Mississippi Today
Welfare head pleaded guilty to federal charges one year ago. What’s happened since?
Welfare head pleaded guilty to federal charges one year ago. What’s happened since?
One year ago today, a former Mississippi state agency director stood before a state and federal judge and admitted to steering federal welfare funds to enrich the sons of a wealthy retired WWE wrestler.
The crimes represent just a sliver of a larger scandal inside a welfare agency that, under the direction of former Gov. Phil Bryant, systematically prioritized federal grant spending on pet projects over people.
“This is often what happens when you have a political party, whether it’s Republican or Democrat, so dominating a state that they think they’re invincible, that they can do anything,” said Doug Jones, a former U.S. senator and U.S. attorney for the Northern District of Alabama.
Auditors accused John Davis, the now 55-year-old disgraced career government bureaucrat, of creating a culture of fear and secrecy at his agency between 2016 and 2019, frittering away at least $77 million in funds that were supposed to assist the state’s poorest residents.
But zooming out, records and text messages obtained by Mississippi Today show that Davis took his direction from the governor who appointed him. While the scandal took place, Bryant often met with Davis about the administration of the federally funded welfare grant and liked what the director was doing. Having agreed to cooperate with prosecutors, Davis is now a key witness in the case.
When the State Auditor’s Office and the Hinds County District Attorney first announced the arrests of Davis and five others in early 2020, they promised to work with their federal partners to fully investigate and pursue every person responsible for what they called the largest public embezzlement case in state history.
Since then, Mississippi Today has surfaced text messages showing that Bryant planned on entering into business with the Florida-based pharmaceutical company at the center of the initial indictments. The texts show that former NFL quarterback Brett Favre briefed Bryant about the funds that welfare officials channeled into the drug startup, Prevacus, and sought the then-governor’s help securing more grants for a new volleyball stadium at University of Southern Mississippi.
Six people ensnared in the case, including Favre, have alleged Bryant approved or even directed some of the spending decisions in question — allegations Bryant has denied.
“We’re still looking through records and text messages as we continue to move up,” Hinds County District Attorney Jody Owens told reporters after Davis’ plea hearing on Sept. 22, 2022, months after Mississippi Today exposed texts between Bryant and the welfare director. “We also continue to work with the federal authorities in Washington and in Mississippi. John Davis is critical because the ladder continues to move up.”
No one in any position above Davis has been charged. Since the 2020 state arrests, federal authorities have charged just two additional people, bringing the total number of state or federal criminal defendants to eight. Bryant and Favre are not facing criminal charges.
Bryant’s attorney Billy Quin said in a statement to Mississippi Today on Thursday that Bryant has not been interviewed by investigators on the case.
READ MORE: Allegations against former Gov. Phil Bryant from Brett Favre, Nancy New, Paul Lacoste, Austin Smith, Teddy DiBiase and Christi Webb.
The seven who have pleaded guilty to crimes within the welfare scandal remain free under cooperation agreements with prosecutors. The government has suspended sentencing until it decides it no longer needs the defendants’ cooperation for potential cases against others. Federal authorities have been silent about the progress of their investigation or who else they may be looking at charging.
“It’s not unusual for their sentencing to be postponed until the full extent of their cooperation is known, and that could be trial testimony,” said Jones, who has followed developments in the welfare case from his neighboring state. “So this could be a ways to go before we see anybody being sentenced.”
The September 2022 federal bill of information against Davis — a charging document to which he pleaded guilty after waiving a formal indictment — represented the first criminal charges the federal government filed within the welfare case, more than two years after the state arrests. Charges against Davis mostly deal with welfare money he pushed to professional wrestling brothers Brett and Ted “Teddy” DiBiase Jr.
Federal prosecutors struck plea deals with nonprofit founder Nancy New and her son Zach New months earlier in April of 2022, but those charges related to public education funds that the News fraudulently obtained for their private schools.
