Treasury Secretary Scott Bessent and Rep. Ilhan Omar (D–MN) are sparring over a new federal inquiry into alleged fraud in Minnesota that investigators say funneled money intended for nonprofits elsewhere — potentially including transfers abroad.
According to Bessent, the Department of the Treasury and the IRS Criminal Investigation unit have opened an investigation as federal prosecutors pursue related cases connected to what he described as a $240 million scheme. He said investigators identified funding routed through unregulated wire-transfer channels, with some transfers traced to the Middle East and Somalia.
“This was not an endogenous thing that the state of Minnesota decided; we had to go in and clean up the mess for them, and this is part of the continued cleanup,” Bessent said.
He added that the government is working to follow the trail of money: “That money has gone overseas, and we are tracking it both to the Middle East and to Somalia to see what the uses of that have been.”
Bessent also accused Omar of minimizing the seriousness of the case. “Rep. Omar tried to downplay it. Said, ‘Oh, it was very tough to know how this money should be used.’ She was gaslighting the American people,” he said.
Omar, for her part, said she returned campaign donations from individuals who were later accused in the fraud and argued that any prosecutions should not be used to cast suspicion on Somali Americans broadly.
“These are people who are being prosecuted, and it is not fair to scapegoat the whole Somali community of whom have been law-abiding and grateful people that have chosen to make Minnesota their home,” Omar said.
She also questioned Bessent’s characterization of events and emphasized her own early concerns about the program. “I don’t think the secretary himself understands what he’s referring to. We obviously had people who were able to donate to our campaign that were involved. We sent that money back a couple years ago, and actually, I was one of the first members of Congress to send a letter to the secretary of (agriculture), asking them to look into what I thought was a reprehensible fraud that was occurring within the program,” she said.
Meanwhile, the House Oversight Committee has requested documents from Gov. Tim Walz related to how his administration handled suspected fraud in state social-services programs.
Bessent said the federal inquiry is still in its early stages. “That’s why it’s an investigation. We started it last week. We’ll see where it goes, but I can tell you that, you know, it’s terrible,” he said.
