Fraud scandal helps to take down governor’s plans for third term
Political shockwaves registered across Minnesota early in the week, in the midst of Governor Tim Walz’s decision to end his bid for a third term in office.
Reports broke late Sunday night and were confirmed Monday, when Walz released a statement and later appeared before reporters to drop out of a race he had entered four months earlier.
The decision came amid mounting pressure and intense scrutiny over numerous reports of fraud, estimated by federal prosecutors to be in the billions of dollars, that occurred in state programs under Walz’s watch.
Walz faced growing calls, both from within and outside his party, to end his re-election bid and he acquiesced, acknowledging the scandal and contending he could not mount a campaign given the circumstances.
The developments came just as area leaders gathered in Ely (see related story) for the annual legislative meeting convened by the Community Economic Development Joint Powers Board.
State Sen. Grant Hauschild (D-Hermantown) was the first to address the news, saying of the Walz decision “I think that’s a good thing.”
“I think it means we can take politics out of this situation and he can focus on doing his job and we can look to the future,” said Hauschild.
State Rep. Roger Skraba (R-Ely) said he would have preferred that Minnesota voters decide Walz’s political fate, and renewed a call for continued focus on the fraud allegations, which allegedly encompass child care, health care and other operations.
“The people of Minnesota shouldn’t give the fraud a pass because one guy is leaving,” said Skraba.
Hauschild also addressed the fraud issues, some that were uncovered years ago and others that have come sharper into focus by federal investigation and a viral video that gained nationwide attention about two weeks ago.
“This is a serious issue,” said Hauschild. “We have to be diligent with what’s happening with fraud. We have to put people in jail who are stealing from taxpayers.”
Skraba also blamed state legislators, particularly House Democrats, for failing to pass legislation that would have established an independent inspector general to oversee fraud claims.
“If that bill would have passed, this wouldn’t be happening right now,” said Skraba. “The Senate was right on this and they had enforcement built into it, and the House Democrats didn’t want that. They didn’t want it and it didn’t get through.”
Skraba added that “in hindsight, hopefully they’ll see that was wrong and we’ll get that through this session. With the IG (Inspector General) there will be more tools available.”
Skraba also defended his decision to rebuff efforts to call for Walz’s resignation.
“And I was like, ‘It’s not our fight folks,’” said Skraba. “One of the primary
reasons I did not want to get involved with that, is the governor is working with us right now on permitting Mesabi Metallics. That’s a big deal. It’s important that we get these mines running. That’s 600 jobs that will bleed into this community. Why would I want to step on his toes?”
Walz, a Nebraska native and former school teacher and coach in Mankato, served several terms in the U.S. House of Representatives and won the state’s highest political effort in 2018.
Both then and in 2022, he scored decisive wins over Republican opponents and won significant political victories in 2023 with the help of Democrat-controlled legislative branches in St. Paul.
In 2024, Walz was elevated to the national scene and was the Democrats’ vice-presidential nominee on a ticket led by former Vice President Kamala Harris.
The Harris-Walz ticket lost to Donald Trump and J.D. Vance and Walz returned to Minnesota.
He announced his re-election bid in September and vowed to win an unprecedented third term as governor.
The fraud scandal, however, has dominated headlines in Minnesota for month and Walz acknowledged the controversy Monday, while also blaming Trump and Republicans and charging they were exploiting the scandal for political gains and aimed to make Minnesota a “colder, meaner,” place.
U.S. Rep. Pete Stauber was one of many political leaders to respond to the Walz decision, asking “how can he be capable of governing our state for another year?”
“He is unfit for governor and for the sake of all Minnesotans, he should do the right thing and resign immediately,” said Stauber.
Locally, Babbitt Mayor Andrea Zupancich, who is angling toward a rematch with Hauschild this year in the election to represent Senate District 3, was one of 241 mayors statewide to call for Walz’s resignation.
Hauschild said Walz’s decision “deserves respect and appreciation. Minnesota is stronger because of his leadership, his decency and his commitment to doing the right thing even when it was not easy. I am especially grateful for Governor Walz’s partnership and support in elevating critical work for northern Minnesota.”
As Walz left the political stage, at least for now, speculation moved to the governor’s race and who might line up to succeed the two-term incumbent.
Leading the list among Democrats was U.S. Sen. Amy Klobuchar (D), who met with Walz the day before his announcement and is strongly considering a run for governor, according to numerous sources.
Klobuchar, who has Ely family ties, won her U.S. Senate seat in 2006 and has been easily re-elected three times.
Leading Republican candidates include House Speaker Lisa Demuth, My Pillow magnate Mike Lindell and Kendall Qualls.
Political caucuses for both parties are set for early-February and could shed some light on potential front-runners in the governor’s race.
