Tim Walz drops out of Minnesota governor’s race amid fraud scandal

Minnesota Gov. Tim Walz has ended his reelection bid amid mounting pressure over a fraud scandal that has engulfed his administration in recent weeks.

The move comes days after a handful of Republican state lawmakers asked Walz to leave office, citing reports from a U.S. Attorney that, since 2018, at least half of the $18 billion paid through Minnesota’s 14 Medicaid waiver programs could be fraudulent, and after Republicans in Congress called on Walz to testify about his failure to address the crisis.

Walz, the former vice presidential candidate on Kamala Harris’ 2024 presidential campaign, cited the growing pressure as one of the reasons for his decision to leave the race, though he pushed back on claims that he has not adequately attempted to curb the crisis.

“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,” he said.

“So I’ve decided to step out of the race and let others worry about the election while I focus on the work,” Walz continued in the statement.

Kentucky Gov. Andy Beshear, head of the Democratic Governor’s association, commended Walz’ leadership and reasserted his confidence that, “no matter who decides to run,” Democrats would win the state in the 2026 governor’s race. The Cook Political Report, a nonpartisan group that analyzes state, federal and presidential elections, labels the Minnesota race as “likely Democrat.”

Walz has scheduled a news conference Jan. 5 at 1 p.m. ET to address his decision.

Minnesota fraud scandal
Since 2022, the Department of Justice charged more than 70 people, many of them U.S. citizens of Somali descent, with siphoning hundreds of millions of taxpayer dollars from Minnesota’s child nutrition program, in what they described as the “largest COVID-19 fraud scheme in the country.”

Assistant U.S. Attorney Joe Thompson announced charges against five people accused of defrauding the Medicaid-funded Housing Stabilization program in late December and suggested that more than $9 billion may have been stolen from more than a dozen Medicaid-funded programs in Minnesota, though he did not say how authorities came to that figure. The $9 billion exceeds the amount people charged so far have been accused of stealing.

Walz applauded the arrests, describing them as “strong action we need from prosecutors to put fraudsters behind bars,” on social media at the time.

Still, Republican lawmakers continued to accuse his administration of mishandling the program. A viral video published at the end of 2025 by conservative influencer Nick Shirley only added fuel to the growing outcry over the abuse. In the video, which has garnered more than 100 million views on social media, Shirley visited multiple day care centers in Minnesota that he alleged were abandoned despite having state licenses to serve children.

In response, FBI Director Kash Patel said his agency had “surged” resources to the state to investigate the fraud. The federal Department of Health and Human Services said it was pausing child care payments to the state amid the controversy. Congress called Walz to testify. The House Oversight Committee scheduled an initial hearing on the topic for Jan. 7.

Walz in his statement exiting the 2026 governor’s race defended the actions his administration has taken to thwart and prosecute fraud and alleged that Republicans were politicizing the issue.

“For the last several years, an organized group of criminals have sought to take advantage of our state’s generosity. And even as we make progress in the fight against the fraudsters, we now see an organized group of political actors seeking to take advantage of the crisis,” he wrote.

He argued his administration sought “tools to combat fraud,” fired officials and jailed people found stealing from the state, among other actions.

“There’s more to do. A single taxpayer dollar wasted on fraud is a dollar too much to tolerate,” Walz said. “But the political gamesmanship we’re seeing from Republicans is only making that fight harder to win.