Mississippi State Auditor Shad White announced his office’s annual report on the state’s federal spending Tuesday, with a special focus on the Mississippi Department of Education’s bidding process to secure computers for school children.
White said the department mishandled choosing a vendor, ultimately giving special treatment to the winning company. That critique, along with other missteps the report details, is something MDE has denied in a letter to the auditor’s office.
White called the 388-page report the most “important report in the state of Mississippi” on whether “federal money actually helped people.”
“From a small county to a big state agency, folks around the state need to know we’re watching these processes,” White said during a Tuesday phone call with reporters.
The annual audit spanned the largest amount of federal funds the office has ever examined in a fiscal year since the 2008 financial crisis. It covers the fiscal year ending June 30, 2021, including the $1.25 billion of Coronavirus Aid, Relief and Economic Security (CARES) Act money allocated by the Legislature.
In 2020, the Legislature allocated $150 million of COVID relief money to purchase computers for remote learning at the beginning of the pandemic. The Department of Education was responsible for managing this process; school districts were required to contribute 20% of their own federal money for their computers, and the remaining 80% would be covered by the federal funds disbursed by the Legislature. The law also gave MDE the ability to select a vendor and make a bulk purchase for participating districts across the state.
The report says the Department of Education let the winning vendor — an Illinois company called CDW — have influence over the criteria for proposals before they were released, and gave the company multiple weeks advance notice of what the criteria would be.
“All vendors selected by MDE were allowed to provide input on the specifications,” MDE wrote in its response letter to the auditor’s office. “The scheduling of these meeting dates … were not solely driven by MDE but were set based on vendor availability. All meetings were scheduled as quickly and as often as practicable under the circumstances.”
MDE dubbed the plan Mississippi Connects. White chastised the agency in 2020 because he said the department required schools to purchase computers from a preferred vendor list to receive the 80/20 match, something MDE also disputed.
In his latest report, White also pointed out that CDW scored better on one section despite being more expensive than other bids. MDE said in its response letter, which was dated in October of this year, the company received more points because of CDW’s promise to deliver the computers by a Nov. 20, 2020 deadline.
White, however, says that all vendors had committed to delivering the devices by the deadline in their cost estimates.
The report also pointed out the Department of Education failed to properly monitor federal funds given to nonprofits that provides meals to hungry children and adults to ensure the money was, in fact, fulfilling that purpose. In their October letter, MDE also disputed this claim.
Separately, the report highlighted $453 million that was improperly administered through unemployment, and up to $69 million that may have gone to fraudulent Medicaid recipients.
The federal government will examine the state’s report — as it does every state’s annual audit report — to determine if any clawbacks for misspent funds are necessary.
Legislative leaders approved a starting budget proposal for the quickly approaching 2023 session that leaves the state with an unprecedented $3.9 billion in unencumbered money.
House Speaker Philip Gunn, who presides over the Legislative Budget Committee that approved the budget recommendation Tuesday, said a little more than $1 billion of the reserve funds are recurring. In other words, the funds will be available yearly for legislators to spend.
The overflowing state coffers are already spawning debate among legislative leaders about providing taxpayers with rebate checks or phasing out the personal income tax.
Overall, the state budget recommendation approved for the upcoming fiscal year, beginning July 1, is for $7 billion in state support funds or $2.04 billion less than what was appropriated for the current fiscal year.
The current budget includes one-time federal COVID-19 relief funds and other reserves. Most likely, the Legislature during the 2023 session will appropriate additional reserve funds for various building projects and for other primarily one-time expenses, significantly increasing the budget total for the upcoming fiscal year. The budget approved Tuesday by the 14-member Budget Committee, which includes both Gunn and Lt. Gov. Delbert Hosemann, is viewed as a starting point for the 174 members of the Legislature to use in developing a budget for the next fiscal year.
Despite the unprecedented revenue growth, though, legislative leaders continue to oppose expanding Medicaid, as 39 other states have done, to provide health care coverage for primarily the working poor. Or, on a lesser scale, to provide Medicaid coverage for mothers of newborns for one year instead of 60 days.
When asked about the state’s poor health outcomes, Gunn said, legislators are looking for solutions, but said, “I think we have to have some discussions about what role the government plays in that.”
Gunn reiterated his opposition to expanding Medicaid and said he would not consider proposals to extend postpartum care from 60 days to a year until the Division of Medicaid endorsed the plan. Medicaid Executive Director Drew Snyder has said the expansion of postpartum care would cost the state $7 million per year, but has refused to take a position on it.
The Senate voted last year to extend postpartum coverage, but it died in the House.
“I don’t see the advantage of doing the postpartum thing,” Gunn said.
The speaker did say he supported spending up to $70 million of the about $300 million the state has left in federal COVID-19 relief funds to help shore up the state’s rural hospitals that have been struggling financially with many in danger of closing.
Gunn said he doesn’t foresee lawmakers pumping more money into the Mississippi Adequate Education Program – the public school funding formula – beyond the money from the teacher pay raise passed last year that will transfer into MAEP. Gunn is critical of the MAEP formula as “unattainable,” and has in the past advocated scrapping it.
“Ask the teachers out there whether they would rather have $250 million in teacher pay raises, or $250 million just go into the formula,” Gunn said. “I think I know which they would rather see.”
The formula was more than $300 million short of full funding last year.
Gunn credited the large reserve to “conservative” budgeting.
“We have rejected the push to grow government over the last many years,” Gunn said.
Most states, whether conservative or liberal, are experiencing strong revenue growth thanks in large part to federal COVID-19 relief funds pumped into states. In addition, high inflation and wage growth also have contributed to increased tax collections.
Gunn said he continues to advocate for the complete elimination of the state income tax. Hosemann and many in the Senate have advocated for a large one-time rebate to taxpayers.
Gov. Tate Reeves, who released his budget proposal in November, also is advocating for the elimination of the income tax.
