Scott Bessent stood in front of reporters Friday and said what a lot of us already suspected: American taxpayer money, stolen through Minnesota’s welfare system, may have ended up in the hands of al-Shabab. The al-Qaeda affiliate. The group responsible for the Westgate mall massacre that killed 67 people in Nairobi. That al-Shabab.
The Treasury Secretary didn’t mince words. His department’s Financial Crimes Enforcement Network has been tracing funds sent to Somalia through money service businesses operating outside the formal banking system. “These funds could have potentially been diverted to the terrorist organization al-Shabab,” Bessent said. “We have traced where the money went and are examining that.”
Let that sink in for a second. Welfare fraud in Minnesota, a state run by Tim Walz for the last six years, may have bankrolled an internationally designated terrorist organization. And Walz’s response? He thinks the reports are “sensationalized.”
More than 75 people have been charged so far in connection with the fraud schemes. The overwhelming majority are part of Minnesota’s Somali population. The biggest case involves “Feeding Our Future,” a $250 million scheme that hijacked a children’s nutrition program funded by the U.S. Department of Agriculture. During COVID, the USDA waived oversight requirements for the Federal Child Nutrition Program. Fraudsters in Minnesota took that opening and ran with it.
Then there’s the Housing Stability Services Program, another pipeline of stolen Medicaid dollars supposedly meant to help people with disabilities and mental illness find stable housing. The Justice Department has charged fewer than a dozen people in that case so far, but more indictments are expected.
Bessent didn’t let Walz off the hook. “It’s clear that Governor Walz has been negligent in his fiduciary duties as a chief executive of the state of Minnesota, that this would happen on his watch,” he said. He went further, too: Treasury is still working to determine whether Walz’s role was limited to “negligence and incompetence” or “something more than that.”
That’s the Treasury Secretary of the United States publicly floating the possibility that a sitting governor did more than just look the other way.
The IRS is now auditing financial institutions that allegedly helped launder the stolen money. A new task force is being stood up to investigate fraud involving pandemic-era tax incentives and the misuse of 501(c)(3) tax-exempt status by organizations tied to the schemes. VP Vance announced a separate multi-state fraud task force earlier this week, with Minnesota squarely at the center.
Rep. James Comer has accused Walz of retaliating against whistleblowers who tried to sound the alarm years ago. Rep. Tom Emmer warned Walz could end up “in cuffs.” President Trump has called Minnesota a “hub of fraudulent money laundering activity.” Dr. Oz’s CMS operation has moved to audit Minnesota’s Medicaid spending and claw back funds.
Walz, who just announced Monday he won’t run for re-election, has tried to play the accountability card. “I am accountable for this, and more importantly, I am the one that will fix it,” he told reporters back in December. Fix it? He couldn’t even see it. Or maybe he chose not to.
The question nobody in the mainstream press wants to ask is obvious: how does $250 million vanish from a children’s food program without the governor’s office noticing? How do money service businesses funnel cash overseas to Somalia for years while state regulators do nothing? How does a state that prides itself on its progressive social safety net become the nation’s biggest welfare fraud crime scene?
Walz had every tool at his disposal. He had whistleblowers telling him something was wrong. He had oversight responsibilities he ignored. And now American tax dollars may have funded the people who want to kill us.
Trump ended Temporary Protected Status for Somali migrants in Minnesota back in November. At the time, critics called it cruel. Now it looks like the bare minimum.
The full scope of the fraud isn’t known yet. Bessent admitted as much. “We do not know the depth, breadth, and collusion in this financial calamity,” he said. What we do know is that it happened in Tim Walz’s state, on Tim Walz’s watch, and he did nothing to stop it.
