Treasury Probes Claims Minnesota Welfare Dollars Reached al Shabaab; Congressional Inquiry Launched

The U.S. Treasury Department is investigating allegations that Minnesota tax and welfare dollars may have been diverted to al Shabaab, the Somalia-based group designated as a terrorist organization, Treasury Secretary Scott Bessent said. The inquiry follows reporting that cites law enforcement sources suggesting millions from state assistance programs could have ultimately reached the extremist group.

'We are investigating allegations that 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,' Secretary Bessent wrote on social media.

On the congressional side, House Oversight Committee Chair Rep. James Comer has opened a separate inquiry and requested documents and communications from Minnesota Governor Tim Walz. Comer said the committee has 'serious concerns' about how fraud in state programs was allowed to occur and wants to determine what state officials knew and what steps were taken.

Governor Walz has said he welcomes federal scrutiny and will cooperate with investigators looking into where allegedly defrauded welfare funds ended up. The governor and other Minnesota Democrats have also warned against stigmatizing entire communities while investigations proceed.

Minnesota has been the focus of several large fraud investigations in recent years. Federal prosecutors say dozens of people were charged in a scheme tied to the nonprofit Feeding Our Future and partner organizations that allegedly stole roughly $250 million in federal nutrition aid by falsely claiming to distribute meals during the COVID-19 pandemic. Officials have also pursued fraud cases related to housing assistance and services for autism.

Many defendants in these cases are from Minnesota's sizable Somali community. Somali American former investigator Kayseh Magan has written that community members have been both accused in and victimized by fraud schemes. Former U.S. Attorney Andy Lugar said those charged in the Feeding Our Future matter 'were looking to get rich, not fund overseas terrorism.'

Political leaders are sharply divided. Former President Donald Trump has repeatedly accused Somali immigrants in Minnesota of widespread fraud and money-laundering activity, alleging — without presenting evidence — that large numbers of Somali residents are exploiting public benefits. State leaders, including Governor Walz, have cautioned against demonizing an entire community without proof.

Questions over whether state assistance funds could have filtered overseas and ultimately reached extremist groups are not new. A 2019 review by the state's Office of the Legislative Auditor said investigators were unable to substantiate claims that Child Care Assistance Program funds were reaching terrorist organizations, though it noted it was possible that money sent overseas could eventually be used by bad actors.

The Treasury announcement and the congressional inquiry add federal resources to ongoing criminal prosecutions and state-level reviews. Investigators say their priority is to trace the path of stolen dollars, determine whether any funds were sent abroad, and hold responsible parties accountable.