The proposal adopted Tuesday would fill the state’s “Rainy Day Fund” with $579 million.
Some other highlights of the proposal include:
Increased spending on:
State employee health insurance: $32 million.
Child Protection Services, foster care and adoption: $12.3 million.
Department of Public Safety, salary increases and forensics lab: $3 million.
Department of Revenue, full funding of homestead exemption: $1.4 million.
The budget proposal includes about $16.5 million in spending cuts, including deleting more than 2,000 vacant state government positions, reducing travel and contractual services, spending down agency cash balances and eliminating one-time expenditures.
The furniture company regularly got sums every few years — ranging from $200,000 to $1.3 million — in exchange for the promise to create jobs.
It was the largest employer in Monroe County. Now, its owner is missing and its former employees are filing lawsuits and hunting for new jobs.
“It’s a disgrace is what it is,” Jackson-based attorney Phil Hearn told Mississippi Today. Hearn is leading a class-action lawsuit on behalf of hundreds of workers.
United was an anchor of the furniture manufacturing hub of Northeast Mississippi — among the dozens of companies benefitting from decades of tax breaks to do business in-state. The companys buildings in Lee County were free from local and state property taxes, another incentive perk. It also likely saved massive amounts of money on its payroll taxes as part of a job creation rebate program and tax credits from a special program for upholstery companies.
When then-Gov. Phil Bryant announced that United would get more than $1.3 million to support an expansion in 2013, he called the manufacturer “a valued business partner for the State of Mississippi.”
In 2015, the company got $500,000 more with similar fanfare. Then, $200,000 the next year and another promise of 100 new jobs. Both the most recent grants were awarded through the state’s “ACE” program – commonly referred to as “deal closing funds” when competition is fierce.
Every celebrated announcement touted jobs, partnerships and keeping Mississippians at work in the furniture industry.
But with one email to 2,700 employees overnight a few days before Thanksgiving, that long-standing partnership shattered. The company wasn’t just closing – it was already closed. No federally-mandated warning to employees that layoffs were coming. No announcement of a sale. No filing for bankruptcy.
Just closed.
Hearn said in his three decades as an attorney handling employee rights cases, he’s never seen anything like this: a total disregard for labor laws, no planning, and limited information available to workers.
“I’ve been with the company through several owners and names,” line worker Jeff Jones told the Daily Journal. “We’ve always bounced back. In the email they made it perfectly clear there’s no bouncing back from this.”
Jones worked for United Furniture for more than 30 years.
Hearn said the state’s history of supporting the company gave employees a sense of security that made the sudden collapse even more shocking.
“It can be difficult to evaluate some of these incentive programs for various reasons,” said State Economist Corey Miller. “A number of companies that get them get more than one incentive, and it’s difficult to untangle the impact of each one.”
Miller said in the case of United, the company’s sudden fall doesn’t mean the millions the state put up to support the company were for nothing.
“I don’t think they necessarily weren’t worth doing,” Miller said. “I haven’t evaluated the whole situation, but it’s possible because they were around for a while, people had jobs, that the state got some return on investment.”
United Furniture was created after a merger between three companies in 2000: Comfort Furniture, Parkhill Furniture and United Chair. Comfort Furniture, the leading of the three, was founded in Mississippi in 1983.
Over the 2010s, the company regularly received state-funded support in grants through the Mississippi Development Authority. In addition to grants, the company was also certified to participate in the state’s Advantage Jobs Incentive Program, which allows companies to have up to 90% of payroll taxes withheld for up to a decade dependent upon the number of jobs it created.
In 2020, the revenue department projected the total cost of the program would be about $18 million and covered a dozen companies in 10 counties – including in counties that were home to United facilities.
Another tax credit program, specific for upholstery companies such as United, allows them up to $2,000 job tax credit per position created since 2010 and covers up to 100% of their income tax liability.
But any details about if United – or any one company – took advantage of either programs and to what extent isn’t public, according to the state Department of Revenue.
By 2017, United had about 3,500 employees and facilities in Nettleton, Tupelo, Okolona, Sherman, Vardaman, Amory and out-of-state facilities in North Carolina and California. The company took over a Belden factory that belonged to a competitor, buying out the Lane brand for an undisclosed amount.
But in July of this year, United announced it was laying off 300 people and closed its Amory plant because it was turning the facility into a distribution warehouse. After the layoffs, the company still had 17 facilities (including one in Vietnam) and about 2,700 employees.
“Our team is committed to the long-term success of our company,” then-Chief Executive Officer Todd Evans said in a statement at the time. “That commitment requires right-sizing at the present time. We are confident that the product, sales, and operational plans that we have established will provide for a successful future.’’
But that success didn’t come.
Miller, the state economist, said the United situation seems like more of an outlier — not an indication Northeast Mississippi’s furniture industry as a whole is in danger.
There has been some slow down industry-wide, Miller said. Companies aren’t seeing the same high demands for home furnishings they were during the pandemic. But most companies aren’t at a crisis level.
The larger economic impacts to the Monroe and Lee counties will depend upon how quickly workers are in new jobs, Miller said.
Nettleton-based furniture manufacturing company Homestretch Furniture hired 15 former United workers at a recent job fair. Ashley Furniture, another company with local manufacturing, has also recruited workers.
MDA declined to make any comments specific to United or its past grants, but Deputy Director Laura Hipp said in a statement that the state agency will “work with local economic development partners on how the needs of the area can be supported.”
Hearn, the attorney, said he’s seen entire families devastated: five brothers who all worked for United, a mother and two daughters – one pregnant – now without health insurance.
His clients largely fall into two categories: eager for another furniture job because it’s all they know, or eager for a change because they’re terrified the same thing will happen at another plant.
His clients range from executive-suite workers to line workers and truck drivers.
“They all have one thing in common,” he said. “They’re scared to death.”
