Attorney General Lynn Fitch has quietly settled Mississippi’s claims against insurance companies over Katrina damages for pennies on the dollar compared to a similar federal case and those settled by her predecessor.
In 2015, former Attorney General Jim Hood and outside attorneys filed a lawsuit to recoup state funds that were awarded to homeowners when the insurance companies did not meet what Hood argued was their legal obligation. After Hurricane Katrina pummeled the Gulf Coast in 2005, insurance companies refused to pay or paid only limited amounts on many claims of homeowners, saying their damage was caused by water not wind and their policies did not cover flood damage.
The state created the Homeowner Assistance Program to help make those homeowners “whole.” Through that program, the state paid $2.03 billion to homeowners for damages. But, according to the lawsuits, many of those damages should have been covered by insurance companies that denied paying damages or limited payouts, citing water damage when in reality the damage was caused by wind. That could have saved the state tens of millions in public funds to be spent on recovery efforts or elsewhere.
In a similar federal case, where the federal flood insurance program accused State Farm of failing to pay for wind damage and instead foisting it off on the National Flood Insurance Program, State Farm agreed to pay the federal government $100 million. But Fitch settled the state’s wind vs. water case with State Farm — which held the most policies of any insurer on the Coast in Katrina — for $12 million.
Before leaving office as attorney general in 2020, Hood settled three of the lawsuits – against insurers Metropolitan, American Security and Balboa. The three lawsuits, covering 652 policyholders, were settled for a total of $6.78 million, or $10,410 per policyholder. Since then, Fitch has settled five of the lawsuits, including the largest against State Farm and Allstate, for a cumulative $21.9 million, or $1,441 per policyholder.
When asked about the settlement discrepancies, Michelle Williams, Fitch’s chief of staff, said in a statement: “I cannot answer some of your questions because we still have pending litigation and your questions involve litigation strategy. But, I will note that the Federal/NFIP (National Flood Insurance Program) case involves different issues, different facts, and different laws from our state case even though the underlying event of Hurricane Katrina is the same.”
One case, against PRIME Insurance, is still pending finalization.
Mississippi Insurance Commissioner Mike Chaney said he supported the settlement of the lawsuits to bring stability to the insurance market in the state.
“I am glad they got settled,” he said. “I have a stable market unlike what is happening in Florida, Louisiana and Texas” with their insurance markets.
Despite Williams’ and Chaney’s defense, some question whether Fitch should have gotten better settlements for the state.
“Because she is a Republican, Attorney General Fitch is probably cozier with the insurance companies than were her two predecessors,” said David Baria, a Bay St. Louis attorney and former Democratic state lawmaker who last week won $10 million in punitive damages against USAA insurance company in a similar case where the insurance company was accused of using deceptive practices to avoid or delay paying a claim.
While the Jackson County jury awarded the estate of Sylvia Minor $10 million in punitive damages and $1.5 million in compensatory damages, Fitch settled the state case involving hundreds of other homeowners with the same USAA for $1.4 million.
Private attorneys contracted with Hood to assist on the case, who receive a percentage of any settlement but nothing if they do not prevail, declined comment on the settlements.
But Baria, who was not involved in the state cases, said a person could compare what the jury awarded in his case and what was awarded in a similar federal case ($100 million) “and “reach your own conclusion” about whether the Fitch settlements were too low.
Chip Merlin is founder of the Merlin Law Group, one of the largest national firms representing policyholders in disputes with insurance companies. His firm handled hundreds of Katrina policyholder claims, including many in Mississippi, all of which have been resolved. Like many others across the country, Merlin was keeping tabs on pending cases, including the state of Mississippi’s lawsuits over the Homeowner Assistance Program.
Merlin said, “I was as surprised as anybody else,” when he learned from recent news reports that most of the outstanding state litigation had been quietly settled starting more than a year ago, with the Mississippi AG’s office issuing no press statements or releases or posting on its website. Merlin said this shows a great lack of transparency for cases brought on behalf of the public.
“I almost fell out of my chair,” Merlin said. “How come we didn’t know about it? That’s a public lawsuit … That impacts the public treasury and there should be some explanation why elected officials thought this was in the best interest of Mississippi.”
