Gov. Tate Reeves tried to keep USM out of the welfare scandal. He instead made it the focus.

by Adam Ganucheau, Mississippi Today
July 26, 2022

Gov. Tate Reeves tried to keep the University of Southern Mississippi out of the state’s ongoing welfare scandal. Instead, with a controversial firing, Reeves focused the nation’s attention on the university.

Attorney Brad Pigott filed a July 11 subpoena on University of Southern Mississippi Athletic Foundation regarding the $5 million it received to build a volleyball stadium — the single largest known purchase within the state’s massive welfare embezzlement scandal. About a week later, Pigott was fired by Reeves’ welfare agency.

READ MORE: State fires attorney probing former Gov. Phil Bryant in welfare scandal lawsuit

A former U.S. attorney, Pigott was hired to lead the agency’s civil lawsuit against dozens of people and entities in efforts to recoup up to $24 million in misspent or stolen federal welfare funds originally sent to Mississippi to help the state’s poorest residents, just a fraction of the overall $77 million scandal. That money, as we now know, ended up in the hands of welfare administrators and many of their high-profile friends who did little to nothing to help the state’s poor.

Pigott says his abrupt termination was politically motivated, that staffers in Reeves’ office had long wanted him to keep USM Athletic Foundation out of his civil lawsuit. The last thing Pigott did as head of the case was subpoena communications the USM athletic foundation had with former Gov. Phil Bryant and NFL quarterback Brett Favre — two people who have, up until the civil case, escaped public legal scrutiny in the scandal. Favre was sued civilly; Bryant was not.

“I believe I was fired as a result of a pattern of orders from the (current) Mississippi governor’s office concerning protecting an entity, called the University of Southern Mississippi Athletic Foundation, from any responsibility in this matter,” Pigott told the New York Times.

Reeves has not denied this assertion, and a statement from his appointed welfare director, which suggested that the subpoena prompted him to remove Pigott from the case, appears to confirm Pigott’s suspicion. The welfare agency said the subpoena was a surprise, but Mississippi Today published an email the newsroom obtained that showed Pigott sent the department a draft of the subpoena more than a week before filing it.

READ MORE: Welfare head says surprise subpoena led to attorney’s firing. Emails show it wasn’t a surprise.

The story has jarred the conscience of the state and nation. Mississippians have skeptically watched state leaders investigate the welfare scandal for more than three years now. Criminal charges originally filed in early 2020 have fallen squarely on six people further down the totem pole, but no one else has been arrested. The welfare department’s civil suit, filed in May, names 38 people or organizations. But Pigott’s firing calls into question the future of even that case. 

While carrying out an effort, apparently, to protect USM from being a main focus of the state’s investigation into the scandal, Reeves has ensured that Southern Miss is at the very focus of it. 

As taxpayers are rightfully wondering why Reeves would insert himself into this scandal he had previously been left out of, it is appropriate to dig into the only thing that has consistently driven him to move on anything: politics.

Reeves, like most successful statewide politicians, has long courted the sizable Southern Miss voting bloc. The Hattiesburg university is the third largest in Mississippi, and the most recent data published by the USM Alumni Association lists 75,000 active alumni in the state of Mississippi — close to 10% of the state’s total gubernatorial cycle electorate.

Reeves’ electoral performance in south Mississippi, where USM alumni are most concentrated, quite likely won him the Governor’s Mansion in 2019. Reeves picked up 23% of his total statewide vote share in Hattiesburg and south. A key to that Pine Belt and Gulf Coast success was his full-breathed support from local elected officials, many of whom are USM alumni.

Importantly for Reeves, one of the most successful political fundraiser in Mississippi history, USM support comes with plenty of political cash. Mississippi Today reviewed the governor’s campaign contributions and found sizable donations from at least 11 USM Athletic Foundation board members.

And several people on the foundation’s board are either direct beneficiaries or known investigation targets of the welfare scheme.

Zach New, who pleaded guilty to state and federal embezzlement charges related to misspending federal grant funds, sits on the USM Athletic Foundation board. Both Zach New and his mother Nancy New, who sat on the athletic foundation’s board before her son replaced her, have donated modestly to Reeves’ campaigns since at least 2015.

