Today, Explained - Brett Favre and the Mississippi welfare fraud
Episode Date: September 30, 2022An extraordinary case of fraud is unfolding in Mississippi, where a chummy cadre of nonprofit leaders, elected officials, and professional athletes redirected tens of millions in welfare funds toward ...their own pet projects. Mississippi Today’s Anna Wolfe explains. This episode was produced by Hady Mawajdeh and Avishay Artsy, edited by Matt Collette, fact-checked by Laura Bullard, engineered by Paul Robert Mounsey and Efim Shapiro, and hosted by Noel King. Transcript at vox.com/todayexplained  Support Today, Explained by making a financial contribution to Vox! bit.ly/givepodcasts Learn more about your ad choices. Visit podcastchoices.com/adchoices
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What about Brett Favre?
Brett Favre is in trouble.
You've probably heard some about this.
Millions of dollars that were meant for poor people in Mississippi
instead went to fund Favre's pet projects,
including a volleyball stadium for his alma mater.
The question many of us have been asking
What the hell is Brett Favre doing here?
is a legitimate one.
What the hell is he doing here?
Why does a multimillionaire need to rip off welfare money?
Well, he didn't need to, but he did it anyway.
And it wasn't just him.
This powerful and well-connected celebrity athlete
had some powerful and well-connected friends
who facilitated his fraud
and cheerfully committed their own along the way.
Coming up on today explained the Mississippians who stole from the poor and
gave to themselves.
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It's Today Explained. I'm Noelle King. Anna Wolfe is a reporter for an independent news outlet called Mississippi Today.
Anna's been credited with uncovering the fashion in which very powerful people in Mississippi misused and outright stole money that was meant for poor Mississippians.
And a lot of people were involved in this, but Brett Favre is a household name.
Before all of this started, what was his reputation among people in Mississippi?
I think it's important to note that, you know, we're in a state that bottoms the list in almost everything good,
tops the list in all the bad things. But one thing that we do really well is we produce
great athletes. And so we exalt these people. We hold them up. They are our role models in
Mississippi. Believe me, I'm blessed. I'm an extremely blessed man. I look at my family.
So I do think that that's significant in this larger story about learning that our idols are capable of these things.
Hall of Fame quarterback Brett Favre is a legend at his alma mater, the University of
Southern Mississippi. He's now facing growing backlash over his connection,
alleged to Mississippi's largest public fraud case.
Earlier this year, the state filed civil suit against 38
people and entities, including Brett Favre. We heard the word guilty 24 times as Nancy
knew and her son admitted to their central role in the massive $77 million welfare fraud scheme.
You know, when I started talking to people after they began learning about his involvement in this scandal, a lot of people I talked to were simply not surprised that he would be involved in this kind of activity.
He's apparently known for having these big idea projects but not really wanting to pony up his own money for them. prize to people that he would have been trying to use his celebrity and his influence to cause
state officials to find taxpayer money for him that they could use for his pet projects.
At one point, Brett Favre even texted Nancy New, the nonprofit founder that was spending this money,
after he received the first $500,000 check from the promotional gig, and this was in December of 2019, he said to her, Santa came today. Thank you, my goodness, thank you. And I think that that shows kind of what his mentality was about this money. You know, it's free money for him. very rich man. He has millions of dollars. He earned them over the course of a very successful
career. Why was Brett Favre even in the vicinity of welfare funds in Mississippi?
His celebrity afforded him a door to reach the state's top officials, which includes welfare
officials. And he used that opportunity to seek funding for his pet projects
so that he didn't have to pay for them himself.
What were some of his pet projects?
The volleyball stadium at USM that received $5 million in welfare funds.
It'll seat 1,000 fans and has locker rooms for both indoor and beach volleyball teams.
As well as the pharmaceutical startup company.
Coming up next, a cure for concussions.
NFL legend Brett Favre will talk about a new treatment helping to protect players.
He also received a million dollars himself for the speaking engagements
and a promotional contract to promote the Families First program.
He's just kind of been known among people in Mississippi as
being behind some of these projects. And welfare was a fund that the state officials knew that
they could manipulate for his benefit. Tell me about this volleyball stadium.
