Trump Education Secretary’s Letter to Walz Sparks Speculation: Will Gavin Newsom Face Calls to Resign Over California’s Massive Fraud Scandals?

In a blistering letter dated December 15, 2025, U.S. Secretary of Education Linda McMahon implored Minnesota Governor Tim Walz (D) to resign, citing dereliction of duty amid massive fraud in federal aid programs, including “ghost students” who siphoned millions in taxpayer dollars meant for college, but instead, pocketed the cash.

🚨 BREAKING: The Trump Administration is formally demanding the RESIGNATION of Minnesota Gov. Tim Walz due to massive fraud and dereliction of duty

Linda McMahon just CAUGHT Minnesota engaging in massive education fraud, where "ghost students" received millions of taxpayer… pic.twitter.com/22xpwOR7ye

— Eric Daugherty (@EricLDaugh) December 16, 2025

The letter highlights how fraudsters, including international rings, exploited lax oversight in Minnesota to create fake student identities, collecting federal grants and loans without ever attending classes.

McMahon writes:

As President Trump put it, you have turned Minnesota into a “fraudulent hub of money laundering activity.” At the beginning of this year, the U.S. Department of Education became aware that fraudulent college applicants, especially concentrated in Minnesota, were gaming the federal postsecondary education system to collect money that was intended for young Americans to help them afford college.

We call these fraudsters “ghost students” because they were not ID-verified and often did not live in the United States, or they simply did not exist. In Minnesota, 1,834 ghost students were found to have received $12.5 million in taxpayer-funded grants and loans. They collected checks from the federal government, shared a small portion of the money with the college, and pocketed the rest-without attending the college at all.

McMahon noted that new federal controls have blocked over $1 billion in attempted theft nationwide, but directly pinned the blame on state leaders for allowing and ignoring systemic crime:

Even one of your state’s top elected officials, Congresswoman Ilhan Omar, has sought to take advantage of the federal taxpayer by advocating for broad student debt cancellation – which she has publicly acknowledged will benefit her directly. She borrowed tens of thousands of dollars to attend college as a politics major that she now does not think she should have to repay, despite her generous, taxpayer-funded salary.

My colleagues in other federal departments have uncovered the massive scandal of welfare fraud in Minnesota, where you have done absolutely nothing as governor to stop this criminal behavior. Scammers have gotten rich off federal housing, education, food stamp, and small business programs even defrauding assistance for elder care and autistic children.

Joining these criminals in their schemes have been Minnesota politicians who benefit-both in votes and donations- from the fraudsters’ support. Like the radical Islamic terror groups overseas who receive Minnesota money to kill American servicemembers, Minnesota’s political elite has turned a blind eye and even helped facilitate the laundering of money that was meant to help America’s least fortunate.

Shame on you, Governor Walz, for allowing this to happen and for benefiting from it. Stop defrauding American taxpayers. No politician is above the law, and my department, alongside every other agency under the leadership of President Trump, will continue to ensure that you will not be able to dodge accountability for your actions.

Given your dereliction of the office entrusted to you by Minnesotans, I implore you to resign and make way for more capable leadership.

While Minnesota continues to generate headlines, many are asking: What about California?

Under Governor Gavin Newsom (D), the Golden State has grappled with far-larger fraud scandals, raising questions about whether the Trump administration will demand Newsom to step down.

California’s community college system has been a prime target for “ghost student” schemes. Nationally, the Department of Education estimates ghost students stole billions of dollars annually, with California community colleges repeatedly cited as hotspots. 

In October, The Globe reported on the potentially massive fraud occurring within the California university system.

One California professor reports that she drops as many as 50% of her “ghost students” whom she cannot verify as real people.

Kim Rich, who teaches Criminal Justice at Pierce College in the Los Angeles Community College District, told the Globe in July she had a student enrolled for her class who died in the 9-11 attack on the World Trade Center, and another who was a business executive and lives in Portugal. Each had been awarded financial aid.

Rich says hackers, crooks and bots use stolen identities for the purpose of obtaining financial aid. She has her students take two quizzes before the drop period in order to flush out the bots, and requires them to do a Zoom meeting with her. Last semester, she only had 2 of 40 students left after dropping all of the bots. And rather than allowing her to move those two remaining students into one of her other classes, her school told her she’d lose pay if she didn’t teach the remaining two students as a separate class. “That’s one college professor at one college at one online course for 2 students,” she said.

As an exercise, Kim Rich searched all nine colleges in her district – there are 10,286 online sections within the colleges. “If just one fraudulent student in each class received $3,000 for three semesters in each class, that’s $30,858,000,” Rich said. She multiplied that by 4 years, and it grows to ~$123,000,000 just for her colleges.

That’s billions, not millions.