In March of this year, the U.S. Attorney’s Office secured guilty pleas from Brett DiBiase, who went to a luxury rehab facility on the welfare program’s dime, and Christi Webb, director of another nonprofit that contracted with the state. It also indicted Teddy DiBiase, who pleaded not guilty, in April. It has not publicly filed new charges since then.
The U.S. Attorney’s Office in the Southern District of Mississippi, which has been handling the case, has not had a permanent U.S. Attorney at its helm since early 2021 and has been waiting more than a year for the U.S. Senate to confirm President Joe Biden’s nomination Todd Gee. On Wednesday, Sen. J.D. Vance of Ohio again single-handedly blocked the Senate’s confirmations of all U.S. Department of Justice appointments, including Gee, because of the current criminal cases they are bringing against former President Donald Trump.
Separate from the criminal cases, 20 people, including Favre, are facing state civil charges. That lawsuit attempts to recoup $77 million from people or entities it says are liable for the misspending, which mostly occurred through two nonprofits running a program called Families First for Mississippi. The U.S. Department of Health and Human Services, the federal agency that administers the welfare grant, or Temporary Assistance for Needy Families, has said that it will require the state to return any misspent funds out of its own budget, but it has been waiting to see what happens with ongoing criminal and civil proceedings before taking action.
U.S. Congressman Bennie Thompson, a Democrat from Mississippi, said he has asked the federal agency for its assessment of the state of Mississippi’s fitness to manage these funds in the future, but he has not received a response.
“The fact that public funds were directed (away) from the original intent … is egregious, especially when the money is intended for vulnerable families to try to prepare them for a better life, and that money just does not get to them,” Thompson said.
Several people or entities named in the civil suit have pushed back on the prevailing public narrative that they callously looted money from the poor.
The DiBiase family, for example, says they were carrying out the mission of the agency when Davis hired them to conduct multi-million-dollar motivational courses or preach the gospel to low-income teens. Paul Lacoste, a fitness trainer whose company received a $1.3 million contract through Families First, says he met about his program with Davis, Bryant, and officials from the federal office, who all supported the concept of offering exercise classes as part of the welfare agency’s approach to strengthening Mississippi families. Lobaki, a software company that received $795,000 through Families First to conduct a virtual reality academy, says the vocational training it was contracted to perform fits the welfare program’s purpose of “ending the dependence of needy parents on government benefits.”
“It was the government that chose to run this program this way. And it was not a secret,” Teddy DiBiase Jr.’s criminal defense attorney, Scott Gilbert, told Mississippi Today earlier this year. “… So what this boils down to is do people feel like this was an appropriate use of TANF money or other money to carry out the function of government? That’s a fair question, and that’s a question that reasonable people absolutely can disagree about. But it’s not a crime.”
Ultimately, the federal government has given state politicians broad leeway to spend federal TANF dollars based on their philosophy about poverty and what constitutes helping people, including the boot-straps approach of intentionally withholding government assistance. Gov. Bryant, who oversaw the welfare department and set its agenda during the time the scandal occurred, preferred the “Families First” programming of parenting and fatherhood classes, bullying prevention, abstinence education and anti-obesity initiatives. But Bryant never asked the agency for outcomes to show what those programs accomplished or how they prevented or moved families out of poverty.
“You would think the state is the safeguard for handling funds like this, but when you have people who are the custodian of these funds at the state level who have unclean missions in life, then you have what you have,” Thompson said.
Over time, the purchases attached to those nebulous services morphed into things like a 15-acre horse ranch for former USM running back Marcus Dupree, the construction of a volleyball stadium, lobbying expenses, sports camps for young athletes and star-studded high school rallies. At the same time, from 2016 to 2020, the state cut the number of families receiving monthly assistance in half, from nearly 6,000 to 2,600, with virtually no concern from state leadership.
“There is a culture. Whether or not legally it rises to federal cases, and goes that high up, from a criminal standpoint, it may or may not. But it certainly is morally corrupt what they did and people ought to pay a political price for it,” Jones said.
From 2020 to 2022, under Gov. Tate Reeves, the caseload of families dropped another 1,000 while the state has left over $100 million in welfare funds unspent. Current agency director Bob Anderson told lawmakers last year that the state was still not tracking the outcomes for families receiving services through TANF subgrantees.
