• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia
Politicsfraud

Minnesota fraud scandal gives Trump cover to withhold funding for kids in 5 Democratic-led states

By
Geoff Mulvihill
Geoff Mulvihill
,
Moriah Balingit
Moriah Balingit
,
Hallie Golden
Hallie Golden
and
The Associated Press
The Associated Press
Down Arrow Button Icon
By
Geoff Mulvihill
Geoff Mulvihill
,
Moriah Balingit
Moriah Balingit
,
Hallie Golden
Hallie Golden
and
The Associated Press
The Associated Press
Down Arrow Button Icon
January 7, 2026, 9:24 AM ET
fraud
Children watch television at ABC Learning Center in Minneapolis, Minn., on Wednesday, Dec. 31, 2025. AP Photo/Mark Vancleave

President Donald Trump’s administration said Tuesday that it is withholding funding for programs that support needy families with children in five Democratic-led states over concerns about fraud.

Recommended Video

The U.S. Department of Health and Human Services, which oversees the program, will require the states to provide extra documentation to access the funds.

“Families who rely on child care and family assistance programs deserve confidence that these resources are used lawfully and for their intended purpose,” HHS Deputy Secretary Jim O’Neill said in a statement.

The administration has not laid out details about the fraud allegations.

HHS said in a statement evening that it “identified concerns that these benefits intended for American citizens and lawful residents may have been improperly provided to individuals who are not eligible under federal law.”

Five states — California, Colorado, Illinois, Minnesota and New York — are targeted, and the HHS said they had been notified.

Gov. Kathy Hochul said earlier in the day that New York is prepared to take the administration to court, as Democratic-led states have done scores of times now.

“We’ll fight this with every fiber of our being, because our kids should not be political pawns in a fight that Donald Trump seems to have with blue state governors,” she said.

The plan to withhold the funds was first reported by the New York Post.

Programs aim to help needy children and their families

The targeted programs provide lifelines to some of the neediest Americans:

— The Child Care and Development Fund subsidizes day care for low-income households, enabling parents to work or go to school.

— Temporary Assistance for Needy Families provides cash assistance and job training so parents in poverty can afford diapers and clothes and earn paychecks.

— The Social Services Block Grant, a much smaller fund, supports several different social service programs.

“These resources support families in need and help them access food and much more. If true, it would be awful to see the federal government targeting the most needy families and children this way,” Colorado Gov. Jared Polis’ office said in a statement.

Trump himself has not spoken on the specifics, but he proclaimed on social media Tuesday: “The Fraud Investigation of California has begun.”

Tara Gallegos, a spokesperson for California Gov. Gavin Newsom, said via email that “Donald Trump is a deranged, habitual liar whose relationship with reality ended years ago.” She also defended California’s record on stamping out fraud in government programs.

New York Democratic Sen. Kirsten Gillibrand said Trump’s move to halt funding aims to score political points, not to stop fraud.

“It’s our job to serve the people most in need and most at risk — no matter what state they live in or what political party their family or elected representatives belong to,” she said in a statement. “To use the power of the government to harm the neediest Americans is immoral and indefensible.”

Trump administration amplifies fraud claims

For months the has claimed that federally funded programs are being defrauded and used that assertion as a rationale to hold up money.

Federal child care funding has been on hold in Minnesota since late last month amid investigations into a series of alleged fraud schemes at day care centers run by people with family roots in Somalia.

In the fallout, HHS officials said no state will receive child care funds without providing more verification. Several states have told The Associated Press that they have not received any guidance on that decision.

The administration also raised fraud claims involving SNAP, the country’s main food aid program, saying it would halt administrative money to states — most Democratic-run ones — unless they provide requested details on recipients. That process could take months.

The administration has said the information provided by most GOP-controlled states shows fraud may be worse than previously believed, though it has not provided the data or detailed reports.

