Governor Tate Reeves explained Thursday that his office, not the independent attorney hired to take the case, used an “objective process” to select who would face charges in the state’s massive civil lawsuit that is trying to recover millions of poorly spent social funds.
The stated process, with its many caveats, excluded the University of Southern Mississippi Athletic Foundation, which the head of the welfare department and his attorney originally planned to sue.
Reeves, who has been accused of political cover-up in recent days for firing the private attorney behind the lawsuit, said the state limited its complaint to people and businesses who received payments that a third-party forensic audit firm called “rubbish, fraud and abuse” in a narrow October 2021 Report or who have been the subject of criminal charges.
“We need to have an objective process by which we determine who is prosecuted. Knowing that, we can add any party in the future,” Reeves said Thursday during a press panel at the Neshoba County Fair – his first public comments since being charged with fired the attorney to protect the USM Athletic Foundation and other politically connected players. “…The only exception in the lawsuit we currently have that was not in the ‘waste, fraud and abuse’ category we pursued is Prevacus. And the reason is that at the time the lawsuit was filed, it was the subject of a criminal indictment from one of the co-conspirators.
But like Prevacus, the pharmaceutical company backed by retired NFL quarterback Brett Favre, payments to the University of Southern Mississippi Athletic Foundation have also been the subject of an indictment and plea. The governor’s office ordered the Department of Social Affairs to remove the USM athletic foundation, whose board includes several Reeves donors, from its original civil complaint before it was filed.
Reeves’ statement also doesn’t agree that forensic auditors found $12.4 million in “waste, fraud and abuse,” but the civil suit seeks to recover $24 million. by and for their enrichment.
Nevertheless, the state has, at least so far, decided not to use the civil trial to explore one of the scandal’s most egregious schemes: the use of $5 million in welfare to build a volleyball stadium at the University of Southern Mississippi.
In fact, the welfare department that Reeves oversees fired the attorney who crafted the case, former U.S. Attorney Brad Pigott, for doing just that. Reeves initially endorsed his director of wellness, Bob Anderson, hiring Pigott on a one-year deal, which ends July 31.
Another paradox in Reeves’ explanation of how they chose the people and purchases to target in the lawsuit is that retired NFL quarterback Brett Favre was not included in the report. ‘forensic audit or criminal charges, but he was named as a defendant in the civil litigation. .
READ MORE: Governor Tate Reeves says ousted welfare scandal lawyer had a ‘political agenda’ and wanted media spotlight
Asked Thursday afternoon to clarify its process for selecting defendants, the governor’s office sent a statement saying, “It was decided at the time, based on the amount of evidence surrounding Prevacus that was presented in the indictment, that a limited exception would be made (for entities and individuals related to Prevacus) to the general policy of sticking to “fraud, waste and abuse” as identified by the indictment. forensic audit. Many other entities have been questioned and/or included in indictments that may be added in the future.
The lawsuit does not limit its investigation of Favre to the deal with Prevacus; it also includes $1.1 million in welfare he received for public appearances that officials say they never gave — an expense never described in the “waste, fraud and abuse” report Reeves is referring to.
Favre was seeking funding from the State of Mississippi to support Prevacus. Just weeks after Favre and Prevacus founder Jake Vanlandingham first offered Gov. Phil Bryant stock in the company to get him “on the team” in late 2018, they began receiving stolen social funds for their experimental drug projects which ultimately totaled over $2 million. Text messages uncovered by Mississippi Today showed Bryant agreed to accept a company package two days after leaving office, but the arrests prompted him to back out of the deal.
“We also considered sensitivities regarding ongoing criminal investigations that it would be inappropriate to comment further on,” the governor’s statement continued.
Forensic auditors also noted in reports that they were limited in what they could review, preventing them from making decisions in its “waste, fraud and abuse” report on approximately $40 million in Mississippi Community Education spending. Non-profit center, including payments to the sports foundation and Favré.