The criminal investigation may have halted the actual fraud, but so far it has made little difference to the very poor families seeking help through the program, or to Mississippians looking for answers about how things went so wrong.
When Hinds County Circuit Court Judge Adrienne Wooten asked Davis at his plea hearing last year why he would break the law to enrich Brett DiBiase, all he could muster was, “Very, very bad judgment,” followed by a long pause and then, “I shouldn’t have done it.”
Davis’ state guilty plea to 18 counts of fraud or conspiracy came with a prison sentence of 32 years — a fact featured prominently in news headlines — but that’s nowhere near the time he’ll actually serve. In the generous joint plea agreement between federal and state prosecutors and Davis, the looming federal sentence of no more than 15 years in federal prison on two counts supersedes the state sentence.
The deal all but ensures he’ll never face a criminal trial or see the inside of one Mississippi’s notoriously harsh state prisons. The other defendants received similar deals. Wooten seemed to leave the courtroom unsatisfied.
“Even with the questions that have been asked,” she said by the end of the hearing, “this court is still not understanding what actually took place and more importantly, what would’ve caused you to perform these particular acts.”
As the historic case enters its fourth year, the same could be said for the public.
June 21, 2019
Investigation begins
Mississippi State Auditor’s Office begins investigation into fraud at the Mississippi Department of Human Services
February 5, 2020
The case goes public
Agents from the auditor’s office arrest six people, making the case public. The charges alleges they stole a total of $4 million from the welfare department, $2 million of which went to a pharmaceutical company called Prevacus. The venture involved both former Gov. Phil Bryant and former NFL quarterback Brett Favre, Mississippi Today uncovered shortly after the arrests
June 22, 2020
First known court action
Agents from the Money Laundering and Asset Recovery Section of the U.S. Department of Justice in Washington filed a complaint for civil forfeiture to seize the Madison home of former professional wrestler Ted “Teddy” DiBiase. This is the DOJ’s first known court action in the welfare case
December 17, 2020
Brett DiBiase faces state charges
Brett DiBiase pleads guilty to state charges
March 16, 2021
Nancy and Zach New indicted
A federal grand jury indicts Nancy and Zach New on separate charges that their private schools, called New Summit, defrauded the Mississippi Department of Education out of $2 million, later increased to $4 million
April 4, 2022
“The Backchannel” is published
Mississippi Today begins publishing its investigative series, “The Backchannel,” which, for the first time, reveals text messages between Bryant and Favre showing that the athlete offered stock in Prevacus to the governor in exchange for his help growing the company; that Favre told Bryant when Prevacus started receiving funds from the welfare operators; and that Bryant agreed to accept a company package after leaving office, right before the initial arrests in early 2020
May 9, 2022
MDHS files civil lawsuit
MDHS files a civil lawsuit against 35 people or companies, including Favre, to recoup $24 million in misspent welfare funds. On the direction of Gov. Tate Reeves’ office, the suit does not target the volleyball stadium or University of Southern Mississippi Athletic Foundation
July 22, 2022
Brad Pigott fired
Reeves’s office and MDHS fire Brad Pigott, the lawyer it hired to craft the civil suit, about a week after Pigott subpoenaed University of Southern Mississippi Athletic Foundation for its communication with former Gov. Bryant, among others
September 22, 2022
John Davis pleads guilty
John Davis pleads guilty to state and federal charges
March 16, 2023
Christi Webb faces federal charges
Christi Webb pleads guilty to federal charges, the first criminal charges she’s faced
April 20, 2023
Ted “Teddy” DiBiase Jr. pleads not guilty
Ted “Teddy” DiBiase Jr. pleads not guilty to federal charges, the first criminal charges he’s faced
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
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https://www.biloxinewsevents.com/?p=290003
Mississippi lawmakers have reached an agreement to ban diversity, equity and inclusion programs and a list of “divisive concepts” from public schools across the state education system, following the lead of numerous other Republican-controlled states and President Donald Trump’s administration.
