UPDATE: The U.S. Treasury has just announced a federal investigation into alarming claims that Minnesota tax dollars may have been funneled to the terrorist group Al-Shabaab. Treasury Secretary Scott Bessent confirmed this urgent action on December 1, 2025, addressing serious allegations of mismanagement under the Biden Administration and Governor Tim Walz.
Bessent emphasized that the investigation is crucial for protecting hardworking Minnesotans and ensuring that their tax dollars are not supporting global terrorism. “At my direction, @USTreasury is investigating allegations that… tax dollars may have been diverted to Al-Shabaab,” he stated on X, highlighting the department’s commitment to swift action.
The scrutiny stems from a damning report by researchers Ryan Thorpe and Christopher F. Rufo of the Manhattan Institute. Their findings suggest a vast fraud scheme involving Minnesota’s Medicaid Housing Stabilization Services program and Feeding Our Future, with significant ties to the local Somali community.
The report claims that millions in stolen funds were transferred to Somalia, allowing Al-Shabaab access to these resources. Investigators found that approximately 40% of Somali households in Minnesota receive remittances from abroad, with the Somali diaspora reportedly sending back an astounding $1.7 billion in 2023—surpassing Somalia’s entire government budget.
Authorities are particularly alarmed by claims that stolen funds were funneled through a network of money traders known as hawalas, which are used to facilitate large transfers by Somali residents in Minnesota. According to a retired police detective who worked with federal counterterrorism, these networks are intricate and extensive.
“Every cent that is sent back to Somalia benefits Al-Shabaab in some way,” stated a former Minneapolis Joint Terrorism Task Force official, emphasizing the severity of the situation.
Governor Walz’s office responded to the allegations, indicating their support for a thorough investigation, stating that if any link between Minnesota funds and Al-Shabaab exists, “we welcome a full investigation.” This response underscores the urgent need to address the implications of these findings.
As the investigation unfolds, it highlights not just potential financial misconduct but also the broader issue of how local communities may inadvertently support extremist organizations. Bessent reassured the public that the Treasury Department is moving swiftly, attributing the urgency to the leadership of President Joe Biden and former President Donald Trump.
The Treasury Department has not released a timeline for when the investigation will conclude, but they have made it clear that their probe is already underway. As authorities work to uncover the full scope of this situation, the implications for Minnesota’s Somali community and beyond remain serious and far-reaching.
As this story develops, it is crucial for residents and taxpayers to stay informed about the outcome of this investigation and its potential impact on local and national security. The Treasury Department will continue to share findings as they emerge, ensuring transparency throughout this urgent investigation.