Had United followed Worker Adjustment and Retraining Notification (WARN) laws, it would have given employees 60 days notice before the massive layoffs.
The decision to shutter the company came from Stage Capital LLC, the company’s owners. Head of Stage Capital, David Belford, has been missing since the email closing the company went out.
Hearn said he’s heard company rumors the millionaire – or possible billionaire – ran off to Paris.
United is now facing three class-action lawsuits – which a judge could roll into one case – that accuses the company of failing to follow the WARN Act and still owing workers their last week’s paycheck.
“I’ve never seen anything so callous,” Hearn said.
Mississippi — the world’s leader in imprisoning people — will soon skyrocket past its capacity to hold them all.
In just 10 months, the state’s prison population has exploded, rising almost twice as fast as inflation. If this rate persists, the Mississippi Department of Corrections would exceed its listed capacity of 20,443 over the next several months.
Eldon Vail, an inspector of Mississippi prisons in recent years, called the alarming rate “pouring gasoline on a top of a fire that is already raging.”
Between 1993 and 2013, the state’s prison population more than quadrupled, thanks largely to mandatory minimum sentences, with the population peaking in the past decade at more than 23,000. That prompted a push for reforms that included House Bill 585, which then Republican Gov. Phil Bryant signed into law in 2014.
In the years since, reforms and an aggressive Parole Board reduced the number of inmates. By 2016, Mississippi had fallen into third place in per capita imprisonment, trailing Louisiana and Oklahoma.
Five years later, additional reform took place with the passage of the Mississippi Earned Parole Eligibility Act, which gave thousands more inmates the opportunity to go before the Parole Board. By Feb. 7, the prison population had fallen to 16,499, the lowest level in two decades.
That fall mirrored the nation, which saw the prison population decline more than 16% in all states but one between 2019 and 2021, according to the Vera Institute of Justice. (The lone holdout? Alaska, which rose 3.6%.)
But under the leadership of new Parole Board Chairman Jeffrey Belk, that trend has reversed itself.
Ten months later, Mississippi’s prison population now exceeds 19,000 in what the Corrections and Criminal Justice Oversight Task Force calls “unprecedented growth.” If this growth continues at the same rate through 2023, that population would surpass 22,500 for the first time since 2010.
Credit: Mississippi Corrections and Criminal Oversight Task Force
If Mississippi hits that number, taxpayers would be forced to pay $111 million more a year than they were paying in 2020 before the population hike, based on the per-day cost figured by the state’s legislative watchdog, Performance Evaluation and Expenditure Review. That’s more than enough to fund the state Department of Health, the governor’s office and a dozen other state agencies.
“While other states are reducing their prison populations, Mississippi is backsliding, thanks in large part to the actions of the Parole Board,” said Cliff Johnson, director of the MacArthur Justice Center at the University of Mississippi School of Law. “It’s demoralizing. It’s infuriating. And it’s terrible corrections policy.”
The population increase has come, despite the decline in Mississippians sentenced to prison, going from 4,270 in 2018 to 3,189 over the past year, according to the task force’s report.
In an interview, Belk told MCIR that the Parole Board is “not a numbers-driven board.”
Some people want the board to “just blindly parole people and not care if they come back,” he said. “We’re not going to do that.”
For his part, Corrections Commissioner Burl Cain said he isn’t worried about MDOC surpassing capacity, because his agency is creating 660 new spaces inside Mississippi prisons. That includes a move of all female inmates from Central Mississippi Correctional Facility in Pearl to the Delta Correctional Facility in Greenwood.
To curb the rise in prison population, he’s banking on better drug rehabilitation and job training programs to reduce recidivism.
About three-fourths of those behind bars in Mississippi battle drug or alcohol problems or both. Cain said a robust rehabilitation program is now available to 2,700 different inmates.
Credit: Mississippi Corrections and Criminal Oversight Task Force
While serving as superintendent of the Louisiana Penitentiary at Angola, he established a job training program that resulted in a three-year recidivism rate of 9.4% for those who finished the program compared with 34% for the average inmate, according to the Louisiana Commission on Law Enforcement.
He hopes to replicate that success in Mississippi, where the three-year recidivism rate is about 33% and the five-year rate is 77%, according to the 2022 World Population Review.
So far, “we have about 170 inmates in the program,” with more to come, he said.
Most of the instructors, who are inmates, earn 25 to 30 cents an hour, or about $52 a month, he said. “It gives them a little bit of independence, and it’s really good for morale.”
MDOC’s work release program plays a companion role in this. “We have 23 out of 25 inmates in jobs making $15 an hour,” he said. “They’re not going to come back.”
Senior U.S. District Judge Keith Starrett of Hattiesburg, who chairs Mississippi’s Reentry Council, praised Cain for providing job training, moral training and job certification. “Reducing recidivism saves lives, money, families and communities,” he said.
House Bill 585 sought to reduce prison overcrowding, which the Pew Foundation estimated would save Mississippi $266 million over a decade.
But the lawmakers’ promise to use those savings for corrections programming never took place, Starrett said. “The Legislature looks out for a lot of folks, but prisons and programs that reduce recidivism are way down on their list of priorities.”
The weak link is the follow-up in programming for those leaving prison, he said. “Let’s say somebody is successful in getting drug treatment, getting a GED and getting a job, but the first week on the job, they cuss at their boss and get fired.”
Now the work goes away, “and they get discouraged and start stealing or selling drugs,” he said. “You’ve got to have support, supervision and encouragement.”
The ultimate goal of both law enforcement and corrections is community safety, and the way to make the community safer is to reduce recidivism, he said. “Of those in prison, 98% are coming back into the community. What’s important is what kind of people they are when they come back. You don’t want them coming home and breaking in your mama’s house.”
