During a recent visit to Minnesota, Treasury Secretary Scott Bessent sat down for an interview with journalist Christopher Rufo. When asked about the annual cost of fraud to the federal government, Bessent estimated the figure at between $300 billion and $600 billion — roughly 10% of the U.S. government’s yearly budget.
“That’s not my number, that’s the General Accounting Office,” Bessent said. “So, it’s about 10% of the federal budget, 1 to 2% of GDP.”
“And, if we can narrow that number, President Trump asks for a $500 billion increase in the defense budget to fortify the 10, 20 years of neglect … If we can get rid of this fraud, waste, and abuse, we can finance a safer, sounder U.S. without taking on more debt.”
You may recall that in November, Rufo and Ryan Thorpe, his colleague at The Manhattan Institute, a conservative think tank, published the explosive findings of their investigation into Medicaid fraud in Minnesota in City Journal. The pair uncovered what they described as widespread fraud involving the alleged diversion of millions of dollars in Minnesota taxpayer funds to entities in Somalia.
Since then, additional allegations have surfaced, making the state ground zero for the Trump administration’s broader crackdown on fraud.
As we’ve learned, although Somalis make up only about 1% of Minnesota’s population, a disproportionate share of the fraud in the state allegedly involves this group.
Although it strains credulity, Minnesota Gov. Tim Walz continues to insist he had no knowledge of the rampant fraud that occurred on his watch and has made clear his resentment of the Trump administration’s investigation into his state’s records.
During the interview, Rufo remarked on the change in venue. It had originally been scheduled to take place at the State Capitol building. He then asked Bessent about the reason for the shift.
Growing very animated, Bessent said, “For one reason, Chris. Tim Walz is a coward — is a coward. He would not guarantee that the Treasury Secretary of the United States of America would have police protection in the Minnesota State Capitol. He’s afraid of what is coming.”
Bessent continued, “He’s not going to be able to hide behind this curtain because we will get there. I don’t have to go into the Capitol building to investigate him.
At one point, he recounted to Rufo a story about “one of the Somali fraudsters” who tried to bribe a juror with $120,000 to influence a verdict. It later emerged that she had been given $200,000 and pocketed the remaining $80,000 — proof, as Bessent put it, “It’s like the scorpion, it’s in their nature.”
The Secretary was especially angry over Somalis who are receiving public assistance in the U.S., but still manage to send money back to Somalia. He said, “one of two things must be true. You are getting too much assistance because you have excess funds to feed yourself, your family, food, clothing, or you’ve got stolen money.
“But, in either case, money needs to stay in the U.S., or your benefits need to be cut.”
The full interview can be viewed here.
Taken together, Bessent’s remarks underscore the administration’s broader argument that fraud is not a marginal problem but a systemic one — with real consequences for taxpayers, public trust, and national priorities. Whether the Minnesota cases prove to be isolated or emblematic of a wider pattern — he thinks it’s the latter — the Treasury Secretary made clear that the era of quiet tolerance is over.
As the Trump administration intensifies its crackdown, the central question is no longer whether fraud exists, but how much political will there is to confront it — and how many entrenched interests will resist when the scrutiny turns their way.
Elizabeth writes commentary for Legal Insurrection and The Washington Examiner. She is an academy fellow at The Heritage Foundation. Please follow Elizabeth on X or LinkedIn.
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