Minnesota used to be held up as the model of a generous, well run welfare state. Under Governor Tim Walz, that image has been replaced by something darker, as fraud scandals pile up and critics say his incompetence let billions of public dollars slip away and even reach a foreign terror group.
In a statement on X, the Minnesota Department of Human Service Employees account, which says it represents more than 480 staff members, declared that Walz is “100% responsible for massive fraud in Minnesota.”
They say they warned him early and were punished for it. “We let Tim Walz know of fraud early on, hoping for a partnership in stopping fraud but no, we got the opposite response,” the group wrote. They accuse him of using “monitoring, threats, repression” and say he “did his best to discredit fraud reports.”
At the same time, federal prosecutors and auditors have uncovered fraud schemes that have stolen more than a billion dollars in public money, much of it linked to members of Minnesota’s Somali community. Conservative investigators and some law enforcement sources now allege that some of that money traveled through informal banking networks and ended up helping the terrorist group Al Shabaab in Somalia. One confidential source told City Journal, “The largest funder of Al-Shabaab is the Minnesota taxpayer.”
The result is a simple political question with huge stakes. Did Tim Walz preside over one of the worst fraud disasters in modern state history and ignore red flags because he was afraid to confront a key voting bloc, while money drained away to criminals and terrorists?
Warnings Walz Allegedly Ignored
Long before the latest headlines, people inside state government say they saw this coming. The DHS whistleblower group says Walz did not just fail to act. They say he weakened watchdogs and punished those who tried to stop fraud.
“In addition to retaliating against whistleblower[s], Tim Walz disempowered the Office of the Legislative Auditor, allowing agencies to disregard their audit findings and guidance,” the employees claimed.
Former fraud investigator Kayesh (or Kayseh) Magan, a Somali American, has said that elected officials in Minnesota, especially Democrats, were scared to crack down when allegations involved Somali run organizations. He said there was a perception that “forcefully tackling this issue might cause political backlash among the Somali community, which is a core voting bloc” for Democrats.
A report by the Office of the Legislative Auditor found that state officials running the child meals program backed down when threatened with accusations of racism and a lawsuit. Feeding Our Future, the nonprofit at the center of the huge child nutrition fraud case, warned that if minority owned businesses were not quickly approved, they would sue and “accusations of racism” would be “sprawled across the news.”
Instead of freezing payments, the state kept approving new feeding sites and kept the money flowing. That pattern of political fear, regulatory retreat, and exploding costs repeats across several programs that blew up on Walz’s watch.
How The Fraud Worked And How Big It Became
The numbers show how badly the system failed. Federal prosecutors say that in three major plots alone more than $1 billion in taxpayer money was stolen in recent years. That total is more than Minnesota spends each year to run its entire Department of Corrections.
The Feeding Our Future scheme may be the most famous. The nonprofit partnered with dozens of local businesses, many of them owned by Somali Minnesotans, to enroll sites in the Federal Child Nutrition Program. The group reported feeding tens of thousands of children every day. In reality, prosecutors say, most of the meals were fake.
The numbers exploded after Covid hit. In 2019, Feeding Our Future received $3.4 million in federal funds. By 2021, that number had rocketed to nearly $200 million. According to City Journal and law enforcement sources, the money bought luxury vehicles and real estate in the United States, Turkey, and Kenya, instead of food for kids.
At the same time, another massive fraud was spreading in the state’s Housing Stabilization Services (HSS) program, which was supposed to help seniors, the disabled, addicts, and the mentally ill find or keep housing. Before HSS launched in 2020, officials estimated an annual cost of $2.6 million. Within a few years, costs ballooned to $21 million, then $42 million, then $74 million, then $104 million.
On August 1, the Department of Human Services moved to scrap the HSS program, admitting that it had been overwhelmed by fraud. Acting U.S. Attorney Joseph Thompson said the “vast majority” of the program was fraudulent and that many providers were “purely fictitious companies solely created to defraud the system.” He explained that they often operated out of “dilapidated storefronts or rundown office buildings” and targeted people leaving rehab, signing them up for services they did not intend to provide.
Thompson has spent years as a fraud prosecutor, yet he said, “I have spent my career as a fraud prosecutor and the depth of the fraud in Minnesota takes my breath away.” He added, “What we see are schemes stacked upon schemes, draining resources meant for those in need. It feels never ending.”
The autism therapy racket tells the same story. A provider named Asha Farhan Hassan is charged with wire fraud and accused of helping steal $14 million from Minnesota’s Early Intensive Developmental and Behavioral Intervention program. Prosecutors say her network recruited children in the Somali community, arranged bogus autism diagnoses when needed, and paid parents cash kickbacks of $300 to $1,500 per child each month, depending on how much Medicaid money the child’s case could generate.