Hinds County District Attorney Jody Owens II — who worked with the then-governor and lawmakers of both parties to help pass House Bill 585 — questioned the rise in inmates. “Are we safer because we are incarcerating more people?” he asked.
Former Chairman Steve Pickett said his Parole Board had a parole rate of about 60%. That is, six out of 10 inmates eligible for parole were able to go free. Belk puts his board’s rate at about 40%.
In contrast to the past board, the current one regularly sets off parole hearings for inmates for years, sometimes as much as seven years before they’re eligible again.
Belk cited the case of 80-year-old woman Evelun Smith, who has been in prison 31 years. He said she had come up for a parole hearing every six months. This time, the Parole Board set her off five years.
“She was not ‘parole-able,’” Belk said. “She didn’t know the heinousness of her crime.”
In 1991, Smith and her boyfriend, Phillip Beard, were given life sentences for their roles in stabbing to death a 28-year-old woman, Dedra McGill of Brookhaven, who had “snitched” on Beard, according to the McComb Enterprise-Journal. Smith testified that Beard had been plotting to kill McGill before she spoke to a grand jury investigating Beard’s drug dealings.
Smith is also serving a 20-year sentence for armed robbery for the couple using McGill’s car to drive them to Louisiana to dump McGill’s mutilated and burned body.
In addition to the current board granting fewer paroles, Mississippi judges are giving longer sentences, according to the task force report. The average sentence in 2018 was 7.7 years; now it’s 8.9 years. The number of those imprisoned for drug offenses has risen from 38.8% in 2018 to 47.3% over the past six months.
State Public Defender André de Gruy said he doesn’t think anyone, including the Parole Board, “knows what they are doing regarding case plans or presumptive parole. They have never followed 585 on presumptive parole.”
The state’s presumptive parole law allows MDOC to release inmates without a parole hearing if they satisfy their case plans.
“Under this program, we tell people exactly what is expected of them when they enter prison, and we reward them when they meet those expectations,” Johnson said. “Our Republican-led Legislature wisely passed the law almost a decade ago, and it has never worked like it is supposed to.”
In a 2021 report, PEER, the state lawmakers’ watchdog, concluded that the Parole Board conducted 274 unnecessary hearings for offenders who qualified for this presumptive parole.
Belk said that was PEER’s “nice way of saying they [the Parole Board and MDOC] weren’t doing it.”
He and Cain are now working to make presumptive parole a reality. That will start with creating a case plan, which will capture education levels, job skills and needs, such as alcohol or drug addictions, when an inmate enters prison, Belk said.
That plan will detail programs for the inmate to take part in, such as getting a GED, developing job skills or taking part in a recovery program, he said. If inmates complete those plans, “there’s no reason why the majority of those can’t be paroled,” he said.
If an inmate rejects chances to improve, it’s better for that inmate to wait, Belk said. “Call it tough love. Sometimes the best thing to do is not parole.”
In fact, he said, some inmates have asked the board to revoke their parole so that they could get six months of intensive drug and alcohol treatment at Walnut Grove Correctional Facility.
Ashley Lukens, president of Mississippi Dreams Prisoner Advocacy, said one major problem is inmates often can’t take classes and programs because of shortages in both correctional officers and case managers.
Since Belk took over as chairman, the Parole Board has increased the number of parole revocations from 1,949 in 2018 to an estimated 2,496 for 2022; the percentage of time served by inmates has risen from 53.5% in 2021 to 60.1% in the last quarter.
To stem this tide, de Gruy suggested the board and judges better utilize Technical Violation Centers. “A lot of people are going to prison for failure to pay fines, fees and assessments. It’s unconstitutional to send someone to prison who can’t pay.”
There needs to be reinvestment, including housing, transportation to jobs for those paroled and improvements in mental health, he said. “We need to relieve the financial burdens because 80% of people entering at arrest can’t afford a lawyer. We then add more and more financial burdens at every step of the process.”
Beyond these issues, there is the question of how many more inmates the Mississippi Department of Corrections can handle.
At the State Penitentiary at Parchman, the department has had to add bunks in order to have enough beds for inmates to sleep. Inmates in Unit 30 told MCIR they now have 104 people, but only three showers, six urinals, five toilets and five sinks.
All this is happening at the same time the department is struggling to hire and retain correctional officers, despite pay raises in recent years. MDOC officials say one of the biggest problems has been retention.
In 2014, the department had 1,591 correctional officers, according to the state Personnel Board. Today, that number is less than 1,000, even though the state is now operating two additional prisons: Walnut Grove Correctional Facility and Marshall County Correctional Facility.
Pickett, who chaired the Parole Board between 2013 and 2021, called the current correctional officer-to-inmate ratio “dangerously low.” So are the case manager numbers, he said.
“We have to accept our failure to invest in good criminal justice public policy,” he said. “We can’t keep pushing the failures back onto local police and county jails and expecting a different outcome.”
Cain said he hopes to solve this shortage through a pay raise for starting correctional officers, beginning Jan. 1. It’s a raise the Personnel Board has already approved.
Will the new pay raise succeed where the old ones failed? For years, starting officers earned $24,900 before the pay rose to $27,149. After Cain arrived in 2020, he convinced lawmakers to boost the starting salary, which is now $36,720. Despite that, MDOC continues to struggle with retaining workers. Cain hopes the newest raise to $40,248 does the trick.
Vail said in recent years, he has witnessed staffing levels so low inside Parchman and East Mississippi Correctional Facility that there wasn’t even a single officer to watch units holding prisoners of 100 or more.
“When that is the case, the vacuum of power and control is ceded to the prisoner population in the form of gangs,” said Vail, who served as corrections secretary for the state of Washington.
In an April report, Justice Department officials criticized “gross understaffing” at Parchman and “uncontrolled gang activity,” which leads to “an environment rife with weapons, drugs, gang violence and extortion. … MDOC officials have long known about these unsafe prison conditions, but have continually failed to correct the conditions.”