Merlin said he can’t opine whether the $12 million settlement with State Farm and other settlements were fair for taxpayers because “we don’t know enough about it — that’s the problem.”
“It’s just very weird the state would settle a year before and nobody know,” Merlin said. “… It calls for the attorney general to say something. I’ve never heard of a settlement involving a public entity being secret … It’s supposed to be on behalf of everybody for the state. If it wasn’t favorable to the state, then the matter should continue on. If it was favorable, you would think elected officials would explain why.”
In terms of transparency, Merlin said it is also unusual that there is a strict non-disclosure clause in the state settlements since the agreements involved public/state funds. Similar language was not in the contracts negotiated by Hood.
Citing pending litigation, Fitch’s office refused to comment on the need for the non-disclosure clause. The attorney general’s office required Mississippi Today and the Sun Herald, which first reported on the State Farm settlement, to submit public records requests to ascertain the settlement amounts. Normally, the AG’s office sends out news releases when settling or winning lawsuits.
As to some companies who settled before Fitch took over for more money per policy, Merlin said: “If similar conduct was going on, then the issue is why did you get so much more against the other companies and less against State Farm?
“I do have to applaud the former attorney general for bringing the litigation in the first place,” Merlin said. “Many times attorneys general don’t bring these actions. It might be difficult, suing big insurance companies.”
Merlin also commented on Mississippi’s Homeowner Assistance Program, which he said was well run and helped thousands of families.
“Mississippi did a great job of getting the money out and taking care of citizens,” Merlin said, “especially compared to Louisiana … I’ve been around to a lot of storms and a lot of states, and nobody ever says the good things, but Mississippi officials did a fantastic job with that.”
State Farm recently agreed to pay the federal government $100 million to settle long-running litigation in federal court, involving two former employee “whistleblowers.” A jury in the case had found that State Farm defrauded the National Flood Insurance Program by charging it for flood damage to a policyholder’s home when the destruction was caused by wind. State Farm’s policies covered wind damage but not flood, which is covered by NFIP. The whistleblowers claimed the company shifted wind damages it should have covered to the federal flood program.
After Katrina, Mississippi received billions in federal block grant funds for Katrina recovery. The state created the Homeowners Assistance Program to provide homeowners grants for flood damage. Thousands of homeowners, who had long been told they did not need federal flood insurance, saw destruction or major damage to their homes by Katrina’s unprecedented flooding.
Mississippi, with its litigation, claimed insurers let the state Homeowner Assistance Program pay people for wind damages that should have been covered by their private insurance policies. The state was suing for damages and money collected from the litigation would go into state coffers.
Hood claimed insurance companies caused Mississippi to pay millions of dollars the state could have otherwise used for other recovery efforts.
“State Farm took advantage of our program by causing HAP to pay for wind losses that State Farm should have covered under its homeowner policies,” Hood said at the time. “Remarkably, State Farm and other insurers walked away from Hurricane Katrina and experienced record profits in the years following, while Mississippi continues to suffer.”
State Farm spokesman Roszell Gadson had little comment when asked about the company’s $12 million settlement with Mississippi. The company has denied wrongdoing in any of its Katrina litigation.
“While State Farm is pleased to have reached a settlement in this matter, the settlement is not an admission that State Farm did anything wrong,” Gadson said. “That is all we have to share.”
According to the lawsuit originally filed by Hood, the state paid State Farm policyholders through HAP $522.1 million, or on average $76,673 per policyholder. By comparison, State Farm paid $98.7 million or on average $14,494 per policyholder.
The largest case settled by Hood before he left office was with Metropolitan Property. Hood settled that case for $4.75 million. Metropolitan paid 429 customers, on average, $8,796. HAP paid $39.2 million, or on average $90,488. Hood settled American Security for $1.35 million. HAP paid 115 American Security policyholders $71 million or $57,070 per customer. By comparison American Security paid $1.2 million or $5,491 per policyholder.
Chaney said the settlement amounts Hood garnered were higher because at least one of the companies wanted to settle quickly so that the lawsuit would not hinder its efforts to merge with another company.
