U.S. Treasury Secretary Scott Bessent on Monday said his department is investigating a claim that money stolen from the state of Minnesota through fraud helped fund a Somalia-based terrorist group.
An unconfirmed report from a conservative think tank published earlier this month alleged that some of the hundreds of millions of dollars stolen from Minnesota in recent years ended up in the hands of the Islamist militant group al-Shabaab, which the U.S. State Department has designated as a terrorist organization.
Soon after that report was published on Nov. 19, President Donald Trump ended temporary legal protections for hundreds of Somali immigrants in Minnesota.
State Republicans then called on federal officials to investigate in letters to the U.S. Attorney’s Office. Now there is a cabinet-level response.
“At my direction, (the U.S. Treasury Department) is 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,” Bessent wrote in a post on X.
Bessent said his department would share findings as the investigation continues.
Fraud cases
Former Acting U.S. Attorney Joe Thompson has said fraud in recent years could top $1 billion. Beyond the nearly 80 charges in the Feeding Our Future case, which involved federal dollars handled by the Minnesota Department of Education, the Minnesota U.S. Attorney’s office also is prosecuting fraud cases in autism and housing stabilization service programs funded by Medicare and administered by the Minnesota Department of Human Services.
It’s never been proven if any money stolen from Minnesota in recent fraud cases, such as the $250 million Feeding Our Future scheme where scammers claimed reimbursement for meals they never served to children during the pandemic, ended up funding terrorism. Though money has ended up overseas, according to authorities.
Citing unnamed sources and a former counterterrorism investigator, writers for City Journal, a publication of the Manhattan Institute, claim that some money sent back from Minnesota to Somalia through informal networks likely would have benefited Al-Shabaab, which controls large swaths of Somalia.
The report shows no definite link between hundreds of millions of dollars in fraud this decade in Minnesota and terrorist groups, though it asserts that al-Shabaab received cuts of money transferred from the U.S. to Somalia through the hawala system, an informal money transfer network used by the Somali diaspora.
Prior claim of fraud funding terror groups
It’s not the first time there have been allegations of a link between fraud in Minnesota and terrorism.
The same premise was at the center of a similar 2018 local news story that spurred action at the state Capitol and a nonpartisan state investigation that found no definitive connection.
KMSP-TV, or Fox 9, reported that money from day care fraud in Minnesota transferred to areas controlled by al-Shabaab in Somalia. An agency whistleblower claimed $100 million in stolen tax dollars had gone overseas.
A subsequent report by the nonpartisan Minnesota Office of the Legislative Auditor couldn’t substantiate claims that money went to terrorist groups. The 2019 report found fraud, though no evidence that it reached $100 million.
OLA did acknowledge, however, that money obtained through fraud sent overseas could end up going to terrorists.
Walz on federal scrutiny: ‘I welcome it’
Last week, the office of Minnesota Gov. Tim Walz said it had not heard anything from state or federal law enforcement regarding the allegations. The Minnesota U.S. Attorney’s office did not respond to requests for comment.
Related Articles
Attorney Chris Madel seeks Republican nomination in MN governor race
How will Kaohly Her’s legislative career shape her leadership of St. Paul?
How fraud swamped Minnesota’s social services system on Tim Walz’s watch
A look at St. Paul’s legal tangles with the Trump administration
Attorney General Keith Ellison joins others in SNAP eligibility lawsuit
Speaking with reporters at the Capitol last Wednesday after presenting Minnesota’s Thanksgiving Turkey, Walz said he was open to federal scrutiny on fraud. Though he added he was worried the allegations were being used to paint the Somali community in a negative light.
“I welcome it. I think it’s the right thing to do. I don’t know if they’ll find the connection,” he said. “But what I will tell you is unhelpful is — do not paint an entire group of people with that same brush, demonizing them, putting them at risk when there is no proof.”
Leave a Reply