BREAKING: Tim Walz drops reelection bid for Minnesota governor amid Somali fraud scandal

Walz said in a statement that he "can’t give a political campaign my all” after what he called an “extraordinarily difficult year for our state" and will not be running in 2026.

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“In September, I announced that I would run for a historic third term as Minnesota’s Governor. And I have every confidence that, if I gave it my all, I would succeed in that effort," Walz said.

“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. 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," Walz added.

The reversal comes amid mounting pressure from Democrats for him to drop out, per Axios.

Walz’s office has scheduled an 11 am news conference Monday, saying only that the governor will “take questions and discuss the news of the day.” No further details were provided. However, Olson reported Sunday evening that Walz is preparing to address his political future and is “likely” to drop out of the 2026 race. Walz took office in 2019.

The announcement comes as Walz faces intensifying scrutiny over a series of fraud-related controversies that have drawn national attention and sharp criticism from Republican lawmakers and political opponents. The former vice presidential candidate has been accused by Republicans of not responding to fraud in Minnesota’s Medicaid-related programs. According to Olson’s report, the governor has also faced pressure from fellow Democrats to clarify his plans for 2026.

On Monday, Dec. 29, several Republican state legislators issued a joint statement calling on Walz to resign. The statement referenced comments from First Assistant US Attorney Joe Thompson, who said that since 2018, at least half of the $18 billion paid through Minnesota’s 14 Medicaid waiver programs could be fraudulent. “The office of the governor deserves respect, and we have tried to give Gov. Walz time to act,” the legislators wrote. “But leadership means doing the right thing even when it is difficult, which is why we are calling on Gov. Walz to resign.”

Minnesota has also become the focus of federal action tied to suspected fraud involving Covid-era relief programs. Small Business Administration Administrator Kelly Loeffler said the SBA has suspended 6,900 Minnesota borrowers after identifying widespread suspected fraud connected to Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL). The suspected activity, she said, involves at least 7,900 loans worth approximately $400 million. “Over the last week, SBA has reviewed thousands of potentially fraudulent pandemic-era PPP and EIDL loans approved in Minnesota,” Loeffler wrote in a post on X. “Today, our agency took action to suspend 6,900 Minnesota borrowers amid suspected fraudulent activity.”

Loeffler added that the suspended individuals will be banned from all SBA loan programs going forward, including disaster loans. In a separate letter on Tuesday, she said the agency would halt more than $5.5 million in annual support to Minnesota “until further notice.”

The controversies have been amplified further by a widely shared exposé from independent reporter Nick Shirley, who went to Minnesota to document alleged fraud at daycare centers. The report circulated widely online and claimed many of the centers under scrutiny were operated by Somali communities. Following the expose, the Trump administration also moved to stop certain federal funding streams to Minnesota connected to childcare centers. There have already been many convictions in a prior Somali scam in which groups took money to feed children during Covid and never provided those services.