Dr. Mehmet Oz, the administrator of the Centers for Medicare and Medicaid Services, told Fox News on Tuesday that his agency also plans to audit Minnesota’s Medicaid bills in search of potential fraud. He did not provide any evidence of fraud that had been found.

___

Associated Press journalists Anthony Izaguirre, Steve Karnowski, Trân Nguyễn, Todd Richmond, Colleen Slevin, Darlene Superville and Sophie Tareen contributed.

Join us at the Fortune Workplace Innovation Summit May 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.
About the Authors
By Geoff Mulvihill
See full bioRight Arrow Button Icon
By Moriah Balingit
See full bioRight Arrow Button Icon
By Hallie Golden
See full bioRight Arrow Button Icon
By The Associated Press
See full bioRight Arrow Button Icon

Latest in Politics

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • Future 50
  • World’s Most Admired Companies
  • See All Rankings
Sections
  • Finance
  • Leadership
  • Success
  • Tech
  • Asia
  • Europe
  • Environment
  • Fortune Crypto
  • Health
  • Retail
  • Lifestyle
  • Politics
  • Newsletters
  • Magazine
  • Features
  • Commentary
  • Mpw
  • CEO Initiative
  • Conferences
  • Personal Finance
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
About Us
  • About Us
  • Editorial Calendar
  • Press Center
  • Work At Fortune
  • Diversity And Inclusion
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Most Popular

placeholder alt text
North America
'I meant what I said in Davos': Carney says he really is planning a Canada split with the U.S. along with 12 new trade deals
By Rob Gillies and The Associated PressJanuary 28, 2026
2 days ago
placeholder alt text
Politics
The American taxpayer spent nearly half a billion dollars deploying federal troops to U.S. cities in 2025, CBO finds
By Nick LichtenbergJanuary 28, 2026
1 day ago
placeholder alt text
C-Suite
Fortune 500 CEOs are no longer giving employees an A for effort. Now they want proof of impact
By Claire ZillmanJanuary 28, 2026
2 days ago
placeholder alt text
C-Suite
Jeff Bezos capped his Amazon salary at $80,000: ‘How could I possibly need more incentive?’
By Sydney LakeJanuary 28, 2026
2 days ago
placeholder alt text
Investing
Jerome Powell got a direct question about the U.S. ‘losing credibility’ and the soaring price of gold and silver. He punted
By Eva RoytburgJanuary 29, 2026
18 hours ago
placeholder alt text
Personal Finance
Current price of silver as of Thursday, January 29, 2026
By Joseph HostetlerJanuary 29, 2026
18 hours ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.


Latest in Politics

schiltz
LawMinnesota
ICE keeps getting slapped down by a George W. Bush-appointed, Antonin Scalia acolyte Republican judge in Minnesota
By Ed White and The Associated PressJanuary 29, 2026
10 hours ago
CryptoCryptocurrency
Landmark crypto bill clears Senate hurdle but Democrats withhold support over lack of ‘gryfto’ rules to prevent Trump family conflicts of interest
By Leo SchwartzJanuary 29, 2026
11 hours ago
homan
PoliticsMinnesota
Trump’s border czar vows ‘zero tolerance’ on assaults against ICE while gesturing at Minnesota drawdown
By Giovanna Dell'Orto, Rebecca Santana and The Associated PressJanuary 29, 2026
11 hours ago
omar
PoliticsMinnesota
Trump on Ilhan Omar getting apple cider vinegar squirted on her: ‘She probably had herself sprayed, knowing her’
By Alanna Durkin Richer, Steve Karnowski and The Associated PressJanuary 29, 2026
12 hours ago
trump
PoliticsImmigration
Trump backlash over ICE builds across American culture, from The Boss to Sam Altman to Martha Stewart
By Steve Peoples and The Associated PressJanuary 29, 2026
12 hours ago
Economynational debt
$38 trillion national debt finds Democratic, Republican supermajority as watchdog sees ‘a major problem for America’s economic future’
By Nick LichtenbergJanuary 29, 2026
13 hours ago