The State Department has helped to relocate tens of thousands of refugees from the war-torn African nation of Somalia to Minnesota, where they can take advantage of some of America’s most generous welfare and charity programs.

But the effort is having the unintended consequence of creating an enclave of immigrants with high unemployment that is both stressing the state’s safety net and creating a rich pool of potential recruiting targets for Islamist terror groups.

In the fiscal year that ended in September, Minnesota welcomed 1,118 Somali refugees arriving directly from Africa, most of them without family ties to the state, according to State Department statistics. Overall, more than 30,000 Somalis live in the midwestern state comprising the nation’s largest concentration of Somali immigrants, according to U.S. Census data.

Many of the refugees settle near the Twin Cities, with Minneapolis being dubbed “Little Mogadishu” after the capital of Somalia.

This population is also being targeted by Islamist terror organizations like the Islamic State and al-Shabab, a Somalia-based group with links to al Qaeda, according to U.S. officials.

Among Minnesota-based Somali-Americans, American converts to Islam or Somali refugees, there have been numerous convictions for various levels of collaboration with Islamist terror groups, plus reports of fighting with al-Shabab or other Islamist groups.

On Sunday, al-Shabab made a propaganda video warning of an attack on shopping malls around the world, including the Mall of America in Minnesota. Al-Shabab claimed responsibility for the terror attack on the Westgate shopping mall in Kenya two years ago, which left 67 dead.

“We have definitely seen targeted terror recruitment videos, videos aimed and targeted directly at the youth here in Minnesota primarily within the Somali community,” said Kyle Loven, an FBI spokesman in Minneapolis. “They’re going after disaffected youth — those who are isolated. We can’t get into specifics, but we’ve been involved in major investigations since 2007 and continue to be.”

Most of Minnesota’s Somali population started off as legal refugees through a program administered by the U.S. State Department through the Bureau of Population, Refugees, and Migration.

Minnesota was selected among the nation’s states for relocation primarily because of its robust entitlement offerings and the number of charitable organizations operating within the state with which the State Department contracts.

“Minnesota is exceptional in many ways but it’s the closest thing in the United States to a true social democratic state,” said Ahmed Samatar, a professor of international studies at Macalester College, in St. Paul.

“That translates into the way Somali refugees have been received here they’ve been given a secure environment, housing, education, health care, perhaps even some minimum income to sustain them until they can stand on their own feet. That’s all provided by Minnesota,” said Mr. Samatar, who has tracked the State Department’s refugee program.

Outside Alaska, Minnesota spends more per low-income person on public welfare than any other state in the U.S., according to a report by the Center for the American Experiment, a think tank located in Minneapolis. The report found Minnesota outspent its average peer state in welfare subsidies by nearly $4,000.

In addition to its generous welfare subsidies, Minnesota also has a number of charitable organizations that contract with the State Department like Lutheran Social Services, Catholic Charities, and World Relief Minnesota. Those organizations agree to help the Somali refugees learn English, get health care, find housing and gradually learn to adopt the U.S. as home.

The State Department didn’t specifically say why Minnesota was selected early in its Somali refugee relocation program only that: “Resettlement locations are chosen for a variety of factors, including communities where a refugee has a family or social tie, where the local resettlement agency has the requisite language skills and social services, and where jobs are available so that refugees can begin the transition to self-sufficiency,” said Larry Bartlett, the U.S. Refugee Admissions program director, in a statement to the Washington Times.

Even though Minnesota has a good job market, that doesn’t seem to have translated into jobs for the Somali refugees. Minnesota’s state demographer’s office reports that only 41 percent of Somali men are working and 54 percent of Somali women are employed, meaning many may rely on the state’s handouts to survive, and are more susceptible to extremists pull.

“It seems safe to assume that if they’re not working, then they’re likely receiving public welfare benefits,” said Peter Nelson, director of public policy at the Center of the American Experiment. “More problematic, the Somali men not working are clearly not integrating as well as they could with society, which could feed into them being radicalized and recruited to fight with” the Islamic State.

Minnesota started seeing Somali refugees gather in their state in the early 1990s, after the Somali civil war led millions to flee to refugee camps, mainly in neighoring Kenya, which also has a refugee camp dubbed “Little Mogadishu” near its capital of Nairobi.

The U.N. worked with the State Department to get the refugees placed, who in turn teamed with the Department of Homeland Security and Department of Health and Human Services, to make the final decision.

Today, in addition to being assigned the state, more Somalis are arriving to Minnesota after briefly being relocated to other states, as most want to live where an established Somali community is, regardless of Minnesota’s harsh weather or landlocked location.

Other large Somali populations reside in Maine, around the Seattle region and in Columbus, Ohio.