House and Senate lawmakers approved a compromise bill in votes on Tuesday and Wednesday. It will likely head to Republican Gov. Tate Reeves for his signature after it clears a procedural motion.
The agreement between the Republican-dominated chambers followed hours of heated debate in which Democrats, almost all of whom are Black, excoriated the legislation as a setback in the long struggle to make Mississippi a fairer place for minorities. They also said the bill could bog universities down with costly legal fights and erode academic freedom.
Democratic Rep. Bryant Clark, who seldom addresses the entire House chamber from the podium during debates, rose to speak out against the bill on Tuesday. He is the son of the late Robert Clark, the first Black Mississippian elected to the state Legislature since the 1800s and the first Black Mississippian to serve as speaker pro tempore and preside over the House chamber since Reconstruction.
“We are better than this, and all of you know that we don’t need this with Mississippi history,” Clark said. “We should be the ones that say, ‘listen, we may be from Mississippi, we may have a dark past, but you know what, we’re going to be the first to stand up this time and say there is nothing wrong with DEI.'”
Legislative Republicans argued that the measure — which will apply to all public schools from the K-12 level through universities — will elevate merit in education and remove a list of so-called “divisive concepts” from academic settings. More broadly, conservative critics of DEI say the programs divide people into categories of victims and oppressors and infuse left-wing ideology into campus life.
“We are a diverse state. Nowhere in here are we trying to wipe that out,” said Republican Sen. Tyler McCaughn, one of the bill’s authors. “We’re just trying to change the focus back to that of excellence.”
The House and Senate initially passed proposals that differed in who they would impact, what activities they would regulate and how they aim to reshape the inner workings of the state’s education system. Some House leaders wanted the bill to be “semi-vague” in its language and wanted to create a process for withholding state funds based on complaints that almost anyone could lodge. The Senate wanted to pair a DEI ban with a task force to study inefficiencies in the higher education system, a provision the upper chamber later agreed to scrap.
The concepts that will be rooted out from curricula include the idea that gender identity can be a “subjective sense of self, disconnected from biological reality.” The move reflects another effort to align with the Trump administration, which has declared via executive order that there are only two sexes.
The House and Senate disagreed on how to enforce the measure but ultimately settled on an agreement that would empower students, parents of minor students, faculty members and contractors to sue schools for violating the law.
People could only sue after they go through an internal campus review process and a 25-day period when schools could fix the alleged violation. Republican Rep. Joey Hood, one of the House negotiators, said that was a compromise between the chambers. The House wanted to make it possible for almost anyone to file lawsuits over the DEI ban, while Senate negotiators initially bristled at the idea of fast-tracking internal campus disputes to the legal system.
The House ultimately held firm in its position to create a private cause of action, or the right to sue, but it agreed to give schools the ability to conduct an investigative process and potentially resolve the alleged violation before letting people sue in chancery courts.
“You have to go through the administrative process,” said Republican Sen. Nicole Boyd, one of the bill’s lead authors. “Because the whole idea is that, if there is a violation, the school needs to cure the violation. That’s what the purpose is. It’s not to create litigation, it’s to cure violations.”
If people disagree with the findings from that process, they could also ask the attorney general’s office to sue on their behalf.
Under the new law, Mississippi could withhold state funds from schools that don’t comply. Schools would be required to compile reports on all complaints filed in response to the new law.
Trump promised in his 2024 campaign to eliminate DEI in the federal government. One of the first executive orders he signed did that. Some Mississippi lawmakers introduced bills in the 2024 session to restrict DEI, but the proposals never made it out of committee. With the national headwinds at their backs and several other laws in Republican-led states to use as models, Mississippi lawmakers made plans to introduce anti-DEI legislation.
The policy debate also unfolded amid the early stages of a potential Republican primary matchup in the 2027 governor’s race between State Auditor Shad White and Lt. Gov. Delbert Hosemann. White, who has been one of the state’s loudest advocates for banning DEI, had branded Hosemann in the months before the 2025 session “DEI Delbert,” claiming the Senate leader has stood in the way of DEI restrictions passing the Legislature.