Chaney said all of the settlements were negotiated by Maison Heidelberg, a Jackson attorney who was one of the attorneys hired by Hood to work on the case. Chaney said the methodology used by Hood in filing the original lawsuits were flawed. He said the lawsuits filed by Hood claimed that the insurance companies were not providing proper payouts for 70% of the claimants when in reality it might have been only 700 or 800.
“Then you had people getting $150,000 grants … (through HAP) and coming back and trying to double dip and get money from the insurance companies,” he said.
Heidelberg, along with other private attorneys involved in the cases, declined comment.
Mackenzie Hughes raises the championship trophy after winning the 2022 Sanderson Farms golf tournament, Sunday, Oct. 2, 2022. Hughes defeated Sepp Straka, winning a two-hole playoff. Credit: Vickie D. King/Mississippi Today
We call Mississippi’s only PGA Tour tournament the Sanderson Farms Championship. This past week, it might as well have been renamed the World Open.
The leaders were from all over the planet. Mackenzie Hughes, a 31-year-old Canadian, won the Sanderson rooster trophy and the $1,422,000 check that came with it. Sepp Straka finished second, losing on the second hole of a sudden-death playoff. Straka, from Vienna, has the distinction of being the first Austrian to first qualify for the PGA Tour and then win on it.
Lefty Garrick Higgo finished third. He’s from South Africa. Dean Burmester, another South African, was fourth all alone. Emiliano Grillo, from Argentina, led a group in a tie for fifth.
Rick Cleveland
The Sanderson Farms Championship was played one week after the Presidents Cup matches, in which a team of Americans won easily over a team of international golfers. It seemed clear Sunday the international team could have used Hughes and a few more of the globetrotters who got a lot richer at Country Club of Jackson.
Hughes, from Hamilton, Ontario, shot rounds of 71, 63, 68 and 69 for a 72-hole total of 17-under par 271. He began Sunday one shot off the lead of American Mark Hubbard, who finished with a 74 and wound up in the fifth place tie.
“I’m over the moon,” Hughes said afterward. “I had some moments today where I was tested and was able to pull through. It’s kind of my M.O. to scramble and save some pars. I had to do that a little bit today on the back nine.”
Actually, he had to do it a lot. Hughes missed the green 24 times in the 72-hole tournament. He scrambled for par successfully on 22 of the 24. None was more important than the all-universe par he made on the 72nd hole of regulation to force the playoff.
The 18th hole at CCJ is a 480-yard par-4 with an uphill shot to the green. Playing in long shadows with the sun setting, beautifully, behind the clubhouse, Hughes pulled his drive left into the rough and then had to hit a low shot, beneath the limbs of a pine tree, into the green. His shot skittered over the green and back to within a couple feet of a luxury suite. He faced a 34-yard shot back to the hole, and chose to putt.
“You don’t practice putts that long,” Hughes would say. “I just told myself I was going to somehow two-putt that hole.”
His approach putt, from over 100 feet away, was perfectly judged distance-wise and left him a two-footer to get into the playoff. He tapped it right into the center of the cup.
Mackenzie Hughes and his caddy shortly before Hughes putts for the championship, Sunday, Oct. 2, 2022. Credit: Vickie D. King/Mississippi Today
The sudden death playoff was pre-arranged to start on No. 18. Both parred the 18th, Hughes again scrambling from a bunker fronting the green. So, they played the 18th again and, for Hughes, the third time in a 45-minute span was a charm. He hit a perfect drive, then a 165-yard approach shot to within eight feet of the cup. After Straka missed his 18-footer for birdie, Hughes poured his into the center of the cup. He was already celebrating as the ball approached the hole.
“I knew when it was a foot away, it was going right in the middle,” Hughes said. “That’s the best feeling in the world.”
That best feeling in the world became even better when his pregnant wife and two young sons headed onto the green to celebrate with him.
“That was the coolest part of the whole deal,” Hughes said. “Words can’t describe how good that feels because I love them so much.”
Mackenzie Hughes and his wife, Jenna Shaw, were newlyweds in October of 2016 when Hughes, a rookie still in his first month on the PGA Tour, won the RSM Classic and the first place prize of early a million bucks. If Hughes thought it would always be that easy, he was badly wrong. He had not won again until Sunday, and there’s a story there.
