Treasury Secretary Investigates Allegations of Fund Diversion to Al Shabaab
Treasury Secretary Scott Bessent has revealed that the Treasury Department is looking into claims suggesting that taxpayer funds in Minnesota may have been misappropriated to the terrorist organization Al Shabaab.
In a post on X, Bessent indicated that his office is examining allegations that money intended for taxpayers in Minnesota was redirected to terrorists, pointing to what he described as “reckless mismanagement” during the administrations of former President Biden and Governor Tim Walz (D-Minn.).
Bessent expressed approval of President Trump’s leadership, noting that government agencies are moving swiftly to ensure that American tax dollars are not being used to support global terrorism.
“At my direction, @USTreasury is investigating allegations that hard-working Minnesotans’ tax dollars may have been diverted to the terrorist organization Al Shabaab under the reckless mismanagement of the Biden Administration and Governor Tim Walz,” he stated. “Thanks to President Trump’s leadership, we are acting quickly to make certain that Americans’ tax dollars do not fund acts of global terrorism.”
A report from City Journal confirmed that federal counterterrorism sources revealed that “millions of dollars in stolen funds were transferred to Somalia” by members of Minnesota’s Somali community, with those funds allegedly ending up in the hands of Al Shabaab.
It was reported that many of these schemes involved individuals from Minnesota’s sizable Somali population. Federal sources indicated that significant amounts of misappropriated funds were sent back to Somalia, benefiting Al Shabaab. A confidential source remarked that “the largest funders of Al Shabaab are Minnesota taxpayers.”
The City Journal piece also highlighted the issues with Minnesota’s Medicaid Housing Stabilization Services (HSS) program, which was intended to provide safe housing for vulnerable populations, like the elderly and mentally ill. However, it appears costs rapidly spiraled as millions were disbursed for insurance claims.
One analysis suggested that if a program were to be designed to facilitate fraud, it might resemble Minnesota’s HSS program. Initiated to assist those in need, it featured “low barriers to entry” and “minimum reimbursement requirements.” Yet, before its launch in 2020, officials estimated costs at $2.6 million annually. Instead, by 2021, the program’s payouts exceeded $21 million, with total costs jumping from $42 million to $104 million in just a few years. By mid-2025, total payments already reached $61 million.
Following the revelations, President Trump declared he would terminate Temporary Protected Status (TPS) for Somali immigrants. He criticized Minnesota under Governor Walz as a hub for money laundering and announced that he was “immediately ending the TPS program for Somalis in Minnesota.”
