Lawmakers spent public money on private schools. Does it violate the Mississippi Constitution?
This past session the Mississippi Legislature gave $10 million to K-12 private schools even though the state constitution appears to be one of the few in the nation to prohibit the practice of providing public money to private schools.
Mississippi is among the 37 states that have so-called “Blaine Amendment” constitutional provisions that ban the expenditure of public funds for private, religious schools. But Mississippi takes that provision a step further: its 1890 Constitution appears to prohibit the expenditure of public funds at any private school.
“No religious or other sect or sects shall ever control any part of the school or other educational funds of this state; nor shall any funds be appropriated toward the support of any sectarian school, or to any school that at the time of receiving such appropriation is not conducted as a free school,” Section 208 of the Mississippi Constitution reads.
Despite the language, the Legislature in recent years has both appropriated funds to private schools and provided tax credits to those who contribute to private schools.
During the recently completed session, the Legislature appropriated $10 million in federal American Rescue Plan Act funds to private schools. The legislation created a debate in both the House and Senate with a bipartisan group of senators stopping the proposal until leadership was able to garner the votes to pass it.
Senate Accountability, Efficiency and Transparency Chair John Polk, R-Hattiesburg, told his colleagues who were opposed to the public funds going to private schools that the private schools had been impacted by COVID-19 and needed help to improve their infrastructure with the federal funds.
“We want to make sure they have some ability to improve their conditions,” he said.
During the lengthy debate of the legislation, though, no one brought up Section 208.
READ MORE: Legislature gives $20 million in pandemic relief funds to private schools, colleges
“We believe public money should be spent on public schools,” said Brandon Jones, an attorney and director of political campaigns and policy for the Southern Poverty Law Center Action Fund. “There are a lot of folks working hard against that idea. This appropriation is part of a coordinated effort by special interest groups and politicians to redirect public dollars to private schools.”
As far as Section 208, Jones said, “Our state constitution has prohibited the use of public dollars for private schools for years, but those types of protections are under attack across the country. As an example, there is a case from Maine that is in front of the U.S. Supreme Court right now that could make it even easier for politicians to send public money to private schools.”
That Maine case — Carson vs. Makin — involves state law, not the constitution. Maine law allows students to access public funds to attend private school in certain rural areas. But the law prohibits the public funds from being used at religious schools.
The argument before the Supreme Court, according to SCOTUSblog, is “whether a state violates the religion clauses or equal protection clause of the United States Constitution by prohibiting students participating in an otherwise generally available student-aid program from choosing to use their aid to attend schools that provide religious, or ‘sectarian,’ instruction.”
Earlier the Supreme Court ruled in a case from Montana (which does have a provision in its constitution preventing the expenditure of public funds at religious schools) that if money was being provided to non-religious private schools, it also had to be given to religious schools.
The difference between Montana and Mississippi is that the Mississippi Constitution seems to also prohibit providing public funds to all private schools — whether religious or not.
“Mississippi’s Constitution clearly prohibits the appropriation of funds to any private school,” said Nancy Loome, executive director of the Parents Campaign, a public school advocacy group. “The Legislature in recent years has routinely flouted this constitutional mandate, sending taxpayer dollars to private academies while intentionally underfunding the public schools for which the Legislature is responsible.”
South Carolina, like Mississippi, has a clause in its constitution prohibiting the expenditure of public funds at both religious and non-religious schools.
Just as it did with the federal American Rescue Plan Act funds, Mississippi in 2020 provided federal Coronavirus Aid, Relief and Economic Security Act funds to private schools. In South Carolina, the issue of providing public CARES Act funds to private schools was the subject of a lawsuit.
In 2021, a federal judge ruled the South Carolina Constitution prohibited providing federal CARES Act funds to private schools. The judge ruled that the state constitution did not discriminate against religion because it prohibited public funds to all private schools.
The language in state constitutions banning the funding of religious schools is traced back to James Gillespie Blaine, the Republican minority leader of the Maine House of Representatives. He advocated for an amendment to the U.S. Constitution preventing public funds to religious schools. Efforts to place the language in the U.S. Constitution narrowly lost, but through a national movement similar language was added to many state constitutions in the 1800s.
Supporters of school vouchers argue that the language in the state constitutions banning public funds to private schools is discriminatory. The amendments, many believe, was aimed originally at Catholic schools. Many Catholics argued that they were discriminated against in the public schools.
Loome argues that preserving public funds for public schools is far from discriminatory.
“During and following integration in the 60s and 70s, lawmakers diverted much-needed funding and resources away from public schools and into private segregation academies,” she said. “It was wrong then, and it is wrong today. The public’s funds belong in the public’s schools, and our constitution makes that plain. “
She added, “The private schools that are getting millions of taxpayer dollars have no accountability for the expenditure of public funds. Public schools are held accountable publicly, with ratings and test scores, and publicly available data. If private schools operate in private, as is their right, they should do so solely with private funds.”