“My oldest son Kenton (soon to be 5) has seen all my trophies but he had never seen me win one,” Hughes said. “He’s old enough to understand it a little bit now and he’s always asking when I am going to win another trophy and when does he get to have a trophy. So this one might have to stay in his room for a while.”
Mississippi’s PGA Tour tournament, which began in Hattiesburg 54 years ago, has been played in the past during April floods, in brutal July heat and was at least once interrupted by a tornado. This year’s sun-kissed event was played under cloudless skies in immaculate autumn weather on what many golfers said are some of the best putting greens in the world.
Nevertheless, the tournament, which has donated more than $10 million to Children’s of Mississippi Hospital since 2013, has faced an indefinite future because of the recently completed sale of Sanderson Farms. That future looked a little brighter after a statement from J. Clinton (Clint) Rivers, CEO and Chairman of the Board of Wayne-Sanderson Farms, the company’s new name.
“We are a newly formed company – literally as of two months ago – and we have a bright future ahead of us,” Rivers said. “For many of us this is our first experience with this event, and I couldn’t think of a better experience. The children’s hospital is a great charity for us to be involved with, and we are proud to be associated with them. I have been asked several times this week about the future of the championship, and I have only one thing to say. See you next year.”
That will come as welcome news to both the children’s hospital and to Mackenzie Hughes, a Canadian who has learned to adore central Mississippi and the state’s capital city.
“I love this golf course,” Hughes said. “I’ll be back for many, many more years.”
Mississippi Today’s Alex Rozier, Geoff Pender and Bobby Harrison discuss the future of Jackson’s beleaguered water system, will it be fixed and what that fix might look like. It seems the federal government through the Environmental Protection Agency is on board for the long-haul fix. Will the state be?
We got you covered.
We’re keeping you informed with the latest on the Jackson water crisis. You can help sustain this news by donating any amount today to join the Mississippi Today member community.
According to the USDA ERA, 15% of Mississippi households in 2020 were experiencing food insecurity. In 2018, one in four Mississippi children walked around hungry. Hunger is an invisible problem that affects so much and so many.
On this episode of Mississippi Stories, Mississippi Today Editor At Large Marshall Ramsey is joined by Langston Moore, who serves as the Regional Director for Society of St. Andrew — Mississippi, an organization that gleans leftover food from farmers and gets it into the hands of those across the state who are feeding the hungry.
From January to July of 2022, 715,814 pounds of food has been gleaned and distributed providing 2,863,256 servings of nutritious food. Hunger continues to be an issue in Mississippi and Moore shares how SoSA MS is fighting it one saved vegetable at a time. To donate to SoSAMS, you can text 42828 or email mississippi@endhunger.org. Or you can mail a check to PO Box 5362, Jackson, MS 39296.
The average state of Mississippi employee has worked for the state for almost 10 years and earns less than the average of all Mississippi workers and woefully less than their counterparts in the four contiguous states, according to information compiled by the state Personnel Board.
While Gov. Tate Reeves, Lt. Gov. Delbert Hosemann, Speaker Phillip Gunn and other political leaders boast of unprecedented revenue collections and surpluses, the buying power of state workers is going backward. The governor, in particular, touts the strong fiscal condition of the state while seemingly ignoring issues like the salary levels of state employees.
“Inflation has risen every month in the last 18 to 20 months.,” state Personnel Board Executive Director Kelly Hardwick said this week on Mississippi Today’s “The Other Side” podcast. “… And so, looking at it, you know, a dollar that an employee was spending a year ago is worth about 90 cents now, 91, somewhere around there. So how do you counterbalance that? And that’s by increasing the salaries.”
Providing such a raise would require legislative action in the 2023 session. During a recent legislative meeting, Hosemann broached the idea of a pay raise. At the meeting, Hardwick told legislative leaders that in the coming weeks he would offer them suggestions on pay increases – such as one-year raise of around 5% or smaller multi-year raises.
The fact of the matter is that because of Mississippi’s record tax collections and surpluses, legislators have the money to provide a meaningful raise – even more than 5%. The question is whether they have the will to do so.
