US Treasury Secretary Bessent: If there is a payout, it looks like corporate welfare

US Treasury Secretary Bessent: If there is a payout, it looks like corporate welfare

U.S. Treasury Secretary Bessent: Strengthening Accountability to Combat Fraud and Misuse of Public Funds

U.S. Treasury Secretary Scott Bessent has announced a series of measures aimed at addressing systemic fraud in government benefits programs and scrutinizing nonprofits that exploit tax-exempt status, emphasizing the need for transparency and accountability in public spending. These actions follow revelations of large-scale fraud in Minnesota, where billions in taxpayer funds were allegedly diverted to fraudulent schemes, including those linked to Somali-based operations and child nutrition program abuses.

Bessent highlighted that under Democratic Governor Tim Walz, Minnesota's welfare fraud had "spiraled out of control," with funds intended for vulnerable populations—such as children and disabled seniors—being misused for luxury assets like real estate, vehicles, and international travel. To address this, the Treasury's Financial Crimes Enforcement Network has launched investigations into Minnesota-based money services businesses, issued geographic targeting orders to track cross-border transactions, and provided law enforcement training to identify fraudulent activity. Additionally, the IRS is forming a task force to audit institutions involved in laundering funds and investigate misuse of pandemic-era tax incentives and 501(c)(3) nonprofit status.

Bessent also emphasized a broader focus on preventing "corporate welfare" by targeting nonprofits that engage in excessive political lobbying or fraudulent practices. The Treasury is seeking a senior official to lead efforts against "abusive" 501(c)(3) organizations, following scrutiny of groups like Feeding Our Future—a charity tied to a $250 million fraud case—and the Council on American-Islamic Relations (CAIR), which faces potential loss of tax-exempt status under the administration's review. According to reports, the administration is intensifying scrutiny of such organizations.

"These initiatives are designed to ensure taxpayer dollars are used as intended," Bessent stated, underscoring the administration's commitment to "economic growth and security" while curbing fraud. As the Treasury notes, the measures reflect a strategic shift toward proactive oversight, aligning with the Treasury's broader goals of modernizing regulations and enhancing financial system resilience.

By tightening reporting requirements, strengthening interagency collaboration, and targeting systemic vulnerabilities, the Treasury aims to restore public trust and ensure equitable distribution of government resources.