“There are certain entities that are involved that the forensic auditor felt they did not have enough information to determine whether or not it was waste, fraud and abuse,” Reeves said Thursday. “And the reason they didn’t have enough information to determine that is because some entities, for example MCEC, because of the criminal case, were unwilling to cooperate with the forensic audit. So there are many entities that are not in the “waste, fraud and abuse” category that can be added in the future. This is also the reason why, most of the time, in situations like this, the civil case comes after the criminal case.
Forensic auditors noted that they were limited in the emails they could review and also unable to retrieve documents not only from the Mississippi Community Education Center, but also from the State Auditor’s Office, which , as the original investigative agency, had many relevant documents.
Some civil defendants have requested a stay of the case to allow the criminal proceedings to conclude before proceeding with the civil proceedings.
“The new defendants have taken responsibility for their roles, but they continue to be pushed into the crossfire by powerful forces vying for political futures and tens of millions of dollars. The state wants to avoid liability and embarrassment, the feds want their money back, and the public wants answers,” New’s attorney Gerry Bufkin wrote in a motion to remain on behalf of the New Mississippi Community Education Center. non-profit.
The hearing for this motion is set for August 17, and based on Reeves’ comments, it appears the state is in favor of this route.
Several other entities that received funds classified as waste, fraud and abuse — such as Through the Fire Ministries, a Christian organization founded by a favorite musician of Deborah Bryant — were not included in the civil lawsuit. The department received $25,000. The other entities named in the forensic audit report that were omitted from the lawsuit received less than $25,000.
The Warren, Washington, Issaquena, Sharkey Community Action Agency (WWISCAA), a defendant in the civil lawsuit, was sued for as little as $49,190.
Lobaki Inc., another company that the defendants admitted to defrauding the government in order to provide hundreds of thousands of welfare dollars, is also omitted from the civil suit.
MDHS originally announced shortly after receiving the forensic audit, the agency would sue both the athletic foundation and Lobaki – but the governor’s office then instituted its “objective process”.
When Pigott began looking for information on the volleyball program, the biggest known purchase in the $77 million welfare scandal, the state abruptly removed him from the case.
The volleyball project began in 2017 when Favre began seeking support for a new sports facility at his alma mater, where his daughter played volleyball. He had the ear of Bryant and welfare officials John Davis, then director of MDHS, and Nancy New, operator of a nonprofit that had begun receiving a windfall of federal grants from the department.
The federal government prohibits states from using this money, a block grant called Temporary Assistance for Needy Families, on brick and mortar, so officials devised a scheme to conceal the true nature of the payment by calling it lease. The non-profit organization claimed the $5 million lease with the sports foundation would allow it to provide services to people in need. Nancy New’s son, Zach New, pleaded guilty to fraud in the scheme. The agreement was signed by the institutes of higher learning and the attorney general’s office, according to the minutes of the IHL board meeting.
A separate report from the same forensic auditors described the Mississippi Community Education Center’s $5 million payment to the USM athletic foundation as prohibited by federal rules.
To explore everyone involved, Pigott subpoenaed the sports foundation for his communication with several key people, including Bryant, his wife Deborah Bryant and Favre. At the same time, Pigott also subpoenaed conservative radio station Supertalk for his interviews with key defendants in the case who often appeared on the show to tout their work.
The administration did not like the direction Pigott was taking.
“There seemed to be a tendency on the part of the attorney that DHS originally hired to want to go beyond those who fell into this category (waste, fraud, and abuse) for the purposes of this litigation,” said Reeves. “It was almost like there was a political agenda from this particular lawyer.”
As for the volleyball plan itself — which could send Zach New to jail — Reeves dithered over the legality of the spending.
“…although it may not have been wise spending, or spending that I would have approved of, the question is whether it was legal or was it waste, fraud and abuse. If it was fraud and waste abuse, we took legal action,” Reeves said. “…I don’t know all the details of how this (volleyball stadium) came to be, what I do know is that it doesn’t seem like an expense that I personally would support for the TANF dollars.”
Are you concerned about how your tax dollars are spent?
Please take a few minutes to share your thoughts on our investigative coverage of the Mississippi welfare scandal: