WASHINGTON (TNND) — House lawmakers held another hearing about the fraud scandal in Minnesota that pushed Gov. Tim Walz out of running for reelection and prompted a crackdown from the Trump administration that they were warned is hitting legitimate care centers and other businesses that rely on government funding to operate, risking closures of organizations providing vital services to their community.

Among the hearing’s witnesses was Nick Shirley, a YouTuber whose video about alleged daycare fraud in Minnesota drew significant attention and ramped up scrutiny on Walz, who ultimately opted to drop his reelection bid in light of the scandal. The initial video alleged nearly a dozen day care centers receiving public funds are not actually providing any services, a claim some of the businesses and state regulators have denied.

"I made this video to document the widespread fraud that has been taking place, as I truly believe that all fraud is bad,” Shirley said. “And people like me, my generation, are sick of seeing tax dollars go toward fraud."

It also spurred a swift crackdown from the Trump administration, with the Department of Health and Human Services freezing all childcare payments to Minnesota days after Shirley’s video went viral. Department of Homeland Security officials have also been in the state to investigate, and the Justice Department added a new assistant attorney general to focus on fraud with their initial attention on Minnesota.

Scott Dexter, a former police officer and state investigator in Minnesota, told the committee he had witnessed widespread fraud in the state's child care system due to deficiencies in the system to approve funds and a lack of recommended safeguards like electronic records and security cameras. But he said his team of investigators were labeled as "racially biased" after noting the trend of fraud happening within the Somali community and state officials launched an outside review of their practices resulting in new restrictions that hindered the ability to continue investigating.

“The purpose of my testimony is not to cast blame on any community. It is to highlight systemic weaknesses that allow large scale fraud to occur and to emphasize the need for stronger safeguards, better oversight and investigative processes that are allowed to function without political interference,” Dexter said.

Funding freezes in response to the continued uncovering of fraud schemes have hurt legitimate businesses and care centers that are now struggling with figuring out how to stay open.

"Instead of doing the obvious thing and targeting criminal actors, the response has been to freeze everyone's payments. That decision does not punish the criminals. It punishes innocent children and families," said Jennifer Larson, Founder and CEO of Minnesota-based Holland Autism Center and Clinic.

Several lawmakers questioned why Minnesota lawmakers didn't act sooner despite evidence and clear signs that taxpayer funds were being mismanaged and going to illegitimate organizations. Investigations yielding prosecutions in Minnesota had been happening for years but the issues with fraud continued to balloon into a multibillion-dollar hole in the budget.

"I think it's politics driving it all. That's why it's appropriate we're investigating here at the congressional level. That's why it's appropriate the Department of Justice has put in place a specific individual to focus on this, not only in Minnesota, but around the country," said Rep. Jim Jordan, R-Ohio.

Witnesses at a previous hearing on the Minnesota fraud also suggested the Walz administration and state Democrats did not act sooner or more aggressively to rein in the fraud for political purposes.

Democrats on the panel said Republicans were politicizing the cases in Minnesota and hypocritical about a series of pardons the president has given to people convicted of fraud.

“Our colleagues want to talk about fraud in Minnesota. Fraud that was already being investigated and prosecuted under the last administration,” said Rep. Jamie Raskin, D-Md.

The GOP-led Congress has opened its own probes into the fraud schemes and already held multiple hearings spotlighting it. Earlier this month, Minnesota state Republicans accused Walz of perpetuating a culture that allowed the schemes to flourish and cost taxpayers vast sums.

Rep. Brett Guthrie, the chairman of the House Committee on Energy and Commerce, announced on Tuesday the committee was requesting documents from Walz and other state officials to get a better handle on the Medicare fraud that has taken place in Minnesota.

“The extensive fraud schemes being perpetrated in Minnesota have wreaked havoc on government-funded health programs. We have an obligation to ensure finite taxpayer dollars are being used responsibly, and that the most vulnerable Americans are not being exploited to the benefit of fraudsters and foreign actors,” lawmakers leading the committee said in a joint statement.

Federal prosecutors have said many social service programs in Minnesota are rampant with fraud, including child nutrition, autism services, day care and housing stabilization programs. Nearly 100 people have been hit with federal charges so far, 62 of which have been convicted in a series of prosecutions that dates back several years.