During the first Senate floor debate over the chamber’s DEI legislation during this year’s legislative session, Hosemann seemed to be conscious of these political attacks. He walked over to staff members and asked how many people were watching the debate live on YouTube.
As the DEI debate cleared one of its final hurdles Wednesday afternoon, the House and Senate remained at loggerheads over the state budget amid Republican infighting. It appeared likely the Legislature would end its session Wednesday or Thursday without passing a $7 billion budget to fund state agencies, potentially threatening a government shutdown.
“It is my understanding that we don’t have a budget and will likely leave here without a budget. But this piece of legislation …which I don’t think remedies any of Mississippi’s issues, this has become one of the top priorities that we had to get done,” said Democratic Sen. Rod Hickman. “I just want to say, if we put that much work into everything else we did, Mississippi might be a much better place.”
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
Mississippi Today
House gives Senate 5 p.m. deadline to come to table, or legislative session ends with no state budget
The House on Wednesday attempted one final time to revive negotiations between it and the Senate over passing a state budget.
Otherwise, the two Republican-led chambers will likely end their session without funding government services for the next fiscal year and potentially jeopardize state agencies.
The House on Wednesday unanimously passed a measure to extend the legislative session and revive budget bills that had died on legislative deadlines last weekend.
House Speaker Jason White said he did not have any prior commitment that the Senate would agree to the proposal, but he wanted to extend one last offer to pass the budget. White, a Republican from West, said if he did not hear from the Senate by 5 p.m. on Wednesday, his chamber would end its regular session.
“The ball is in their court,” White said of the Senate. “Every indication has been that they would not agree to extend the deadlines for purposes of doing the budget. I don’t know why that is. We did it last year, and we’ve done it most years.”
But it did not appear likely Wednesday afternoon that the Senate would comply.
The Mississippi Legislature has not left Jackson without setting at least most of the state budget since 2009, when then Gov. Haley Barbour had to force them back to set one to avoid a government shutdown.
The House measure to extend the session is now before the Senate for consideration. To pass, it would require a two-thirds majority vote of senators. But that might prove impossible. Numerous senators on both sides of the aisle vowed to vote against extending the current session, and Lt. Gov. Delbert Hosemann who oversees the chamber said such an extension likely couldn’t pass.
Senate leadership seemed surprised at the news that the House passed the resolution to negotiate a budget, and several senators earlier on Wednesday made passing references to ending the session without passing a budget.
“We’ll look at it after it passes the full House,” Senate President Pro Tempore Dean Kirby said.
The House and Senate, each having a Republican supermajority, have fought over many issues since the legislative session began early January.
But the battle over a tax overhaul plan, including elimination of the state individual income tax, appeared to cause a major rift. Lawmakers did pass a tax overhaul, which the governor has signed into law, but Senate leaders cried foul over how it passed, with the House seizing on typos in the Senate’s proposal that accidentally resembled the House’s more aggressive elimination plan.
The Senate had urged caution in eliminating the income tax, and had economic growth triggers that would have likely phased in the elimination over many years. But the typos essentially negated the triggers, and the House and governor ran with it.
The two chambers have also recently fought over the budget. White said he communicated directly with Senate leaders that the House would stand firm on not passing a budget late in the session.
But Senate leaders said they had trouble getting the House to meet with them to haggle out the final budget.
On the normally scheduled “conference weekend” with a deadline to agree to a budget last Saturday, the House did not show, taking the weekend off. This angered Hosemann and the Senate. All the budget bills died, requiring a vote to extend the session, or the governor forcing them into a special session.
If the Legislature ends its regular session without adopting a budget, the only option to fund state agencies before their budgets expire on June 30 is for Gov. Tate Reeves to call lawmakers back into a special session later.
“There really isn’t any other option (than the governor calling a special session),” Lt. Gov. Delbert Hosemann previously said.
If Reeves calls a special session, he gets to set the Legislature’s agenda. A special session call gives an otherwise constitutionally weak Mississippi governor more power over the Legislature.
