Mississippi welfare funds scandal

On January 11, 2016, Mississippi Governor Phil Bryant appointed John Davis as the director of the Mississippi Department of Human Services.[2] At the time, the agency was providing a record low number of recipients with direct cash assistance welfare in favor of other programs, such as job training classes. The department did not record who the classes served, and in many instances did not set income level eligibility requirements for class attendees. Davis halted the department's competitive bidding process for acquiring contractors and over four years ordered the agency to grant the nonprofit organizations Mississippi Community Education Center and Family Resource Center of North Mississippi $65 million and $45 million, respectively, to fund the Families First of Mississippi program. The nonprofits received the money upfront and not as reimbursements for tasks performed, as was most common for other nonprofits who worked with the department as TANF subgrantees.[1]

In 2020, Brett Favre's involvement with the development and promotion of a concussion treatment drug, Prevasol, by the Prevacus corporation, came under scrutiny. The nonprofit Mississippi Community Education Center (MCEC) received $2.5 million in federal grant funds diverted from Mississippi's TANF welfare funds, as well as tens of millions in public funds as an element of the scheme. The Mississippi state auditor has termed the scheme "the largest public embezzlement case in state history". A grand jury in Hinds County indicted MCEC founder, Nancy New, and her son Zach in the scheme. Favre had introduced MCEC's founders to top state welfare officials.[3] A lawsuit filed against former Mississippi Governor Phil Bryant for his alleged role in the scandal resulted in the publication of a 2017 text message between Nancy New, operator of the nonprofit Mississippi Community Education Center, and Favre in September 2022.[4] The message revealed former Mississippi governor Phil Bryant and some members of his government illegally diverted welfare funding to build a volleyball stadium at Favre's alma mater the University of Southern Mississippi, with Favre asking New: "If you were to pay me is there anyway [sic] the media can find out where it came from and how much?"[5][6]

Bryant became involved in the scheme when he alerted Mississippi State Auditor Shad White about possible fraud inside the Mississippi Department of Human Services.[4] Text messages between Favre, Bryant, and New also revealed how the departure of John Davis, who himself was found to have been involved in the funds scheme, from the Department of Human Services would be used to divert attention and aid funding for the stadium proposal.[7] Favre's daughter played for the school's volleyball team.[7] In addition, Favre was paid $1.1 million in fees for speeches he never delivered and spent $2 million in fund for a biotech venture he already invested in.[8][9][10]

Davis was close friends with retired professional wrestlers Ted DiBiase and his two sons, Ted DiBiase Jr. and Brett DiBiase, and encouraged the two nonprofits to compensate them for various services which the office of the Mississippi State Auditor later determined were not performed or did not serve to benefit needy Mississippians. Davis also frequently involved the DiBiases in department affairs and built a public agency motivational speaking program with Ted DiBiase Jr. that was funded by the nonprofits. From 2017 to 2019, DiBiase Jr.'s companies Priceless Ventures LLC and Familiae Orientem were paid over $3 million by the organizations. During Davis' tenure, the Department of Human Services also awarded grants totaling over $2 million to the Heart of David Ministry, a nonprofit owned by Ted DiBiase.[1] The Northeast Mississippi Football Coaches Association was revealed to have received $30,000 in welfare money in early 2019 as a donation "in consideration of ... having Ted DiBiase Jr. as banquet speaker."[11]

In December 2018, Jake VanLandingham, the owner of a Florida-based pharmaceutical startup company that developed concussion treatments, Prevacus, was introduced to an official at the Mississippi Community Education Center by a Mississippi investor. VanLandingham had several phone calls with nonprofit staff and a meeting before signing an agreement with the organization.[2][12] Text messages from November 2018 also revealed that Brett Favre, who had invested in the company since 2014, played a prominent role in connecting VanLandingham with Mississippi Governor Phil Bryant.[13] Later messages Bryant not only agreed to use welfare money as a source for project grant money, but also sought to become an investor in Prevacus after his term as Governor ended.[13][14] However, Bryant's ambition of becoming an investor in the company were thwarted by the arrests of John Davis and Nancy New.[14]

The Mississippi Community Education Center used TANF funds to provide $5 million towards the construction of a volleyball stadium at University of Southern Mississippi (in the form of a brief lease for one event), paid a mortgage on a ranch in Flora, Mississippi, owned by former football player Marcus Dupree, and funded a fitness program run by former footballer Paul Lacoste. Dupree was also paid by the Mississippi Community Education Center and Family Resource Center of North Mississippi for a statewide lecture tour.[1]