So Brett Favre wanted to see this state-of-the-art volleyball stadium built at the campus at
University of Southern Mississippi, which is his alma mater, and also the school where his daughter was playing volleyball at the time. And so when he
was going around asking for support from state officials and other wealthy Mississippians, he
ended up having a conversation with former Governor Phil Bryant about getting private donations to build this stadium. He eventually met with welfare officials in 2017 who committed almost immediately
$4 million in welfare funds to him to build this facility. They also had conversations
with the governor after that about getting the ball rolling on actually getting the money there.
Is there any evidence that when Brett Favre went looking for money to build this volleyball stadium at the university,
that he knew some of the money that would come his way
was money that was supposed to go to poor people in Mississippi?
The reason that he had to have some idea
was because they couldn't just take this money from the welfare program and put it into the volleyball stadium.
They had to come up with a plan, a proposal that told the state of Mississippi that the volleyball facility was going to be a place where people in poverty would receive programming that would help them escape poverty. The way that they got the money from the
welfare program to the Athletic Foundation, which is the entity that built the stadium,
is through a lease agreement. It wasn't a direct payment to contractors to build the stadium.
It was a lease that the non-profit entered for five million million. The lease was for the purpose of providing
programming for poor people at the campus at USM. And it says that in the lease agreement.
What shape is the stadium in now?
It's up, it's finished. And, you know, volleyball matches are being held there.
What's not being done there is any programming for people in poverty. They held one
event and it was a healthy teens rally. It was a rally that they were holding at places across the
state that they would bring teenagers in and talk to them about things like cyberbullying and
suicide prevention and teen pregnancy. And they held one rally at USM that justified $5 million in lease payments in 2018.
Can you give me context for why a volleyball stadium was seen as so important that people
would go about stealing money to get it done? Brett Favre's daughter was playing volleyball at the university at this time,
and that's why he wanted to see this stadium built.
I wish I had a better answer.
It is as absurd as you think it is.
When you start to pull these threads and the bombshells start dropping about Brett Favre,
what happens?
Does he return the money? Does anyone
say, okay, the university is now going to have to pony up the money that it got from the state and
pay us back? So it's important to note that, you know, from 2020, near the beginning, Brett Favre
has denied knowing that this money came from this Temporary Assistance for Needy Families program
and denies really being the architect for the money going to the volleyball stadium.
He can't deny that he received $1 million in welfare payments that was outlined in the audit,
and he did pay back half of that money at the beginning when it was first uncovered
in the audit that he had received
this $1.1 million. He promised to pay the entirety of the $1.1 million back. He did not pay the
remainder of it back until more than a year later after a separate forensic audit came out in
October of 2021. The auditor's office says that he owes interest on that money for the time that he had had it, and he has not paid the interest on it.
Do you think Brett Favre is going to be indicted on any criminal charges? Where is this headed?
Brett Favre certainly was the inspiration behind this welfare expenditure.
Whether he is criminally liable is going to be up to prosecutors and the court system.
We're going to continue to make sure that this case is thoroughly investigated.
As everyone knows, we have turned over every piece of evidence that we have over to federal investigators.
This case is going to be thoroughly investigated top to bottom.
Can you tell me what is happening to Brett Favre's reputation in Mississippi right
now? You know, I think that people in Mississippi recognize that Brett Favre is almost a sideshow
of this larger corruption that took place. It certainly has captured the national attention
and people know about this story because of Brett Favre. But I think people in Mississippi
are really tired of the
systemic issues that brought us here. And they want to see that interrogated, not Brett Favre
as an individual. Coming up next, why was Mississippi's welfare system that susceptible to fraud. by Wirecutter. AuraFrames make it easy to share unlimited photos and videos directly from your phone to the frame.
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I was pretty mischievous and when we were little, while my dad was practicing after school,
we would go sneak into the cafeteria and steal milk.