Others argue that parents should have the right to spend their tax dollars on a school of their choice.
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With UMMC out of network, Blue Cross members agonize over losing the doctors they trust
Christy Van of Jayess didn’t know what was wrong with her son. It was 2020, and her six-year old, Cooper, was living with stomach issues that put him in near-constant pain and limited his ability to have a normal childhood.
They weren’t getting any answers from Cooper’s pediatrician or a gastroenterologist in Flowood.
“They tried to help him, but I really felt like they weren’t taking me seriously, and I knew that something else was wrong,” Van said.
That changed when her son was referred to Dr. Michael Nowicki, a children’s gastroenterology specialist at University of Mississippi Medical Center. After she told Nowicki about Cooper’s symptoms, he ordered a sweat test.
With that one test, Nowicki was able to diagnose Cooper with cystic fibrosis, a disorder that causes severe damage to the lungs, digestive system and other organs. The condition affects the cells that produce mucus, sweat and other bodily fluids, leading these fluids to thicken and block critical bodily functions.
The disorder manifested in Cooper as a pancreatic deficiency that prevents him from properly digesting fats.
“I’ve never been so shocked in my life. It was devastating for us,” said Van. “At first we were just so overwhelmed, but those doctors at UMMC took care of us.”
Cooper will have to visit a hospital every three months for the rest of his life. He currently sees Dr. David Josey, a pediatric pulmonologist at UMMC, along with a slew of specialists who help manage different facets of living with cystic fibrosis.
“It was just so devastating to me to hear the word ‘forever,’ but Cooper doesn’t dread (going to the doctor)… Cooper just really loves him (Dr. Josey) and his whole team.”
But now the future of Cooper’s care is uncertain. He is one of tens of thousands of Mississippians who have been impacted by UMMC going out of network with his family’s insurer, Blue Cross & Blue Shield of Mississippi. The dispute between the two stems from disagreement over reimbursement rates and Blue Cross’ quality care plan, which measures hospital performance and whether services provided to patients are adequate.
Cooper can continue receiving care at UMMC through his parents’ Blue Cross plan until July 1. Then, they have to make some tough decisions. Paying thousands of dollars per month out-of-pocket each month isn’t an option for a single-income household like his.
UMMC is the only accredited cystic fibrosis care center in the entire state of Mississippi.
Cooper has a daily at-home care routine that allows him to live a normal life. Every morning when he wakes up and before he goes to bed he uses a high-frequency chest wall oscillation device, or a vest that vibrates at a high frequency to clear his lungs of excess mucus.
He also takes a variety of medications that have cleared up his digestive issues.
The treatments prescribed by his UMMC doctor have allowed him to flourish and grow to be an energetic eight-year-old who loves to play sports, his mom said.
“It’s changed his life,” Van said of Cooper’s treatment. “You couldn’t look at him and tell that there was anything wrong with him.”
Switching Cooper’s care to a hospital in network with Blue Cross isn’t an easy fix. UMMC is. The closest alternatives are the University of Alabama Medical Center in Tuscaloosa and Tulane Medical Center in New Orleans.
Though it comes with added financial burdens, the only option the Vans see is buying Cooper a separate health insurance plan that’s in UMMC’s network.
“That is where I want him to be,” Van said. “They saved his life and have given him back his quality of life … we’re just hoping and praying that it’s going to work itself out.”
UMMC and Blue Cross have not been in communication since April 1, when UMMC officially went out of network with the insurance company, according to officials from both entities. Mississippi Insurance Commissioner Mike Chaney on Thursday penned a letter urging the two parties to utilize the same mediation process that was used to settle their contract dispute in 2018.
UMMC is asking Blue Cross for substantial increases to inpatient, outpatient and professional reimbursement rates, some as large as 50%. UMMC maintains it’s asking for below-market rates for academic medical centers. Blue Cross officials say that steep rate hikes would necessitate a substantial increase in customer premiums – despite a Mississippi Today investigation that revealed the insurer is sitting on an enormous reserve of money.
Nicolette Brokaw of Vicksburg has been going to UMMC since she was a baby. Now an adult, she has been seeing the same doctor for a decade, who treats her for an Alpha-1 antitrypsin deficiency (AAT deficiency), a condition that significantly raises a person’s risk for liver and lung disease.
Six months ago when Brokaw received a letter from Blue Cross that alerted her to the contract dispute from UMMC, she decided it wasn’t worth worrying about. She couldn’t control the outcome, and they had resolved similar disputes in previous years.
Now, with UMMC out of network, she’s dreading the laborious and emotionally draining process of finding a new doctor who she trusts.