Open the Books reports that Rich has been beating the drum for years, as they highlighted in an article three years ago in 2022: “65,000+ Fake Students Enrolled In The California Junior College System.”

“Hackers enroll the fake students and collect up to $900 million in financial aid and Covid-19 aid each semester. However, no one seems to know for sure the sheer scale of the fraud.”

Rich said she conservatively estimates that 10% or 210,000 out of the 2.1 million students of enrolled college students at all 116 California Community Colleges are bots or fake. If each of those receive an average of $5,000 in financial aid, the cost is well over $1.5 billion for a single semester.

But education fraud in California is just the tip of the iceberg.

California’s Employment Development Department (EDD) lost tens of billions during the COVID-19 pandemic to fraudulent unemployment claims, with estimates ranging from $20 billion to over $40 billion paid to scammers, including prisoners and international fraud rings. Newsom himself acknowledged the debacle, but accountability has been zero, zilch, nada. 

In August 2023, The Globe reported that the California State Auditor rated EDD as “high risk” in a report.

The report states: “EDD is a high-risk agency because of its mismanagement of the UI program. Specifically, EDD is unable to reliably estimate improper payments under the UI program, thus adversely affecting the State’s financial statements as well as impairing efforts to independently evaluate the efficacy of EDD’s own fraud prevention activities.”

In other words, it can even figure out how much money it lost to pandemic unemployment benefit fraud. The current estimate is about $40 billion dollars.

The report notes the EDD did not “block addresses used to file unusually high numbers of claims,” hence dozens if not hundreds of pre-loaded chipless debit cards containing up to about $13,000 each being sent to the same address.

This audit comes just a couple of months after the state Legislative Analyst’s Office declared the EDD to be “structurally insolvent” and that the surcharge imposed in every California business to repay the feds will last for more than a dozen years – at least – and could total upwards of $1,500 per employee in the state.

Yesterday, The Globe reported that the California State Auditor rated eight state agencies as “high risk,” including an encore appearance by the EDD.

The California State Auditor published a scalding report Friday that is an unvarnished indictment of Governor Gavin Newsom and his administration. The report should have everyone living in California horrified.

The Auditor’s report finds Gavin Newsom while in his final year as governor, has upended the state’s financial structure, compromised public safety, and left the state’s infrastructure in far worse condition.

The auditor did not pull any punches, warning that the state is headed toward much worse economic and infrastructure trouble. The next governor will be saddled with Gavin Newsom’s statewide catastrophe.

As the State Auditor says, In order to assign the “High-Risk” designation to an agency, the Auditor says waste, fraud, abuse, or mismanagement are the four following conditions that must be present.

Homelessness spending under Newsom has also come under deserved scrutiny.

Gov. Gavin Newsom has spent $37 billion on homelessness since 2019, according to the California Legislative Analyst’s Office, yet the homeless population has grown, and state audits have revealed shocking lack of tracking and oversight, with little evidence of results…unless you consider the bloated salaries of “unhoused” nonprofit grifters like Katie Hill.

In May, Michael Shellenberger confirmed Newsom is The Worst Governor in America: “Local governments, not Gov. Gavin Newsom, increased homelessness in California to its all-time high, he says. Nonsense. As SF mayor, he enabled addiction, crime & homelessness. As governor, he spent $37B to increase it by 24%, and raise violent crime to 31% over national average.”

Local governments, not Gov. Gavin Newsom, increased homelessness in California to its all-time high, he says. Nonsense. As SF mayor, he enabled addiction, crime & homelessness. As governor, he spent $37B to increase it by 24%, and raise violent crime to 31% over national average pic.twitter.com/3k91ehSbtW

— Michael Shellenberger (@shellenberger) May 13, 2025

More recently, Newsom’s former chief of staff, Dana Williamson, was indicted on federal bank and wire fraud charges involving hundreds of thousands of dollars. While Newsom claims shock, the scandal adds to a pattern of perceived corruption and mismanagement in his inner circle.

On a bullet train to nowhere, the California High-Speed Rail boondoggle, now billions over budget, has no operational track after more than a decade.

The $100M raised during the Fire Aid charity concerts to help the Palisades and Alta Dena fire victims? Up in smoke or in an opaque morass of politically-aligned nonprofits.

If McMahon’s letter sets a precedent — holding governors accountable for failing to safeguard federal dollars — then Newsom’s record makes him a prime candidate for a requested resignation from the Trump administration. 

Given the scale of California’s scandals, which dwarf Minnesota’s in dollar terms, many believe it’s only a matter of time. As 2026 candidate for California Governor Steve Hilton told The Globe, “If you think Minnesota is bad, California is much, much worse.”

Californians deserve leadership that protects taxpayer dollars, not one that presides over their disappearance.