Mississippi Today

Mississippi welfare scandal inspires national safety net improvements

Published

1 year ago

February 6, 2024

The decision to use $1.3 million in Mississippi’s federal welfare dollars to fund a boot camp-style fitness program in 2018 didn’t occur entirely off the books or in secret.

It was allegedly part of a state-sanctioned initiative that exploited the social safety net — a national trend that federal officials are trying to reverse through several policy changes it recently proposed.

Auditors later deemed expenditures on the exercise program unlawful, lumping it within a sprawling welfare fraud scheme to which seven people have pleaded guilty, and the state has demanded the money returned. But at the time, Mississippi and federal officials were all on board, according to the fitness instructor Paul Lacoste.

In fact, Lacoste recalls that before he received his contract for welfare funds, the state agency director John Davis, his boss then-Gov. Phil Bryant, and federal officials were at the table and supported the idea. Davis has pleaded guilty to several felonies and potentially faces years in prison, Lacoste has not been charged criminally but he is facing civil litigation, and Bryant is not facing criminal or civil charges.

The federal grant that supplied the funds, Temporary Assistance for Needy Families or TANF, is a work and family stabilization program, not a health-related program.

Leaders may have theoretically justified the purchase by arguing that helping low-income people get fit would help them enter or maintain their employment. In other words, a healthy population equals a strong workforce. It may be a stretch, but it’s arguably the kind of mental leap states have made since welfare reform in the 1990’s in order to spend federal welfare funds on virtually anything but cash assistance to needy families.

But it’s unclear if that’s how leaders justified the fitness classes or if that explanation would even fly. Mississippi didn’t necessarily have to explain their logic because the federal government didn’t require it. The U.S. Department of Health and Human Services, which administers the program, exercises no authority to scrutinize state spending or determine whether the uses actually align with the program’s intended purposes.

Enter the Mississippi welfare scandal, where state officials used politically-connected nonprofits and dubious legal loopholes to funnel welfare money to the construction of a volleyball stadium, a pharmaceutical startup company, a wrestling ministry, and countless other questionable programs.

Under U.S. President Joe Biden, the U.S. Department of Health and Human Services is attempting to clarify what kinds of programs states can support with TANF funds. The rules say that states may no longer be able to use the grant to support afterschool programs, college scholarships for recent high school graduates from middle-class families, or child welfare investigations — all things Mississippi currently does within its TANF program.

“It would be premature for DHS to comment on a proposed rule,” a spokesperson for Mississippi Department of Human Services said in an emailed statement to Mississippi Today. “ACF (the Office of Family Assistance at the U.S. Department of Human Services) has only issued a notice of a proposed rule. There could be changes before a final rule is adopted.”

HHS similarly said it “cannot speculate on the application of a rule that is a proposed rule and has not yet been finalized” as it reviews more than 7,000 public comments on the proposal.

If it takes effect as proposed in coming months, the federal government will also finally have the leeway to determine, after the state makes an expenditure, if purchases were “reasonably calculated,” meaning a “reasonable person” would find that it accomplished one of the goals of the TANF program.

If state and federal officials disagree, the state must provide evidence or academic research to justify their spending — something the federal government has never before required.

The notice of proposed rule changes, released in October, acknowledges that states have been spending federal public assistance funds “on a wide range of benefits and services, including some with tenuous connections to a TANF purpose.”

The notice comes on the heels of Mississippi’s scandal, including Mississippi Today’s Pulitzer Prize-winning reporting on the subject, which helped place a national spotlight on the failings of the program.

“I think this is HHS right now realizing, because of Mississippi, ‘We don’t have clarity on our enforcement authority as an agency to determine when costs are unallowable,’” said Matt Williams, director of research for the Mississippi Low-Income Child Care Initiative. “They’re trying to introduce reason. They’re acknowledging that states can justify so much that has no connection to getting resources in the hands of families below poverty. … Because of that flexibility in those four purposes, they need some kind of mechanism to say back to the states, ‘Hey, this is wrong. This does not pass muster.’”

When Congress replaced the nation’s former welfare entitlement program Aid to Families with Dependent Children in 1996 with TANF, a block grant, it gave states broad flexibility to spend the funds on four vague purposes. Those are:

Provide assistance to needy families so children can be cared for in their home;
Reduce the dependence of needy parents by promoting job preparation, work and marriage;
Prevent out-of-wedlock pregnancies;
Encourage two-parent families.

