Daycare Checks in Wisconsin Went to Swiss-Backed Firm With Billion Dollars in Revenue, Affluent Areas

It’s basically welfare for daycare centers, some of them run by billionaires.

Democrats are slamming legislative Republicans’ refusal to continue a pandemic-focused program that handed out big federally-funded monthly checks to daycare centers in the state. However, a Wisconsin Right Now investigation has found that the federally funded program gave checks of at least $20,000 a month to some daycare centers, even in affluent areas, and it gave more than $4 million to subsidize multiple centers run by a Portland, Oregon, for-profit company that boasts more than $1 billion in revenue and was once tied to notorious “junk bond king” Michael Milken.

One childcare center located in Hartland, Wisconsin, the Wee Know School, raked in more than $443,000 in checks through the “Child Care Counts” program over the past three years. More than 1,100 providers received more than $100,000, state records show. More than $3 million went to daycares promising to promote “inclusive spaces,” WRN has documented. Some daycare centers receiving large checks have had violations with the state, including those relating to reporting of child abuse, WRN has documented.

Some of the daycare centers sent checks have a history of violations and fines with the state that are serious. One entry in state records for KinderCare Calhoun reads,

Another KinderCare facility on 3 Mile Road has had violations that include, “Supervision of children was not adequate on September 16, 2022 when a 2 1/2 year old child was found by staff alone in the DPS A room. Staff were unaware how long the child was in the room.” That facility received more than $476,000 in checks through the daycare subsidy program, state records show.

Another entry for that center reads, “A staff person used prohibited actions toward a child in care when the staff person was observed grabbing a child’s face, shouting “I told you to be quiet”, and then pushing the child’s face away.”

The Hartland Wee Know School also has violations, including, “In several classrooms there are cords accessible to children which are a choking hazard.”

Some centers listed as receiving checks do not come up in this state database of regulated childcare centers.

According to the state’s own records, Wisconsin Right Now has learned, more than $4 million in checks went to multiple daycare centers, called KinderCare, that are backed financially by one of the largest private equity firms in Europe. Partners Group was co-founded by a trio of Swiss billionaires who met at Goldman Sachs.

KinderCare, based out of state, was previously tied to the so-called notorious “junk bond king Michael Milken, who went to prison for fraud with great infamy in the 1990s. In 2021, that firm generated more than $1 billion in revenue.

In 2004, when Milken sought to acquire KinderCare, the New York Times headlined its story, “Milken Sees the Classroom as Profit Center.” In 2015, Milken’s company sold its share to the Swiss private equity firm. In 2021, though, according to the Commercial Observer, “Milken-led Private REIT Nabs $642M Loan on KinderCare Portfolio.” On April 24, 1990, Michael Milken “pled guilty to a six-count felony information charging him with conspiracy, securities fraud, mail fraud, market manipulation and tax fraud,” according to the US government. 

One book called KinderCare facilities the “childcare equivalent of the fast food restaurant.”

Here are just some examples of monthly checks given to KinderCare facilities in Wisconsin over the past three years, according to State of Wisconsin records:

If you believe Democrats or just get your news from mainstream media outlets, though, you probably think that cruel Republicans hate kids and impoverished mom-and-pop daycare centers will all go under throughout Wisconsin without the more than $300 million in state funding that Gov. Tony Evers wanted in order to continue the federal program when its money soon runs out. Media outlets have run stories quoting daycare operators as saying they will have to close, raise costs on parents, cut staff or staff wages and other sky-is-falling scenarios.

Democrats say half of the state is a “childcare desert,” and even wealthy families can’t find daycare. Supporters of the program say that Wisconsin daycares need it because they can’t pay livable wages and thus lose good workers or can’t take all of the children on waiting lists. Thus, they want the state to continue providing monthly checks on the taxpayer dime to keep these businesses afloat.

An update on #childcare in Wisconsin: #SaveChildCareCounts pic.twitter.com/sqzWvhHFwR

— Senator Melissa Agard 🌻 (@SenatorAgard) June 28, 2023

To be sure, some daycare centers given much smaller checks are listed only under a person’s name and are only caring for a couple kids. However, the big money went to more sophisticated operations. Some are in modest homes, such as this child care business run by a woman who received $675 in checks.

The daycares given checks are scattered throughout the state. But the media never paint the full picture. Some are run by religious organizations. Some are home-based.

Wisconsin's Child Care Counts program has funded more than 22k child care jobs and helped 113k children since 2020.

Republicans just defunded the program in the dead of night. Sen. Kelda Roys said the decision will make even more of Wisconsin into a childcare desert. pic.twitter.com/CddlVp4M89

— More Perfect Union (@MorePerfectUS) June 16, 2023

The program handed out $600 million in checks to 4,900 childcare centers over a three-year period, using federal money, according to the Legislative Fiscal Bureau, which is non-partisan.

The checks could be used for a variety of things including “rent/space costs, utilities, insurance, business-related taxes, and payroll/benefits,” and “expenses related to mitigating the risk of COVID-19,” as well as “Materials/supplies for enhancing the program environment and curriculum, and social and emotional development supports,” continuing education, mental health services for children and employees and “additional costs to ensure high-quality programming.” That’s according to the state’s website.

If daycare centers would have to close without grants, maybe they are failed businesses that should close, some argue. Some restaurants, auto shops, grocery stores, and clothing outlets are struggling too, due to staffing shortages and pandemic-era closures, but no one is handing them grants to stay open, at least not anymore.

Here are some other facts on the program:

Republicans aren’t “cutting” or “gutting” the program

Republicans aren’t “cutting” or “gutting” the daycare subsidy program. It’s a federally funded pandemic era program that they are just refusing to keep alive using state taxpayer dollars instead. The GOP-controlled Joint Finance Committee voted not to continue funding the program with state tax dollars.

Millions of dollars went to “promoting inclusive spaces”

Some daycares received $1,000 or $1,675 checks for “promoting inclusive spaces,” such as upgrading them to accommodate children with disabilities. Overall, $3.5 million went to daycare centers for “promoting inclusive spaces.” Example:

The industry has stabilized as the pandemic waned

The industry is now stabilized. According to a state press release, “only 2.7 percent of providers (118) closed in October 2021 compared to 40 percent (1,729) in March 2020.” So the need has waned with the pandemic.

Wisconsin Shares already helps parents afford daycare

Wisconsin already has a program called Wisconsin Shares that helps fund parents’ childcare expenses, and rates are increasing. Already under the program, providers “cannot use Child Care Counts funds to reimburse families who do not receive Wisconsin Shares.”