Democrat-run states nationwide could soon be under investigation, President Donald Trump claimed during a New Year’s Eve speech at this Mar-a-Lago club, the latest development in the administration’s fast-moving response to viral, unverified claims of fraud at Minnesota day care centers.
“We’re going to take back our country. Can you imagine, they stole $18 billion?” Trump said, though it was unclear exactly to what he was referring. “That’s just what we’re learning about. That’s peanuts. And California is worse. Illinois is worse, and sadly, New York is worse.”
“It was a giant scam,” he added. “Other than that, we’re going to have a great year. Actually, I view that as the reason for a good year because we’re going to get to the bottom of it.”
White House Press Secretary Karoline Leavitt sounded a similar note on Fox News earlier in the day.
“Minnesota is at the top of the list but we know there has been massive fraud in blue states across this country,” she said. “Look at California, look at New York. These states will all be under investigation and consideration as far as this administration is concerned.”
The outrage began last week after a right-wing influencer went viral claiming to have discovered tens of millions of dollars of fraud at what he claimed were empty, federally supported child care centers, run by people of Somali descent in Minnesota.
State officials, as well as the daycare owners themselves, have disputed the claims in the video, which Minnesota Republicans admit to helping create, but the Trump administration has used the video’s allegations as the basis for a sweeping crackdown.
First, the administration froze such funds for Minnesota, then moved Wednesday to do the same nationally. Homeland Security and FBI agents have also launched investigations.
“This is Trump’s long game,” Minnesota Gov. Tim Walz, who was on the Democratic ticket against Trump in 2024, wrote on X earlier this week. “We’ve spent years cracking down on fraudsters. It’s a serious issue – but this has been his plan all along. He’s politicizing the issue to defund programs that help Minnesotans.”
State and federal officials have been prosecuting government program fraud in Minnesota for years, and 57 people have been convicted as part of the $300 million Feeding Our Future fraud scheme. Such prosecutions began under the Democratic Biden and Walz administrations.
The president frequently disparages Somali people. He claimed recently they “contribute nothing” to America and called Rep. Ilhan Omar, a Somali-American who represents Minnesota and is a regular Trump critic, a piece of “garbage.”
Somalis in Minnesota, including some of the day care center owners mentioned in the video, say they have faced harassment and vandalism following the president’s comments, which have often been accompanied by racist invective from Trump supporters online.
“What is not helpful is the president of the United States demonizing an entire community or pardoning someone single-handedly responsible for $1.6 billion in fraud,” Walz wrote an an op-ed in the Minnesota StarTribune earlier this month, a reference to Trump’s recent commutation of private equity executive David Gentile’s prison sentence.
Defrauding federal programs is not merely a blue state issue.
Earlier this year, state and federal prosecutors announced charges for more than 300 defendants who are accused of carrying out $14.6 billion worth of health care fraud across 19 states, often involving misleading federal government programs including Medicare.
The president and his allies have tied the fraud claims to their unproven allegations of election fraud in Democratic states as they look to 2026.
“We need America First governors everywhere in 2026!” Rep. Nancy Mace claimed on X, in response to a Trump post claiming “crooked” Democratic governors in California and Minnesota enabled unspecified fraud in both states.
The administration frequently targets Democrat-run states for exceptional treatment, including the deployment of troops to blue cities as part of crime and immigration crackdowns.
The president has used the threat of pulling federal funds in the past as a threat, including claims he would withhold wildfire recovery funds from California and punish New York if democratic socialist Zohran Mamdani was elected mayor.
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