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Good morning, Roca Nation. Here are today’s four need-to-know stories:
OpenAI CEO Sam Altman explored partnering with a rocket company that would rival Elon Musk's SpaceX (free)
Global child deaths are expected to increase for the first time this century, while mass killings in the US dropped to their lowest level since 2006 (free)
Authorities arrested a man on Thursday in connection with bombs found outside the DNC and RNC on January 6, 2021
The New York Times filed a lawsuit against the Pentagon, claiming new press policies violated journalists' constitutional rights
By Max Towey
“You should look into Somali autism rates.”
Before heading to Minneapolis for our Somali reporting trip in mid-October, a friend gave me this tip. At first, I shrugged it off, assuming it was yet another unsubstantiated X rumor.
Then I read this in MPR (Minnesota Public Radio) News:
One in 16 Somali-Minnesota 4-year-olds has autism. That’s compared with one in 53 of their classmates.
The data comes from a 2023 Centers for Disease Control autism survey, with help from two University of Minnesota researchers who are tracking the rise in overall diagnoses over the years.
I checked the source and confirmed it. Then I sent the link to the study to the Roca team group chat, writing, “Damn someone told us that Somali kids have the highest autism rates today and I didn’t believe him.”
We discussed why it might be happening, but then shrugged it off. There must be some explanation – something about a cultural barrier or just bad reporting.
It turns out there was an explanation: Fraud.
On November 19, anti-critical race theory activist Christopher Rufo published a bombshell report in City Journal, the publication of the conservative Manhattan Institute think tank, that alleged that Somalis in Minnesota led a massive $1B fraud ring, and that Governor Tim Walz (D) and others ignored it. He wrote:
Minnesota is drowning in fraud. Billions in taxpayer dollars have been stolen during the administration of Governor Tim Walz alone. Democratic state officials, overseeing one of the most generous welfare regimes in the country, are asleep at the switch. And the media, duty-bound by progressive pieties, refuse to connect the dots.
In many cases, the fraud has allegedly been perpetrated by members of Minnesota’s sizable Somali community. Federal counterterrorism sources confirm that millions of dollars in stolen funds have been sent back to Somalia, where they ultimately landed in the hands of the terror group Al-Shabaab. As one confidential source put it: “The largest funder of Al-Shabaab is the Minnesota taxpayer.”
Rufo is a serious person but also an activist, so we approached his claims with skepticism. But as we dug deeper into it, it became clear that this wasn’t just a viral right-wing X post – the numbers, indictments, and tips didn’t lie.
Then, 10 days after Rufo’s story, it escaped the conservative echo chamber, with The New York Times publishing a piece: “How Fraud Swamped Minnesota’s Social Services System on Tim Walz’s Watch.”
So what exactly happened in Minnesota? How did billions of dollars of fraud so blatantly take place?
Having just returned from Minnesota’s Somali community, in today’s deep-dive, we answer both questions.
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The fraud alarm bells sounded long before Chris Rufo and City Journal hit “publish.”
In mid-September, state representative Walter Hudson (R) – who sits on the state’s fraud committee – called out a “racketeering enterprise” underway in Minnesota. He posted a 20-minute video on X with the caption:
Here's the inside scoop on what's happening with fraud in Minnesota. It's not complicated. But it does appear to be covered up. This level of fraud doesn't happen by accident. @PamBondi ... listening to this and taking it seriously will make your career.
And a week before that, the small, independent publication County Highway published a piece connecting the dots of the scandal:
All of the people indicted over alleged housing-stabilization and autism fraud, and all but two of the 73 Feeding Our Future defendants, are Somali. Statewide, Somali children are seven times likelier than their non-Somali counterparts to receive autism treatment, suggesting that Somalis either have far better access to a specialized medical service than the average Minnesotan, or that Somali operators are illegally billing a large volume of phantom services to the state.
At this point, you’re probably wondering what exactly the fraud consisted of. The answer is complicated.
It comprises a series of scams that have unfolded since Covid, as Minnesota expanded its state programs related to child nutrition, housing assistance for homeless families, and therapy services for children with disabilities. The fraudsters – overwhelmingly Somali, per indictments and convictions – used fake companies and nonprofits to submit bogus invoices for services that were never provided, taking billions from Minnesota’s government.
As state agencies reimbursed the fraudsters, they took the funds and spent them lavishly on high-end cars (Porsches, Teslas, Mercedes G-Wagons), mansions, jewelry, designer goods, international trips (e.g., honeymoons in the Maldives), and real estate investments in places like Kenya, Turkey, and Dubai.
