An attorney for defendants in Mississippi’s sprawling welfare scandal has subpoenaed former Gov. Phil Bryant for documents related to the decision to use $5 million in Temporary Assistance For Needy Families Funds to build a volleyball stadium at the University of Southern Mississippi. Retired NFL quarterback Brett Favre, a friend of the former governor, privately advocated for the volleyball stadium’s construction.
Mississippi Today’s Anna Wolfe first reported the subpoena. Defendant Nancy New’s attorney, Gary Bufkin, filed it on Monday, saying that he had “no confidence” that the state would “pursue the evidence wherever it leads” and vowed to “find the truth, even if we have to drag it kicking and screaming into the light.”
Nancy New ran the nonprofit Mississippi Community Education Center when it received the TANF funds and directed them to the USM Athletic Foundation, whose board she sat on, to fund the stadium. She and her son, Zach New, have pled guilty to multiple state charges, including bribery and wire fraud as part of a plea agreement. Though federal TANF block grants allow states broad discretion over their spending, they cannot be used for “brick and mortar” construction projects under state law.
In his plea agreement on April 22, 2022, the younger New said that, in July 2017, he “acted with” his mother, former Mississippi Department of Human Services Director John Davis “and others, at their direction, to disguise the USM construction project as a ‘lease’ as a means of circumventing the limited purpose grant’s strict prohibition against ‘brick and mortar’ construction projects in violation of Miss. Code Ann. 97-7-10.”
Prosecutors say the News and Davis funneled millions in TANF money to pet causes, with welfare funds often making its way to the coffers of wealthy celebrities like Brett Favre (who has denied any wrongdoing in the case and has not been charged with any crime). The News are cooperating with the ongoing state investigation, but face separate federal charges over allegedly using $2 million in public-education funds for their private school.
During his time as governor, Bryant had close ties to Nancy New and he celebrated the launch of Families First For Mississippi, an MCEC offshoot, with her in 2016. Prosecutors have not accused the former governor of wrongdoing in the ongoing investigation.
Even as welfare dollars flowed to the wealthy and their favored projects in the poorest state in the nation, MDHS significantly reduced the number of Mississippi welfare applicants who received TANF funds over the past decade.
In 2017, the year Favre began receiving $1.1 million in TANF dollars through MCEC for promotions, MDHS confirmed to The Clarion-Ledger that it had approved just 167 out of 11,717 applicants for Temporary Assistance For Needy Families funds the prior year. The 1.42% acceptance rate was the lowest in the nation, and Mississippi remains near the bottom today.
‘The Volleyball Thing Kept Coming Up’
In April, Wolfe obtained and reported on a 2018 text message in which Brett Favre allegedly told an acquaintance, Jake VanLandingham, that Nancy New “has strong connections and gave me 5 million for Vball facility via grant money.” VanLandingham is the founder of a pharmaceutical startup called Prevacus that Favre had invested in. Bryant and Favre sought to bring the company to Mississippi, and the State says Prevacus received $2.1 million in TANF funds as part of the MDHS scheme. Prosecutors have not accused Favre, Prevacus or VanLandingham of any criminal wrongdoing.
In an interview with Mississippi Today in April, Bryant said that, in his conversations with Favre, “the volleyball thing kept coming up, and popping up, and then it’d go away.”
“If you look at some of Brett’s texts, they were—and literally, I’d probably be standing behind stage ready to go make a speech trying to read through these things. So I would go like, ‘Ah, great. Good deal. See you later.’ I mean, you just look at my salutations,” Mississippi Today reported Bryant saying. “They were like, I acknowledge, I got it. Try to be positive and moved on.”
Mississippi State Auditor Shad White, who first entered office as a Bryant appointee, began his investigation of MDHS and the News after then-Gov. Bryant turned over information he had received about alleged misspending in July 2019. That same month, MDHS announced that Davis was stepping down, and Bryant praised him for having “dedicated his life to serving others” and being “a tremendous advocate for Mississippi’s children and families.”
The auditor turned information over to state and federal prosecutors, and Hinds County District Attorney Jody Owens arrested Davis, the News and three others in February 2020. Davis has pleaded not guilty to multiple state charges in the welfare scandal but faces years in prison.
‘Trying To Get To The Truth’
In May, the State filed a civil lawsuit against 38 individuals (including Davis, the News, Favre and VanLandingham) seeking to retrieve millions in misspent welfare funds on behalf of MDHS. Earlier this month on July 11, the private attorney leading the case, Brad Pigott, issued a subpoena to the University of Southern Mississippi Athletic Foundation asking for copies of its communications with Bryant, his wife Deborah Bryant, Favre, the News, Davis and retired WWE wrestler Ted DiBiase Jr., a recipient of the misspent TANF funds.
After the subpoena, MDHS fired Pigott on July 22. The lawyer told Wolfe that he believed he was fired for “trying to get to the truth” about the volleyball stadium and claimed the current governor, Tate Reeves, was involved in the decision. Pigott, whom Democratic President Bill Clinton once appointed to serve as the U.S. attorney for the Southern District of Mississippi, said he is sure the state “can find a loyal Republican lawyer to do the work.”
Reached for comment, MDHS Communications Director Mark Jones disputed the characterization that Pigott was “fired,” saying the agency had simply chosen not to renew his contract, which expires on July 30.
In a statement after Pigott’s termination, current MDHS Director Bob Anderson said that Pigott had “made a solid start at moving the litigation along” but had since “made decisions about the litigation and filed pleadings without any prior dialogue with officials at MDHS.”
