Minnesota Gov. Tim Walz, a Democrat who was his party’s vice presidential nominee in 2024, announced Monday he is dropping his campaign for a third term. The announcement comes amid weeks of scrutiny over the state’s perceived indifference to the alleged misuse of public funds in social services programs.
The alleged fraud came under increased scrutiny after conservative content creator and self-described independent journalist Nick Shirley posted a video that he said exposed child care centers stealing government funds in Minnesota. The video has garnered millions of views and has been amplified by Vice President JD Vance, among others.
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Walz has come under fire for failing to prevent fraud. The White House claims he “did absolutely nothing” about fraud allegations and was “tolerating, if not tacitly allowing” illegal activity by Somali Americans who run social service programs.
Walz has defended his state and pushed back after Shirley posted the video, saying Minnesota has spent years working to “crack down on fraud.”
Earlier this month, Minnesota state officials said the child care centers covered in Shirley’s video are working “as intended” and that the influencer was wrong when he said no children were inside centers receiving federal subsidies. They said eight of the nine child care centers had children present; the ninth didn’t because it was still open for the day.
Shirley defended his video following the criticisms. In response to the racism claims, Shirley said it doesn’t matter what race a person is, “fraud is fraud.”
Walz addresses fraud investigation
During a news conference announcing he was ending his campaign, Walz said he would have won in the end but the allegations made it impossible for him to “give a political campaign my all.”
He spoke directly about fraud in his state and defended his state’s response to crime.
“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,” Walz said. “So I’ve decided to step out of the race and let others worry about the election while I focus on the work.”
Minnesota has to come first – always.
— Governor Tim Walz (@GovTimWalz) January 5, 2026
Today, I’m proud of the work we’ve done to make Minnesota the best place to live and raise kids.
I’ve decided to step out of the race and let others worry about the election while I focus on the work. pic.twitter.com/AYbvcOzyPI
Walz said Minnesota ended last year on a “sour note” and that “an organized group of criminals” exploited the state’s generosity. He also said that President Donald Trump and his administration have used the situation to their political benefit.
“I won’t mince words here,” Walz said. “Donald Trump and his allies – in Washington, in St. Paul, and online – want to make our state a colder, meaner place. They want to poison our people against each other by attacking our neighbors.”
Walz also said that the state is currently investigating fraud and has in the past. Walz said it’s important so people can trust the programs Minnesota offers.
“Make no mistake: We should be concerned about fraud in our state government,” Walz said. “We cannot effectively deliver programs and services if we can’t earn the public’s trust. That’s why, over the past few years, we’ve made systemic changes to the way we do business.”
Reactions to Walz’s decision
After Walz’s announcement, Shirley celebrated on his X account, saying he “ENDED TIM WALZ.”
I ENDED TIM WALZ
— Nick shirley (@nickshirleyy) January 5, 2026
X owner Elon Musk commented under Shirley’s post, saying, “Thank God,” to which Shirley responded, “Amen, would not have been possible without X.”
Neither Trump nor the White House has yet reacted to Walz’s decision.
What was shown in Shirley’s video?
In the video, Shirley visited nine federally subsidized child care centers with another man named “David.” Shirley alleged the facilities are fraudulently claiming money from the state.
He filmed the centers, which appear empty, and implies they are “ghost” centers not serving children. Shirley also pointed out misspellings on signage, which he said indicated the facilities’ inauthenticity.
He interviewed several people who he said are from the area who said they had never seen children at the centers.
Shirley also used public payment records, claiming Minnesota paid millions to these facilities.
Who is ‘David’?
The man credited as “David” is portrayed as an interested person who was concerned about the facilities not helping children. The Minnesota Star-Tribune later identified the man as David Hoch, a conservative who previously ran for Minnesota governor.
The Intercept also reported that Hoch has a history of targeting Somali migrants in fraud allegations. In a now-deleted Instagram post, Hoch said, “EVERY Somali in MN is engaged in fraud. ALL of them.” In another post, he said, “Even the Blacks have had enough of the demon Muslims.”
According to The Intercept, Hoch received information about the child care centers through the Minnesota state legislature. Emails cited in Shirley’s video show Hoch received the information on state funding for the facilities from a Republican staffer named Joe Marble.
Minnesota state Rep. Lisa Demuth, a Republican, said her party has worked to “expose fraud for years, including working with Nick Shirley.” However, Shirley denied working with or even knowing Demuth.
In his announcement today, Walz seemed to allude to the link between Shirley’s video and his political opponents.
“But the political gamesmanship we’re seeing from Republicans is only making that fight harder to win,” Walz said. “We’ve got Republicans here in the legislature playing hide-and-seek with whistleblowers.”
Walz said the video and how Trump and other leading Republicans reacted to it were “disgusting” and “dangerous.” He claimed the GOP is playing with the future of Minnesota.
Minnesota’s previous fraud investigations
Fraud investigations have been underway in Minnesota for years, and federal grand juries have charged more than 90 people. However, the issue gained new attention after Shirley’s video.
The U.S. Department of Health and Human Services launched dedicated state-specific fraud hotlines and a nationwide email tip line for reporting suspected child care abuse..