“Among the purposes, you do not see the purpose being to reduce poverty, which has been a shocking omission,” said Heather Hahn, a national TANF expert with the Urban Institute. “But it was a highly political change, and earlier versions had not passed and this one did.”

The ability of states to create their own welfare programs is central to the law; removing that flexibility would require an act of Congress.

Hahn told Mississippi Today she thinks HHS is “still really walking a fine line between flexibility and accountability.”

Authors of “The Injustice of Place: Uncovering the Legacy of Poverty in America,” released in August, explain that the federal government did more than just authorize states to spend the money however they wanted. By placing tough restrictions on administering the monthly welfare check to poor families, and virtually no limitations around the spending on ancillary programs, it actually incentivized states to direct the funding elsewhere. The federal government allotted states the same amount of money no matter how many needy families they served.

“To spend the funds to help needy families, the states must navigate myriad rules and reporting requirements. But to use the money for other purposes, they need only justify that the expense is relevant to one of the core purposes of the program,” write the authors and national poverty researchers Luke Shaefer, Kathryn Edin and Timothy Nelson. “These criteria leave a lot of wiggle room, to say the least. Mississippi, a state that ranks among the most corrupt by any measure, took that wiggle room to the extreme.”

Much of the scrutiny around Mississippi’s spending relates to a state rule that allows non-cash TANF programs to serve families who earn up to 350% of the federal poverty line — about $87,000 for a family of three — meaning the funds benefitted many middle-class families.

The new federal rules would require states to define “needy” as families earning under 200% of the federal poverty line. But this new requirement would only apply to cash assistance — which Mississippi already caps far below the poverty line — and workforce training and support programs.

According to the four TANF purposes, the federal government does not require that programs related to pregnancy and parenthood be reserved for the needy.

States have been using the TANF program to support college scholarships for adults without children, many from middle class families, under the argument that they reduce out-of-wedlock pregnancy. The federal agency specified that this would not likely meet the “reasonable person standard.”

In its most recent reports, Mississippi counts more than $15 million in state spending on college scholarships as part of its required state match to draw down federal TANF funds. The state labels this expenditure under the goal of ending the dependency of needy parents on government benefits — though the recipients are most often neither parents nor needy. Mississippi Today’s ongoing investigation into the welfare program found in 2019 that 40% of those scholarships went to middle-class families, and the vast majority were traditional students between the ages of 17 and 24.

The rules also say that states will likely no longer be able to use TANF to fund after school programs, which received a total of $925 million nationally in 2021. Most recently, Mississippi was spending about $13 million in TANF funds on these services annually.

For years, Mississippi has used TANF funds to plug budget holes at the Mississippi Department of Child Protection Services, the agency that investigates child abuse and neglect and conducts family separations — the antithesis of the TANF program. The payments were interagency transfers, hidden from public view. But recently, MDHS entered a TANF subgrant agreement with MDCPS, which spelled out for the first time what the funds were actually meant to support.

Under that agreement, MDHS supplies MDCPS nearly $30 million, primarily to pay for social workers who investigate child abuse and neglect reports, as well as in-home family preservation services and the child abuse hotline. HHS said states will likely no longer be allowed to use TANF funds for child welfare investigations.

As written, the rule also aims to prevent states from using TANF funds to support crisis pregnancy centers – a policy that Republican lawmakers, including Sen. Cindy Hyde-Smith, have decried. Mississippi does not, however, currently use TANF dollars for these programs.

Through these new rules, the federal welfare agency appears to encourage — but not require — states to revert back to providing poor families with monthly payments.

“More than 27 years after the establishment of TANF, state programs have shifted away from a focus on direct cash and employment assistance,” reads the federal notice. “Although states are permitted under the statute to determine how much funding to expend on cash assistance, we remind states that there is a large body of research that shows that cash assistance is a critically important tool for reducing family and child poverty.”

Currently, states spend 23% of TANF funds nationally on direct cash assistance. They spend the rest on things like child care and head start (23%), workforce training (8%), child welfare (6%), Earned Income Tax Credits (6%), out-of-wedlock pregnancy prevention (1%) and fatherhood and two-parent family formation and maintenance programs (0.4%). (Compared to less than half a percent nationally, Mississippi spends 25% of its welfare funds on fatherhood programs).

