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In Mississippi, wellness for the well-connected as scandal spreads

As he became further entangled in a scheme siphoning off federal welfare money to build a more than $5 million volleyball stadium at the University of Southern Mississippi, former football star Brett Favre sent a text message with a question to the director of a nonprofit organization that distributes funds intended for welfare recipients in the poorest state in the nation.

“If you had to pay me,” he wrote in 2017 about a proposed $1.1 million for promotional efforts that would actually go toward building the stadium, “is there any way the media can find out where it came from and how much ?”. Several years of text messages about the project came to light when they were presented in court last week and were first published by Mississippi Todaythe small nonprofit news site that has consistently led the story’s reporting.

Much more than that payment has been exposed in a scandal that has spread considerably beyond Favre. A motley assortment of political appointees, former football stars, one-time professional wrestlers, business figures and various friends of the state’s former Republican governor have been charged with pocketing or embezzling money intended for needy families.

On Thursday, John Davis, who served as executive director of the Mississippi Department of Human Services under former Gov. Phil Bryant pleaded guilty to both. federal and state charges of embezzlement of federal welfare funds. Millions of dollars were transferred to friends and family, according to court documents.

According to a lawsuit filed by the state in May, about $5 million was siphoned off to Ted DiBiase, a flamboyant retired wrestler once known as “The Million Dollar Man,” and two of his sons, as well as various entities connected to them. , including a ministry. Much of the money went to bogus services, bogus jobs, first-class travel arrangements and even a son’s $160,000 stay at a luxury rehab center in Malibu, California, the lawsuit claims. .

Similarly, the state asserts that Marcus Dupree, a former high school football phenom and professional running back, who was paid to act as a celebrity endorser and motivational speaker, did not perform any contractual services for the $371,000 he received. to buy and live in a sprawling residence with pool and adjoining horse pastures in a gated community.

Favre, who earned more than $140 million in his Hall of Fame career, was paid $1.1 million for speeches he never made, the suit says. He also orchestrated more than $2 million in government funding that was funneled into a biotech startup in which he had invested, according to the lawsuit.

None of the three have been charged with crimes and all have denied any wrongdoing. But even the most cynical observers in Mississippi have been stunned by the brazenness of the activity in the indictments and how deeply they reflect inequalities rooted in the history of a state with the highest poverty rate in the nation.

“The speculation with the poor continues,” said Democratic Rep. Bennie Thompson. He added: “He’s like Robin Hood in reverse: you take from the poor and you give to the rich.”

All of the fraudulent grant allegations were established in the lawsuit filed in May against 38 individuals and organizations, seeking reimbursement of more than $24 million. Instead of helping the poor, the federal welfare program known as Temporary Assistance for Needy Families, or TANF, seemed to become a slush fund for pet projects and personal gain.

The state alleges that the money was diverted for services that were often never provided and, in any event, would not have complied with federal and state regulations governing their distribution. The case follows a state audit released in May 2020 that suggests up to $94 million of TANF funds may have been siphoned off.

Six people were arrested in February 2020 on charges of embezzling public funds in what State Auditor Shad White described as one of the largest public corruption cases in Mississippi history. Most of them have pleaded guilty; Hinds County District Attorney Jody E. Owens II said a joint investigation by federal and state investigators could bring charges against more people.

Attorneys for Messrs. DiBiase and Dupree did not respond to requests for comment. Michael T. Dawkins, the attorney representing Mr. DiBiase and his Heart of David Ministry, said in court documents that his clients had acted lawfully.

After the charges first surfaced, an attorney for Dupree, J. Matthew Eichelberger, released a letter saying his client had won the money.

Bud Holmes, Favre’s attorney, did not respond to a request for comment. Both he and Mr. Favre have repeatedly said that the football legend was unaware that the funds came from a federal welfare program.

When it comes to basic assistance, Mississippi ranks 47th among US states in the amount of money it spends, said Aditi Shrivastava, senior policy analyst at the Center on Budget and Policy Priorities in Washington. Figures compiled by the center indicate the national average maximum benefit, paid to few people, was $498 a month in July 2021, compared to $260 in Mississippi.