In recent months, Parchman has seen a new wave of violence.
On Sept. 26, inmate Richard Weems, who was serving 25 years for armed robbery and 25 years for kidnapping out of Madison County, was killed by blunt force trauma to his head.
Two weeks later, inmate Markeith Williams, who was serving a 25-year sentence for armed robbery out of Grenada County, was stabbed to death in Parchman’s Unit 29, which has a long history of violence, including the killings of three inmates in a 2019-2020 riot.
Despite having the highest incarceration rate in the nation, Mississippi spends less per inmate than any other state.
“Lack of adequate funding is the primary reason for the extraordinary levels of violence and death in the Mississippi Department of Corrections,” Vail said.
Whatever momentum there might have been to parole more people from prison may have been undone by the case of Frederick Bell, whom the Parole Board voted to release under supervision after he served 31 years behind bars for the 1991 killing of a 21-year-old clerk during a store robbery. He also pleaded guilty to killing a 20-year-old man in Memphis.
Bell committed the crimes when he was 19, and now he serves as a mentor, teacher and pastor behind bars.
In August, the Parole Board concluded that he had been rehabilitated and voted to free him, but when criticism followed, the board reversed its decision — just hours before he was slated to walk out the doors of Parchman prison.
Brandon Jones, director of political campaigns for the Southern Poverty Law Center, criticized Mississippi’s “terrible thicket of sentencing laws,” which include “one of the most unforgiving habitual offender arrangements in the world.”
This means thousands of Mississippians held behind bars have “no path to parole at all,” he said. “There needs to be more reasonable paths to parole and a Parole Board that sees the value in second chances.”
This story was produced by the Mississippi Center for Investigative Reporting, a nonprofit news organization that is exposing wrongdoing, educating and empowering Mississippians, and raising up the next generation of investigative reporters. Sign up for our newsletter.
My friend Scott once gave me some excellent advice: “When something bad happens, take a day or two to be mad and then shake-it-off and get busy.” I hope Jackson State can take the momentum created by Deion Sanders, hire a great new coach and keep that it going.
After months of national coverage about how former NFL quarterback Brett Favre solicited welfare money to build a volleyball stadium at his alma mater, the state of Mississippi has filed civil charges attempting to recoup the money.
The lawsuit alleges that Favre “understood that grant funds provided by MDHS could not be used for brick-and-mortar construction” — the first time Favre has officially faced this charge.
The new allegation comes just one week after Favre filed a punchy motion to dismiss the welfare department’s civil charges against him.
Mississippi Department of Human Services filed its initial civil suit, the agency’s response to a multi-million dollar fraud and embezzlement scandal, in May. The initial complaint targeted Favre for $1.1 million he received under a “vague, illusory promise that Favre make appearances or record PSAs” and $2.1 million the athlete helped secure for a pharmaceutical venture.
But the complaint did not initially include the University of Southern Mississippi Athletic Foundation, which took $5 million in welfare money to build a volleyball stadium — billed as a “wellness center” — on its campus.
The amended complaint, filed Monday, adds the athletic foundation and sheds more light on the roles of Favre and other state officials in the scheme, including university officials who are not included as defendants. Former welfare director John Davis and nonprofit founder Nancy New have both pleaded guilty to several fraud and bribery charges in connection with the welfare scandal.
“Despite the Foundation’s expressing worries about ‘rais[ing] negative concerns’ and being ‘scared to death,’ Brett Favre urged Nancy New that it was necessary for the Foundation to ‘utilize you guys [John Davis and Nancy New] in every way,’” the filing reads.
While the new complaint increases Favre’s potential liability by $5 million, it removed the $1.1 million claim against Favre in the initial complaint because he repaid that amount to the state in 2020 and 2021.
The new filing also adds a lobbyist, two former MDHS attorneys and a virtual reality company as defendants in the lawsuit.
It does not mention former Gov. Phil Bryant or the discussions the governor had with Favre about finding funding for the volleyball stadium or Prevacus, the company purportedly developing a drug to treat concussions.
“Governor Bryant was both aware of and supported MCEC’s payments to Prevacus at issue in this lawsuit, as well as its $5 million payment to Southern Miss in connection with the construction of a wellness center,” Favre alleged in his most recent motion.
The lawsuit still names fitness trainer Paul Lacoste and his organization Victory Sports Foundation, which received $1.3 million under what former MDHS leader Davis described as “the Lt. Gov’s fitness issue,” referring to then-Lt. Gov. Tate Reeves. Now governor and in control of the suit, Reeves is also not mentioned in the amended complaint.
In the new complaint, MDHS added the following new defendants:
USM Athletic Foundation.
N3 Holdings, the company that Nancy New and her sons Zach and Jess New owned and allegedly used to personally invest in Favre’s pharmaceutical start-up companies called Prevacus and PreSolMD.
Lobaki, Inc. and Lobaki Foundation, a virtual reality company that received welfare funding to prop up a VR training academy.
JTS Enterprises, the company formed by Brian Jeff Smith, John Davis’ brother-in-law, through which he received welfare funds.
William Longwitz, former lawmaker and lobbyist who received nearly $320,000 in welfare funds to lobby on behalf of New’s organization.
Inside Capitol, LLC, Will Longwitz’s lobbying firm.
Jacob Black, former MDHS attorney.
Garrig Shields, former MDHS attorney who left the agency to work for New’s nonprofit.
William, Weiss, Hester and Co., PLLC, the accounting firm that conducted regular audits of the New nonprofit.
The initial complaint sought to claw back a total of about $24 million. The new complaint asserts that the two nonprofits through which most of the money was misspent — Mississippi Community Education Center and Family Resource of North Mississippi — breached their agreements with MDHS and should have to return their entire awarded amounts, $39.3 million for MCEC and $38 million for FRC. Neither nonprofit has assets totaling anywhere near those amounts.
