WASHINGTON, D.C. – U.S. Sen. Mike Lee (R-UT) has signed onto proposed legislation to prevent massive childcare fraud cases.
Joining Senators Ted Cruz (R-TX) and Rick Scott (R-FL), Lee agreed on Feb. 18 to become a co-sponsor of the Payment Integrity Act to reform federal funding of welfare and childcare programs.
If enacted, the Payment Integrity Act would have nationwide impact, but the obvious intended target of the proposed legislation is the alleged mass fraud scandal involving the Somali community in Minneapolis.
“Support for childcare should go to real kids,” according to Lee, “not empty rooms.
“Fake childcare operations are stealing funding from the ones who are actually taking care of American’s children in need.”
In 2025, more than 115,000 children ages five and under were eligible for support from federal Child Care and Development Block Grants (CCDBG) in Minnesota, according to a U.S. government fact sheet issued in September of 2025.
Yet only about 12,000 of those children – roughly 10 percent – actually received that support.
Lee’s staff members here in Washington say that the individuals exposed in Minnesota who stole upwards of $9 billion from American taxpayers did not merely commit financial fraud, but also diverted limited child care assistance away from families that genuinely needed it.
U.S. Department of Health and Human Services officials acknowledge that, under the Biden administration, they were obliged to reduce CCDBG oversight in ways that heightened the likelihood of waste, fraud and abuse in federally funded childcare programs.
That loophole actually invited the fraud that has been recently revealed in the Somali community in Minneapolis and elsewhere, Lee’s staff members emphasize.
White House officials allege that recent probes have revealed that a massive, complex network of non-profits and affiliates tied to Minnesota’s Somali community looted billions in federal funds by claiming to have fed children, sheltered the homeless and provided therapy to autistic children, all of whom were non-existent.
In January, Lee reportedly advised federal officials to also investigate an alleged bogus drug treatment center operated by a Somali non-profit in Minneapolis.
“Programs in Minnesota for welfare and child care … were treated like Automated Teller Machines by criminals,” Cruz argues.
“The mass fraud in Minnesota shows that American taxpayers can no longer rely on local and state politicians to prevent abuses, because those politicians often have electoral and partisan incentives to look the other way.”
Specifically, the Payment Integrity Act would require states to base funding for child care providers on actual verified attendance rather than on reported enrollment.
The proposed legislation would also allow states to pay retroactively for childcare expenses instead of paying in advance.
“This is due diligence that should have been implemented all along,” Lee concludes.