Experts said the fraud stemmed from changes to such programs enacted in 1996, when cash benefits paid to poor families were replaced by block grants issued to states. They are supposed to allocate the money according to four federal guidelines that emphasize moving poor families into stable employment, but in practice, states and governors have wide leeway.

Ironically, the Mississippi Legislature also added a fifth guideline, “to prevent fraud and abuse.” That was aimed at aid recipients, but the state now alleges the wrongdoers included public officials running the program.

Nancy New and her son Zach New, who ran a nonprofit educational organization called the Mississippi Community Education Center, pleaded guilty last spring to charges of embezzling TANF funds.

Text messages that were revealed in court documents suggested that the former governor. Bryant, working with Ms. New, helped Mr. Favre obtain federal money to build a state-of-the-art volleyball facility at Mr. Bryant and Mr. Favre’s alma mater, the University of Southern Mississippi, where the Mr. Favre’s daughter played the sport.

“Can we help you with your project?” Bryant wrote in a July 2019 text message to New, noting that she had just spoken with Favre.

In 2020, the state auditor’s report said the university received $5 million under a bogus lease to use all of its athletic facilities, including the yet-to-be-built volleyball center, for programs for the poor.

The money, paid by the Mississippi Department of Human Services through the nonprofit News, actually went toward construction, according to the audit. Last April, Mr. New pleaded guilty to transferring $4 million in TANF funds to the university, which the federal government prohibits from being used for “bricks and mortar” projects.

Texts released last week seemed to indicate that the $1.1 million welfare contract to promote the center’s programs, work that was never done, was another way of diverting money to the stadium.

In the August 2017 text conversation about hiding the source of the money earmarked for the facility, Ms. New assured Mr. Favre that she understood that he was “disturbed,” but that kind of information was never made public. The next day, she wrote: “Whoa I just got off the phone with Phil Bryant! He is on board with us! We will do it!

William M. Quin II, an attorney for Bryant, said the text messages did not support the argument that the governor had encouraged and advised Favre and state officials on how to obtain the grant. “The allegation is manifestly false,” he said in an emailed statement, dismissing the text messages as “chosen.” Bryant has not been charged with any crime.

The volleyball stadium was not actually part of the claim. Last July, after J. Brad Pigott, a former federal prosecutor hired by the state to help recover lost millions, began subpoenaing information about what had happened at the university, he was fired. Mr. Favre has repaid the state $1.1 million, although the state auditor has said he still owes $228,000 in interest.

Organizations that help the poor have long worried that block grants by governors could invite abuse, said Oleta Garrett Fitzgerald, director of the Children’s Defense Fund’s southern regional office.

“There was a danger that this money could become a slush fund long before this debacle,” he said.

In Mississippi, she and others said, the problem is compounded by the fact that Republican governors and state legislatures in recent years have been ideologically opposed to government programs designed to help the poor. “They probably thought it was funny to use money that was supposed to go, in her mind, to people who didn’t deserve it,” she said of the accused officials.

Mississippi is one of 12 states that has refused to expand Medicaid and has regularly turned down federal money meant to improve medical treatment, housing and child care, among other issues, Congressman Thompson said. At the end of 2020, Mississippi had $47 million in unspent TANF funds, Ms. Shrivastava said.

At the University of Southern Mississippi, faculty members say the school prides itself on admitting first-generation students from the kind of families the money was meant to help. “No one is very happy about it,” said Denis Wiesenburg, president of the faculty senate and professor of marine science, of the recent unwanted attention. “We recognize that it has tarnished the reputation of the university.”

The scandal has been around for years, largely due to opinionated reporting by Mississippi Today. But that does not quench the anger of those most affected.

Carol Burnett, executive director of the Mississippi Low-Income Child Care Initiative, a nonprofit, said people were dismayed that tens of millions of dollars appeared to have been given away that should have gone to initiatives like improving public transportation or childcare for the working poor. instead, to wealthy political cronies. “They see this money that is meant to help people like them, being used so misused and redirected to people who don’t need help,” she said. “It’s infuriating.”

Jenny Vrentas contributed report.

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