MINNESOTA – Governor Tim Walz said Monday that he will not run for a third term in 2026. He pointed to the widening fraud problems inside the state’s social services system and said his attention needs to stay on fixing them.
The move comes only months after he said he planned to run again, and as pressure rises over claims of billions in taxpayer losses tied largely to fraud in programs serving the Somali-American community.
Walz, who gained national attention as Kamala Harris’s running mate in the 2024 presidential race, said stepping aside is about choosing the job over the campaign trail. “Every minute I spend defending my own political interests would be a minute I can’t spend defending the people of Minnesota,” he said in a statement.
People close to the governor say he met over the weekend with U.S. Senator Amy Klobuchar, who is now weighing a run for governor.
A Fraud Story That Keeps Growing
Walz’s announcement lands in the middle of several fraud probes that keep getting bigger. Federal prosecutors have described the theft as “industrial-scale.” The best-known case is Feeding Our Future, in which a state-sponsored nonprofit is accused of stealing about $250 million in federal child nutrition money during the COVID-19 pandemic.
Prosecutors say it used false claims that children were being fed when they were not. More than 78 people, many of Somali descent, have been charged. More than 50 have pleaded guilty, and others have been convicted at trial, including the nonprofit’s founder.
Since then, investigators have widened their focus. Federal authorities now estimate fraud across Minnesota’s Medicaid and child care systems could top $9 billion since 2018. Those allegations include fake autism centers, housing aid schemes, and child care providers billing for services that did not happen. Assistant U.S. Attorney Joe Thompson called the scale “staggering,” and suggested it may rank among the largest welfare fraud efforts in U.S. history.
Child care fraud has drawn fresh attention in recent weeks. Independent journalist Nick Shirley posted a viral video showing what appeared to be empty, Somali-owned daycare sites in Minneapolis that still received large state payments.
State records show several centers featured in the video collected more than $17 million from the Child Care Assistance Program (CCAP) in fiscal year 2025 alone. In response, the U.S. Department of Health and Human Services froze child care payments nationwide and shut down pandemic-era loopholes that allowed payments without verifying attendance.
Republicans, along with President Donald Trump, have blamed Walz’s administration for weak oversight. They argue the state did not move quickly enough, in part out of concern about upsetting Minnesota’s influential Somali community, a key Democratic voting bloc. Walz has defended his approach. He has pointed to a new fraud prevention director and added safeguards, and he has called the $9 billion estimate “sensationalized.”
Federal Investigators Expand Their Focus to the Walz Administration
Walz has not been accused of personal wrongdoing. Even so, federal investigators are reviewing how his administration approved sponsors and sent out payments. The Republican-led House Oversight Committee has opened an inquiry and invited Walz to testify in February. The FBI and the Treasury Department are also looking into possible money laundering ties.
Walz has said “the buck stops with me,” while also arguing that loosened federal rules during the pandemic made programs easier to exploit. The politics have been rough. Polling has shown his approval slipping, and some Democrats have privately pushed him to step aside.
The controversy has also pulled in U.S. Representative Ilhan Omar (D-Minn.), whose district includes much of Minneapolis’s Somali community. Critics have raised questions about her family’s rapid rise in wealth.
Her financial disclosures show her net worth jumping to between $6 million and $30 million in 2024. The increase is tied largely to her husband Tim Mynett’s venture capital firm and winery, assets that were listed as close to zero the year before.
Conservative watchdog groups, including the National Legal and Policy Center, have flagged the disclosures while fraud investigations continue statewide. No formal charges have been filed against Omar, and no direct link has been alleged between her and the fraud cases. Her office has dismissed the claims as part of a “coordinated right-wing disinformation campaign.”
What Tim Walz’s Exit Means for 2026
With Walz out, the 2026 governor’s race is wide open. Klobuchar could enter as a strong Democrat if she decides to run. On the Republican side, state lawmakers and high-profile figures, including MyPillow CEO Mike Lindell, are already campaigning on promises of tougher oversight and a crackdown on fraud.
More trials are expected to stretch into 2026. Meanwhile, many Minnesotans are left angry and frustrated that programs meant to help vulnerable families may have been exploited on a massive scale.
Walz says he will spend the rest of his term chasing reforms and backing investigators, but the fraud scandal is now a defining part of his tenure, and it has sharpened the debate over accountability in one of the country’s most generous welfare states.