But there’s no federal data of individual expenditures under those spending categories. The federal government doesn’t require state welfare agencies to provide actual documentation detailing this spending.

The only tool HHS has to hold states accountable for these purchases is an annual audit, which states must have conducted each year. In Mississippi, the entity that performs that audit is the State Auditor, an elected politician.

Mississippi’s auditor found repeated deficiencies in MDHS spending controls that went unaddressed for years. The reports may only test a fraction of purchases each year, and they occur retroactively, meaning by the time HHS learns about potential misspending, the money is already gone.

Even under the new requirements for a TANF program to be “reasonably calculated,” the federal government wouldn’t have prior approval. The analysis and enforcement would still happen retroactively, experts said.

“I think HHS is trying to be as strong as they can within their statutory authority to hold states’ feet to the fire and require actual evidence,” Williams said.

But what Williams said might actually happen in practice is that states like Mississippi will be in a constant back-and-forth bureaucratic corrective action plan with the federal government. A state that made unallowable purchases could face a future reduction of their federal TANF grant, which it would be required to make up with state funds, but Williams questions how the federal government would enforce that.

Williams said there are more impactful policy changes that may require action by Congress, such as requiring states to spend a certain percentage of their TANF grant on assistance — not just cash, but other direct supports like child care — or ease eligibility requirements so that more families would qualify for assistance.

Currently, a family of three in Mississippi must earn under 25% of the federal poverty line, about $457 a month, to be eligible for cash assistance. In 2022, the state only spent about 5% of its annual grant on these monthly payments to poor families — about $4.3 million out of $86.5 million. However, this is up from $3.5 million, or about 4%, in 2021.

Just 211 adults in Mississippi receive the aid.

The state’s largest current TANF subgrant, a $5 million subgrant with Canopy Children’s Solutions, is for a program under the state’s “Parenthood Initiative” called LINK, which is supposed to help families “navigate the difficulties of locating and accessing basic needs, educating families on how to access these resources on their own, educating and promoting healthy family values and building resilience and self-sufficiency to ensure long term permanency.”

States are allowed to transfer up to 30% of their TANF grant to the low-income child care voucher program. While Mississippi had chosen not to do this for the past several years, MDHS Director Bob Anderson recently told state lawmakers the agency had decided to begin making this transfer.

Williams is hopeful the new regulations signal a step toward “acknowledging that states have too much flexibility, and that that flexibility has eviscerated the social safety net as we know it.”

But many questions remain in Mississippi. For example, auditors and lawyers have come to different conclusions about what, exactly, was wrong about Lacoste’s welfare-funded boot camp program.

While Lacoste represented to the public that his fitness classes were part of a partnership with MDHS and Families First for Mississippi — the initiative to which the state outsourced its TANF program — he did not set any requirements for participants to be low-income, according to audits.

Lawyers hired by the state to file civil charges argue that Lacoste and his organization Victory Sports Foundation must return the funds because his program did not achieve a lawful TANF purpose.

But neither of the audits on which the lawsuit was based appeared to actually analyze whether fitness and nutrition services would fit within the TANF purposes.

The audit report by the State Auditor’s Office, conducted on behalf of the federal government, said the payments to Victory Sports violated federal law, not because fitness classes are inherently unaligned with a TANF goal, but primarily because the program was not reserved for the needy.

Forensic auditors hired by the state said the payments were improper for neither of those reasons, but because they were made under undue influence by then MDHS director Davis.

Officials from the U.S. Department of Human Services have not made any public statements to clear this up, providing a canned response to Mississippi Today for this story.

So would an exercise program meet the new “reasonable person” standard?

“No,” Williams said, before pausing and then clarifying, “Whose definition of ‘reasonable’?”

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

Did you miss our previous article…
https://www.biloxinewsevents.com/?p=329018

Up Next

Mississippi to soon have its first state ‘climate action plan’

Don't Miss

On this day in 1961

Mississippi Today

Rate decision on hold as Wingate tracks down Siemens funds

Published

1 day ago

July 14, 2025

Staff Editor

mississippitoday.org – @alxrzr – 2025-07-14 15:48:00

by Alex Rozier, Mississippi Today
July 14, 2025

U.S. District Court Judge Henry Wingate said he’s putting his decision on hold over whether to approve JXN Water’s proposed rate increase until after he finds out what happened with roughly $90 million from a settlement with Siemens.

