Walz's lieutenant governor and progressive Senate hopeful slammed for leadership amid Somali fraud crisis

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Scale of Minnesota fraud is ‘staggering,’ all responsible will be held accountable: Rep Kristin Robbins

House Fraud Committee Chair Rep. Kristin Robbins, R-Minn., discusses Gov. Tim Walz ending his reelection campaign and the investigation into alleged fraud in Minnesota on ‘The Story.’ 

Minnesota Lt. Gov. and progressive Democratic Senate candidate Peggy Flanagan is taking criticism, including from inside her own party, for her leadership during what has been described as the nation's largest COVID-era fraud scheme.

Along with Democrat Gov. Tim Walz, Flanagan, who has helped lead the state as lieutenant governor since 2019, has come under fire for allowing the fraud scheme to grow during her watch.

A Minnesota Democratic operative told Fox News Digital that Flanagan "could absolutely lose to a Republican given all the fraud that took place during her time as Lt. Governor."

"Today is the day Peggy's Senate race effectively ended," said the Democratic operative.

FRAUD FALLOUT FORCES DEMOCRATIC GOV. TIM WALZ TO ABANDON MINNESOTA RE-ELECTION BID

Minnesota Lt. Gov. Peggy Flanagan speaks as Gov. Tim Walz, right, listens. (Aaron Lavinsky/Star Tribune via Getty Images)

"Here are the facts: Peggy Flanagan was already a bad general election candidate, and this has made it even worse," the operative went on, adding, "she owes the voters answers about what she knew and when."

House Majority Whip Tom Emmer, R-Minn., whose district includes the Twin Cities suburbs, told Fox News Digital that "Peggy Flanagan is just as much of a failure as Tim Walz."

He noted that Flanagan’s primary opponent, Democratic Rep. Angie Craig, "isn’t much better."

"Both of these candidates sat idly by while billions were stolen from hardworking taxpayers in Minnesota. And just like Tim, they ought to reconsider their candidacy," said Emmer.

Walz, who served as former Vice President Kamala Harris’ running mate in 2024, announced on Monday that he was withdrawing from seeking a third term as governor in light of the fraud scandal.

"As I reflected on this moment with my family and my team over the holidays, I came to the conclusion that I can’t give a political campaign my all," Walz wrote in a statement. "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."

OVER 1,000 ARRESTED IN ‘MASSIVE’ MINNESOTA OPERATION, INCLUDING MURDERERS, RAPISTS, PEDOPHILES

Minnesota Governor Tim Walz speaks to reporters after he announced that he would not seek reelection, at the Minnesota State Capitol in St. Paul, Minnesota, on January 5, 2026. (Tim Evans/Reuters)

"So, I’ve decided to step out of this race and let others worry about the election while I focus on the work in front of me for the next year," the governor added.

Flanagan is running to replace outgoing Democratic Sen. Tina Smith, who is retiring from the Senate. She has been endorsed by the likes of Sen. Bernie Sanders, I-Vt., and Sen. Elizabeth Warren, D-Mass.

Though she is considered a frontrunner, Flanagan’s response to the scandal has garnered criticism. She was recently seen on a Somali TV station wearing a hijab at a mall to signal her support for Minnesota’s Somali community as the federal government cracks down on the fraud scheme.

This comes as more than 90 people, most from Minnesota's large Somali community, have been charged since 2022 in what has been described as the nation's largest COVID-era scheme. How much money has been stolen through alleged money laundering operations involving fraudulent meal and housing programs, daycare centers and Medicaid services is still being tabulated. But the U.S. attorney in Minnesota said the scope of the fraud could exceed $1 billion and rise to as high as $9 billion.

In response to the criticisms, Lexi Byler, a spokesperson for Flanagan’s campaign, told Fox News Digital that "the Lt. Governor has made clear that the amount of fraud that is acceptable is zero and anyone who steals from taxpayer dollars should be prosecuted to the fullest extent of the law — which is exactly what's happening in Minnesota, where 98 people have been charged and 62 convicted so far."

TRUMP FLIPS DEMOCRATS’ ‘NO ONE IS ABOVE THE LAW’ MANTRA AFTER WALZ DROPS RE-ELECTION BID

Minnesota Lt. Gov. and Senate candidate Peggy Flanagan appeared in a hijab on Somali TV as the state reels from a massive fraud scandal tied to a Somali-run nonprofit. (Somali TV Minnesota)

Byler added that "what’s hard to take seriously is Republicans talking about accountability while Donald Trump has pardoned 27 corporate fraudsters and fired the Inspectors General whose job it is to police fraud," adding that "Republicans are going to have to answer for that."

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On her campaign website, Flanagan touts her record as lieutenant governor, including expanding Minnesota’s paid family and medical leave program and investments in education, healthcare and housing.

The Minnesota primary will be on August 11. 

Fox News Digital also reached out to Walz and Craig for comment but did not immediately receive a response.

Fox News Digital's Paul Steinhauser and Andrew Mark Miller contributed to this report.