"Minnesota has been ground zero for fraud and corruption because it plays a cynical game of racial and ethnic politics," HUD Secretary Scott Turner told Fox News Digital. (Bill Clark/CQ-Roll Call, Inc via Getty Images)
Minnesota has become the focal point of government fraud, as details emerged regarding an alleged sweeping COVID-era scheme involving money laundering and tied to multiple social-services programs. Nearly 100 people, most of whom are from Minnesota's Somali community, have been charged, while federal prosecutors estimated that the total amount of fraud across various state-administered social services programs could reach more than $9 billion.
Considering the alleged fraud involved taxpayer dollars, HUD officials said evidence suggests that racial politics also extended to Minneapolis’s housing policy.
The letter argues that Minneapolis has "committed to making available and allocating housing resources based on race and nationality," raising potential federal civil rights violations.
HUD specifically cited language in the city’s "Minneapolis 2040" comprehensive plan, as well as the city's Strategic and Racial Equity Action Plan, as cause for concern.
Minneapolis 2040, which went into effect in 2020 under Frey, is the city's comprehensive plan outlining the economic, infrastructure and environmental vision of the city across the next decade and a half. It includes a section focused on establishing "cultural districts," which are described as "contiguous area with a rich sense of cultural and/or linguistic identity rooted in communities significantly populated by people of color, Indigenous people, and/or immigrants."
"This plan strives to eliminate disparities among people of color and indigenous peoples compared with white people," Minneapolis 2040 states.
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The letter also cited Minneapolis’ Strategic and Racial Equity Action guide, which instructs city departments to align racial equity goals with their plans, programs and budgets.
"Minneapolis’s current Strategic and Racial Equity Action Plan claims to tangibly align ‘racial equity goals with department plans and budgets,'" the letter states. "For example, your Community Planning and Economic Development department will prioritize 'rental housing for Black, Indigenous, People of Color and Immigrant communities’ by ‘leveraging (its) rental licensing authority.’"
"That is not going to fly," Trainor wrote in his letter to Frey.
Immigration and Customs Enforcement officers question a man about his status on Lake Street near Karmel Mall in Minnesota Dec. 10, 2025. (Christopher Juhn/Anadolu via Getty Images)
Frey said earlier in January of the fraud that "obviously, everybody could have done more to prevent" it, but that "you do not hold an entire community, any community, accountable for the actions of individuals," referring to the Somali community.
Minneapolis has been roiled by protests and agitators clashing with federal law enforcement deployed to the state amid the fraud investigations. The chaos heightened after the fatal shooting of a woman by an ICE agent in early January after she allegedly attempted to use her vehicle as a weapon against a federal officer.
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Turner joined Fox News at the start of the new year and said HUD officials were on the ground in Minnesota investigating funds delivered to public housing authorities.
A firework explodes near fencing outside the Bishop Henry Whipple Federal Building during protests Jan. 12, 2026, in Minneapolis. (Jen Golbeck/The Associated Press )
"We have investigators that are making sure that any HUD-funded programs in Minnesota are being carried out appropriately," he said. "Also, we just launched an investigation and housing authorities, public housing authorities there in Minnesota. They receive about $108 million in Minneapolis, and also about $46 million in public housing assistance there. So we want to make sure that we're being good stewards of taxpayer money."
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Turner reported on X Monday that his department uncovered "up to $84 million in ineligible assistance during Biden’s final year — including $496,000 in improper assistance to 509 dead tenants."
https://www.foxnews.com/politics/exclusive-hud-launches-civil-rights-probe-minneapolis-over-race-based-housing-priorities