In 2020, the city of Jackson settled its lawsuit with the German company over years of faulty metering for water services. While about a third of the $90 million went to legal fees, city officials couldn’t immediately say where the rest of those funds went during a status conference Monday.

City Attorney Drew Martin said he was working to comply with a subpoena Wingate issued last week looking for an accounting of the settlement dollars, adding that he would have those details within a day or two. While he couldn’t say for sure where the money went, Martin said the city spent about $50 million within a few months after the settlement, and that there was $8 million remaining as of 2022.

Ted Henifin speaks during a press conference at City Hall in Jackson, Miss., Monday, December 5, 2022. Henifin was appointed as Jackson’s water system’s third-party administrator.

Ted Henifin, who runs JXN Water and first proposed the rate increase in February, said the increase would still be necessary even if the utility received all the money from the Siemens settlement. He said the utility’s day-to-day management is operating at a deficit, and that the $60 million from the settlement — what Jackson received after paying its lawyers — would only cover losses for the next two years.

Henifin added that he’s asking the federal government to move around its funding to the city so he can spend more of it on operations and management. Without a boost to JXN Water’s finances, he said the utility would have to stop paying its contractors.

Wingate inquired about the settlement money during a two-day status conference last month. Henifin told the judge he had no idea what the city did with the funds. Wingate explained Monday that he wanted to make sure he was aware of all possible funding for JXN Water before approving a second rate increase in as many years.

It’s unclear how soon he’ll decide. In addition to Jackson officials, Wingate issued the subpoena on July 9 to the state and federal government as well as four different law firms. The subpoena gives the parties 30 days to produce any information on where the settlement funds went.

The judge also brought up the city’s history with shutting off nonpaying customers. Martin explained that the city, under then Mayor Tony Yarber, agreed to pause shutoffs for customers who had issues with Siemens’ water meters. Jackson prepared to bring back shutoffs in 2019, he said, but put them on hold again during the COVID-19 pandemic.

This article first appeared on Mississippi Today and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.

The post Rate decision on hold as Wingate tracks down Siemens funds appeared first on mississippitoday.org

Note: The following A.I. based commentary is not part of the original article, reproduced above, but is offered in the hopes that it will promote greater media literacy and critical thinking, by making any potential bias more visible to the reader –Staff Editor.

Political Bias Rating: Centrist

This article maintains a factual, neutral tone focused on reporting the status of a legal and financial issue concerning Jackson’s water utility and the Siemens settlement funds. It presents statements from both the judge and city officials without editorializing or taking sides. The language is straightforward and balanced, emphasizing transparency and accountability rather than ideological framing. The article refrains from promoting any political viewpoint and instead centers on the procedural and fiscal aspects of the case, aligning it with neutral, centrist reporting.

Mississippi Today

Donor aids Civil War battlefield in Vicksburg

Published

1 day ago

July 14, 2025

Staff Editor

mississippitoday.org – @MSTODAYnews – 2025-07-14 14:58:00

by Simeon Gates, Mississippi Today
July 14, 2025

Vicksburg National Military Park is receiving over $5 million toward restoring a key monument and removing a building that previously was used as a visitors’ center.

Friends of the Vicksburg National Military Park recently announced a $2.8 million private donation to the park by John L. Nau III, a Texas businessman and philanthropist who was a founding board member of the nonprofit Friends organization.

The National Park Service’s Centennial Challenge program will match the donation with $2.5 million in federal funds.

The money will go to restoring the Illinois Memorial and removing an unrelated building that was “erroneously constructed on core battlefield ground — an intrusion that obscures the story and sacrifices of the men who fought and died there in 1863,” according to the Friends.

“Standing on restored battlefield ground gives visitors a chance to truly understand the story of Vicksburg — not just read about it, but feel it,” Bess Averett, executive director of the Friends of Vicksburg National Military Park, said in a press release. “Visitors deserve to walk this hallowed ground and see it as Union and Confederate soldiers saw it during the siege.”