The spending numbers again show a system out of control. Autism claims to Medicaid in Minnesota jumped from $3 million in 2018 to $54 million in 2019, $77 million in 2020, $183 million in 2021, $279 million in 2022, and $399 million in 2023. During the same period, the number of autism providers exploded from 41 to 328. Many new centers were established by Somali operators who said they were offering culturally appropriate services.
Thompson has openly said that these cases form “a web that has stolen billions of dollars in taxpayer money.” He warned that Minnesota is seeing “massive fraud schemes” that are “not an isolated scheme.”
All of this happened while Tim Walz sat in the governor’s chair.
The Walz Record: Generosity, Blind Spots, And Political Fear
Walz’s defenders say the problem is bigger than any one administration. But it is also clear that the worst abuses took place on his watch, after he became governor in 2019 and as he positioned himself as a progressive leader on social policy.
He has admitted that his administration “may have erred on the side of generosity” during the pandemic, pushing money out fast to keep people fed and housed. “The programs are set up to move the money to people,” Walz said. “The programs are set up to improve people’s lives, and in many cases, the criminals find the loopholes.”
Critics argue that this is exactly the problem. Programs were designed for easy access, with “low barriers to entry” and “minimal requirements for reimbursement,” especially in HSS. That created a perfect environment for fraud.
DHS Inspector General James Clark told lawmakers that “greedy people and businesses have learned how to exploit our programs,” and he described fraud as the “business model” in Minnesota’s social services.
Republican leaders say Walz let this happen. They point out that his administration kept spending, kept approving new providers, and failed to shut down programs even after red flags appeared. State House Speaker Lisa Demuth accused him of raising taxes while letting “fraud run wild.” Another Republican said that if you talk to law enforcement officials and others close to the probes, “they will tell you off the record that we are not even close to being halfway there” in understanding the true scale of the fraud.
Even some Somali leaders see a deeper cultural problem combined with Minnesota’s soft touch. Professor Ahmed Samatar, a Somali American expert on Somali studies, said that Minnesota is “so tolerant, so open and so geared toward keeping an eye on the weak” that it left itself vulnerable. He noted that Somalis who grew up under a corrupt state back home often saw stealing from the government as normal.
That combination of imported habits, weak oversight, and political fear of being called racist created, in the words of City Journal, “what happens when a tribal mindset meets a bleeding-heart bureaucracy.”
From Welfare Dollars To War Zones: Allegations Of Terror Financing
The fraud itself would be bad enough. Now a new allegation has raised the stakes. City Journal, citing multiple federal counterterrorism sources, reports that “millions of dollars in stolen funds have been sent back to Somalia, where they ultimately landed in the hands of the terror group Al-Shabaab.”
One confidential source told the magazine, “The largest funder of Al-Shabaab is the Minnesota taxpayer.” A former federal official who worked with Minneapolis terror cases said that “for every dollar that is transferred from the Twin Cities back to Somalia, Al-Shabaab is taking a cut of it.”
These claims focus on hawalas, informal money traders that move cash from Somali communities abroad to family members and businesses in Somalia. Retired Seattle detective Glenn Kerns spent years tracing these flows. He said that one hawala network sent $20 million abroad in a single year and that many senders were on public benefits in the United States. “We had good sources tell us: this is welfare fraud,” Kerns said.
Kerns says he followed the trail overseas and learned through human sources that significant funds were reaching Al Shabaab linked networks. Whether senders wanted that or not, the terrorist group was taking its cut inside Somalia.
None of this has yet resulted in terrorism charges inside the big Minnesota fraud cases. The New York Times notes that the idea of Minnesota fraud money reaching Al Shabaab has been around since 2018 but says there is “no solid evidence to substantiate it” in court. Local station KTTC also reports that it has not been able to verify City Journal’s claim.
Even so, the pattern is clear enough to alarm members of Congress and state lawmakers. Minnesota GOP lawmakers wrote to U.S. Attorney Daniel Rosen that there is “good reason to believe that Minnesota taxpayer dollars are going straight into terrorists’ hands.” They called it “a serious betrayal of taxpayer trust” and “a grave threat to our national security.”
They also tied the problem back to Walz. “The sprawling fraud that has become endemic under Governor Walz’s failed leadership is troubling enough for Minnesota taxpayers; the notion that these dollars could be flowing to foreign terrorist organizations adds a truly disturbing additional element,” they wrote.
If these allegations are confirmed, Walz will not be remembered only as the governor who lost control of welfare fraud. He will be seen as the governor whose failures let money from Minnesota’s safety net end up helping one of the world’s most violent jihadist groups.
Who Is Al Shabaab And Why The Allegation Matters
Al Shabaab, short for Harakat Shabaab al Mujahidin, is a clan based Islamist insurgent and terrorist group in Somalia. It grew out of the Islamic Courts Union that seized much of southern Somalia in 2006. Even after being driven from power in 2007, Al Shabaab has continued a bloody campaign against the Federal Government of Somalia, African Union peacekeepers, and civilian targets.
