Investigation Launched Into Tim Walz Over Funds Tied to Somali Terror Group
A political storm erupted Monday after Treasury Secretary Scott Bessent announced a sweeping federal investigation into allegations that Minnesota’s taxpayer dollars were funneled to the Somali terror organization Al Shabaab during Governor Tim Walz’s administration. The announcement, delivered publicly and with unmistakable urgency, signals one of the most serious federal inquiries yet into the ongoing welfare fraud scandals engulfing Minnesota.
“At my direction, U S Treasury is investigating allegations that under the reckless mismanagement of the Biden Administration and Governor Tim Walz, hardworking Minnesotans’ tax dollars may have been diverted to the terrorist organization Al Shabaab,” Bessent said. “Thanks to the leadership of President Donald Trump, we are acting fast to ensure Americans’ taxes are not funding acts of global terror. We will share our findings as our investigation continues.”
The probe follows explosive investigative reporting by Ryan Thorpe and Christopher Rufo that documented widespread fraud throughout Minnesota’s welfare system. Their research included confirmation from federal counterterrorism sources that money stolen from state programs was sent back to Somalia through informal money channels known as hawalas. Federal sources said substantial sums ultimately reached Al Shabaab, an Al Qaeda linked terror group responsible for deadly attacks across East Africa.
One confidential source told investigators that “the largest funder of Al Shabaab is the Minnesota taxpayer,” a claim that gained new national attention with Monday’s Treasury announcement. “There is an issue here that is real, and if there is ever an event that is traceable back to these funds, or to people from this area, then this situation will take on a whole new set of optics,” the source added.
At my direction, @USTreasury is investigating allegations that under the feckless mismanagement of the Biden Administration and Governor Tim Walz, hardworking Minnesotans’ tax dollars may have been diverted to the terrorist organization Al-Shabaab.
Thanks to the leadership of… https://t.co/uillMknuXL
— Treasury Secretary Scott Bessent (@SecScottBessent) December 1, 2025
The roots of the scandal stretch back years. Under Walz’s tenure, Minnesota experienced a surge in large scale fraud inside programs intended for vulnerable residents. The state’s Housing Stabilization Services initiative, designed to help seniors, disabled individuals, and those battling addiction, ballooned from an estimated 2.6 million dollars a year to more than 100 million dollars annually. Federal prosecutors said the “vast majority” of the program’s claims were fraudulent.
Criminal indictments soon followed. U S Attorney Joseph Thompson charged several individuals after identifying a network of fictitious companies that billed the state for services never provided. Thompson said the depth of the fraud “takes my breath away” and warned that additional cases are still coming.
Minnesota has also been rocked by the Feeding Our Future scandal, a separate 250 million dollar fraud ring that federal prosecutors say involved fake meal programs, fabricated attendance sheets, and lavish spending on luxury cars and international real estate. Dozens of defendants have pleaded guilty. Several individuals involved in the scheme had close ties to Democratic officials, including figures who appeared at events with Representative Ilhan Omar and local Minneapolis leaders.
Multiple federal sources told investigators that remittances flowing from these fraud operations were routed overseas, where Al Shabaab took a cut of every dollar transmitted. One former federal official said, “Every cent that is sent back to Somalia benefits Al Shabaab in some way.”
With the Treasury Department now involved and President Trump backing the inquiry, the political implications for Walz are immediate and severe. The governor is seeking a third term in 2026 and already faces growing public frustration over documented failures inside state agencies.
Former state senator David Gaither warned that “political blowback is brewing,” adding that officials close to the probes believe the true scale of the fraud is far from fully uncovered.