“I’m going to have to go through the process of giving my whole life story again,” Brokaw said. “They’re going to look at me like I have six heads, and I don’t want to go through that.”
An even bigger worry is finding a new doctor for her three-year-old son with autism, Liam. Recently she’s become worried that Liam is having absence seizures, which are common in autistic children and involve brief, sudden lapses of consciousness.
Brokaw said Liam sometimes stares off into space for a bit, and her intuition tells her it’s not normal distraction. If she could, Brokaw would take Liam to Dr. Lamar Davis, a children’s neurologist at UMMC, who Liam has seen before.
“I wish I could go back to him for this problem, but I can’t because I can’t afford to pay out of pocket for a neurologist,” Brokaw said. “… I wish money wasn’t an object, but it is.”
Currently, Brokaw is trying to get Liam health coverage under a special eligibility category of Medicaid in Mississippi called Disabled Child Living at Home.
Although Liam has already been diagnosed with autism, due to Social Security disability rules, the Mississippi Division of Medicaid is requiring that he receive a behavioral evaluation with an autism rating scale to become eligible for coverage.
“The first diagnosis we got was black and white, but it’s not good enough,” Brokaw said. “It’s ridiculous.”
Brokaw is considering taking Liam to Ochsner Medical Center in New Orleans, but that comes with its own financial challenges. Even if she’s able to get an appointment there, the added gas and hotel costs are going to put added strain on her family, which relies solely on her husband’s income.
What really bothers Brokaw is the knowledge that the people making the business decisions that have put the health of her family, and others at risk are insulated from the consequences of those decisions, she said.
“I can’t imagine what these other people who basically live at the hospital are going through,” Brokaw said. “It’s these people that are taking the hit, not the CEO or the board members. They’re not going to have to worry about putting gas in their car. They go back to $500,000 homes. They can go to the doctor whenever they want to.”
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Black voter strength diluted in Mississippi Supreme Court districts, federal lawsuit claims
Multiple groups have filed a federal lawsuit claiming Mississippi’s three Supreme Court districts, which have not been redrawn in more than 35 years, dilute Black voter strength.
The lawsuit was filed in the Northern District of Mississippi on behalf of Black citizens of the state who claim the districts should have been redrawn since the 1980s by the Legislature to adhere to population changes found by the U.S Census.
“Mississippi’s Supreme Court districts dilute the voice and the votes of Black Mississippians in violation of federal law,” said Ari Savitzky, senior attorney for the American Civil Liberties Union Voting Rights Project.
The state, which has an African American population of about 38%, has nine Supreme Court justices – one of which is Black.
Justice Leslie King is the fourth Black Mississippian to represent the Central District on the state’s high court. All four Black judges initially were appointed to a post on the court by governors and later won election to the court.
When asked why it had been so long since the Legislature had redrawn the districts, House Speaker Philip Gunn had no comment other than to say he was not familiar with the lawsuit.
In 2020, Latrice Westbrooks, a member of the Court of Appeals, sought to become the second African American serving simultaneously on the Supreme Court for the first time in the state’s history and sought to be the first Black woman to serve on the Supreme Court. She lost by about 12,000 votes to Kenneth Griffis who garnered about 51% of the vote.
The three transportation commissioners and three public service commissioners also are elected from the three Supreme Court districts. Willie Simmons of Cleveland, who is African American, currently serves as the Central District transportation commissioner.
He is the first African American elected to serve as a public service commissioner or transportation commissioner.
The lawsuit says the Central District “could easily be redrawn, consistent with traditional principles, to have a majority of eligible Black voters. Especially in light of the high degree of racial polarization in voting in Mississippi, such a change is needed to ensure that Supreme Court elections comply with federal law and allow Black Mississippians a fair and equal opportunity to elect candidates of their choosing.”
The lawsuit says the districts violate federal voting rights law. Because of federal law, states must redraw state legislative and U.S. congressional districts every 10 years to adhere to population shifts found by the decennial U.S. Census. States have more leeway in adhering “to one-man, one-vote” or equal representation principles in judicial districts, but still there are federal and judicial guidelines that must be met in drawing the judicial districts.
“Equal opportunities to ascend to high leadership roles like state Supreme Court justice will draw in more potential leaders committed to building their lives and careers in Mississippi,” said businessman Dyamone White, one of the plaintiffs in the lawsuit. “As a business owner who plans to build a family here in Mississippi, I am committed to building up our state. That means creating Supreme Court district maps that give Black Mississippians fair representation and equal opportunity.”
Other plaintiffs are Ty Pinkins, a 20-year Army veteran and Georgetown law graduate; educator Constance Slaughter Harvey-Burwell; and state Senate Minority Leader Derrick Simmons of Greenville.
