Washington, D.C. – January 1, 2026 – In a bold move to combat alleged widespread fraud in federal subsidy programs, President Donald Trump has ordered the immediate halt of hundreds of millions of dollars in childcare funding to Minnesota, following shocking revelations from undercover videos released in late December 2025. The decision, announced on New Year’s Eve, has ignited fierce debate over accountability in public spending and sparked protests from childcare providers across the state.
The controversy erupted when investigative journalist Shirley Thompson unveiled a series of videos exposing apparent discrepancies at several Minnesota childcare centers. The footage, captured during unannounced visits, showed facilities billing the federal government for subsidies far exceeding the number of children actually present. One glaring example highlighted in the videos is ABC Learning Center in Minneapolis, which reportedly received nearly $3 million in federal funds over the past three years. Despite documented violations, including overcrowding and inadequate staffing, the center continued to claim reimbursements for phantom enrollments, raising red flags about systemic abuse of taxpayer dollars.
“These videos paint a disturbing picture of fraud that’s been draining our resources and betraying hardworking families,” President Trump stated during his New Year’s Eve address from Mar-a-Lago. “We’re not going to let this continue. We’re freezing the funds, and we’re going after every penny that’s been stolen. Investigations are underway, and those responsible will be held accountable.”
In response to the exposés, the Trump administration swiftly implemented nationwide reforms to tighten oversight of childcare subsidies. New rules mandate that providers submit photographic evidence of enrolled children and detailed receipts for all claimed expenses. These measures aim to prevent future fraud by ensuring verifiable proof of services rendered, with noncompliance risking immediate disqualification from federal programs.
The freeze affects an estimated $400 million in annual payments to Minnesota’s childcare sector, impacting thousands of providers and families reliant on subsidized care. State officials have expressed concern over the abrupt halt, warning of potential disruptions to essential services for low-income families. “While we support transparency, this blanket freeze could harm innocent providers and the children they serve,” said Minnesota Governor Tim Walz in a statement.
Tensions have escalated further with reports of a suspicious burglary at one of the implicated centers shortly after the videos surfaced. Authorities are investigating whether the incident, which involved the theft of records and equipment, was an attempt to tamper with evidence. Meanwhile, childcare providers have taken to the streets in protest, arguing that the allegations tarnish the reputation of an industry already struggling with post-pandemic recovery and staffing shortages.
Federal investigators, including teams from the Department of Health and Human Services and the FBI, are now probing the extent of the fraud. Sources close to the investigation indicate that similar patterns may exist in other states, potentially leading to broader fund suspensions if additional evidence emerges.
As the new year begins, the administration’s crackdown underscores President Trump’s ongoing commitment to fiscal responsibility and anti-corruption efforts. Critics, however, accuse the move of being politically motivated, especially in a battleground state like Minnesota. With ongoing probes and legal challenges on the horizon, this scandal could reshape the landscape of federal childcare funding for years to come.
