Gov. Tim Walz (D-MN) appears poised to exit the 2026 gubernatorial race as mounting pressure from a multi-billion dollar fraud scandal threatens to derail his political future.
Minnesota political analyst Blois Olson made waves Sunday evening when he announced on social media that the embattled governor would likely withdraw from the upcoming race.
The announcement comes just hours before a scheduled press conference Monday morning at 11 a.m., where Walz’s office has remained tight-lipped about the agenda.
The governor’s office has not responded to KARE 11 requests for comment about the purpose of Monday’s address or the speculation surrounding his political future.
Walz has found himself at the center of a firestorm over alleged massive Medicaid and daycare fraud schemes operating within Minnesota’s borders.
The scandal has drawn sharp criticism from President Donald Trump and other national figures, putting the failed vice presidential candidate under intense scrutiny.
Financial losses from the alleged fraud could potentially reach into the multi-billions, according to reports from investigators and state officials.
The controversy gained significant traction after independent journalist Nick Shirley published viral footage last month showing taxpayer-funded daycare centers across Minnesota that appeared to be operating with few or no children present.
Federal authorities have responded by launching a comprehensive operation in Minnesota targeting individuals allegedly defrauding taxpayers through these schemes.
The Department of Homeland Security described the operation as focused on “identifying, arresting, and removing criminals who are defrauding the American people,” according to New York Post reporting.
Republican lawmakers have launched sustained attacks against Minnesota Democrats, accusing them of negligence that allowed billions in taxpayer dollars to vanish.
One Florida lawmaker drew comparisons between the alleged fraud network and “organized crime,” highlighting the scale and sophistication of the suspected schemes.
The Trump administration has announced plans to freeze certain federal childcare funding until states implement stronger verification measures for their programs.
President Trump addressed the Minnesota situation during a New Year’s Eve celebration at Mar-a-Lago, suggesting the actual scope of the fraud might exceed current estimates.
“Can you imagine, they stole $18 billion,” Trump told the assembled crowd.
State Representative Kristin Robbins, a Republican from Maple Grove who chairs the Minnesota Fraud Committee and is running for governor, revealed she had warned the Walz administration about potential fraud nearly a year ago.
Robbins told the Post she held a hearing on daycare fraud in February 2024 and subsequently provided the Department of Human Services with a detailed list of concerning facilities.
The list included daycare providers who had received over one million dollars in state funding during the previous year while maintaining numerous violations on their records.
“They can’t say they didn’t know. We had a hearing on it. We gave them a list, and nothing has happened,” Robbins stated outside the Quality Learning Center facility.
She expressed shock that fraudulent operations continued despite repeated warnings to state officials.
The House Oversight Committee has scheduled multiple hearings in the coming weeks to investigate the scandal and determine how such widespread fraud was allowed to occur.
Political analyst Olson revealed to Fox 9 that Walz had met with Democratic Senator Amy Klobuchar on Sunday, fueling speculation about potential successors in the gubernatorial race.
Klobuchar has emerged as a possible frontrunner to replace Walz as the Democratic candidate if he withdraws from the 2026 race.
The timing of Monday’s press conference has intensified speculation that Walz will announce his decision to step aside rather than face voters amid the ongoing scandal.
