According to a report by the state auditor’s office, NFL Hall of Fame quarterback Brett Favre allegedly received $1.1 million in money from a welfare program for personal appearances that he never made.
The annual single audit questioned the alleged misspending of more than $94 million in Temporary Aid to Needy Families funds by several conspirators, including the former director of the state Department of Human Services, and two non-profits over a three-year period starting in 2016. Out of the audit’s more than 400 pages, 104 are dedicated to the TANF scandal.
The conspirators are accused of obtaining millions from the TANF program via a variety of business entities and accounting tricks. The audit also exposed some sweetheart deals given to various family members of the conspirators and even expensive vehicles for personal use bought with taxpayer funds. Exercise classes paid for with federal grants were made available for no charge to legislators and other public officials. Conspirators in the scheme are also accused of hiring lobbyists with taxpayer money even though doing so is prohibited by federal law.
TANF funds were also used to sponsor a college baseball tournament played in Biloxi and pay for bowl game tickets.
“Inside that audit, you will see what some of my staff call some of the most egregious spending that they’ve ever seen,” state Auditor Shad White said at a news conference. “Add all that up and you have what is a pretty grotesque pattern of misspending of federal tax dollars.”
The consequences for the state could be severe, as the misspent TANF funds could be clawed back by the federal government, along with penalties.
The conspirators that were arrested in February included the former head of the state Department of Human Services John Davis; the director of the Mississippi Community Education Center, Nancy New; her son Zach New and a former professional wrestler, Brett DiBiase.
White says more indictments in the separate criminal investigation being conducted by the auditor’s office and federal investigators could be coming. He also said that many of the subcontractors involved were not aware their fees were being paid from federal funds.
Favre was supposed to provide three speaking engagements, one radio spot and one keynote address. Two payments were made, one for $500,000 in December 2017 and another for $600,000 in June 2018. State auditors found the former University of Southern Mississippi and Green Bay Packer quarterback didn’t speak or even make an appearance at the events for which he was paid.
According to the audit, Davis and other management officials at the DHS were accused of threatening and intimidating employees from reporting waste, fraud and abuse. DHS officials were also accused of paying for exorbitant conferences, first-class air travel and other travel expenses using TANF funds.
Davis resigned in July 2019. According to the audit, the MCEC awarded contracts for services to some of Davis’ relatives, including a company owned by his brother in law and his nephew.
Davis’ brother in law also leased some property in Brookhaven to the MCEC for $365,000 and was contracted as a “leadership outreach coordinator" for $150,000. Davis’ nephew was contracted to coordinate and create a coding academy and website design program for $139,500, plus travel expenses.
Also mentioned in the audit was another 501 (c)(3) non-profit, the Family Resource Center of North Mississippi, that received most of its funds from taxpayers. According to IRS filings, the center received more than $20 million in taxpayer funds in 2018, more than $10.7 million in 2017 and more than $2.1 million in 2016.
The FRC also employed Davis’ family members, with his brother in law receiving $93,600 from contracts and the nephew received $55,625 plus $14,368 in travel expenses. The nephew was also paid $130,000 for by the FRC for his work on a coding academy and website design program. According to FRC employees, the $14,278 in travel was needed so the nephew could be trained on how to teach the coding academy material.
According to the audit, the funding increase from 2016 to 2019 for the FRC was due to Davis scrapping an approved scoring method for subgrantees in the TANF program to one where he unilaterally decided when grants were awarded and how much funding was provided.
The organization’s filings said its primary mission was promoting safe and stable families in north Mississippi through assistance to needy families, victims’ assistance, counseling, education and other services.
Among the questioned outlays related to the Mississippi Community Education Center were three vehicles purchased with TANF funds. One of those vehicles was a 2019 Nissan Armada ($52,257 price) that was registered to the MCEC, but the license tag address was Nancy New’s home. A Chevrolet Silverado pickup ($59,840) was registered to MCEC, but the license tag address was MCEC assistant director Zach New’s home address.
A third vehicle, a $54,221 Ford F-250 was registered by the educational non-profit, but the license tag address was the home of her son Jess New, who wasn’t listed as a staffer at the MCEC.
MCEC also used TANF funds to keep the money flowing with lobbying/government relations contracts. AvantGarde Strategies was paid $21,000 in fiscal 2019, but no contract was available for auditors to review. Inside Capital was paid $318,325 for three years, but again no contract was available to auditors.
Lucas Compton was paid $72,000 for services that included maintaining federal revenue streams and “bipartisan advocacy.” The FRC also paid Compton $84,000 for the same services.
The MCEC was also accused of paying more than $1.3 million with the Victory Sports Foundation to conduct three 12-week fitness boot camps. Participants in the camps paid a fee to attend and no checks of the participants were conducted to ensure they were TANF eligible. Also, the camps were offered to members of the Legislature, other elected officials and other political staffers for no charge. The auditor’s report says there was no evidence that the participants knew the money for the boot camps came from federal grant funds.
The MCEC helped sponsor a college baseball tournament in Biloxi in fiscal 2019 with a $37,500 payment to Overtime Sports, the company that owns a minor league baseball team (the Biloxi Shuckers) and leases its ballpark from the city.
According to the Mississippi Community Education Center’s filings with the IRS, the 501 (c)(3) non-profit organization received $26.7 million in government grants in 2017 and $12.9 million in 2016 after receiving nearly $2.4 million from government sources in 2015.
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