The lawsuit was filed by the ACLU, ACLU of Mississippi, Southern Poverty Law Center (SPLC) and the law firm of Simpson Thacher & Bartlett.
The next Supreme Court elections are slated for 2024 when three members of the court will be up for re-election. The PSC and transportation commissioners will be on the ballot in 2023.
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Blue Cross is sitting on a huge pile of money. In some states, consumers would get it back.
Janah Garriga’s 12-year-old daughter, Joshlyn, was diagnosed with T-cell leukemia in February. Joshlyn loves her doctors and nurses at the University of Mississippi Medical Center.
But when Garriga took her daughter to an appointment in early April, she was asked to sign a letter accepting full financial responsibility for all the costs of her daughter’s treatment because the hospital recently went out of network with Blue Cross and Blue Shield of Mississippi, her insurance company.
The letter turned out to be a mistake on the hospital’s part. Because Medicaid is her daughter’s secondary insurer, Garriga fortunately won’t be on the hook for out-of-pocket cancer treatment — unlike many other families across the state.
But after so much confusion, she still worries something could go wrong, complicating her daughter’s cancer treatment.
As the stalemate between the state’s largest hospital and its largest insurer drags on, some of the most gravely ill Mississippians are reaping the consequences, forced to delay needed care, travel out of state and leave doctors with whom they’ve built relationships over years.
Blue Cross of Mississippi is refusing to pay UMMC more for its services. Meanwhile, the for-profit mutual insurance company is sitting on an enormous reserve of money, a Mississippi Today investigation shows, hiding its top leaders’ compensation amounts and transferring its members’ power to longstanding company executives.
Most policyholders caught in the middle of the insurer’s dispute with UMMC are unaware that they have signed away their right to participate in the board’s decisions and are surprised to learn that Blue Cross holds a surplus of hundreds of millions of dollars.
When Garriga learned about the size of Blue Cross of Mississippi’s surplus, she was speechless for a moment.
“It’s greed,” she said. “… And it’s sad that it’s people’s life at stake.”
Financial records show the company has accumulated far more than what regulators require to protect consumers, and perhaps the largest such surplus by percentage of any Blue Cross company in the country.
The value of the company’s surplus stands at about $750 million, about eight times the level that would trigger regulators to take action and about four times the level Blue Cross sets as the floor for companies with its trademark.
“That is extraordinarily high for a company of that size,” said Brendan Bridgeland, an attorney and director of the Boston-based Center for Insurance Research, which advocates on behalf of insurance consumers. “It seems like (policyholders) are probably paying more than they should for their health insurance.”
Bryan Lagg, senior vice president of consumer markets and sales at Blue Cross of Mississippi, said the reserves are a “critical component” of the company’s financial security and its ability to pay for future health care services.
“This is even more important today due to the cost of health care services,” Lagg said in a statement. “We take great pride in knowing payments for health care services (for our Members and Network Providers) will continue even in the event of a natural disaster, economic crisis or the uncertainties of a pandemic.”
The surplus has attracted little public scrutiny in part because of a governance structure that curtails oversight.
As a mutual insurance company, Blue Cross of Mississippi is supposed to be owned by its policyholders, who can participate in meetings and hold company executives accountable. But policyholders give up that right when they sign up for coverage and can earn it back only by mailing a written request to the company's headquarters. That means a handful of board members have been making decisions that affect hundreds of thousands of Mississippians with almost no oversight from either investors or policyholders.
Blue Cross officials did not answer questions about the structure of the company, including how many members have filed written requests or what the process is after a request is filed.
Consumer advocates say the size of the surplus means the company could afford to pass savings on to consumers by reducing rates. Instead, Blue Cross has raised premiums for many of its consumers in recent years.
In January 2020, for example, it hiked fees for small business plans by 13%, affecting 55,000 Mississippians. Premiums for two types of individual health plans were also increased 16% in the same time frame. The company cited a significant underwriting loss, which occurs when a company has to pay more in claims than it expected.
Chuck Bell, programs director at the advocacy organization Consumer Reports, has studied health insurance surplus levels around the country. After reviewing the surplus level held by Blue Cross of Mississippi, he said he sees a role for state oversight. As a for-profit insurer, the company could return excess surplus to the community by lowering rates.
“We think it's appropriate for the state to put some guardrails around how much surplus can be accumulated, and not leave it to the boards and managements of the health plans, who may or may not take action,” he said.
After raising rates in 2020, the insurance company went on to triple its profits that same year, according to its annual statement. The insurer made over $60 million that year compared to around $20 million in 2019.
Officials with the company said the increase was due primarily to stock investment performance and a delay in the impact of COVID-related claims. The company’s 2021 net income was just under $17 million with a “significant underwriting loss,” said Cayla Mangrum, manager of corporate communications for the company.