The group is affiliated with Al Qaeda. Their leaders publicly announced a merger in 2012. Al Shabaab has carried out suicide bombings, assassinations, and raids in Somalia and neighboring countries.
Among its worst attacks are the 2013 assault on the Westgate mall in Nairobi, which killed 67 people, and the 2015 massacre at Garissa University in Kenya, where around 150 mostly Christian students were murdered. The group has also killed journalists, peace activists, and aid workers and blocked Western food aid during the 2011 famine that killed tens of thousands of Somalis.
Because of this record, the United States labeled Al Shabaab a Foreign Terrorist Organization in 2008 and a Specially Designated Global Terrorist entity. That makes it illegal to support the group in any way and allows authorities to block its funds.
When critics say that Walz’s failures allowed money to flow through hawalas into regions where Al Shabaab takes a cut, they are not making a small point. They are saying that sloppy welfare oversight in Minnesota may have helped keep a terror group afloat.
Trump Turns Up The Heat On Walz And Somali TPS
President Donald Trump has seized on the scandal and directly linked Walz’s Minnesota to criminal money laundering and terror finance. He called the state “a hub of fraudulent money laundering activity” and focused on Somali immigrants who benefit from Temporary Protected Status.
In a Truth Social post on November 21, Trump said he is terminating TPS for Somalis living in Minnesota. He claimed they are involved in “fraudulent money laundering activity” and declared, “Send them back to where they came from. It’s OVER!”
Trump and his allies have echoed the City Journal line that “the largest funder of Al-Shabaab is the Minnesota taxpayer.” They are using that phrase to argue that welfare fraud under Walz is both a financial disaster and a security threat.
Walz shot back by accusing Trump of scapegoating. “It is not surprising that the President has chosen to broadly target an entire community,” Walz said. “This is what he does to change the subject.” Attorney General Keith Ellison said his office is looking at “every option on the table to push back against this threat,” and noted that there are “some good examples we can follow” given Trump’s past efforts to restrict immigrants.
But for many voters, the question is not whether Trump is harsh. It is whether Walz ever had control of the system he was supposed to manage.
Somali Community Caught In The Crossfire
There is no doubt that most Somali Americans in Minnesota had nothing to do with these frauds, let alone any terror support. Minnesota is home to the largest Somali community in the United States, with roughly 80,000 to 87,000 people. Many came as refugees in the 1990s.
They have built businesses, entered politics, and become part of the fabric of the state. Several Somali Americans serve in the legislature and local offices. Representative Ilhan Omar, whose district includes Minneapolis, said, “We do not blame the lawlessness of an individual on a whole community.”
Trump’s statements and the allegations about terror funding have left many Somalis feeling under siege. Community leaders held a potluck and interfaith gathering at a Somali mall to condemn Trump’s language. The Minnesota Somali Community Center says new fraud controls make legitimate providers feel “criminalized and intentionally targeted.”
Filmmaker Abdi Mohamed said, “The actions of a small group have made it easier for people already inclined to reject us to double down. The broader Somali community hardworking, family oriented, deeply committed to Minnesota is left carrying that burden.”
Yet even Somali scholars like Samatar say there must be a reckoning. He argues that Minnesota has been “extremely good to Somalis” and that it is time to confront the fact that “nearly all of the defendants” in some cases come from the Somali community, as fraud investigator Magan has pointed out.
Can Walz Fix What He Failed To Guard?
Walz insists he is taking action now. In September he signed an executive order telling state agencies to “intensify efforts to prevent, detect, and combat fraud.” He has created a fraud task force, expanded information sharing, hired an independent auditor to review 14 high risk Medicaid programs, and backed the shutdown of the Housing Stabilization Services program.
“We have no tolerance for fraud in the State of Minnesota,” he said. “Abuse of taxpayer dollars takes resources away from the people who need them most.”
The problem for Walz is that these tough words are coming after years of negligence, warnings from staff, and signals from auditors that were ignored or brushed aside. Thompson, the federal prosecutor, gave a blunt warning: “No one will support these programs if they continue to be riddled with fraud. We are losing our way of life in Minnesota in a very real way.”
Republicans are already making fraud the central issue in the next governor’s race. One GOP candidate says “political blowback is brewing” and calls it “a real rough place to be if you are the current administration.”
At bottom, the scandal is not only about stolen money. It is about whether a governor charged with protecting both Minnesota’s generous safety net and its security was awake at the wheel. On Tim Walz’s watch, fake nonprofits and shell companies drained billions from programs for children, the disabled, and the poor. Federal sources now say some of that money may have helped one of the world’s most dangerous terror groups.
Minnesotans will have to decide whether they trust Walz to clean up a system that collapsed under his leadership, or whether his record of missed warnings, political timidity, and after the fact fixes has already answered that question.
NP Editor: I’m not sure I’ve seen any politician as wishy washy as Walz, refusing to check fraud, and then saying he has no tolerance for fraud. He and Kamala were a good match, if they had been elected we would have had the most inept administration in history.