“Minnesota has a very large and relatively new Somali community. So you have first generation Somali youth who are torn because they haven’t experienced the best of America yet and still have feelings for their country,” said Oren Segal, director of ADL’s Center on Extremism. “And so they’re ripe for online terrorist recruiters, who say ‘Come and fight for your homeland, something you believe in,’ because they haven’t assimilated to America yet.”

Indeed, the FBI has noticed a steady stream of Islamist-recruitment videos specifically targeted at Minnesota’s Somali population, said the FBI’s Mr. Loven.

“What the FBI in Minneapolis has done with the U.S. Attorney is we have established strong liaison program within the Somali community, to seek out and work with concerned civic organizations and people who have a general uneasiness that their population has been targeted,” Mr. Loven said. “The videos and the online messaging is clearly targeting youths from within the Somali community and it’s a challenge for law enforcement to determine who will be moved to action with these videos.”

Since 2008, as many as 40 men from Minneapolis have joined Islamist groups after being pulled in by jihadists through social media, federal officials say.

Last year, an American youth named Douglas McAuthur McCain died in Syria fighting for the Islamic State. Mr. McCain was recruited in Minnesota, where he lived.

In 2009, another Minnesota youth, Troy Kastigar posted a recruiting video for al-Shabab before he was killed fighting for the terrorist group in Somalia. Kastigar and McCain are thought to have been friends.

That same year a Somali man who left Minneapolis joined al-Shabab and blew himself up in a suicide bombing at an Ethiopian consulate in Somalia, killing 24 people.

In an effort to better assimilate their refugee population — and deter against Islamist recruitment efforts — Gov. Mark Dayton has expanded the state’s entitlement programs, although he remains mum on the state’s expense at doing so.

“The state of Minnesota receives funding through the federal Department of Health and Human Services, Office of Refugee Resettlement to promote the successful resettlement and integration of refugees in Minnesota,” said a spokeswoman at the state’s Department of Human Services. “The Refugee Programs Office of the Minnesota Department of Human Services administers these federal funds to partner with diverse community-based agencies around the state to provide various services to refugees who are fewer than five years in the country. Programming includes social services, employment services, services for the elderly and after-school programs for youth.”

However, issues come up on the political tightrope of welcoming refugees into the state along with supporting U.S. counter-terror measures and building a civic society in Somalia, which has collapsed into a regional clan society with a barely existing government over the past 20-odd years.

Fro example, Merchants Bank halted money transfers to Somalia this month in the wake of a cease-and-desist order issued by the U.S. Treasury Department’s Office of the Comptroller of Currency.

The U.S. Treasury was worried Merchants could not adequately prove all the money being wired from the U.S. was going to legitimate sources abroad, and not to jihadist groups.

Sens. Amy Klobuchar and Al Franken, both Democrats, sent a letter to Secretary of State John Kerry seeking a meeting to craft an “emergency plan” that would address the shortage of reliable money transfer services that Somalis can use to send money to their homeland, as the move caused an uproar in Minnesota.

“There were actually 20 indictments against people participating in al-Shabaab, already nine convictions over the past two years, and some recent indictments involving those recruited to go fight with” the Islamic State, said Ms. Klobuchar in a statement responding to the Mall of America threat.

“So we know this is a real problem in our community. But the Somalis in our community, they are serving in elected office, they are running businesses. They are part of a fabric of life in the community and also part of the solution,” she said.

In addition to law-enforcement reaching out to the Somali community to build terror leads, Minnesotans have also welcomed them onto their entitlement rolls, with the state’s cash assistance and food stamp programs, skyrocketing in recent years.

The number of Somali adults and children who participated in the Minnesota’s family cash assistance program jumped 34 percent from 2008 to 2013, according to the state’s statistics. Likewise, Minnesota’s food assistance participation increased 98 percent, to 17,300 adults and children, which does not include U.S.-born Somalis, in the same timeframe.

Last year, due to the influx of Somali youths, the Minneapolis School District started its NABAD program — an acronym that means “peace” in Somali — aimed at helping Somali children better assimilate to the U.S. educational system.

The program, which was expanded to eight classrooms last year, teaches English, provides a Somali-speaking classroom aide and is required for a year before the children join a regular classroom setting.

And the state is doing more to enroll more Somali immigrants into its Obamacare health exchanges, dubbed MNsure. Many Minnesota residents who aren’t covered but want health insurance are parents, women and Somali immigrants aware of universal health care in their native country, according to MNsure research.

Overall, the number of Somalis resettled in the state has more than tripled in four years, according to State Department statistics. And with the surge in refugees comes more of a risk to the community, radicalization experts say.

“The issue of young Somali’s being brought into these terror organizations is huge — but I think one thing that is often ignored is a lot of young Americans who are not in the Somali community are also responding to these specific calls,” said ADL’s Mr. Segal. “The community in Minnesota has particularly been hit — some have no doubt been brainwashed by the propaganda targeted at them.”

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