Fraud fallout forces Democratic Gov Tim Walz to abandon Minnesota reelection bid

Tim Walz

Fraud fallout forces Democratic Gov Tim Walz to abandon Minnesota reelection bid

Paul Steinhauser Fox News

Published

January 5, 2026 9:31am EST

Updated

January 5, 2026 9:32am EST

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Gov. Tim Walz of Minnesota announced on Monday that he is dropping his bid for a third term as governor, amid stinging criticism of the unsuccessful 2024 Democratic vice presidential nominee's handling of his state's massive welfare assistance fraud scandal.

"[T]he political gamesmanship we’re seeing from Republicans is only making that fight harder to win," Walz charged in a statement.

"But as I reflected on this moment with my family and my team over the holidays, I came to the conclusion that I can’t give a political campaign my all," the governor added. "Every minute I spend defending my own political interests would be a minute I can’t spend defending the people of Minnesota against the criminals who prey on our generosity and the cynics who prey on our differences."

"So I’ve decided to step out of the race and let others worry about the election while I focus on the work," the governor announced.

Walz launched his bid for a third four-year term as Minnesota governor in September, but in recent weeks has been facing a barrage of incoming political fire from President Donald Trump and Republicans, and some Democrats, over large-scale theft allegations in a state that has long prided itself on good governance.

More than 90 people – most from Minnesota's large Somali community – have been charged since 2022 in what has been described as the nation's largest COVID-era scheme. Exactly how much money has been stolen through alleged money laundering operations involving fraudulent meal and housing programs, daycare centers, and Medicaid services is still being tabulated. The U.S. Attorney in Minnesota said the scope of the fraud could exceed $1 billion.

Prosecutors said that some of the dozens who have already pleaded guilty used the money to buy luxury cars, real estate, jewelry and international vacations, with some of the funds also sent overseas and potentially into the hands of Islamic terrorists.

"This is on my watch, I am accountable for this and, more importantly I am the one that will fix it," Walz told reporters last month, as he took responsibility for the scandal.

The governor took actions to stop some of the suspected fraudulent payments, and ordered an outside audit of Medicaid billing in the state.

Trump repeatedly blasted Walz as "incompetent," and during Thanksgiving used a slur for developmentally disabled people to describe the governor.

The scandal, which grabbed plenty of national attention over the past two months, went viral the past few weeks following the release of a video by 23-year-old YouTube content creator Nick Shirley, who alleged widespread fraud at Somali-run daycare centers. Days later, the Trump administration froze federal child-care funding to Minnesota.

Paul Steinhauser is a politics reporter based in the swing state of New Hampshire. He covers the campaign trail from coast to coast."

Fraud fallout forces Democratic Gov Tim Walz to abandon Minnesota reelection bid

Fraud fallout forces Democratic Gov Tim Walz to abandon Minnesota reelection bid

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