Former U.S. Attorney Brad Pigott, the private attorney MDHS first hired to bring the suit, planned to include the volleyball project in the complaint, but Reeves’ office instructed him to remove it before filing. In July, after Pigott subpoenaed the athletic foundation for its communication with former Gov. Bryant, among other individuals, Reeves’ appointed welfare director Bob Anderson fired the attorney. At that time, Reeves said the agency was still considering more potential defendants to add to the suit, including the athletic foundation.
“Governor Tate Reeves tasked me with correcting the path of MDHS,” Anderson said in a statement Monday. “As part of that process, MDHS has been working hard to restore trust and put in place numerous internal controls to ensure that misspending is not repeated in the future. The rest of the task involves recovering and returning to the taxpayers the millions of dollars in misspent funds which were intended to benefit Mississippi’s needy families. We continue that task with this motion to file an amended civil complaint.”
The amended complaint alleges that in April of 2017, Favre made a “handshake agreement” with USM, where his daughter played volleyball, to personally guarantee the funds to construct a new facility for the team. He then contributed $150,000 worth of autographed merchandise and began soliciting donations from various people and companies, including the Kohler family.
“Favre, however, was unable to convince his friends and connections to donate enough money to meet his obligation to fund the construction of the volleyball facility, and he did not want to pay the costs out of his own pocket,” the complaint reads.
Favre’s attorney Eric Herschmann rejected the assertion that the athlete personally committed funds to the project, pointing to emails from USM’s athletic director at the time, Jon Gilbert, that say Favre agreed to fundraise for the project.
In July of 2017, Gilbert introduced Favre to nonprofit founder Nancy New, Favre said in his recent filing.
New, who sat on the athletic foundation board alongside Favre, and another nonprofit operator Christi Webb had just become the recipients of a massive cash flow from the welfare department. At the time, New’s nonprofit Mississippi Community Education Center already had existing leases with USM, including for a large suite at the football stadium, where the nonprofit could invite guests to watch the games.
Shortly after connecting with New, Favre met at USM with her, Gilbert, Davis, MDHS attorney Garrig Shields and former WWE wrestler Teddy DiBiase to discuss using MDHS funds on the volleyball construction.
“John Davis discussed his plan to ‘do good things for USM’ and ‘give them 4 mil’ with Christi Webb and Nancy New, both of whom enthusiastically agreed. John Davis suggested that Nancy New tell Jon Gilbert that the facility should be named after Favre,” the complaint reads. “The Foundation told Brett Favre that they were ‘very leary [sic] of accepting such a large grant,’ and suggested ‘trying to find a way for John [Davis] to allocate money to an entity that could then give to us that would pay for brick and mortar.’ Brett Favre also told Nancy New he ‘passed [this] same info[rmation] to John [Davis] and of course he [John Davis] sent back we will find a way to make it work.’”
The lawsuit alleges attorneys Shields and Black were instrumental in crafting the sham lease agreement, as well as facilitating several other allegedly fraudulent purchases.
Black was one of the employees who gathered and brought information about Davis’ alleged fraud to Gov. Bryant in June of 2019.
Favre denies any wrongdoing in the volleyball project. Longwitz, Black, Shields and a spokesperson for USM did not return calls to Mississippi Today on Monday.
“While he had helped raise funds for the facility and thereby met Davis and New, Favre, as with the transfers complained of in the Complaint, did absolutely nothing wrong in connection with the Wellness Center,” Favre’s Nov. 28 motion reads. “During Favre’s fundraising efforts, in July 2017, the Southern Miss athletic director introduced Favre to New, a Southern Miss Athletic Foundation board member, as someone who could assist Favre with the fundraising. New was well connected with numerous Mississippi officials, including Davis and then-Governor Bryant, and close friends with Governor Bryant’s wife Deborah Bryant.”
Tom Duff, current president of the Institutions of Higher Learning Board of Trustees and one of the board members who signed off on the $5 million MDHS grant to build the volleyball stadium in 2017, told Mississippi Today last month that he believed USM should return the funds.
“MDHS’s proposed amended complaint, in which MDHS has dropped its original $1.1 million claim against Brett Favre, while adding new groundless allegations about him, is as frivolous as its original complaint,” Herschmann said in a statement Monday after the state’s latest filing. “Again, MDHS omits facts key to these new allegations—including that the Mississippi Attorney General signed off on the transfers of funds from MDHS to another state entity, the University of Southern Mississippi, all with the full knowledge and consent of the Governor and other State officials. That a private citizen, like non-lawyer Brett Favre, could have any liability under these circumstances is baseless. Accordingly, we will oppose, on Brett’s behalf, MDHS’s motion to amend the complaint to the extent it adds these new groundless allegations. “
Editor’s note: Mississippi Today Editor-in-Chief Adam Ganucheau’s mother signed off on the language of a lease agreement to construct a University of Southern Mississippi volleyball stadium. Read more about that here.
Low-income women in Mississippi have less access to health care in the months after giving birth than their counterparts in every state except Wyoming.
Mississippi and Wyoming are now the only two states in the country that have neither expanded Medicaid eligibility to low-income working adults, nor extended postpartum Medicaid coverage for new mothers beyond 60 days after birth, according to data compiled by the health nonprofit KFF.
The other nine states that have not expanded Medicaid eligibility have all sought to extend postpartum coverage in recent years. Seven of them, including Alabama, Tennessee, Georgia and South Carolina, have extended coverage to a year after birth. Texas and Wisconsin have sought federal approval to implement shorter extensions of six months and 90 days, respectively.
“We know infant mortality and maternal health are challenges for our state,” said Tennessee Gov. Bill Lee, a Republican who opposes Medicaid expansion, when he introduced his proposal to extend postpartum coverage in 2020. “One in two Tennessee births are covered through our Medicaid program.”