We'd sneak in the locker room, we'd steal Gatorade or we'd steal his jocks and socks and all that stuff because we wanted to be like the grownups. It's Today Explained. Anna Wolfe, you broke
this story wide open. There is a world in which you don't start reporting and we don't learn
any of this. That's kind of the point of people doing fraud. What made you start looking into
what was happening with welfare money in Mississippi? I really began earnestly looking
at this welfare program. It's called
Temporary Assistance for Needy Families in 2018 after I took over the poverty beat at Mississippi
Today. There was a story that came out the year prior that said that the state had denied nearly
99% of people who were applying for cash welfare assistance. I wanted to know how the state was
spending the rest of the money,
and more importantly, who was being helped and how. DHS, Mississippi Department of Human Services, is the agency that administers these funds, and I wasn't able to get expenditure reports or
invoices showing how the money was spent. At one point, I filed a complaint against the agency.
So Anna is down this rabbit hole for about two years. Where was all of the
welfare money in Mississippi going if it wasn't going to poor people? A state auditor also started
looking into that question. And in early 2020, the auditor discovered what was going on. There
was criminal activity. The auditor announced the arrest of these six individuals, including the
former welfare director. Within weeks of that, we uncovered the connections between one of the companies that received $2 million in stolen welfare funds and Brett Favre and Phil Bryant, the former governor.
And we've been closely following that trail ever since.
Can I ask you how this begins, like how it is possible for this to begin? This begins with welfare reform in the 90s
because what happened wouldn't have been possible without welfare reform.
When I ran for president four years ago,
I pledged to end welfare as we know it,
to transform a broken system
that traps too many people
in a cycle of dependence to one that emphasizes work and independence.
So when welfare reform happened in the 1990s, the TANF program was created, and it replaced
the former entitlement program, Aid to Families with Dependent Children.
And when it did that, it turned the welfare program into a block
grant. And it allowed states to create their own state plans around what they would do to solve
poverty. And those plans go to the federal government. The federal government doesn't
even have the authority to sign off and approve those plans. And it also allows states to use the money in ways that simply further
this ideology about people in poverty and what people in poverty need. So in Mississippi,
programs are not created based on what people in poverty are telling the state that they need.
They're really more focused on what the state's pre-existing notion about people in poverty is.
So you see a lot of the money being spent on things that the state is calling fatherhood programs because there's a notion that families without fathers are at the root cause of poverty.
And so you have mentorship programs, but really that's just turned into giving celebrities money to go
around and talk about the welfare program. And you don't see any outcomes from those programs on how
what the state's doing is actually decisions about welfare over to the states.
And when does the abuse of the system begin in Mississippi?
2016 is also a natural starting point for this story because that is when John Davis became director.
John Davis is the former
director who was in charge of the welfare department when this scandal occurred, and he
just pled guilty to federal charges last week. A state judge today sentenced Davis to more than
30 years in prison and put him on house arrest until the federal sentencing in February.
The governor at the time, Phil Bryant, had apparently instructed him in 2016 to, instead
of giving this TANF fund to different service organizations across the state, he instructed
the director to consolidate the program. And the idea was that DHS would put out tens of millions
of dollars to one or two organizations who would then decide who to give that money to
through private grants so that
that money wouldn't be then publicly reported. It was now private. They would call the initiative
Families First for Mississippi. And this is the program through which most of the misspending
occurred. Who was that money supposed to be for? One in five people in Mississippi live in poverty.
We rank near the bottom of all of these lists of median
income or workforce participation rate or average wages. Over the last year, I would say that
I probably only earned like five to six thousand dollars. I actually had a bank account, but I don't
right now. It was so much things needed. It just got into negatives.
We've got a very low-income and low-wage population,
and these funds would have actually helped people find self-sufficiency.
That is the mission statement of the program and of the agency.
So, you know, the state didn't want to put out this money
through direct cash assistance to people in poverty because there's this notion in conservative states that social safety net programs create dependency on the government and that they de-incentivize working. been proven to help people find success and interrupt generational poverty, workforce
development programs, you know, effective caseworker programs, after-school and child
care programs, transportation. These are the things that could have helped people find
economic mobility that they did not. What's notable is that all the welfare money that
might have been spread out among lots of different programs was instead funneled into just a couple. What was the point of that, takes to administer those grants and make sure that people are spending them properly.