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
Cuts to public health and mental health funding in Mississippi have doubled – reaching approximately $238 million – since initial estimates last week, when cancellations to federal grants allocated for COVID-19 pandemic relief were first announced.
Slashed funding to the state’s health department will impact community health workers, planned improvements to the public health laboratory, the agency’s ability to provide COVID-19 vaccinations and preparedness efforts for emerging pathogens, like H5 bird flu.
The grant cancellations, which total $230 million, will not be catastrophic for the agency, State Health Officer Dr. Daniel Edney told members of the Mississippi House Democratic Caucus at the Capitol April 1.
But they will set back the agency, which is still working to recover after the COVID-19 pandemic decimated its workforce and exposed “serious deficiencies” in the agency’s data collection and management systems.
The cuts will have a more significant impact on the state’s economy and agency subgrantees, who carry out public health work on the ground with health department grants, he said.
“The agency is okay. But I’m very worried about all of our partners all over the state,” Edney told lawmakers.
The health department was forced to lay off 17 contract workers as a result of the grant cancellations, though Edney said he aims to rehire them under new contracts.
Other positions funded by health department grants are in jeopardy. Two community health workers at Back Bay Mission, a nonprofit that supports people living in poverty in Biloxi, were laid off as a result of the cuts, according to WLOX. It’s unclear how many more community health workers, who educate and help people access health care, have been impacted statewide.
The department was in the process of purchasing a comprehensive data management system before the cuts and has lost the ability to invest in the Mississippi Public Health Laboratory, he said. The laboratory performs environmental and clinical testing services that aid in the prevention and control of disease.
The agency has worked to reduce its dependence on federal funds, Edney said, which will help it weather the storm. Sixty-six percent of the department’s budget is federally funded.
The Centers for Disease Control and Prevention pulled back $11.4 billion in funding to state health departments nationwide last week. The funding was originally allocated by Congress for testing and vaccination against the coronavirus as part of COVID-19 relief legislation, and to address health disparities in high-risk and underserved populations. An additional $1 billion from the Substance Abuse and Mental Health Services Administration was also terminated.
“The COVID-19 pandemic is over, and HHS will no longer waste billions of taxpayer dollars responding to a non-existent pandemic that Americans moved on from years ago,” the Department of Health and Human Services Director of Communications Andrew Nixon said in a statement.
HHS did not respond to questions from Mississippi Today about the cuts in Mississippi.
Democratic attorneys general and governors in 23 states filed a lawsuit against the U.S. Department of Health and Human Services Tuesday, arguing that the sudden cancellation of the funding was unlawful and seeking injunctive relief to halt the cuts. Mississippi did not join the suit.
Mental health cuts
The Department of Mental Health received about $7.5 million in cuts to federal grants from the Substance Abuse and Mental Health Services Administration.
Over half of the cuts were to community mental health centers, and supported alcohol and drug treatment services for people who can not afford treatment, housing services for parenting and pregnant women and their children, and prevention services.
The cuts could result in reduced beds at community mental health centers, Phaedre Cole, the director of Life Help and President of Mississippi Association of Community Mental Health Centers, told lawmakers April 1.
Community mental health centers in Mississippi are already struggling to keep their doors open. Four centers in the state have closed since 2012, and a third have an imminent to high risk of closure, Cole told legislators at a hearing last December.
“We are facing a financial crisis that threatens our ability to maintain our mission,” she said Dec. 5.
Cuts to the department will also impact diversion coordinators, who are charged with reducing recidivism of people with serious mental illness to the state’s mental health hospital, a program for first-episode psychosis, youth mental health court funding, school-aged mental health programs and suicide response programs.
The Department of Mental Health hopes to reallocate existing funding from alcohol tax revenue and federal block grant funding to discontinued programs.
The agency posted a list of all the services that have received funding cuts. The State Department of Health plans to post such a list, said spokesperson Greg Flynn.
Health leaders have expressed fear that there could be more funding cuts coming.
“My concern is that this is the beginning and not the end,” said Edney.
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
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