fraud can afford to provide better aid to real residents in need — creating a race to the top in administration rather than a race to exploit Washington.

This guaranteed-income architecture now fuels a destructive cycle. Federal spending drives debt. Debt fuels inflation. Inflation expands dependence. And Washington responds by printing more money and sending it back to the states — without demanding serious accountability.

The result is a bottomless pit of spending, fraud, and inflation, with states handed endless federal funds and almost no incentive to police abuse.

Minnesota’s massive Somali-linked fraud scandal exposes this system in its most grotesque form. The question is whether President Trump will use it to force states to reclaim ownership — and responsibility — over welfare.

The day-care, nutrition, and medical fraud uncovered in Minneapolis is not an aberration. It is the predictable outcome of an open-ended entitlement state. Fraud networks thrive wherever federal money flows without limits or consequences. While the Minneapolis cases involved tight-knit ethnic networks, the underlying problem is national and structural. As long as states do not have to pay their own way, fraud will remain rational behavior.

California offers a parallel example. A report last summer found that roughly one-third of all community college applications in the state were fake — submitted solely to extract federal financial aid. That scam could not survive if California had to pick up the tab.

It isn’t just a blue-state problem, either. As Alex Berenson has reported, Indiana’s Medicaid spending on “autism behavioral therapy” exploded thirtyfold in just six years, reaching $75,000 per child for a few hours a week of unproven playtime therapy. When federal dollars cover the bill, discipline evaporates.

Wanlee Prachyapanaprai via iStock/Getty Images

Many Americans ask how Minnesota allowed the Feeding Our Future scandal to persist for years. The answer is simple: Washington supplied unlimited money, and the state faced no budgetary consequence for ignoring warning signs.

Over 200 day-care and medical providers allegedly siphoned billions across Medicaid, child care, and nutrition programs. That scale of fraud does not occur without political indifference — or worse.

States have every incentive under this system to look away. Federal money enables a closed loop of special interests, dependency, and electoral protection. Oversight threatens the flow.

Devolving welfare programs to the states — using fixed block grants rather than open-ended federal matches — would cut this dynamic off at the knees. States must balance their budgets. They do not have a printing press. When fraud costs real money, enforcement follows.

This is the moment for Trump to make that case. Either states raise taxes to fund welfare programs themselves, or they reform and prioritize them. That choice restores democratic accountability.

Consider the contrast. The United States spends roughly $1 trillion on national defense — protecting everyone. Yet we now spend even more on means-tested welfare that serves narrower populations while distorting the economy for all. Open-ended welfare spending drives inflation, which then forces more people onto welfare. End the money-printing, and fewer people will need subsidies in the first place.

NoraVector via iStock/Getty Images

In response to the Minnesota scandal, Trump’s Office of Management and Budget froze $10 billion in funding for TANF and the Child Care Development Fund across several states. That is a start. But temporary freezes will not survive the next Democrat administration.

The durable fix is statutory restructuring — through budget reconciliation — to force states to assume full financial responsibility for welfare programs. Without unlimited federal backstopping, abuse becomes politically and fiscally intolerable.

Critics warn that block grants spark a “race to the bottom.” The 1996 welfare reform suggests the opposite. When states gained ownership, many innovated — emphasizing work, child-care support, and fraud reduction. Accountability improved because incentives changed.

Yes, benefits should be limited to the truly needy. Open-ended entitlements allowed 250 “meal sites” to appear almost overnight in Minnesota, claiming to feed 120,000 children a day.

Force states to balance their books, and they will treat taxpayer money with respect. States that eliminate fraud can afford to provide better aid to real residents in need — creating a race to the top in administration rather than a race to exploit Washington.

The real way to “feed our future” is to end inflationary money-printing and dismantle the infinite entitlement state — so families can afford food on their own again.

Blaze Media Minnesota Minnesota department of human services News Scott stillman Tim Walz

Somali terror group cashing in on your tax dollars? Minnesota’s childcare fraud whistleblowers warned about a decade ago.

By mfnnewsJanuary 9, 2026 Article

Minnesota has faced intense scrutiny in recent weeks due to revelations of a widespread childcare fraud scheme, largely among local Somalis, that has allegedly drained millions of taxpayer dollars. However, the problem is far from new, as whistleblowers have been warning about this alleged rampant abuse for nearly a decade.

Yet, there has been little progress or accountability.

In May 2018, KMSP-TV released a scathing report alleging “massive daycare fraud” based on whistleblower claims. Scott Stillman, a former employee of the Minnesota Department of Human Services, told the news outlet that he warned his supervisors about these issues in a series of emails in March 2017.

Stillman, an upper management employee who spent eight years overseeing the state’s digital forensics lab, explained that he reported alleged fraud to the state’s DHS because he was concerned there was a “strong possibility” that defrauded taxpayer funds were being used against innocent civilians and the U.S. military.

‘Everyone who did this must be arrested.’

The alleged fraud pertained to the Child Care Assistance Program, which the federal government created in 1990 to help low-income parents afford childcare so they could work or participate in job training.

Stillman told KMSP he wanted the federal government to launch an independent investigation into the handling of day care and Medicaid programs, claiming the fraud reached $100 million or more annually. He also alleged that individuals in the state sent the fraudulent money to Somalia, where it was used to fund a terrorist organization known as al-Shabaab.

The local news interview prompted lawmakers to hold a hearing that same month.

“This is not a Minnesota problem,” Stillman testified. “It started in Minnesota, but we found an individual in our investigation who was teaching and training other states to do this, and it’s spreading out.”

“A federal investigation would reveal that there are other entities involved in this who may be receiving benefits from this fraud,” he said.