In one case, a nonprofit named Feeding Our Future sponsored fake taxpayer-funded meal sites. The operators of Feeding Our Future claimed they were serving tens of thousands of meals daily to children – even on weekends and holidays – even though little or no food was actually provided. They used fabricated rosters, fake invoices from nonexistent vendors, and made-up attendance records. The nonprofit stole over $250M, and 56 defendants have pleaded guilty as of September.
One of the Feeding Our Future fraudsters, Asha Farhan Hassan, also stole taxpayer money for her autism fraud scheme. Per the indictment, Hassan, age 28, was charged with “wire fraud for her role in a $14 million autism fraud scheme.” The indictment continues:
Hassan devised and carried out a scheme to defraud the Early Intensive Developmental and Behavioral Intervention (“EIDBI”) benefit, a publicly funded Minnesota Health Care Program that offers medically necessary services to people under the age of 21 with autism spectrum disorder (“ASD”).
Over the course of five years, Hassan recruited parents to sign their kids up for these benefits and paid them monthly kickbacks for enrolling them in her fake company, “Smart Therapy.” She then submitted “millions of dollars’ worth of claims for Medicaid reimbursement on behalf of Smart Therapy.” When Hassan received the reimbursements, she paid kickbacks to the families – between $300 and $1,500 per child per month – and kept the rest as profit.
Might these scams, replicated across the community, explain the nation-leading autism rates?
So how did this happen? How did Governor Tim Walz, elected in 2019, allow what Biden Attorney General Merrick Garland described as the largest Covid relief hustle in the country to happen?
One theory is that officials feared alienating the Somali voting bloc. There are at least 80,000 in the state, concentrated in the Minneapolis area, where they are a critical part of the Democratic coalition. Mayor Jacob Frey (D) regularly delivers speeches and runs ads in Somali. This year, he narrowly warded off a challenge from Omar Fateh, a Somali Democratic Socialist who got 47% of the vote. To do so, numerous reports suggest Frey exploited tribal differences in the Somali community to undermine Fateh.
As one politician said to Rufo:
The media does not want to put a light on this. And if you’re a politician, it’s a significant disadvantage for you to alienate the Somali community. If you don’t win the Somali community, you can’t win Minneapolis. And if you don’t win Minneapolis, you can’t win the state.
Similarly, officials and politicians appear to have been afraid of being called racist. One prosecutor told The New York Times, “This was a huge part of the problem…Allegations of racism can be a reputation or career killer.” Such fears were probably particularly pronounced when considering a black, Muslim immigrant group in the city where George Floyd was murdered.
Another explanation is sheer incompetence, because, as City Journal noted, “At least 28 fraud scandals have surfaced since Walz was elected governor in 2019.”
Walz defended the programs in a Meet the Press interview: “The programs are set up to move the money to people. The programs are set up to improve people’s lives, and in many cases, the criminals find the loopholes.”
Walz, who is currently seeking a third term, noticeably refused to single out the Somalis in his interview. Instead, he viewed it as a simpler matter: Bad people did bad things with our good systems.
But here are the numbers: Most of the 59 people convicted so far in Minnesota’s fraud scandals are of Somali descent, and of the 86 people charged with defrauding meals, housing, and autism programs, 78 are of Somali ancestry. It’s worth noting that most are American citizens.
There’s one other notable component that we have to address.
In the Somali neighborhood of Cedar-Riverside in Minneapolis, it jumped out to me how many businesses provide international wiring services. A teen explained this, saying, “Within our community, we usually send money back home to the less fortunate.” World Bank data shows that such remittances account for 17.5% of Somalia’s GDP. The frequency with which people send money back home explains why at least one of these money transfer businesses is located on every floor of the neighborhood’s Somali mall.
Rufo’s exposé noted that a significant amount of stolen money was sent back to Somalia. But here, we need to call balls and strikes.
Rufo highlights that these remittances ended up in the hands of a terror group:
Our investigation reveals, for the first time, that some of this money has been directed to an even more troubling destination: the al-Qaida-linked Islamic terror group Al-Shabaab. According to multiple law-enforcement sources, Minnesota’s Somali community has sent untold millions through a network of ‘hawalas,’ informal clan-based money-traders, that have wound up in the coffers of Al-Shabaab.
This point immediately went viral, with claims that Somalis were taking stolen taxpayer money and shipping it back to al-Qaeda. Yet there’s no evidence that this was happening intentionally.
In reality, al-Shabaab runs a shadow government across Somalia. Like an organized crime group, it taxes or extorts households and businesses, including those that accept remittances. It’s likely that any money going to Somalia will partially end up in the hands of al-Shabaab. Rufo’s claim that “Somalis in Minneapolis are stealing billions from Americans taxpayers, loading bags of cash onto commercial flights, and funding terrorism back in Mogadishu” therefore appears misleading. If evidence emerges that Somalis are trying to fund al-Shabaab, we’ll change this.