Lagg said the company uses the vast majority of customers’ premiums to pay their health care costs, meeting and often exceeding federal requirements for that metric. Instead of relying on premiums to make money, the company says it profits through “administrative efficiency and investments.”
When an individual signs up for insurance with Blue Cross of Mississippi, a seldom-noticed part of the policy states the person transfers that power to company executives.
“As a part of the Subscriber’s enrollment for membership and coverage with Blue Cross & Blue Shield of Mississippi … he or she has appointed Blue Cross & Blue Shield of Mississippi’s President, Executive Vice President, and Secretary as proxies to cast his or her vote, upon concurrence of at least two of them, on all matters arising at membership meetings,” the policy states.
If the policy holder wants to challenge the proxy, he or she must file a “written revocation” with the company.
Officials at Blue Cross of Mississippi declined to answer Mississippi Today’s questions about this policy.
Typically, Bridgeland said, a mutual company will notify policyholders each year about an annual meeting or upcoming vote and request a proxy designation – not require customers to appoint the executives as proxies in perpetuity when they sign up for coverage.
Bridgeland said he had never seen a mutual insurance company with such strict limits on policyholder participation.
“It runs against any sort of corporate governance recommendations I’ve seen and is very much out of line with best practices,” he said. “And the reason is because you don’t want to make management completely insulated, which this effectively does.”
In theory, a mutual company puts policyholders in charge of executives. But Bridgeland said things rarely work out that way, because it’s difficult for individual policyholders to exercise power, so executives treat the company like a “personal fiefdom.” At Blue Cross Mississippi, the proxy policy has given the board total control and almost no oversight.
The composition of the board of directors hasn’t changed much this century, for example. From 2005 to 2017, there was just one addition: Mary Carol Pigott, the chief operating officer in 2005, became CEO and president and joined the board of directors by 2012. Richard John Hale, her predecessor as CEO, then became chairman of the board.
When Blue Cross converted from a nonprofit to a for-profit mutual company in 1995, it had a 15-member board. By the mid-2000s, it had only seven or eight members. According to the rules established in 1995, board members vote to appoint new members.
“It’s sort of like an old Soviet Russia election,” Bridgeland says. “The party tells you who to vote for. So there’s gonna be zero change.”
Blue Cross officials also declined to answer questions about why its board membership has dwindled over the years.
In order to guarantee an insurance company can pay out all the claims that could come its way, regulators establish a certain amount of capital they must hold, similar to a rainy day fund. The size of a company’s surplus is expressed as a percentage of the baseline requirement, called the risk-based capital ratio.
Generally insurers try to hold at least three times as much capital as the minimum requirement– a ratio of 300%.
If the ratio is too low – meaning the company has fewer assets and more liabilities – the company risks insolvency and its customers could get hurt. But if the ratio is too high, the company may be hoarding customers’ cash with no benefit to them, especially if it raises their rates anyway.
At Blue Cross of Mississippi, the ratio stood at 1,578% at the end of 2021. United, the next largest insurer in the state, held a ratio of 1,078%, according to financial documents Mississippi Today obtained. The ratio for Ambetter, which sells plans on the health insurance marketplace, was 745%.
The Mississippi company’s surplus is significantly larger than those of its Blue Cross peers in neighboring states. Louisiana held a ratio of 944% at the end of 2021, and Arkansas of 751%. The for-profit Anthem Blue Cross & Blue Shield of Georgia held a ratio of 506%.
Officials at the state insurance department said there is no ceiling for the surplus, so Blue Cross of Mississippi isn’t violating any rules or laws.
"Blue Cross & Blue Shield of Mississippi’s financial strength, administrative efficiency and rating discipline are for the benefit of our Members and should not be used to mislead or distract from the issue and why UMMC made the decision to become non-network," Lagg said. "The issue is the cost and quality of health care services for our Members and UMMC’s outrageous demands which will only further increase costs unnecessarily."
But the size of the company’s surplus far outpaces industry averages. A 2019 report by the Vermont Department of Financial Regulation looked at surpluses held by 16 Blue Cross companies around the country. Mississippi’s surplus was the largest, at 1700%. The second-largest, in Idaho, was 1321%.
Ten of the companies held a surplus below 1000%. The average was 937%.
Blue Cross' unusually large surplus has held for years. From 2013 to 2017, Mississippi’s surplus never dipped below 1600% and was consistently the highest in the group the Vermont report studied.
Though Mississippi’s regulations haven’t stopped Blue Cross from amassing this rainy day fund, regulators in other states have imposed limits on insurers’ surplus levels.
The Pennsylvania legislature gave regulators the authority to review surplus levels at Blue Cross insurers, which are nonprofit, and require them to justify or reduce any surplus beyond a certain level. Most recently, that cap was set at 750% for larger plans or 950% for smaller plans, which experience more volatility and thus need a larger cushion.
