The case of Fozia Ali (2)

In this series I follow up on Jeff Baillon’s intensely reported FOX 9 story “Millions of dollars fly out of MSP in suitcases, but why?” I gave my own twist to Baillon’s story in the City Journal column “Mogadishu, Minnesota” (my title: “Assimilation, Minnesota style”).

In part 1 I noted the media backlash to Baillon’s story at the Pioneer Press, at MPR, and, of course, at the Star Tribune. The media, however, have not followed up on Baillon’s findings regarding rampant daycare fraud. In this post I want to provide some relevant background while noting the findings that remain undisputed supplemented by my own reporting and research.

• Minnesota’s Child Care Assistance Program (CCAP) is a joint state-federal program (50-50) administered by the Minnesota Department of Human Services (DHS). It pays benefits to daycare providers providing services to qualifying parents as explained in information that can be accessed on the DHS site here.

• The program is limited to the budget set by the legislature. There is a waiting list for parents seeking the program’s benefits. Any provider who steals from the program is stealing from needy applicants as well as from taxpayers.

• Fraud is rampant in the program. Thirteen daycare providers have been closed for fraud and six felony convictions have resulted in $4.6 million in court-ordered restitution. Ten more daycare providers are under active investigation. See Laura Yuen, “Fox 9 reporting on day care fraud called into question” (MPR, May 14, 2018).

• So far as I can tell, the cases of reported fraud go back five years and derive almost entirely from Somali daycare providers. See, e.g., Rochelle Olson, “Hennepin County raids day-care centers as part of fraud investigation; 4 arrested” (Star Tribune, September 30, 2015). In one case, the provider paid kickbacks to parents to keep the lid on. See, e.g., Chris Serres, “Minneapolis daycare charged with overbilling state $103,500” (Star Tribune, April 8, 2016).

• Baillon adds this poignant detail: “Sources in the Somali community told Fox 9 it is an open secret that starting a daycare center is a license to make money. The fraud is so widespread they said, that people buy shares of daycare businesses to get a cut of the huge public subsidies that are pouring in.”

• In 2017 CCAP was budgeted at $248 million. Baillon reported that the fraud involved in the program may approach $100 million. That seems too high, but how long has this been going on? Minnesota’s Office of Legislative Auditor is undertaking an investigation of the Child Care Assistance. When I spoke with Deputy Legislative Auditor Chris Buse last week he was just assembling his team.

• DHS referred me to the page on the CCAP program linked above in response to my request for information. I called and wrote DHS last week with a question based on my research: “CCAP seems to be a program that is relatively easy to defraud. How else to account for a case like Fozia Ali’s and the multiplicity of similar cases? Will you please respond/comment?”

• I received this response from DHS (my emphasis): “Any amount of fraud is too much. DHS created the Office of the Inspector General in 2011 to address fraud, waste and abuse in public programs. DHS has added resources and made recommendations to the Legislature to increase our ability to ensure public funds are used for those who need them.”

• Oh, yeah, also this preface to the message quoted above (emphasis mine): “If you reference the following in your reporting, please attribute the information to the department and not to me personally.”

Baillon presented the case of Fozia Ali as illustrative of the issues he raised. I will turn to her case briefly in part 3.


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