The core premise of Rufo’s reporting is documented and verified, though. Perhaps the individuals in Minneapolis’ Somali community who stole over $1B – or the officials who let it happen – took “Minnesota Nice” a little too far.
Editor’s Note
In case you missed it, we ran our report from Minnesota’s Somali community the other day. You can read it here. Have thoughts on this? Let us know by replying here.
We got loads of emails yesterday in response to our article on the $140k poverty line. Thanks for writing in — we loved reading your notes. Below are a handful of those replies.
Donna wrote:
It’s never made sense to me to use a single federal poverty line without adjusting for local realities and cost of living. A family of 4 living in Iowa at $32k would experience an entirely different life than those in Massachusetts, or even within the same state in a rural vs urban area.
But $140,000 is not poverty; that number is too high. Families at that income may be stretched thin, but poverty is “extremely poor”. The fact that healthcare costs are included at all shows an inaccurate approach, because people living in actual poverty typically qualify for Medicaid, which carries little to no out-of-pocket cost. However, $32,000 isn’t a fair representation either, and the threshold should be somewhere in between.
Have we really not had a single economist or mathematician revisit this formula in decades? The FPL is used to determine so much: children’s health insurance, food coverage, housing assistance, etc. It’s hard to believe we’ve been willfully imprecise when the stakes are people’s lives.
Jordan wrote:
I grew up in a low-income family of 6. My dad was a high-school custodian ~$20k a year (15 years ago). My mother homeschooled us until I left home at 16. We were poor. I think the question we should be asking is "how much access does one need to essential and non-essential goods and services to live a satisfactory life?" Living a dollar above Orshansky's poverty metric is not likely to do much good but keep a family in perpetual stress. I think, if each of us were honest, we would admit that simply meeting the minimum metrics of survival is not the type of life any of us would have for ourselves or any of those that we love. But I doubt simply giving money to people resolves the issues. That is why I think 'access' is more important than cash. When my mother had cancer (four times) and needed chemotherapy, surgeries, radiation, etc. we had access to such procedures even though we did not have cash because here in Canada we have access to public healthcare. This is just one example, but my point is that expandiing access to essential and even some non-essential goods and services can obfuscate the cost of living in a broad sense. Yes, someone will say "well the high income earners are basically paying for sick poor people through their taxes". Yes, that is a really nice thing they do. It all comes out in the wash. The "pain" the rich experience in paying higher taxes is offset by the "pain" poor people experience by living paycheque to paycheque and have to worry and struggle the whole way through. And in the end, we all get the same priviledge of dying and leaving it all behind.
Eric said:
I live in NJ and can basically guarantee you that Green’s poverty line is very wrong. I’m a college student living with my widowed mom and two older brothers. My older brothers help pay the mortgage and some subscriptions, but other than that my mom pays for everything else and is the primary source of income for our household. She is a 1st grade teacher in a horribly funded education system that definitely doesn’t pay her anywhere near Green’s $140k poverty line and we’re definitely not living in poverty. We always got heat, water, electricity, plenty of food and TV. I don’t know where Green took his study in NJ to get such a high number. My mom can cover a very large majority of the expenses with just her measly income. Only reasonable way Green could’ve gotten that number is if he decided to study a high income family living in a high-cost area like Princeton or Cape May.
TLDR: Green’s poverty line is at least double the actual one (at least here in NJ)
And Maggie from NY wrote:
I live in Queens and work in Midtown Manhattan. I'm very lucky that the company I work for values hard work, and I've gotten two small raises this year, bringing me up to 4K more than I was making last October when I first started here (about 68K now). That being said, I've felt the crunch the entire time, and have less to put into my savings per paycheck than when I was working freelance and being paid hourly 4 years ago. The cost of groceries alone has gone up so much in the past year that my regular $50 trip to the supermarket (regular local supermarket, no Whole Foods or organic fancy stuff) now covers one meal for my boyfriend and I instead of two & some snacks like it did last February. Just yesterday I attempted to save money by "making Chinese" rather than ordering - I bought a bag of frozen dumplings, some bok choy, 2 pedialytes, some cough drops, and a pint of ice cream, and spent $56. I considered blueberries but a pint was $9. I agree with the contrarians - 140K as a poverty line is probably way overshooting it. But 30K is way too low, especially in a metropolitan area like mine. Winship, claiming that "we can afford what we could in the past plus a lot more non-food spending" needs to zoom out, because that is NOT the case for the majority of my generation, even if it is for the boomers.
Side note - whenever I complain about the cost of living in NY people tell me to move home to save money. Man, I'm from here!!! People are born in New York too, and most of us aren't born into multi million dollar families in Manhattan!
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Thanks for reading. We’ll be back with more tomorrow.
—Max and Max