The irony is that those record tax collections are attributable in a large part to inflation. Because of inflation, salaries – in the private sector, at least – have risen, providing the state more tax revenue. And because of inflation, the cost of retail items has risen, meaning the state’s 7% tax on retail items generates more revenue.
One of the retail items impacted the most by inflation has been groceries. And the state’s regressive 7% tax on groceries, the highest of its kind in the nation, means inflation is helping to fill Mississippi coffers more than those of any other state. There is an argument that those grocery tax collections should be returned to those most impacted by the regressive tax, such as the poor and middle class – and perhaps even to state employees in the form of a pay increase.
Besides inflation, there also is the point that Mississippi state workers earn less than those in the private sector, according to numbers from the Bureau of Labor Statistics. Hardwick said that should not be happening because the private sector includes the types of jobs that do not exist in the public sector, such as service and retail jobs that are normally lower paying.
“If you did the math, compared apples to apples with the private sector, they (state employees) should be making about $50,000,” Hardwick said.
When comparing Mississippi state workers to those in neighboring states, Arkansas is the closest at $50,394 per year – almost $7,000 more than in Mississippi. Louisiana state workers on average earn $52,592 while Tennessee’s is the highest at $61,261.
Still, state workers in Mississippi must be working harder. There are currently 23,561 state employees under state Personnel Board regulations compared to 26,525 in 2018. It should be pointed out that in addition to the workers who fall under the purview of the Personnel Board, there also are public school teachers, public universities and colleges staff and faculty. Adding all of those together, there are nearly 85,000 state workers, including a tiny fraction in the offices of elected officials who work at the pleasure of their bosses. Workers with state Personnel Board purview have civil service protection and cannot be fired without cause.
The startling number is that over the last 10 years the state workforce – those with civil service protection such as prison guards, administrators at Medicaid, direct care workers at Mental Health, social workers in Child Protection Services – has decreased by 24% or by 7,500.
Thus far the Legislature has chosen not to offset those reductions in the workforce by providing significant raises to make the state workers more competitive with employees in the private sector and with those in neighboring states.
Whether that will change in 2023 remains to be seen. But Hosemann and other legislative leaders are talking about it.
It’s hard to find new Halloween music. GOOD Halloween music. It’s always the same old movie themes, horror punk, and gothic melodies. Not that there’s anything wrong with those, but sometimes you want something new.
Well, if you’ve never heard Ryan Gosling’s band “Dead Man’s Bones”, you’re in for a treat.
From the hauntingly beautiful music to the dark, sexy vocals from Mr. Gosling…the mood is perfect…only improved by the added genius of a children’s choir singing background on the majority of the album. The whole album is worth a try, but here are a few of my favorites.
“In The Room Where You Sleep” seems to be their most popular song, and was my introduction to the project. This song was on the soundtrack for The Conjuring.
My personal favorite is “My Body’s A Zombie For You”. I think you’ll understand why…if you just listen.
“Lose Your Soul” is a very catchy song.
There are so many more on this album that I love, but I just wanted to give you a taste of it. Go seek out the rest on your own.
Former NFL quarterback Brett Favre met resistance when he tried selling University of Southern Mississippi on a deal to accept federal grant money to build a volleyball stadium, texts show.
“Nancy I spoke with Jon Gilbert this evening and between you and I he is very Leary of accepting such a large grant. Got me very uneasy,” Favre texted Nancy New, owner of the nonprofit Mississippi Community Education Center, which had been granted millions in federal welfare funds from the Mississippi Department of Human Services.
Two days before this, Favre, New, USM Athletic Director Jon Gilbert, MDHS Director John Davis and others had met at the university to discuss the project. Davis, a subordinate of former Gov. Phil Bryant, verbally committed to providing $4 million in welfare funds to build the volleyball stadium.
“He did mention 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. I passed same info to John and of course he sent back we will find a way to make it work,” Favre wrote.
Federal regulation strictly prohibits states from using funds from Temporary Assistance for Needy Families – the fund MDHS Director John Davis had virtually outsourced to MCEC – on exactly the term Favre used, “brick and mortar,” or construction projects. University officials were apparently apprehensive about the maneuvering.