In Mississippi, that number is higher: about six in 10 births are covered by Medicaid.
During the ongoing COVID-19 federal public health emergency, states are not allowed to kick anyone off Medicaid. As a result, women who have given birth since March 2020 will have coverage until the emergency is lifted, potentially as soon as early 2023.
But ordinarily, a Mississippi woman with two kids and a partner together earning $3,000 a month, for example, would lose her Medicaid coverage two months after her baby is born.
The same woman living in Alabama, which has not expanded Medicaid eligibility but approved a 12-month postpartum coverage extension earlier this year, would have health insurance until her baby is a year old. And the same woman living in Arkansas, which has expanded Medicaid but not extended postpartum coverage, would have health insurance before and after her pregnancy, because she would be eligible based solely on her income.
In Mississippi, women whose pregnancies are covered by Medicaid lose the ability to go to check-ups, get treatment for postpartum depression, and receive care for chronic conditions when their babies are just two months old.
(AP Photo/Rogelio V. Solis)
House Speaker Philip Gunn, R-Clinton, has repeatedly rejected postpartum Medicaid extension, which easily passed the Senate last session. He has described the proposal as Medicaid expansion, though it would not make more people eligible for Medicaid. Almost every other state that has refused to expand Medicaid has nevertheless extended postpartum coverage.
Last week, some of the state’s leading doctors told the Senate Medicaid Committee that extending postpartum Medicaid would not only improve abysmal maternal and infant health outcomes but also save money.
Mississippi has the country’s highest infant mortality rate and highest rate of premature births. Dr. Anita Henderson, a pediatrician and president of the Mississippi Chapter of the American Academy of Pediatrics, said the hospital cost of delivering a healthy baby at full term is typically around $5,000 to $6,000. But an extremely preterm baby requires a long stay in a neonatal intensive care unit (NICU), at an average cost of $600,000.
State Health Officer Dr. Daniel P. Edney mentioned that Mississippi is one of just two states that has neither extended postpartum coverage nor expanded Medicaid eligibility.
“What I would beg us to consider is the fact it makes much more economic sense to let Medicaid pay for this rather than the state having to pay for it – either state agencies such as the health department paying, or hospitals paying for it with uncompensated care,” he said.
Pregnant women in Mississippi qualify for Medicaid as long as their family income is below 194% of the federal poverty level– about $4,600 per month for a family of four.
But after giving birth, a Mississippian with kids qualifies for Medicaid only if she has a very low income, earning $578 or less monthly for a family of four.
With such a strict income eligibility requirement, it’s all but impossible for anyone with a full-time job to qualify for Medicaid coverage. (And healthy adults without kids never qualify for Medicaid in Mississippi.)
In states that have expanded Medicaid, including Louisiana and Arkansas, adults with incomes below 138% of the federal poverty level, or about $3,200 for a family of four, qualify for health insurance.
An analysis by the consulting firm Manatt found that expanding eligibility for Medicaid would cut enrollment in pregnancy Medicaid by about half, because many women would qualify based on income alone.
Wil Ervin, deputy administrator for health policy for Mississippi Medicaid, told the Senate Medicaid Committee last week that extending postpartum coverage to a year would cost the state about $7 million.
Mississippi Insurance Commissioner Mike Chaney recently told members of the media he supports the expansion of Medicaid, but that the program most likely will end in 2025.
That statement is inaccurate. Robin Rudowitz, vice president and head of the Medicaid team for the Kaiser Family Foundation, said the program is not slated to end and there is nothing pending federally that would result in the demise of Medicaid expansion in 2025.
The Medicaid expansion program will continue “unless Congress changes the law,” said Rudowitz. Kaiser is a health care advocacy nonprofit and keeps close tabs on federal legislation.
Medicaid expansion is part of the Patient Protection and Affordable Care Act, commonly called Obamacare, which was passed in 2010. Under the expansion program, states can provide health care coverage through Medicaid for people — primarily the working poor — earning up the 138% of the federal poverty level, or about $18,500 annually for an individual.
Mississippi is one of 11 states that has opted not to expand Medicaid to ensure health care coverage for the working poor. Many in the Republican leadership in Mississippi, specifically Gov. Tate Reeves and House Speaker Philip Gunn, have maintained the state cannot afford to expand Medicaid and that they do not want to add to the welfare rolls by providing health insurance for the working poor.
Chaney is the only Mississippi statewide official to take a firm position in favor of expansion, though in doing so he has echoed another talking point of those who oppose expansion — that it will not last.
During the annual Hobnob in October, where the state’s political leaders speak to members of the Mississippi Economic Council, Chaney said of Medicaid expansion: “I’m not sure it would work today because it’s only got a three-year life left on the expansion part. In 2025, all the people that have been put on under expansion will be taken off and you’ve got to find a new (health care coverage) home for them unless the feds change the program. It depends on who controls the election, who controls the administration. I don’t know.”
During additional conversations in recent days, Chaney referenced programs other than the Medicaid expansion program that will end. It is true that the state’s “traditional” Medicaid rolls could be shrinking in the coming months.
As part of federal COVID-19 relief legislation, the federal contribution to each state’s Medicaid program was increased by 6.2% during the pandemic public health emergency. The increase means that this fiscal year the federal government would pay 84.06% of the cost of providing health care services for Mississippi Medicaid recipients with the state paying the rest.
As part of receiving the additional federal funds through the higher matching rate, the state has had to agree not to remove anyone from the Medicaid rolls. In Mississippi, Medicaid provides coverage for poor pregnant women, poor children, the disabled, some categories of the elderly and some caretakers of Medicaid recipients living in extreme poverty.
Medicaid expansion would provide coverage for healthy people who otherwise would not be eligible for Medicaid.