Blue Cross is by far the biggest private insurer in Mississippi, with about 56% of the market. United, the second-largest, claims only 17%.
The size of the company’s surplus “would suggest to me that there is available money here, that in the hands of good advocates, maybe ought to be addressed to health care needs,” said Walter Smith, executive director of the nonprofit group D.C. Appleseed.
Smith’s organization won a legal battle with a local nonprofit Blue Cross affiliate that had amassed “excessive” surpluses with a smaller pile of extra assets than what Blue Cross of Mississippi currently holds. The settlement agreement required the company to set up a $95 million fund to support public health in D.C.
Because Blue Cross of Mississippi is a for-profit company, it’s not directly comparable to the D.C. case his organization spearheaded, which involved a nonprofit founded as a “charitable and benevolent institution,” Smith said. But consumer advocates say if a for-profit company has a huge surplus, it shouldn’t need to raise rates, and in some states regulators could stop it from doing so.
But in Mississippi, state law prohibits regulators from using an insurer’s surplus level to justify approving or denying a rate increase. And moreover, the state insurance commissioner does not control rates on group and self-funded plans, according to Commissioner Mike Chaney.
“The only rate authority we have for Blue Cross and Blue Shield is for individual policies, and they have less than 30,000 people (with those plans) in the state,” said Chaney.
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Podcast: Inside the Phil Bryant interview everyone’s talking about
Mississippi Today recently published “The Backchannel” investigation, which used never-before-published text messages to explore former Gov. Phil Bryant’s role in the state’s welfare scandal. Before the series published, Bryant sat down with Mississippi Today for a three-hour interview. Journalists Anna Wolfe and Adam Ganucheau discuss how the interview came about, what it was like inside Bryant’s office, and how it’s been perceived since the series published.
Listen to more episodes of The Other Side.
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Gunn hopes favorable ruling on GOP closed-door meetings provides second Ethics Commission win
Close attention will be focused on the normally low-key Mississippi Ethics Commission when it considers and rules on whether members of the House Republican Caucus, led by Speaker Philip Gunn, violate the state’s open meeting law when they meet behind closed doors.
The open meetings case might be the most high-profile issue to be considered by the Ethics Commission since 2013 — another case involving the Mississippi House and Speaker Gunn.
In that case the Ethics Commission, in a 5-3 vote, reversed previous rulings to find in favor of Gunn.
The case involved whether House members who worked for health care providers could vote on funding for Medicaid, which provides the largest chunk of revenue for many health care providers in Mississippi. For years, based on Ethics Commission rulings, legislators who worked in the health care profession did not vote on Medicaid funding bills because of the perceived conflict of interest.
This became an issue in the 2013 session when House Democrats blocked the Medicaid bill, demanding a vote on expanding Medicaid to provide health care coverage to primarily the working poor. Gunn and the Republican majority opposed expanding Medicaid, but for various reasons did not want to vote on it.
The problem was that the state Constitution requires approval from a majority of the membership, instead of just those voting, to pass a budget bill. In other words, 63 yes votes were needed in the 122-member House. With House members not voting based on the Ethics Commission ruling, the vote of a majority of the membership could not be garnered to approve the Medicaid appropriations bill.
The 2013 regular session ended with no Medicaid budget. Then-Gov. Phil Bryant said he believed he could run the Division of Medicaid without legislative funding. Not many, though, took that claim seriously.
Instead, Gunn asked the Ethics Commission to rule on whether the House members who worked in the health care profession had a conflict of interest if they voted on the Medicaid budget.
The commission reversed previous rulings that previously said the members should not vote because of the conflict of interest.
“This is a difficult decision for all of us,” said Paul Breazeale of Jackson, then a member of the Ethics Commission and part of the majority who voted to reverse past rulings. “We do have rulings that differ in the past. It is a timely issue.”
Tom Hood, the executive director of the commission but not a voting member, defended the ruling. He said since the previous Ethics Commission ruling barring legislators employed in health care from voting on Medicaid, there had been state Supreme Court rulings saying legislators whose spouses were teachers could vote on education funding. If the spouses of teachers could vote on education funding, then legislators working in health care should be able to vote on Medicaid funding, the commission reasoned.
The most fascinating part of the ruling was that the Ethics Commission added that legislators working in health care could vote no on Medicaid expansion. But members who would vote yes should not vote because that would be a conflict of interest.
The mental gymnastics for the commission to reach that conclusion remains a mystery for many nearly a decade later.
In the current case before the Ethics Commission, Gunn will be asking the panel to conclude that his Republican Caucus meetings do not violate state law even though the state Supreme Court has ruled in past cases that if a majority of a governmental body meets behind closed doors to discuss policy, it is considered a violation of the open meetings law.