“My fear is he (Gilbert) doesn’t except all that you and John can allocate even if it is legally signed off on,” Favre texted New.
“They are scared to death it seems,” he also texted, referring to USM, according to the court filing.
Eventually, after conversations between the nonprofit officials, attorneys at MDHS and general counsel for the university, Favre got the greenlight. But only after the deal evolved to include an additional half-million for improvements to the basketball stadium Reed Green Coliseum.
New’s attorney Gerry Bufkin argues in a court document filed Friday that the evidence suggests Bryant may have had a hand in pushing the project into the end zone.
At this time in July of 2017, Nancy New had already entered a subgrant with the USM athletic foundation for around $200,000, which would be used to renovate another building on campus called M-Club. As the smaller of Mississippi’s big three universities, USM has historically had a harder time generating funds for these kinds of projects.
“It’s obvious that you and John are tremendous assets for USM and in order for us to get ahead in the game we have to utilize you guys in every way,” Favre texted New.
These new texts, revealed Friday and printed here exactly as they appear without correction, provide a further glimpse into how officials ended up funneling $5 million in welfare funds, money that’s supposed to serve the state’s neediest residents, into the construction of a volleyball stadium at USM. Nancy New’s son Zach New pleaded guilty to defrauding the government related to the expenditure in April.
But in the midst of Favre’s persistence, the project was also reviewed by many – MDHS attorneys, USM attorneys, the Attorney General’s Office, the Institutions of Higher Learning board – who all failed to intervene and stop it.
The new texts came to light within a court battle over whether Bryant should have to comply with a subpoena issued by the attorney for the News and their nonprofit. Another defendant, Austin Smith, also joined the subpoena.
The attorneys are bringing the subpoena against Bryant in an ongoing civil suit over welfare misspending, even though Bryant is not a defendant in the litigation, because they say Bryant’s involvement in welfare spending, and particularly the volleyball project, is crucial to their clients’ defense. Bryant argues in his objection to the subpoena that he did nothing wrong, and shouldn’t have to release privileged communication as a result of the defense attorney’s fishing expedition.
“Governor Bryant makes one thing abundantly clear: he is desperate to avoid public scrutiny of his text messages concerning welfare funds used to build the Volleyball Facility at USM,” New’s attorney Gerry Bufkin wrote Friday. “Of course, Bryant insists he did nothing to facilitate the flow of millions from MDHS to the athletic construction project, but he refuses to produce his text messages and other documents that presumably would support his contentions, if true. In lieu of transparency, Bryant opts for obfuscation.”
Favre began discussions with USM about building a new volleyball stadium sometime before late 2016. Favre contacted Bryant for help with the project in April 2017. These conversations were about raising private donations for the project.
When officials in the athletics department began talking to New about the volleyball stadium in July, they were already working with her nonprofit on a separate project, in which it would provide money through a lease for renovations and improvements to the student athlete facility called the M-Club. AD Gilbert sent New a copy of the volleyball building design in mid-July 2017.
The next several days were busy. Favre and New met about the volleyball project. Bryant met with Davis about MDHS projects. Then Bryant discussed the volleyball project with Favre, who sent him construction documents.
Bryant did not produce any of his communication immediately after his initial texts with Favre about the volleyball facility, but two days later, Davis and New met with Favre and USM athletics officials and Davis agreed to fund the project.
“Wow, just got off the phone with Phil Bryant! He is on board with us! We will get this done!” New texted Favre several days later.
“Bryant’s denials notwithstanding, the evidence and timing of the meetings described herein, suggest that Davis discussed Favre’s Volleyball Facility with Bryant the week of the meeting at USM and received approval from Bryant, express or implied, to fund the project through MDHS. After the meeting at USM, Davis explaining the large funding commitment saying, ‘the Governor likes this project and wants to get it done.’”
Bufkin also noted that the events leading to welfare officials funding the volleyball project mirror another scenario in which Favre contacted the governor for support for a pharmaceutical company called Prevacus and within days, welfare officials were committing funds to the project.