In 1863, Union forces led by Gen. Ulysses S. Grant laid siege to Vicksburg. After 47 days, the Confederate army surrendered, and the defeat turned the tide of the Civil War as the Union gained control of the Mississippi River.

Vicksburg National Military Park was established in 1899 at the battleground. It commemorates the siege and its role in the Civil War, as well as those who fought.

The Illinois Memorial is dedicated to more than 36,000 soldiers from that state who fought in Vicksburg. Both the stone and the inscriptions inside the building have worn down from weather exposure.

In the release, Friends of Vicksburg National Military Park said the park needs both public and private support, as the National Park Service manages over 400 units nationwide.

“We need donors and volunteers now more than ever before,” Averett said.

This article first appeared on Mississippi Today and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.

The post Donor aids Civil War battlefield in Vicksburg appeared first on mississippitoday.org

Political Bias Rating: Centrist

This article presents factual reporting on a private donation to Vicksburg National Military Park without evident ideological slant. The piece focuses on the historical significance of the park, the restoration efforts funded by both private and federal sources, and quotes from a nonprofit executive emphasizing the need for support. The language is neutral and informative, avoiding political framing or partisan commentary. It reports on the actions and statements of involved parties without promoting a particular political viewpoint, adhering to balanced coverage of the subject matter.

Mississippi Today

Coast judge upholds secrecy in politically charged case. Media appeals ruling.

Published

1 day ago

July 14, 2025

Staff Editor

mississippitoday.org – @MSTODAYnews – 2025-07-14 10:30:00

by Anita Lee, Sun Herald and Taylor Vance, Mississippi Today
July 14, 2025

A Jackson County Chancery Court judge is denying the public access to a case that involves several politically connected Mississippians and their failed venture to ticket uninsured motorists using cameras and artificial intelligence.

Media companies Mississippi Today and the Sun Herald have filed for relief with the state Supreme Court, arguing that Chancery Judge Neil Harris improperly closed the court file without notice and a hearing to consider alternatives. The media outlets say the court file should be opened.

Mississippi Today in June filed its motion asking that Harris unseal the case, which he denied six days later.

Gulfport attorney Henry Laird writes in the media companies’ petition for state Supreme Court review, “The Chancery Court sealing the entire court file both before and after Mississippi Today’s motion to unseal the file violates the public and press’ cherished right of openness and access to its public court system and records.”

Mississippi judges have long followed a 1990 state Supreme Court decision that says, “A hearing must be held in which the press is allowed to intervene on behalf of the public and present argument, if any, against closure.”

Instead, Harris said he found no hearing necessary after reviewing the pleadings to open the file. The case, he said, is between two private companies.

“There are no public entities included as parties,” he wrote, “and there are no public funds at issue. Other than curiosity regarding issues between private parties, there is no public interest involved.”

The case involves what is usually a public function: Issuing tickets to the owners of uninsured vehicles. And, according to one party to the case, the Mississippi Department of Public Safety is owed $345,000 from the uninsured motorist program.

Since the entire court file is closed, the public is unable to see why the judge sealed the case. The Mississippians said in the Chancery Court case that they have “substantial” business interests to protect and “a lot of political importance,” an attorney opposing them said in a related federal case that is not sealed.

Jackson County Chancery Judge Neil Harris

Georgia-based Securix LLC signed up its first Mississippi client in 2021, the city of Ocean Springs, an agreement with the city showed. Securix developed a program that uses traffic cameras, artificial intelligence and bulk data on insured motorists to identify the owners of vehicles without insurance.

To sign on other Mississippi cities, Securix enlisted three well-known consultants, Quinton Dickerson, Josh Gregory and Robert Wilkinson. Dickerson and Gregory are Republican political operatives in Jackson who have run numerous state and local campaigns and advise many of the state’s top elected officials. Wilkinson, a Coast attorney, has represented local governments and government agencies, including the city of Ocean Springs.

MS business partnership sours

In 2023, the Mississippians formed QJR LLC. Their company entered a 50-50 partnership with Securix called Securix Mississippi.

Securix Mississippi sold the cities of Biloxi, Pearl and Senatobia on the uninsured driver program.

Fees collected from uninsured drivers were apportioned to the company, the cities and the Department of Public Safety, the operating agreement with Biloxi showed.