Now, I think that that is the stated reason, but I also understand that since this money, and we're talking about tens of millions of dollars, we're going to these private nonprofits who then had the ability to spend the money however they wanted.
And there was no reporting back to the department to say how
they were spending the money, it created a black hole for this money to funnel through without
anyone knowing about it. All right, so what you end up with is a situation in which you have
millions of dollars, you have very little oversight. We all know what that can lead to,
and it absolutely did in this case. When did people in Mississippi start to realize the
extent of what was going on here? There were two things that were happening in 2019. First, a
department employee, an employee of John Davis's, had gone to the governor's office with this small
tip about suspected fraud on John Davis's part. He takes this small tip to the governor's office,
who takes that
information to the state auditor. Now, the auditor is already conducting an annual audit on DHS
because there is a routine audit that the state auditor's office does every year on state agencies
that receive federal funds. And so there was the investigation into suspected fraud and the regular
routine financial audit that were actually
occurring at the same time in 2019. The arrests were the result of the criminal investigation
and the audit report released in May was the result of the regular audit procedures.
The audit released in May of 2020 really opened up a whole new world of information
and data about how the money had been spent. We knew that this $4 million had allegedly been
stolen, but we didn't know the breadth of the issue, the breadth of the breach at DHS.
So the state of Mississippi had allowed tens of millions of dollars from this federal program,
and actually from other assistance programs as well, to be used in ways that did little to nothing to help people in
poverty. Instead, the two nonprofits that I described were using the money on lobbyists,
football tickets, and promotional events with athletes, famous athletes, fitness programs,
and they put on concerts, religious concerts as well. And one of the things that stood out to me was that there
was a line item in the audit that they had used TANF money to pay for a speeding ticket.
And I think that just really illustrates, you know, just how much this fund had turned into
their piggy bank, right? Whose names in that audit really stood out? So we saw that during
the last four years of the Bryan administration, for some reason,
money from the Department of Human Services kept going to famous athletes. Of course,
you know about Brett Favre. That's the story that has been national here lately. But there was
$5 million that went to the family of Brett DiBiase, this wrestler whose dad is the million-dollar man.
I'm Ted DiBiase. I'm the million-dollar man.
They say that money is the root of all evil.
Well, I'm here to tell you that it's not.
So those are professional wrestlers who received welfare money,
as well as the former football player Marcus Dupree.
I'm doing a foundation called the Marcus Dupree Foundation where I work with my horses and kids
and mentor and seeing the kids' face light up when they see the horses and stuff like that.
And another former football player, Paul Lacoste, was paid to put on fitness camps for
Mississippians, but also for lawmakers and other powerful people.
6.0 is the speed of the treadmills. Let's go. We don't have time to drink water. We're too fat to
drink water. These are the names that have really stuck out and made the headlines. But the family
members and friends of these welfare officials were also people who received money from this program. And so the audit was essentially a
laundry list of purchases that the auditor found. The narrative that this audit report generated
and the tone that was set at the beginning, you know, came pretty early on in this whole
investigation. And that was that Davis, John Davis, was this tyrant in charge of the welfare agency, sort of directing everyone to do these nonsensical things and pay out this money to wrestlers and football players.
But as we've learned more and more over the last two years, this corruption was really system-wide.
And I think investigators are looking to see how far it goes to the top, not just to John Davis.
Let's go back to the thing that the audit ultimately found, which is that
tens of millions of dollars were misspent or stolen.
Is the state going to
get that money back and be able to use it to help poor people? The people who received this money
improperly do not have it to pay back, generally. The state civil suit is asking Nancy New to pay
back $19 million. Nancy New doesn't have $19 million. Brett Favre is one of the only people who might
actually have the money to pay back. But that's a small fraction of the larger,
you know, amount of money that was misspent here.
Anna Wolfe is an investigative reporter from Mississippi Today. Check them out. They are doing extraordinary work.
Today's show was produced by Hadi Mouagdi and Avishai Artsy.
It was fact-checked by Laura Bullard and Jillian Weinberger and Miles Bryan,
who is colorblind, and engineered by Paul Robert Mouncey.
Matthew Collette edited the show.
I'm Noelle King. It's Today Explained.