They may need to send a thank you not to a young YouTube influencer. Independent journalist Nick Shirley took credit for Walz’ decision in an X post Monday morning.
There are a number of layers to the story, but Shirley’s role is big.
The exit announcement comes as a semi-surprise since Walz was running as the incumbent, but the mounting scrutiny from massive fraud revelations in his state make it easier to understand.
A poll by Minneapolis television state KSTP and SurveyUSA pegged Walz’ approval rating at 42%.
With millions of mismanaged money – much of it funneled through Somali-run daycares -- it seems a bridge too far for any campaign. Walz apparently agrees.
The Department of Health and Human Services has frozen $10 billion in child-care funding for Minnesota and four other Democrat-led states.
“Around the holidays, a video was posted on social media going to different daycare facilities, finding that there were very few, if any, children there, alleging some to be false store fronts,” Dr. Alex Adams, of Health and Human Services, said on Washington Watch last week. “Unfortunately, those allegations align well with past reports.”
The federal actions came after an online video by Shirley alleged fraud in child-care services in Somali communities in Minneapolis. Minnesota officials had disputed the allegations.
More congressional hearings are scheduled.
Some early actions
Among the actions taken in response to the fraud:
- A tip line on the ChildCare.gov website for reporting allegations of fraud, waste, or abuse.
- An audit of Minnesota and some of the daycare facilities that were specifically named.
- A defend-the-spend system to substantiate a state’s drawdown of funds for childcare after proof of legitimacy.
Minnesota has been under scrutiny in recent weeks over yearslong investigations and controversies about alleged fraud in child-care centers.
Shirley’s video posted to his X account on Dec. 26 claimed to have uncovered roughly $110 million in fraud in one day.
It has garnered almost 140 million views.
Tuesday Shirley claimed that Google is suppressing searches for his X account.
Adams referenced an HHS report from May 2025 which found that Minnesota did not comply with federal and state attendance documentation requirements.
The report did not uncover fraud but suggested that poor attendance practices could lead to overpayment of federal funds.
Adams told show host Tony Perkins he is not aware of any action being taken. However, he does know that this has been on the Trump administrations radar for a while.
“Earlier in December, well in advance of those social media videos, we had sent letters to Gov. Walz and his administration asking for more information on the childcare program, some of their cash assistance programs, some of their block grants,” Adams said.
He says they asked for specific information by December 26 but received no substantive response.
“They asked for a delay into this month. So, they've got about a week to provide answers to us, but we're hoping to get to the bottom of that soon,” states Adams.
The “eye popping” fraud impacts far more than Minnesota, Adams said. All Americans are involved when federal tax dollars are stolen. He says that one of the implicated programs was the Child Care Development Fund, which is overseen by the Administration for Children and Families, which Adams oversees.
“American taxpayers send $185 million out each year to the state of Minnesota, and Minnesota is supposed to administer that with fidelity, and they're supposed get it to families in need, families who are working, who would not be able to join the workforce, but for having child-care support,” says Adams. “Yet, every dollar stolen by one of these fraudsters is taken from the pocket of children and families.”
Fraud is never isolated
He emphasizes that “fraud does not occur in a vacuum” and points to the polices that already existed in Washington, D.C. These polices can either enable or impede fraud, and the Biden-Harris administration only contributed to it, Adams said.
“The Biden administration had adopted regulations that would have required states to pay child care providers in advance based on enrollment rather than after the fact based on attendance records that are verifiable. That would have turbocharged fraud,” Adams said. “The Trump administration published a proposed rule to eliminate those Biden-era provisions, and we're trying to get these programs back on the right path, which is to help the children and families for whom Congress intended.”
As for the Minnesota governor, Adams believes that Walz is doing the right thing by not seeking reelection.
“Either through negligence or malice, Gov. Walz has overseen one of the largest welfare fraud scandals in American history, and I think it's appropriate that he's stepping away,” says Adams.
Associated Press photos
