Investigation into Misuse of Federal Funds in Minnesota
The U.S. Department of Health and Human Services (HHS) is looking into whether substantial taxpayer funds allocated to Minnesota’s social services were, perhaps, misused to promote illegal immigration. This comes from a letter obtained by the Post, indicating serious concerns regarding how the money is managed.
Alex Adams, who serves as assistant secretary in the HHS Office of Children and Families, addressed a letter to Minnesota’s Democratic Governor Tim Walz, Minneapolis Mayor Jacob Frey, and various nonprofits that received significant federal grants for Head Start programs. In this letter, he outlined that tracking federal funds is primarily about accountability to taxpayers and expressed worries that the funds might be facilitating illegal immigration.
“Right now, we are kind of in the exploratory phase,” Adams mentioned. He emphasized the need for data to ensure that no fraudulent activity is taking place. However, he noted that recent reports of fraud in Minnesota’s social services raised red flags, giving his agency reason to suspect misuse of taxpayer money.
During the last fiscal year of former President Joe Biden’s term, more than $690 million was raised for safety net programs in Minnesota—while HHS was under Secretary Xavier Becerra. Currently, HHS has requested a detailed list of state entities that received funding between 2019 and 2025 by December 26.
Data from federal spending records show that HHS ACF provided over 1,000 federal grants totaling more than $8.6 billion to Minnesota organizations during those fiscal years. Between 2022 and 2025, this figure stood at over $4.5 billion.
As of 2023, Minnesota reportedly has about 130,000 undocumented immigrants, which is an increase of roughly 40,000 since 2019, making up about 2% of the state’s populace.
In his letter, Adams mentioned allegations from Minnesota Department of Human Services employees claiming that warnings about wrongdoing were consistently overlooked. Whistleblowers apparently faced retaliation, and misuse of federal funds may have persisted for years under the current leadership.
Additionally, the allegations are under review by the Treasury Department and the Republican-led House Oversight Committee. They blame Governor Walz for facilitating a “massive fraud” scheme that reportedly defrauded taxpayers of over $1 billion, primarily affecting Somali immigrants.
Adams stated these concerns are amplified by recent federal indictments and claims that a notable amount of federal funds were improperly directed away from American families who needed support.
Federal prosecutors in Minnesota have already convicted numerous individuals involved in fraudulent activities that led to the theft of over $250 million from taxpayers, many of whom were linked to the Somali community and a fraudulent nonprofit called Feeding Our Future. This organization claimed to support needy children but funneled funds into luxury items instead.
The HHS ACF is reviewing several programs, including Parent Community Engagement, Community Services Block Grant (CSBG), and various forms of assistance targeting low-income individuals and families.
In his letter, Adams underscored the Trump Administration’s dedication to eliminating fraud, safeguarding taxpayer funds, and ensuring the integrity of federal benefit programs. He asked for comprehensive administrative data on grant recipients and their operations.
For several programs, HHS officials require data from 2019 to 2025, while additional specific data from 2022 to 2025 was requested for the Child Care Development Fund and other Head Start-related grants.
The information requested includes details like the recipient’s name, address, social security number, date of birth, state identification number, and any relevant numbers used for program administration. Adams indicated that this information is vital to conduct a thorough assessment of the program’s operations and identify any misconduct.
So far, representatives from Governor Walz’s and Mayor Frey’s offices have not replied to requests for comments regarding this situation.