“A public body must strictly comply with the (Open Meetings) Act when a quorum assembles and discusses a matter under its supervision, control, jurisdiction or advisory power,” the commission wrote in a separate case recently involving a legislative committee.
The 77-member Republican Caucus constitutes much more than a majority of the 122-member House and meets regularly where issues before the Legislature are discussed.
In a late January interview with Mississippi Today where Hood was asked if the House Republican Caucus meeting violated state law, he said, “Neither the courts nor the Ethics Commission have dealt with a case on those facts.”
Gunn argues that the meetings do not violate state law because the Republican caucus is not an official “public body.” But the flip side of that is the Republican caucus does include enough members of the Mississippi Legislature to take official action.
It is of note that, based on research done by the state of Maine, 12 states have provisions in their law saying party caucuses are exempt from their open meetings laws.
Mississippi law does not have such an exemption.
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Gov. Tate Reeves vetoes bill easing Jim Crow-era voting restrictions
Gov. Tate Reeves vetoed a bill intended to make it easier for some people who lost their voting rights as a result of a Jim Crow-era provision of the state’s 1890 Constitution to regain their right to vote.
The constitutional provision, originally written to keep Black Mississippians from voting, prohibits those convicted of certain felonies from being able to vote unless their suffrage rights are restored by a two-thirds vote of both chambers of the Legislature or by a gubernatorial pardon.
House Judiciary B Chair Nick Bain, a Republican from Corinth who drafted the language that was vetoed, said during the session many courts already are restoring voting rights to those whose crimes are expunged. He said he believes that was the original intent of the legislation, and the bill he offered during the 2022 session, simply “clarified” that all judges should be granting the rights to vote to those whose crimes are expunged.
But Reeves vetoed the “clarifying” language on Friday.
“Felony disenfranchisement is an animating principle of the social contract at the heart of every great republic dating back to the founding of ancient Greece and Rome,” the Republican Reeves wrote in his veto message, which was filed with the Legislature on Friday.
“In America, such laws date back to the colonies and the eventual founding of our Republic,” Reeves continued. “Since statehood, in one form or another, Mississippi law has recognized felony disenfranchisement.”
Mississippi is one of a handful of states — less than 10 — that places a lifetime ban on voting for those convicted of certain felonies unless through the action of the Legislature or the governor. Most states restore the right to vote at some point after a person has completed his or her sentence.
It is difficult and rare for a Mississippian to have his right to vote restored through the legislative process. Typically, fewer than five people are successful each year in navigating the Mississippi legislative maze to regain voting rights. The Legislature approved suffrage bills during the 2022 session to restore voting rights to just five people.
READ MORE: Mississippi Senate killed 19 House bills to restore voting rights in 2021
In the 1890s, the Mississippi Supreme Court said the disfranchisement of felons was placed in the Constitution “to obstruct the exercise of the franchise by the negro race” by targeting “the offenses to which its weaker members were prone.” The provision’s intent was the same as the poll tax, the literacy test and other Jim Crow-era provisions that sought to prevent African Americans from voting, according to a lawsuit filed challenging the constitutionality of the provision.
The crimes placed in the Constitution where conviction would cost a person the right to vote were bribery, theft, arson, obtaining money or goods under false pretense, perjury, forgery, embezzlement, bigamy and burglary. Those were crimes that the 1890 framers believed African Americans were more likely to commit.
In 1968, the crimes of murder and rape were added as disenfranchising crimes. But even today, a person could be convicted of writing a bad check and lose the right to vote, but be a major drug kingpin locked up in prison and still vote.
The Legislature has never allowed the public to vote on whether to allow an easier method to restore voting rights.
A 2018 analysis by Mississippi Today found that 61% of the Mississippians who have lost their rights to vote are African American, despite the fact that African Americans represent about 38% of the state’s total voting-age population.
The vetoed bill, Senate Bill 2536, also established a registry of those convicted of public corruption. It will be up to the Senate leadership to decide whether to try to overturn the gubernatorial veto during the 2023 session.
In the 2020 session, which was Reeves’ first as governor, he became the first governor since 2002 to have a veto overturned.
The felony disenfranchisement provision of the Mississippi Constitution is currently being challenged in federal court based on its “racist origins.” The state of Mississippi, led by Attorney General Lynn Fitch, is fighting to preserve the Jim Crow-era provision.
READ MORE: Attorney general Lynn Fitch argues in federal court that Jim Crow-era voting ban should be upheld
It is not clear how the Reeves veto will impact the litigation.
Bain, who was unavailable for comment, had said during the session he did not believe the language was controversial, but just an attempt to ensure all judges were treating those who had their records expunged the same in terms of the restoration of voting rights.