Photo by Matt Roth for The Washington Post via Getty Images

Stillman’s testimony prompted the Minnesota’s Office of the Legislative Auditor in 2019 to issue a report in which auditors stated they could not verify the alleged $100 million in annual fraud and concluded they could not provide a reliable estimate.

However, they believed the fraud was greater than the $5 million to $6 million prosecutors were able to prove in several criminal cases where defendants were charged with felonies and ordered to pay $4.6 million in restitution for their participation in a childcare fraud scheme.

Auditors also said they could not substantiate Stillman’s claims that any of the alleged funds were making their way into the pockets of terrorist groups.

“On the other hand, we found that federal regulatory and law enforcement agencies are concerned that terrorist organizations in certain countries, including Somalia, obtain and use money sent from the United States by immigrants and refugees to family and friends in those countries,” the auditors wrote. “In addition, federal prosecutions have convicted several individuals in Minnesota of providing material support to terrorist organizations in foreign [countries].”

Federal and state officials have been concerned about Child Care Assistance Program fraud since at least 2013, the report added.

The auditor’s report referenced an August 2018 email from Jay Swanson, the then-manager of the CCAP Investigations Unit, in which he substantiated Stillman’s allegations.

“Investigators, as well as the Supervisor and Manager of this unit believe that the overall fraud rate in this program is at least 50% of the $217M paid to child care centers in CY2017,” he wrote in an email to then-Inspector General Carolyn Ham.

Swanson claimed that much of the “pervasive” fraud could be attributed to “large scale overbilling” by “many child care centers,” eligible mothers recruited by providers to receive cash kickbacks, fraudulent centers opening in the same location as a previous center that was ineligible for the program, and shell care centers that exist only to scam the program, among numerous other schemes and oversight gaps.

“In my opinion anyone who claims that Mr. Stillman was making false statements on this topic either has no knowledge of this situation, or is attempting to shift the focus of the conversation away from a very serious issue,” Swanson concluded in his letter to the inspector general.

During a December 2018 hearing before the state lawmakers, IG Ham disputed Swanson’s claim.

“I do not trust the allegation that 50% of CCAP money is being paid fraudulently,” Ham remarked.

The CCAP Investigations Unit also warned about rampant fraud, according to the 2019 auditor report. The unit’s manager stated that investigators “do not believe, despite the number of cases investigated thus far, that any real progress has been made regarding CCAP fraud.”

“Investigators regularly see fraudulent child care centers open faster than they can close the existing ones down,” the manager explained.

While Minnesota DHS officials did not dispute the existence of a CCAP fraud problem, they argued that $100 million in fraud, as Stillman had claimed, was “not a credible number.”

“We’re concerned about fraud and are aggressively pursuing it, but it’s not at that level. Funding for the Child Care Assistance Program for 2017 was $248.2 million,” the MDHS said in a statement in May 2018, responding to Stillman’s allegations.

Photographer: Simone Lueck/Bloomberg via Getty Images

Then-acting MDHS Commissioner Chuck Johnson reiterated that Stillman’s fraud estimate was not credible. However, he admitted he could not put a reliable number on the total fraud.

By the time the 2019 report was published, dozens of Minnesota residents and childcare centers had been charged with CCAP fraud.

Since these issues were initially brought to the MDHS’ attention, Minnesota has transitioned CCAP oversight and administration to the Department of Children, Youth, and Families. When reached for comment concerning childcare fraud, MDHS directed Blaze News to contact DCYF. That department did not respond.

Minnesota’s long-standing childcare fraud issues recently gained national attention, thanks to journalist Nick Shirley’s on-the-ground reporting in December. This explosive coverage has ignited fierce criticism of the state’s Democratic leadership while shining a harsh light on broader oversight failures that extend beyond the CCAP.

This week, the Minnesota Office of the Legislative Auditor released a performance audit highlighting grant issuance lapses in the Minnesota Department of Human Services’ Behavioral Health Administration, the department responsible for overseeing mental health programs and alcohol and drug abuse services.

Auditors aimed to assess whether the BHA had “adequate internal controls and complied with significant finance-related requirements related to oversight of grants.” Instead, they found that the administration had failed to comply with “most” of the tested requirements, concluding that it lacked sufficient internal controls over grant funds.

Some of the report’s shocking findings included nearly $300,000 in unsupported grant reimbursements, $915,000 in grant payments for work performed before fully executed agreements were established, $2.5 million in grants awarded without using a competitive bid process, and the improper use of single-source grants.

Additionally, auditors noted that, while MDHS and BHA staff were cooperative with the audit, they provided “a number of documents” that were “either backdated or created after our audit began.”

When reached for comment about the OLA report, Minnesota’s Department of Human Services provided an excerpt from temporary Commissioner Shireen Gandhi’s testimony at a Tuesday Legislative Audit Commission hearing.

During her opening remarks, Gandhi stated that she was “shocked” to learn that staff have provided auditors “anything other than an accurate representation of the work done.”

“With respect to the audit report, while it’s upsetting that DHS has findings in an area that we have placed concerted effort, the OLA’s report highlights the importance of the compliance work that is under way at the department. And the findings provide us with a road map for our focus going forward to continue strengthening oversight and integrity of behavioral health grants,” Gandhi said. “I take the report seriously, I accept responsibility for the findings, and I will ensure that DHS closes the findings.”

Eric Daugherty of Florida’s Voice reacted to the new “BOMBSHELL” report, stating that it confirms the MDHS “FABRICATED RECORDS and did not verify grant recipients, tried COVERING THEIR TRACKS, enabling massive fraud.”

He called on Gov. Tim Walz to immediately resign. Walz has already dropped out of his re-election campaign amid the state’s ongoing fraud controversy.

“Everyone who did this must be arrested,” Daugherty wrote.

It is not yet clear whether any of these reports will result in criminal investigations.

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