Together, the News ran a nonprofit that received and was tasked to administer federal welfare funding to programs that would help the needy. But they instead steered much of it to friends and celebrities, such as Favre and another football star Marcus Dupree, and even diverted $5 million in welfare funding to the USM Athletic Foundation for the volleyball center at their alma mater. 

Reeves has long been in the News’ orbit, recording an education commercial for his gubernatorial campaign in mid-2019 at the special needs school the News owned in Jackson — where, at that time, they were running a separate federal fraud scheme to which they have since pleaded guilty.

At the end of 2019 and early 2020, when the News sensed they would soon face criminal charges, the Reeves administration was poised to take office. Several times, according to text messages obtained by Mississippi Today, they turned to Reeves’ incoming chief of staff, among other powerful political sources, for help. Reeves’ former chief of staff told Mississippi Today the incoming administration steered clear of assisting the News.

NFL legend and USM alumnus Brett Favre, who was close with the News and publicly took credit for a multi-million dollar donation that helped build the volleyball center, also sits on the USM Athletic Foundation board. Favre endorsed Reeves in 2019, calling the future governor “a friend and family man who is committed to making our state a better place.” Deanna Favre, the quarterback’s wife, wrote Reeves a $2,500 check just days before the 2019 governor’s election.

The quarterback also attended a Reeves fundraiser in July 2019 — a couple months before Reeves faced a crowded GOP primary for governor.

Another USM Athletic Foundation board member is Poncho James, a close acquaintance of Favre’s who invested at least tens of thousands in the so far fruitless experimental pharmaceutical company called Prevacus that Favre was backing and that received welfare funding. James hosted that Hattiesburg fundraiser for Reeves in 2019, where Favre snapped the picture with Reeves and Bryant. James also wrote the future governor a $2,500 check for that race.

James, according to text messages obtained by Mississippi Today investigative reporter Anna Wolfe, believed that getting Reeves elected in 2019 could help their concussion drug venture.

Tommy Duff, one of the state’s few billionaires, also sits on the USM Athletic Foundation board. He is president of the board of trustees of the Institutions of Higher Learning, which voted to approve the lease that allowed for Nancy New and her nonprofit to pay the athletic foundation $5 million to build the volleyball facility, according to the board’s meeting minutes. 

Duff has given Reeves at least $32,000 for his campaigns since 2011. In recent months, however, the two have reportedly fallen out. Duff, who typically writes a sizable check to Reeves each year, last gave to the governor’s campaign in 2020.

Rodney Bennett, former president of University of Southern Mississippi, sat until recently on the USM Athletic Foundation board. Bennett wrote Reeves’ campaign a $1,000 check in 2019 and another $1,000 check in 2020. 

Other USM Athletic Foundation board members have given Reeves large campaign contributions over the years. Chuck Scianna, a Texas businessman, wrote Reeves a $25,000 check in 2018, a $10,000 check in 2020, and another $10,000 check in 2021. Hattiesburg businessman and board member “Abb” Payne has given Reeves at least $22,500 since 2015. Joe Quinlan, a bank executive and foundation board member, wrote Reeves a $5,000 check in 2019.

Clare Hester, one of the state’s most high-powered lobbyists, represents the Southern Miss Athletic Foundation. Hester and Reeves have long had a close working relationship, with the lobbyist giving Reeves at least $40,000 in campaign contributions.

For his part, Reeves is not coy about his relationship with USM. He regularly travels to Hattiesburg to announce government grants or projects, and he attends sporting events.

Time will tell how those USM supporters and alumni feel about how Reeves has handled the events of the past few days — and whether state or federal investigators will focus even more attention on the USM Athletic Foundation.

“All I did, and I believe all that caused me to be terminated from representing the department or having anything to do with the litigation, was to try to get the truth about all of that,” Pigott told Mississippi Today hours after his firing. “People are going to go to jail over this, at least the state should be willing to find out the truth of what happened.”

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