Treasury Inquiry Into Minnesota Fraud Case Sparks Clash With Rep. Ilhan Omar

WASHINGTON — A federal investigation into one of the largest pandemic-era fraud schemes in the United States has broadened into a political flashpoint, drawing in Treasury officials, House Republicans, and Minnesota Rep. Ilhan Omar after new public allegations surfaced about the handling of more than a billion dollars in misused welfare funds.

The issue escalated Sunday after Treasury Secretary Scott Besson said on Face the Nation that his department was examining whether money stolen through Minnesota’s “Feeding Our Future” program — a COVID-era initiative intended to provide food assistance — may have been sent overseas, including to Somalia and parts of the Middle East. While he emphasized investigators had not established any link to terrorism, he confirmed the probe was ongoing and initiated at President Trump’s direction.

“This was discovered by IRS Criminal Investigations,” Besson said. “Money moved through unregulated wire-transfer organizations, and some of it has gone overseas. We are tracing where it has gone and for what purpose.”

Pressed on claims circulating among conservative commentators that stolen funds may have supported terrorist groups, Besson clarified that investigators have no evidence supporting that allegation. “That’s why it’s an investigation,” he said. “We started it last week.”

His remarks, however, immediately intensified scrutiny of Rep. Ilhan Omar, whose Minneapolis district includes a large Somali-American population and who previously received campaign contributions from individuals later charged in the scheme. Omar’s campaign returned those donations years before the indictments.

When Omar appeared on the same program moments later, she strongly rejected the secretary’s insinuations and said he was “misrepresenting the facts.”

“I really don’t think the secretary himself understands what he’s referring to,” she said. “We returned contributions long ago, and I was among the first members of Congress to ask the Department of Agriculture to investigate what we believed was a reprehensible fraud occurring within the program.”

The Justice Department has called the case — involving more than $1 billion in stolen federal funds — the largest COVID-era fraud scheme in the country. Of the 87 people charged, most are of Somali descent, a fact that has intensified political focus on Minnesota’s Somali-American community.

Omar said that focus has produced misleading assumptions.

“The Somali community is also a victim here,” she said. “We are taxpayers. We are Minnesotans. We are equally frustrated and angered by the theft of funds that should have gone to children and families.”

Still, Face the Nation moderator Margaret Brennan pressed Omar on whether state officials — led at the time by Democrats — failed to recognize or stop the widespread fraud.

“That is precisely why I wrote to the Agriculture Department,” Omar responded. “How could that amount of money disappear without alarms going off? It’s something we must continue to investigate.”

Omar noted that the leader of Feeding Our Future, who first claimed investigations were racially motivated, was not Somali but a white Minnesotan. She argued that accusations of bias had been used as a shield to deflect scrutiny and allow the scheme to continue.

“When the state halted payments, the organization sued,” she said. “A judge ordered the funds to resume. This wasn’t a case of people looking the other way — there were multiple institutional failures.”

The interview grew more tense when Brennan raised comments from Republicans suggesting potential terrorist ties. Omar dismissed the speculation as “baseless,” saying that if such a link existed, “that would represent a failure by the FBI and our judicial system, and those individuals should be prosecuted immediately.”

The conversation later shifted to immigration politics after Brennan cited a Thanksgiving Day post by former Trump adviser Stephen Miller asserting that migrants “recreate the conditions and terrors of their broken homelands.” Omar condemned the remarks as xenophobic.

“His rhetoric mirrors the language Nazis once used toward Jewish people,” she said, arguing that immigrants — including Somali-Americans — contribute to the country and are “productive members of this nation.”

The interview quickly gained traction online, where conservative influencers portrayed Omar as evasive and defensive, while progressives accused the Treasury secretary of amplifying unproven narratives. Political analysts noted that both the investigation and the political fallout are likely to grow, especially as Minnesota braces for new federal oversight following signals from the Centers for Medicare & Medicaid Services that policy changes may be implemented in the state.

What remains clear is that the sprawling fraud case — already one of the most significant in U.S. pandemic relief history — has become entangled in broader debates over immigration, community trust, and the federal government’s ability to track billions of dollars in emergency spending. As the Treasury investigation expands, both Besson and Omar have signaled that more revelations are likely in the months ahead.