The citations offered three options, according to copies included in a federal lawsuit filed by three Mississippi residents who received them:

Call a toll-free number and provide proof of insurance.
Enter a diversion program that charges a $300 fee and includes a short online course and requires agreement that the vehicle will not be driven uninsured on public roadways.
Contest the ticket in court and risk $510 in fines and fees, plus the potential of a one-year driver’s license suspension.

The Securix Mississippi partnership soon soured.

Securix Chairman Jonathan Miller of Georgia said in a sworn court declaration submitted in the federal case that he was subjected around March 2024 to a “freeze out” by members and/or employees of QJR. They stopped giving him information, Miller said.

The Department of Public Safety in August pulled the plug on the controversial ticketing program, shutting off the company’s access to the insured driver database.

In September, QJR filed its Chancery Court lawsuit against Securix LLC.

What is known about the case comes from documents in the federal court file. QJR claims the company and its members have been defamed by Miller and Securix and wants their 50-50 business partnership dissolved.

The Chancery Court case does not even show up when the parties are searched for by name.

With a case number gleaned from the federal court file, a search of chancery records shows only that the case is under seal.

Normally, when a case is under seal, the docket would still be available. A docket lists all records and proceedings in a case. While sealed records are listed and described, they can’t be viewed.

“There is no court file,” attorney Laird said in asking the Supreme Court to review Judge Harris’ decision to leave the file sealed. “There is no docket sheet. There is absolutely no access on the part of the public or press to their public court file in this case.”

Judge closes file without public notice

All Mississippi court files are presumed open unless they are closed with notice and a hearing under guidelines established in the 1990 case Gannett River States Publishing Co. vs. Hand.

“It appears that the judge ignored what has been settled law in Mississippi since 1990,” said retired Jackson attorney Leonard Van Slyke, who represented Gannett in the case and still advises the media.

He added, “Since that time, there have not been many efforts to close a courtroom or a court file because the rules are pretty clear as to when that can be done. It is obvious from the rules that this would be a rare occurrence.”

A court file can be closed only if a party in the case requesting closure can show an “overriding interest” that would be prejudiced by publicity.

The Supreme Court said in 1990 that the public is entitled to at least 24 hours’ notice — on the court docket — before a judge considers closure. As a representative of the public, the media has a right to a hearing before a court file or proceeding is closed.

At the hearing, the judge must consider the least restrictive closure possible and reasonable alternatives. The judge also must make findings that explain why alternatives to closure were rejected.

The court wrote in Gannett vs. Hand:

“A transcript of the closure hearing should be made public and if a petition for extraordinary relief concerning a closure order is filed in this Court, it should be accompanied by the transcript, the court’s findings of fact and conclusions of law, and the evidence adduced at the hearing upon which the judge bases the findings and conclusions.”

Because Judge Harris held no hearing, the high court will have a scant record on which to base its review. Without a court record, Laird pointed out in his filing, the public can have no confidence the judge made a sound decision.

Kevin Goldberg, an attorney who serves as vice president and First Amendment expert at the nonpartisan, nonprofit Freedom Forum, said the First Amendment guarantees the public access to courts.

In the Securix case, he said, a private business was doing work normally performed by a police department or other public agency, and residents could be snared into legal proceedings when they received tickets and public funds were involved.

“These are not private people in a small town, going about their business,” Goldberg said. “These people’s business is the public’s business . . . I think that means they need to accept that they’re going to be scrutinized all the time, including when they voluntarily make a decision to go to court.”

This article was produced in partnership between the Sun Herald and Mississippi Today.

This article first appeared on Mississippi Today and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.

The post Coast judge upholds secrecy in politically charged case. Media appeals ruling. appeared first on mississippitoday.org

Political Bias Rating: Center-Left

This article maintains a largely factual and investigative tone, focusing on government transparency, judicial procedure, and public access to court records. It critiques the secrecy upheld by a judge in a politically sensitive case involving private companies executing public functions, highlighting concerns about accountability and public interest. The framing leans slightly toward advocating for open government and media rights, values often associated with center-left perspectives. However, it stops short of overt ideological framing or partisan language, striving to report the facts and legal context while underscoring the public’s right to scrutiny.