The increased matching rate has resulted in a boon in revenue for the state. According to a Kaiser study, between 2020-2022, the enhanced matching rate for the state’s current program and increased Medicaid enrollment have resulted in additional costs of $173 million in state funds. But during the same time period, the federal government has provided an additional $1.1 billion in federal funds for Mississippi Medicaid recipients.
Mississippi, as the poorest state in the nation, receives the largest matching rate from the federal government for its existing Medicaid program.
Chaney is correct that the enhanced matching rate will end and people most likely will be removed from the rolls, most likely long before 2025. But Rudowitz said the administration of President Joe Biden has said it will provide states a 60-day notice before ending the state of emergency.
At that time, as Chaney said, Mississippi and other states will have to determine if there are ways to provide health care coverage for those who are removed from Medicaid. In Mississippi, many of those who might be removed could obtain coverage by expanding Medicaid or by providing one year of Medicaid coverage for mothers of newborns.
Many of the people in Mississippi who have remained on the rolls during the public health emergency are mothers of newborns. Under Mississippi law, outside of the federal public health emergency, postpartum coverage lasts for only 60 days.
Under Medicaid expansion, the federal government pays 90% of the costs.
Rudowitz said the 90% rate “remains in perpetuity unless Congress changes the law.”
She also said there has been no talk in recent years of Republicans in Congress trying to repeal Obamacare or more specifically the Medicaid expansion program.
In fact, as part of COVID-19 relief legislation, the states that have not expanded Medicaid have been offered a financial incentive to do so. In Mississippi, it is estimated that the financial incentive would provide more than $600 million in federal funds over two years.
Rudowitz said the federal legislation does not put a time limit on how long the states have to expand Medicaid and claim the financial incentive. But the financial incentive only lasts for two years once it begins.
South Dakota citizens voted in early November to adopt Medicaid expansion. Mississippi and 10 other states, most in the Southeast, have not adopted Medicaid expansion.
Robert Taylor, nativo de Laurel, será el próximo superintendente de educación del estado. Credit: Mississippi Department of Education
El superintendente de educación estatal recién nombrado, Robert Taylor, hizo sus primeros comentarios públicos el lunes desde que fue nombrado para el cargo.
“Espero trabajar con (líderes educativos y funcionarios electos) porque este es nuestro estado, este es nuestro hogar y queremos verlo mejorar continuamente”, dijo. “¿Qué podría ser un regalo más grande para un hijo nativo?”
Hablando con los periodistas a través de Zoom, Taylor habló sobre una variedad de temas:
Prioridades iniciales: quiere conocer al personal del Departamento de Educación de Mississippi y reunirse con los superintendentes locales de todo el estado para comprender las fortalezas y debilidades de sus distritos.
Teoría crítica de la raza: Taylor dijo que la teoría crítica de la raza no se enseña en las escuelas públicas. Él entiende que es una teoría jurídica y que sería inexacto decir que la apoya. “Tuve que decirme a mí mismo: ‘Soy un hombre educado, pero me temo que no puedo hablar inteligentemente sobre lo que es la teoría crítica de la raza’”, ya que no se relaciona con su trabajo. Es responsabilidad de las escuelas ayudar a los estudiantes a convertirse en pensadores críticos, pero no empujarlos en ninguna dirección en particular, dijo.
La escasez de maestros: La escasez de maestros y la inversión en maestros de calidad son algunos de los principales desafíos que enfrenta el estado, dijo. Mencionó soluciones, incluida la creación de relaciones con los programas de formación docente en las universidades, programas alternativos de licencias y más trabajo con las administraciones locales con respecto a cómo supervisan a los docentes. También habló sobre la creación de apoyos para ayudar a los maestros a permanecer en el salón de clases.
Continuar y expandir el progreso de Mississippi en el trabajo de alfabetización.
Trabajar con la cámara estatal: Quiere que el MDE se asocie con la Legislatura para ayudar a informar los proyectos de ley que crean los legisladores en función de lo que muestran los datos y la investigación como exitosos.
Un año escolar continuo: cuando se le preguntó específicamente acerca de pasar a un horario escolar de todo el año, algo por lo que el vicegobernador Delbert Hoseman expresó su apoyo, Taylor dijo que la investigación muestra que la educación de todo el año es beneficiosa y apoyaría una propuesta de este tipo.
Participación de los padres: Taylor cree que los padres deben tener una voz fuerte en la educación pública. Dijo que sabe que quieren lo mejor para sus hijos y quiere que se sientan escuchados y que puedan confiar en sus escuelas. Considera que es su deber hacer que la experiencia de la educación sea lo mejor posible para los estudiantes y maestros de todo el estado.
Regreso a casa: Planea vivir en el área metropolitana de Jackson, pero espera conseguir un terreno donde pueda cavar en la tierra y disfrutar del aire libre. También posee tierras en el condado de Greene con sus hermanos donde cazan.
Representación: “Espero que los estudiantes de color vean que tienen la oportunidad de ascender a una posición como esta. Ciertamente me gustaría pensar que no fui seleccionado por mi color sino por mi cuerpo de trabajo. Reconozco que hay muchos niños y niñas negros jóvenes que se ven a sí mismos en mí, pero les pediría que no solo se vean en mí sino en todos los que se encuentren porque eso es ciertamente lo que me pasó a mí”.
Taylor comenzará en su nuevo cargo en enero de 2023, pendiente de confirmación por parte del senado estatal.
Andrés Fuentes
Andrés Fuentes es periodista de FOX8-TV en Nueva Orleans y traductor de Mississippi Today. Antes de que el nativo de Nueva Orleans regresara, era periodista para WLOX-TV en Biloxi, Mississippi.
Mississippi Today’s Bobby Harrison reminisces with former Mississippi political reporter Mac Gordon about covering outspoken former Gov. Kirk Fordice and other political figures from state’s past. Gordon, who now lives in Georgia, also talks about the current Senate race in the Peach State involving former football great Herschel Walker.
