Bessent Says Minn. Tax Dollars May Have Been Diverted to Terror Group-llllllll
Treasury Secretary Scott Bessent said Friday it is possible Minnesota taxpayer dollars were diverted to the Somali-based terrorist group al-Shabab and blamed Democratic Gov. Tim Walz for what he described as a lack of oversight as multiple fraud investigations unfold in the state. Bessent said the Treasury Department’s Financial Crimes Enforcement Network is investigating whether money service businesses were used to funnel funds overseas, Fox News reported.
He did not name the financial institutions believed to be involved. “We are thoroughly investigating the fraud, including funds sent to Somalia through money service businesses, which provide financial services outside of a formal bank,” Bessent said during a virtual press conference.
“These funds could have potentially been diverted to the terrorist organization al-Shabab,” he said. “We have traced where the money went and are examining that.”
“These businesses had an obligation to comply with anti-money laundering laws, and they will be held responsible for any crimes they committed,” Bessent said.
In December 2025, Bessent announced the Treasury was leading an investigation into whether Minnesota funds were diverted to al-Shabab.
More than 75 people have been charged in connection with alleged fraud schemes tied to Minnesota’s social services system, according to federal officials.
Bessent has previously said a significant portion of the funds obtained through the alleged schemes were transferred overseas.
Bessent said Friday that the Internal Revenue Service’s civil enforcement division is auditing financial institutions suspected of facilitating the laundering of Minnesota funds.
He said the IRS plans to announce the formation of a task force to investigate fraud involving pandemic-era tax incentives and the misuse of 501(c)(3) tax-exempt status by entities implicated in Minnesota-based social services fraud.
Bessent also said Treasury officials are providing training to Minnesota law enforcement on how to use financial data, including suspicious activity reports, to combat fraud.
Bessent blamed Walz for failing to properly oversee state funds.
“It’s clear that Governor Walz has been negligent in his fiduciary duties as chief executive of the state of Minnesota that this would happen on his watch,” Bessent said.
“We are actively pursuing all leads to see the level of involvement, whether it’s limited to negligence and incompetence or something more than that,” he said.
“We do not know the depth, breadth, and collusion in this financial calamity that Governor Walz has allowed to happen,” Bessent said. “Was this directed from overseas, or was it allowed to flourish right here in Minnesota. We will find out.”
Walz’s office did not immediately respond to a request for comment.
Walz has previously disputed reports suggesting the fraud could total more than $9 billion, calling such claims exaggerated and sensationalized.
“I am accountable for this, and more importantly, I am the one that will fix it,” Walz told reporters in December.
Walz, who announced this week he will not seek re-election, has faced mounting criticism from Republicans and President Donald Trump, who has labeled Minnesota a hub of fraudulent money laundering activity.
Lawmakers are also investigating the alleged $250 million “Feeding Our Future” fraud scheme, which targeted a federally funded children’s nutrition program administered by Minnesota during the COVID-19 pandemic.
At least 77 people have been charged in that case.
Federal authorities are also probing alleged fraud tied to Minnesota’s Housing Stability Services Program, which provides Medicaid-funded housing assistance for vulnerable populations.
Fewer than a dozen people have been charged so far in that case, but additional charges are expected.
Rep. Ilhan Omar Intensifies Criticism of Federal Immigration Enforcement
Democratic Rep. Ilhan Omar of Minnesota sharply escalated her criticism of the Trump administration’s immigration enforcement operations on Monday, accusing federal agents of treating Minneapolis as an occupying force and again calling for Homeland Security Secretary Kristi Noem’s resignation or impeachment.
In remarks to constituents in Minneapolis, Omar repeatedly described the presence of Immigration and Customs Enforcement (ICE) and other federal officers in the city as an inappropriate use of government authority, saying the situation has created fear among local residents. Omar said Minneapolis is “currently under occupation” and cited concerns about schools, hospitals and daily life as evidence of what she called harmful federal intervention.
“We do not exaggerate when we say we have schools where two-thirds of the students are afraid to go to school,” Omar said. “We do not exaggerate when we say we have people who are afraid to go to the hospital because our hospitals have occupying paramilitary forces.”
Omar referenced two recent fatalities during federal immigration operations in Minneapolis — the deaths of Alex Pretti and Renee Good — and argued those incidents underscored the need for new leadership at DHS. In her remarks, she blamed senior White House advisers for shaping the administration’s immigration policies.
“When we say it is time for Kristi Noem to go, we mean it now,” Omar added. “And there needs to be accountability for the architect of the terror we are facing in Minneapolis and so many other cities, which is Stephen Miller.”
Omar’s comments follow an appearance on MSNBC’s All In with Chris Hayes, where she reiterated those positions and broadened her critique to include senior administration officials. In that interview, she said Noem should resign or face impeachment, echoing earlier statements from House Democratic leadership. Omar also repeated criticism of Miller, a senior White House adviser on immigration policy, calling him a “copycat of the Nazis” and suggesting he should be prosecuted.
Her remarks also tied national Republican rhetoric on immigration to broader social tensions, asserting that aggressive enforcement language has “created anger” that can lead to confrontations with Somali immigrants and other community members in Minnesota.
Omar’s public criticism comes amid the ongoing federal immigration operation known as Operation Metro Surge. Federal agents have been deployed to Minneapolis to apprehend illegal immigrants with criminal convictions, drawing protests and heightened scrutiny from local officials and advocacy groups.
Democratic lawmakers, including House Minority Leader Hakeem Jeffries (D-N.Y.) and Senate Minority Leader Chuck Schumer (D-N.Y.), have called for increased oversight of DHS and ICE policies as part of broader negotiations over long-term funding for the Department of Homeland Security. Jeffries has publicly stated that Noem should be impeached if she does not resign, and Schumer has called for additional conditions on immigration enforcement in appropriations legislation.
In response to increased political pressure, DHS has taken steps to increase transparency in its operations. Earlier this week, Secretary Kristi Noem announced that body-worn cameras will be issued to all federal immigration enforcement officers deployed in Minneapolis as an immediate measure, with plans to expand the program nationwide as funding becomes available. “Effective immediately we are deploying body cameras to every officer in the field in Minneapolis,” Noem wrote on X, the platform formerly known as Twitter.
Federal officials have said that some Customs and Border Protection (CBP) officers present during the Jan. 24 shooting of Pretti were already equipped with body cameras, though full footage has not been released. Officials have not yet clarified whether ICE officers were wearing cameras during the earlier fatal encounter involving Good.
Minnesota Gov. Tim Walz responded to Noem’s announcement by saying body cameras should have been in place prior to the deaths of Pretti and Good, who were tragically killed while interfering with ICE law enforcement operations.
