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Mississippi’s welfare scandals exposes how the rich really get rich

This story originally appeared in the Sept. 20, 2022 edition of the Reckon Report newsletter. To subscribe to all of our newsletters, go here.

The biggest lie the devil ever told is that in America rich people got rich through their own hard work.

Every day, developers strike multimillion dollar deals to build shopping malls and apartment buildings — almost never by risking their own money but by lobbying politicians to create special taxing districts, award tax credits or getting the public (i.e. us) to finance the projects through other means.

A whole lot of rich folks got rich by using other people’s money. Shannon Sharpe, a retired NFL player and commentator, made this point recently in breaking down the involvement of pro football legend Brett Favre in Mississippi’s sweeping $77 million welfare scandal.

Favre, a Mississippi native, received more than $1 million to give motivational talks that never happened and he helped secure $5 million to build a volleyball arena at his alma mater and where his daughter played.

Sharpe estimated that Favre made $100 million over the course of his NFL career, has a vast network that includes other wealthy pro athletes and business partners. But instead of asking his buddies to pitch in to pay for the stadium, the money ultimately came from the state welfare program.

It’s worth noting that despite household incomes being lower in Mississippi than anyplace else in the nation, Mississippi has long been among the stingiest with cash assistance. And it’s also worth noting that just a few years earlier Mississippi passed a law requiring welfare recipients to pass a drug screen to get benefits, which critics called a ploy to kick people off the program or scare them from applying in the first place.

The story is fascinating for a lot of reasons. One, you could not invent a better cast of characters than Favre, former WWE pro wrestler Ted DiBiase and his sons, football great Marcus Dupree and ex-Gov. Phil Bryant.

But above all, the story is most fascinating because it’s a peek under the rug at the rawest dimensions of power, greed and cruelty. It’s fascinating because it shows us the sausage-making of how wealth is actually built in low-resource places.

This is not even a story about haves and have-nots. It’s a story about takers and the taken-from.

And that there is the real story of America.

A few burning questions about Mississippi’s welfare scandal, answered

This story is wild af, I know. I was the editor at Mississippi Today, when the story broke and am still amazed at how crazy it is. I’m also amazed that MT’s Anna Wolfe has largely been unfazed and continued bulldogging the story, even when a former pro football player insinuated being armed when she showed up to ask him questions about his alleged involvement early on in the saga.

So the best thing for you to do is read their series, The Backchannel, which breaks down the play by play. But I’ll try my best to recap the insaniest parts for the tl;dr set.

Read The Backchannel here.

Wait....so they did what with welfare money?

A long, long time ago Bill Clinton wanted to score brownie points with white conservatives so he championed the overhaul of the federal welfare system, including its cash assistance program. It used to be that people who received welfare were mailed monthly paper checks, as the Cleveland-born rap quartet Bone Thugs once harmonized about in the song 1st of tha Month.

The federal government changed the program (and its name, to Temporary Assistance to Needy Families, TANF) to give all the welfare money to the states in the form of huge block grants. The feds gave states wide latitude to set rules, including eligibility requirements, and provided very little oversight for spending.

Fast forward, some states like Mississippi decided to skimp on cash payments and beat their chests about millions of tax dollars they refused to hand out to lazy, shiftless poors. Instead, a handful of politically connected folks cooked up a plan to divert these welfare dollars to their friends and cronies if they could make an argument that money would help the same low-income people TANF is supposed to help.

In February 2020, six people in Mississippi were indicted and arrested on charges of embezzlement and fraud. Prosecutors said as a part of the scheme, Mississippi taxpayers gave a wrestler more than $3 million to “address the multiple needs of inner-city youth,” even though he had no experience in that field and $5 million for a volleyball facility ostensibly to provide services for the underserved local population.

Who are the major players?

For a film adaptation, I’d like to formally request that Larenz Tate play Mississippi Today’s grouchy editor-in-chief with a heart o’ gold when the scandal broke. Other roles that will need to be cast include:

  • John Davis, director of the Mississippi Department of Human Services from 2016 to 2019 and one of the alleged masterminds
  • Nancy New, prominent private school operator, founder and director of the nonprofit Mississippi Community Education Center
  • Zach New, Nancy New’s son and nonprofit assistant director
  • Brett DiBiase, retired WWE wrestle and peer addiction educator
  • Phil Bryant, Mississippi’s former governor
  • Deborah Bryant, Bryant’s wife and First Lady of Mississippi
  • Brett Favre, retired NFL quarterback
  • Shad White, Mississippi State Auditor, originally appointed by Phil Bryant in 2018 and elected statewide in 2019

For a more complete list of defendants, politicos, lawyers and side characters, go here.

Will any of the major players go to prison?

Tbd. In February 2020, the Mississippi state auditor announced the arrests of a half dozen people, indicted on a range of charges related to embezzlement and fraud, including the head of the former state welfare agency and the head of a nonprofit.

Since then, two of the key players — Nancy New, the nonprofit leader and bestie of Mississippi’s former First Lady, and her son — have pleaded guilty to state and federal charges. While one of the central players in the scheme, former state welfare agency head John Davis, awaits trial later this year.

So far, neither Favre nor Bryant, the former governor, have been charged with any crimes. However, we do know that federal investigators have spoken with Favre about his involvement.

Plus, a new report published recently by Mississippi Today, a nonprofit leader alleged in court filings that  Republican officials pressed her to fire the wife of a Democratic political rival, which, if the feds are paying attention, could also raise questions about campaign finance violations.

At the very least, there’ll be reforms to stop this from happening again — right?

It’s hard to see that. Despite the fact that the state auditor estimates more than $70 million in taxpayer money was misspent, the fiscal hawks in the Republican controlled Mississippi Legislature haven’t so much as held a hearing on what went down. A few ill-fated bills were proposed but never saw the light of committee.

The senior-most member of Mississippi’s congressional delegation, its only Democrat, U.S. Rep. Bennie Thompson, has called for a federal probe into the involvement of former Gov. Bryant, who’s now a lobbyist. But there hasn’t been much interest in any congressional-level hearings on the matter either.

Pssst...

It’s not a state election year in Mississippi. But no matter where you live, one way to make your voice — or outrage — heard is by registering to vote and hitting the polls in November.

As of Monday, we’re 50 days away from the midterms. Tuesday, Sept. 27 is National Voter Registration Day. Be on the lookout for a lil somethin’ from the Reckon video team about that.

R.L. Nave | rnave@reckonmedia.com

Ryan "R.L." Nave has been Reckon's editor-in-chief since May 2020

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