“Although USM Athletic Foundation is not yet a party in this case, Brad Pigott issued an extensive subpoena to that entity without any prior discussion of the matter with MDHS,” said Anderson, whom Reeves appointed in 2020. “Attorneys represent clients, and MDHS is the client here. … When it becomes apparent that the client and the lawyer are not on the same page, the client has every right to find another attorney.”
(Note: Pigott has previously donated to the nonprofit organization that publishes the Mississippi Free Press, which does not influence news coverage and choices.)
On July 23, Mississippi Today reported emails that show Pigott had sent a draft copy of the subpoena to MDHS’ general counsel and to the Mississippi Attorney General’s Office. Gov. Reeves’ office said in a statement that he “has worked closely with DHS throughout our efforts to recover fraudulent spending” and that “included discussions about the decision not to extend Brad Pigott’s contract.”
Auditor White, who is a Republican, criticized the decision on MDHS on July 23, saying that “firing Pigott is a mistake.”
“From the beginning of this case, I said having a bipartisan team look at this case is important,” the auditor tweeted. “That’s one of the many reasons I gave our findings to the DA of Hinds Co, who’s a Democrat. I’ve also, of course, given everything to the FBI. Pigott worked well with my office, communicating regularly with us about the status of the case and how we could share information.
“I hope Pigott’s firing doesn’t delay the recovery of the millions of misspent welfare money that we identified in our audits. I do not have the authority to prosecute or litigate my team’s expenses, so having good attorneys represent the interests of the taxpayers is important.”
Before his firing, Pigott had scheduled depositions for the next few months with key figures in the TANF scandal, including the News, VanLandingham, Favre, Ted DiBiase Jr. and his father, retired WWE wrestler Ted DiBiase Sr. (also known as the “Million Dollar Man”) and others.
“People are going to jail over this; at least the state should be willing to find out the truth of what happened,” Pigott told Wolfe.
‘Cast As The Ring Leaders’
In the statement today, the News’ attorney Gerry Bufkin alluded to Pigott’s firing, saying they did not trust the state to “follow through with its subpoena” even as MDHS seeks new legal representation.
“Nancy and Zach have been cast as the ring leaders in this spending circus since the beginning,” Bufkin told Wolfe. “The auditor’s office focused on them to the exclusion of others, and now MDHS has fired Brad Pigott to ensure that the cast of characters remains small. This certainly appears to be a patent attempt by the State to obfuscate the truth and to protect itself and its political allies.”
Logan Reeves, the communications director for Auditor White, took exception to those remarks.
“They’re free to make any argument they want in court through their attorney,” he told the Mississippi Free Press. “Any assertion that an audit singles specific people out demonstrates a fundamental misunderstanding of how these audits work. That assertion is a slap in the face to the men and women of the auditor’s office who put their professional careers on the line with the work they do every day.”
In a 2020 letter to Mississippi Commissioner of Higher Education Alfred Rankins Jr., White pointed out that the Mississippi Institutions of Higher Learning was aware that the News’ nonprofit “was paying USM with Department of Human Services (DHS) funds for the use of USM facilities.”
The state auditor pointed to the minutes from IHL’s Oct. 19, 2017, board meeting, which approved $5 million for the USM Athletic Foundation to “construct a wellness center” that would be “funded through the lease of athletic department facilities by the Mississippi Community Education Center.”
“MCEC’s funding for this project is via a Block Grant from the Mississippi Department of Human Services,” the 2017 IHL minutes said. “The funding from MCEC shall be prepaid rent to the Foundation in the amount of Five Million Dollars ($5,000,000) for the leasing of certain USM athletic facilities including but not limited to the to be constructed Wellness Center, Reed Green Coliseum and additional athletic space as agreed upon by USM and the Foundation.”
In his letter on May 7, 2020, White said “the audit shows that IHL approved the lease of land with the understanding that the property would be used by MCEC in exchange for DHS money.”
“IHL cannot claim ignorance of this fact. That assertion flies in the face of your own minutes,” he wrote. “If IHL objected to the arrangement with MCEC, then the time to voice that objection was when the matter came up for a vote, not after the State Auditor pointed it out. … Instead of quibbling, perhaps your time could be better spent providing the public with a plan for the Wellness Center to be used by the at-risk community in Hattiesburg and providing that to me in a letter. This way, the TANF money that was paid for the Center might be used to benefit the community it was intended to benefit.”
The 2017 IHL minutes said the agreement over the volleyball stadium “was reviewed and approved by the Attorney General’s Office prior to the Board’s approval.” The attorney general at the time was Jim Hood, a Democrat; Republican Lynn Fitch replaced him in January 2020.
Bufkin’s subpoenas today requested information from Bryant as well as the attorney general’s office, IHL and the USM Athletic Foundation. Each subpoena requested documents “reflecting communications … relating in any way to the USM Volleyball Center.”
The USM Athletic Foundation did not respond to a request for comment today. Earlier this month, U.S. House Rep. Bennie Thompson wrote a letter to U.S. Attorney General Merrick Garland, asking the U.S. Justice Department to investigate Bryant’s role in the welfare scandal.
“This gross misuse of TANF dollars must illicit (sic) a review of former Governor Phil Bryant’s involvement,” Thompson said. “Such an investigation should also examine the intolerable activity of retired NFL quarterback Brett Favre and how his actions were aided by Governor Bryant. I urge you to work with the Department of Health and Human Services to conduct a federal investigation into the Mississippi TANF embezzlement scheme that centers around the role of former Governor Phil Bryant.”