The Trump administration has suspended $129 million in federal benefit payments to Minnesota, citing allegations of large-scale fraud involving non-profits and businesses operating in the state. The action follows months of scrutiny over the use of federal aid, particularly programs aimed at helping low-income residents.
The decision was announced by Brooke Rollins, Secretary of the U.S. Department of Agriculture (USDA), in a letter addressed to Minnesota Governor Tim Walz and Minneapolis Mayor Jacob Frey. The letter, which was also shared on social media, demands immediate transparency from local authorities and links the funding halt to ongoing investigations into financial misconduct.
USDA Demands Justification Amid Widespread Fraud Claims
According to The Guardian, the USDA is requiring Minnesota’s state officials to provide justification for all federal benefit expenditures dating back to January 20, 2025. Going forward, any future federal payments will be subject to the same reporting standards. Rollins stated that local administrations have failed to cooperate with federal authorities and have not taken basic steps to prevent fraud.
“Despite a staggering, wide-reaching fraud scandal, your administrations refuse to provide basic information or take common sense measures to stop fraud,” wrote Rollins in her letter. She further emphasized that the Trump administration will not “allow such fraud to continue.”
The USDA’s move is connected to multiple investigations, including a prominent case in which federal prosecutors allege that $250 million in food assistance intended for vulnerable children during the COVID-19 pandemic was stolen. According to FBI Director Kash Patel, the scheme led to 78 indictments and 57 convictions. In response, the agency deployed additional personnel to Minnesota in December 2025 to pursue similar fraud networks.
The letter also arrives amid a broader federal ruling that bars the Trump administration from blocking child care subsidies and other support programs in five Democratic-led states, including Minnesota. Still, the USDA’s current suspension appears to function independently of that ruling, focusing specifically on new justifications for spending and withholding funds until satisfied.
State Officials Push Back, Cite Political Targeting
The decision has prompted strong reactions from Minnesota officials. Governor Walz has not publicly responded, but Minneapolis spokesperson Brian Feintech stated the city is in communication with state partners to assess the impact. He accused the Trump administration of political motives, stating, “Minneapolis is the latest target… willing to harm Americans in service to its perceived political gain,” according to The Guardian.
Minnesota Attorney General Keith Ellison responded more forcefully, posting on X (formerly Twitter): “I will not allow you to take from Minnesotans in need. I’ll see you in court.”
The controversy escalates an already tense relationship between the Trump administration and Minnesota’s leadership. Federal officials have repeatedly cited alleged fraud schemes involving the state’s Somali population, with prosecutors estimating up to $9 billion in stolen funds. In November 2025, the president rescinded legal protections for Somali immigrants, linking them to criminal activity and accusing them of undermining the state’s integrity.
