Treasury Opens Federal Probe After Report Alleging Minnesota Funds Reached Al-Shabaab

U.S. Treasury Secretary Scott Bessent has ordered a federal investigation into allegations that Minnesota tax dollars were diverted to the extremist group Al-Shabaab. The announcement follows an independent report that identified alleged fraud in state programs and described money transfers from Minnesota to Somalia that investigators say may have ended up with the militant organization.

What was announced

On the social platform X, Secretary Bessent said he directed Treasury investigators to examine claims that funds were siphoned from Minnesota programs and flowed to Al-Shabaab. He described the allegations as requiring urgent scrutiny and said the Treasury would share findings as the review continues.

Source of the allegations

The allegations stem from a recent report by Ryan Thorpe and Christopher F. Rufo of the Manhattan Institute. Their investigation focused on apparent fraud in Minnesota’s Medicaid Housing Stabilization Services program and at nonprofits, including Feeding Our Future. The report alleges that some fraudulent proceeds were transferred from Minnesota to Somalia through informal money-transfer networks known as hawalas.

Claims about remittances and links to Al-Shabaab

The report cites law-enforcement sources and a retired Joint Terrorism Task Force investigator who described complex money-transfer activity. The authors say these transfers contributed to a broader flow of remittances from the Somali diaspora — which the report estimates at about $1.7 billion to Somalia in 2023 — and contend that a fraction of that money ultimately reached Al-Shabaab.

"Under the feckless mismanagement of the Biden Administration and Governor Tim Walz, hardworking Minnesotans’ tax dollars may have been diverted to the terrorist organization Al-Shabaab," Bessent posted on X.

Responses and caveats

Governor Tim Walz’s office said the governor would welcome an investigation if any verified link is found between Minnesota funds and Al-Shabaab. The Treasury probe is intended to determine whether the allegations are supported by evidence that meets legal and evidentiary standards.

It is important to note that the claims currently rest on an investigative report and statements from sources cited by its authors; they have not yet been proven in a court of law or through the Treasury’s review. Authorities will need to corroborate any transactions, identify responsible parties, and establish intent or knowledge before concluding that money was knowingly routed to a terrorist organization.

Next steps

The federal inquiry will examine financial records and the pathways alleged in the report, including use of hawalas and remittance patterns. Results will be released when investigators have completed their review and determined which findings can be publicly shared.

Sources: Report authors Ryan Thorpe and Christopher F. Rufo; public statements by Treasury Secretary Scott Bessent; quoted law-enforcement sources cited in the report.