The post Gov. Tate Reeves vetoes bill easing Jim Crow-era voting restrictions appeared first on Mississippi Today.
Nancy and Zach New plead guilty to bribery and fraud in state welfare case
Nancy New, a once prominent private school and nonprofit founder, and her son Zach New pleaded guilty to state criminal charges in Mississippi’s sprawling welfare scandal on Friday.
The 69-year-old former educator is pleading guilty to four counts of bribing a public official, two counts of fraud against the government, five counts of wire fraud and racketeering. Her deal comes with a total maximum sentence of 99 years, with 25 to serve.
But state prosecutors have recommended that the state judge wait to sentence Nancy New until she receives a sentence in her separate federal case — which is expected to produce a sentence of no more than ten years — and then sentence her to equal or lesser time to run concurrently with the federal sentence.
In other words, state prosecutors recommend Nancy New serve her entire sentence in federal prison and serve no additional time for the state charges above what she serves in the federal case. She pleaded guilty in the federal case earlier this week to one count of money laundering, which carries a maximum sentence of ten years.
Zach New, the 39-year-old vice president of his mother’s nonprofit, pleaded guilty to the same charges, minus racketeering. His charges come with a total maximum sentence of 75 years, with 17 to serve. State prosecutors have offered him the same deal to serve only the number of years he receives in the separate federal case. He pleaded guilty in the federal case to conspiracy to commit wire fraud, which comes with a maximum sentence of five years.
Both Nancy and Zach New have agreed to cooperate with prosecutors and testify against their co-defendants. Both state and federal criminal investigations are ongoing and could result in charges against additional people, sources close to the probes say.
Under the state plea deal, the News will serve whatever sentence they receive in federal prison, instead of Mississippi’s state prisons with notoriously barbaric conditions.
The News, who could also pay more than $3.6 million in restitution as part of the plea deal, are changing their plea earlier than he was required since their state trial was not set to take place for at least three months. Their petitions filed Friday include new details about their role in the bribery and theft of funds from the Mississippi Department of Human Services, the state’s safety net agency.
In these cases, the News separately scammed both the Mississippi Department of Human Services out of welfare funds and the Mississippi Department of Education out of public education dollars. The News ran the nonprofit Mississippi Community Education Center, which received tens of millions of federal grant funds as a subgrantee of the Mississippi Department of Human during the administration of then-welfare director John Davis.
Three of the wire fraud charges relate to financial transfers they made from the nonprofit to the private, for-profit school district called New Learning Resources, then to a drug company in Florida called Prevacus, as well as transfers they made directly from the nonprofit to Prevacus.
Text messages published earlier this month in Mississippi Today’s “The Backchannel” investigation reveal that right before the News agreed to funnel welfare money to Prevacus, the company’s owner and former NFL quarterback Brett Favre offered former Gov. Phil Bryant company stock in exchange for help Bryant provided when he was governor. Bryant appeared to agree by text to accept that offer after he left office, Mississippi Today reported. Favre even referenced in texts to Bryant the public funding that the company was receiving from the state and Nancy New. Bryant responded positively.
The News were accused also of funneling embezzled funds to an affiliate of Prevacus, called PreSolMD, but those transfers were not included in the counts to which the News recently pleaded guilty. The companies allegedly received $2.15 million in stolen federal grant funds.
READ MORE: Phil Bryant had his sights on a payout as welfare funds flowed to Brett Favre
In 2017, the News also made an “off the books” purchase of a black GMC Yukon for Davis, the state welfare agency director, and two of his senior executives at their request to incentivize them to keep agency funds flowing to the nonprofit. Davis is also facing charges, to which he’s pleaded not guilty, related to the scheme.
The News also hired WWE wrestler Brett DiBiase on a salary of $250,000 and Davis’ nephew Austin Smith, knowing that they weren’t qualified for the jobs, and gave Davis unrestricted access to the nonprofit’s credit card.
They also defrauded the state by transferring $1.2 million to Victory Sports Foundation, run by local former football player Paul Lacoste, knowing the foundation was not eligible for the funds and by paying $4 million to build a volleyball stadium, a payment he and others disguised as a “lease.”
Another count of wire fraud relates to the construction of a virtual reality center in downtown Jackson, which the News also helped disguise as a lease.
The nonprofit also at one point transmitted $3,000 to Davis, which he distributed to attendees of “Law of 16,” a professional development presentation conducted by retired WWE wrestler Ted “Teddy” DiBiase Jr., who himself collected more than $3 million in welfare funds.
Nancy New’s racketeering charge, which is not included on Zach New’s guilty plea, relates to her and Davis transferring money from her nonprofit to a rehab facility in California, where Brett DiBiase was receiving treatment.
The post Nancy and Zach New plead guilty to bribery and fraud in state welfare case appeared first on Mississippi Today.