The U.S. Treasury Department has opened an investigation into allegations that tax dollars from Minnesota may have been funneled to the militant group Al-Shabaab in Somalia, Treasury Secretary Scott Bessent said on Monday. The move follows days of political tension after former President Donald Trump labeled Minnesota a “hub of fraudulent money laundering,” citing unverified reports circulated by Republican lawmakers.
Bessent announced the inquiry on X, saying the department was examining whether state tax funds were misused under what he called weak oversight by the Biden administration and Minnesota Governor Tim Walz. The allegation quickly escalated into a national controversy, drawing attention to ongoing debates about fraud in federal and state welfare programs.
A political flashpoint with national implications
Governor Walz has not commented on the Treasury investigation. However, he previously rejected Trump’s accusations, arguing that the former president was unfairly targeting Minnesota’s Somali community. Walz noted that fraud cases involving individuals of East African descent stemmed from COVID-era programs, and that state authorities had prosecuted offenders regardless of background.
In a recent NBC News interview, Walz said Minnesota’s prosperity and generous social programs can attract criminals, but insisted the vast majority of residents follow the law. He criticized efforts to link isolated fraud cases to an entire community, calling such generalizations “lazy.”
The political tensions deepened last month when Trump announced the termination of temporary deportation protections for Somalis living in Minnesota. He claimed “Somali gangs are terrorizing” residents, accelerating the end of a humanitarian program that has existed since 1991. Although protections remain valid through March 2026 under Biden administration extensions, the Congressional Research Service reports that only 705 Somali-born individuals in the United States currently hold Temporary Protected Status. Most Minnesotans of Somali heritage are U.S. citizens.
The Treasury investigation now adds a federal layer to an issue already entangled in national politics, immigration debates and community concerns. Officials have not indicated when findings will be released, nor what potential consequences could follow if the allegations are substantiated.