US – On Friday, January 9, 2026, Treasury Secretary Scott Bessent announced a decisive federal expansion of investigations into financial links between local entities and Somalia. This movement signals a shift in the federal government’s approach to the state, with the Treasury Department now actively scrutinizing the flow of funds to East Africa as part of a broader crackdown on public benefits fraud. Secretary Bessent confirmed that his agency has initiated formal investigations into four specific money service businesses used by the diaspora to send funds to relatives. While the names of these businesses have not been made public, they are now under intense federal oversight to determine if they played a role in laundering money or facilitating the movement of stolen government aid.
The impetus for this heightened surveillance is the massive fraud identified in programs like Feeding Our Future, where hundreds of millions of dollars intended for child nutrition were diverted. Federal prosecutors have updated the estimated losses in these schemes, suggesting the scale of the theft is even larger than initially reported. In response, the Treasury has introduced a Geographic Targeting Order for Hennepin and Ramsey counties, which imposes strict new reporting requirements on any international wire transfers. This policy is designed to give the Financial Crimes Enforcement Network a granular view of every significant dollar leaving the state for Somalia, effectively putting the entire corridor under a financial microscope.
This federal push has created a significant rift between the Trump administration and local Minnesota leaders. The visit occurred amidst a backdrop of civil unrest following a fatal encounter involving federal immigration officers in a residential Minneapolis neighborhood. While Governor Tim Walz has expressed his own outrage at the “Feeding Our Future” criminals and pledged to cooperate in recovering stolen funds, he and other local officials have also voiced concerns about the potential for these broad financial crackdowns to unfairly target the Somali community. Critics, including policy analysts from the Cato Institute, argue that these actions represent an unprecedented level of financial surveillance that threatens to cut off legitimate humanitarian lifelines.
For the Somali economy, these developments pose a serious risk to its primary source of financial stability. Somalia relies heavily on remittances to sustain its population, with these transfers often accounting for more than a third of the nation’s total economic activity. If federal investigations lead to the mass closure of money transfer operators in Minnesota, the resulting “chilling effect” could leave millions of people in Somalia without access to the funds they need for basic survival. Furthermore, the increased regulatory costs and the potential for banks to “de-risk” by closing accounts associated with Somalia could push these transactions into informal and unregulated channels, making the financial landscape even more precarious for one of the world’s most remittance-dependent nations.
