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 at least half of the $18 billion paid through Minnesota's 14 Medicaid waiver programs since 2018 could be fraudulent and after Republicans in Congress called on Walz to testify about his failure to address the scandal.
Walz, the former vice presidential candidate on Kamala Harris ' 2024 presidential campaign, spoke about his decision at a news conference Jan. 5, citing the growing pressure as one of the reasons for his decision to leave the race and pushing back on claims that his administration failed to combat fraud.
"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, reading from a previously published statement. "I’ve decided to step out of the race and let others worry about the election while I focus on the work."
He was seeking his third term as governor.
Kentucky Gov. Andy Beshear, head of the Democratic Governors Association, commended Walz's 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 outcome "likely Democrat."
Sen. Amy Klobuchar, D-Minnesota, is said to be considering a run for governor, according to multiple media reports .
Minnesota fraud scandal
Since 2022, the Justice Department has 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 it 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, 61, applauded the arrests on social media at the time, describing them as "strong action we need from prosecutors to put fraudsters behind bars."
Republican lawmakers 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 federal Department of Health and Human Services said it was pausing child care payments to the state amid the controversy. Congress has called Walz to testify; the House Oversight Committee has scheduled an initial hearing for Jan. 7.
In his statement, Walz defended the actions his administration has taken to thwart and prosecute fraud and accused Republicans of politicizing the scandal.
Federal Bureau of Investigation (FBI) Director Kash Patel
speaks alongside Acting U.S. Attorney General Todd Blanche during a news conference at the at the Robert F. Kennedy Department of Justice building on April 21, 2026 in Washington, DC.
Patel
faced scrutiny in the wake of a April 2026 report in The Atlantic
magazine alleging he engaged in excessive drinking and his behavior could jeopardize national security.
"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."
Contributing: Christopher Cann
This article originally appeared on USA TODAY: Tim Walz drops out of Minnesota governor's race amid fraud scandal
