Treasury Secretary Scott Bessent announced Monday that the U.S. Treasury Department has opened a federal investigation into allegations that Minnesota tax dollars were diverted to the terrorist organization Al-Shabaab during the Biden-Harris administration and under Minnesota Gov. Tim Walz.
The investigation follows recent reporting that uncovered large-scale fraud schemes involving Minnesota social programs and remittances routed through Somali money-transfer networks.
Bessent released the announcement on X, stating that the allegations warranted immediate action.
“At my direction, @USTreasury 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.
He added that the Treasury Department was moving quickly “to ensure Americans’ taxes are not funding acts of global terror,” and said the agency would release findings as the investigation continues.
At my direction, @USTreasury 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.
Thanks to the leadership of… https://t.co/uillMknuXL
— Treasury Secretary Scott Bessent (@SecScottBessent) December 1, 2025
This Could Be the Most Important Video Gun Owners Watch All Year
Gov. Walz’s office told Fox News Digital that Walz said last week he would welcome an investigation if any connection were found between Minnesota state funds and Al-Shabaab.
The launch of the investigation follows a report published last month by Ryan Thorpe and Christopher F. Rufo of the Manhattan Institute.
The report examined fraud schemes tied to Minnesota’s Medicaid Housing Stabilization Services program, Feeding Our Future and additional organizations.
Thorpe and Rufo documented how the schemes operated and reported that individuals within Minnesota’s Somali community were responsible for significant portions of the fraud.
According to the report, federal counterterrorism sources confirmed that millions of dollars in stolen funds had been transferred to Somalia.
Thorpe and Rufo wrote that this was how Al-Shabaab ultimately obtained access to the money.
Their reporting focused in part on the question, “Where did the money go?” and tracked how Minnesota-based fraud rings moved funds abroad.
The report cited data showing that remittances play a major role in Somalia’s economy, with approximately 40 percent of Somali households receiving money from abroad.
In 2023, members of the Somali diaspora sent an estimated $1.7 billion back to Somalia, a figure exceeding the national government’s budget for that year.
Thorpe and Rufo reported that the stolen funds were funneled to Al-Shabaab, an al-Qaeda-linked terrorist group, through hawalas — informal networks of money traders used widely across East Africa and the Middle East.
Thank you, Secretary Bessent! https://t.co/NLa4eWPy2p
— Christopher F. Rufo ⚔️ (@christopherrufo) December 2, 2025
Multiple law enforcement sources told the authors that Minnesota-based Somali networks had sent millions of dollars through these channels.
Former Seattle Police Department detective Glenn Kerns, who spent 14 years on a federal Joint Terrorism Task Force, described how the networks operated.
Kerns told Thorpe and Rufo that Somali participants used commercial flights from Seattle to move cash into hawala systems in Somalia. He said investigators pulled financial records and discovered that many of the individuals sending money were receiving federal benefits.
“We had sources going into the hawalas to send money. I went down to [Minnesota] and pulled all of their records and, well s—, all these Somalis sending out money are on DHS benefits,” Kerns told the authors.
A confidential source cited in the report stated, “The largest funder of Al-Shabaab is the Minnesota taxpayer.”
A former official who served on the Minneapolis Joint Terrorism Task Force told Thorpe and Rufo that funds exported from Somali communities in the United States and Europe ultimately strengthened the terrorist group.
“Every scrap of economic activity, in the Twin Cities, in America, throughout Western Europe, anywhere Somalis are concentrated, every cent that is sent back to Somalia benefits Al-Shabaab in some way,” the former official said.
The Treasury Department’s investigation is ongoing.
