Paul Lacoste, a fitness trainer and one of the retired athletes ensnared in Mississippi’s ongoing welfare scandal, is firing back at the state agency suing him.

In his recent counterclaim, Lacoste alleges that someone from the state invited him to a meeting in mid-2018 to discuss awarding him a contract, and that former Gov. Phil Bryant directed the welfare agency to hire Lacoste’s organization to conduct free fitness boot camps throughout the state.

At this time, the athlete had already been putting on classes for professionals and government officials in the Jackson metro area, which included then-Lt. Gov. Tate Reeves and many other lawmakers.

Lacoste’s organization, Victory Sports Foundation, eventually received $1.3 million in funds from the federal welfare program Temporary Assistance for Needy Families, or TANF, through a private nonprofit called Mississippi Community Education Center, auditors found in 2020. 

“In return for those funds, Victory Sports and Lacoste conducted fitness boot camps, none of which were designed to achieve, or did achieve, any lawful TANF purpose,” MDHS’s complaint reads. “… Lacoste and Victory Sports Foundation owe MDHS a debt of $1,309,183.”

The payments led to criminal charges against nonprofit founder Nancy New and her son Zach New, who admitted that they defrauded the government by funneling welfare money to Lacoste’s program.

But Lacoste maintains that he never knew the money he received was meant to help poor families, and now he’s alleging the former governor and federal officials were in on it. 

Lacoste joins a growing number of defendants in the civil case — including Nancy New, the former welfare director’s nephew Austin Smith and former NFL quarterback Brett Favre — who are implicating Bryant. The former governor has not faced civil or criminal charges.

Mississippi Today first reported on Reeves’ connections to the fitness contract, including meetings he had with both Lacoste and former welfare director John Davis, who is awaiting sentencing in the criminal welfare fraud case. The revelations prompted Smith’s attorney to demand Reeves be added as a defendant to the lawsuit. 

But Lacoste’s recent motion doesn’t mention Reeves by name, only Bryant. 

Because Reeves controls the welfare department, an agency under the governor’s office, he’s also in charge of the civil suit, which targets Lacoste along with dozens of others. Lacoste also endorsed Reeves for governor in 2019.

Lacoste’s counterclaim said he’s been “ridiculed throughout the State as someone who knowingly took money from indigent people in Mississippi.”

“He did no such thing,” the filing reads. “This damage has and continues to be suffered as the proximate result of the negligence by the State through MDHS (Mississippi Department of Human Services) when MDHS negligently paid for the fitness camps with TANF funds.”

Lacoste asked the judge, Hinds County Circuit Court Judge Faye Peterson, to enter a judgment against MDHS and award him damages for emotional distress among other things.

The athlete said he attended a meeting with Bryant and Davis in mid-2018. He said representatives from the federal government, whose policies govern how states can spend their welfare funds, were in attendance.

Lacoste said Bryant and Davis told him that they wanted to hire his organization as part of the state’s initiative to reduce obesity and improve wellness for Mississippians. Though they were engaging the welfare department, Lacoste’s filing does not say that they discussed reserving the program for poor families.

“At the conclusion of the meeting, the state and federal attendees in the meeting asked Lacoste if he would be interested in providing the services on a statewide basis,” Lacoste’s counterclaim reads. “Ultimately, Governor Bryant instructed John Davis to work with Lacoste, and VSF (Victory Sports Foundation) ultimately was selected to provide the services.”

The civil charges MDHS filed against Lacoste also discuss this meeting, but in a much different tone, and omitted the fact that Bryant and federal representatives were there.

“Lacoste facilitated a meeting with Davis, during which Lacoste proposed to MDHS Executive Director John Davis that Davis steer substantial grant funds to Victory Sports (and thus to Lacoste) in exchange for Lacoste’s continuing provision of ‘fitness camps’ to elected officials, their political staffs, and fee-paying participants,” reads MDHS’s amended civil complaint.

Lacoste, Davis and Reeves then met to discuss the fitness program in early 2019 – after Lacoste’s organization entered into the contract with New’s nonprofit but before it received the bulk of the money. The agency was in financial turmoil at that time and had recently notified grantees that their funding would be cut. MDHS subgrants are conditional on money being available, so a contract itself is not always a guarantee of payment.

Lacoste told Davis that Reeves wanted to meet alone, adding, “Tate wants us all to himself.”

Two days later, Davis instructed his deputy to make covert payments to New’s nonprofit to pay for the Lacoste contract, calling it “the Lt. Gov’s fitness issue,” referring to Gov. Reeves, lieutenant governor at the time of the scandal. 

State Auditor Shad White, the former Bryant campaign manager whom Bryant originally appointed to his position, questioned the payments to the Victory Sports program because “no eligibility determination was made to verify participants were TANF eligible or needy.”

But a forensic audit released in October of 2021, which MDHS has used as the basis of its civil complaint, questioned the payments to Victory Sports Foundation because they were indicative of undue influence by Davis.

“John Davis’s influence was needed for Victory Sports to be awarded a grant from MCEC,” auditors wrote.

None of the audits mentioned Bryant’s or Reeves’ involvement in securing the contract or payments for Lacoste.

MDHS’s amended complaint alleges that Davis “created a culture of secrecy and fear within the agency to cover his illegal and fraudulent misuse of the public funds entrusted to his authority.”

“He fraudulently abused his position at MDHS to ingratiate himself with these former athletes by employing them or arranging to provide them with federal TANF grant funds,” it said.

Davis, who is cooperating with the prosecution in its ongoing investigation, has not made any public comments regarding the involvement of Bryant or Reeves.

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