“Importantly, Davis was Executive Director of MDHS for approximately four years.” Bufkin wrote. “In the entirety of his tenure, he committed $4 million or more only twice upon first hearing a proposal. The first time was the Volleyball Facility. The second was Prevacus. The evidence suggests that Bryant was involved in both projects.”
In July, the News attorney Gerry Bufkin filed a subpoena on Bryant for his communication related to the volleyball stadium. Waide joined the subpoena. Bryant’s attorney Billy Quin objected to the subpoena, claiming the communication is privileged and should at the very least be placed under a protective order. In a lengthy court filing, Bryant released several pages of texts he says prove he didn’t know Favre was getting welfare money for the volleyball project.
Now, Bufkin and Waide are pushing back, saying the timeline Bryant provided through his texts is incomplete and that Bryant should have to produce all the relevant communication publicly.
“Bryant never denies that such expenditure was fraudulent,” wrote Jim Waide, attorney for Smith, Davis’ nephew who received hundreds of thousands under contracts with the nonprofits. “Instead, Bryant blames Defendant John Davis, Defendant Nancy New, and Defendant Brett Favre. Bryant provides documents to demonstrate that he was not personally involved in the fraudulent scheme. Bryant’s documents paint an incomplete picture, however, because he neglects to attach correspondence between Bryant and Defendant John Davis. Communications demonstrating Bryant’s participation would likely be between Bryant and his immediate subordinate, Defendant John Davis.”
Waide notes that the bulk of communication Bryant has put forth came after the former governor was aware that the welfare department was under an investigation by the auditor’s office for suspected fraud. Bryant had relayed a small tip regarding Davis in late June 2019.
“Naturally, Bryant would have been careful not to generate incriminating documents after he knew about the investigation. Only after Bryant knew that he was ‘to [sic] old for Federal Prison’ did Bryant generate exculpatory documents,” Waide writes.
Waide argues that Bryant’s communication is not privileged because privileges do not protect fraudulent conduct. Considering Nancy New’s allegation that Bryant directed her to make payments to Favre, “as a matter of law, there is ‘good ground to support’ a belief that Bryant participated in the fraudulent conduct,” Waide writes.
“Bryant’s selective production of text messages, most of which were created after Bryant realized MDHS was under investigation by the State Auditor, should not be summarily accepted as exonerating Bryant without the parties’ having access to all relevant evidence,” Waide writes.
Bryant’s attorney also accuses New’s attorney from attempting to try the case in the media, but Bufkin argues that Bryant invited the media attention himself, namely in a lengthy interview with Mississippi Today.
“In response to questions concerning his involvement in funding the Volleyball Facility and Prevacus, Bryant chose to sit for a three-hour interview with Mississippi Today in an apparent attempt to shift the public narrative, and the media coverage, in his favor. By doing so, Bryant voluntarily thrust himself further into the media spotlight,” Bufkin wrote.
Mississippi Today compiled the following timeline based on documents and communication gathered in the court process or retrieved through records requests. Read the timeline here.
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.
As more documents and text messages come to light surrounding the Brett Favre volleyball project, Mississippi Today has compiled a timeline that gives a greater glimpse into how officials funneled $5 million in welfare funds to build a new stadium at University of Southern Mississippi.
The timeline shows that Favre discussed the volleyball stadium for months before reaching out to then-Gov. Phil Bryant for help raising donations. When the private funds didn’t immediately roll in, university officials discussed bringing on Nancy New’s nonprofit as a lease partner on the project. The nonprofit had already signed a similar lease to provide upgrades to another building on campus following a hunting trip Nancy New’s sons attended with USM officials. A flurry of activity happened in late July and early August, including conversations between welfare officials, Favre and Bryant.
USM officials expressed apprehension about using grant funds for the project, but eventually, after the deal was modified to include an additional $1 million for improvements to the basketball stadium and the university’s maintenance fund, per Favre’s texts, university attorneys greenlit the project. It was then approved by the Attorney General’s Office and IHL.
Below is a timeline of events compiled by Mississippi Today based on documents and communication gathered in the court process or retrieved through records requests:
Dec. 20, 2016: Conversations began sometime before then between University of Southern Mississippi and Brett Favre about building a volleyball stadium
“I had the impression Brett wanted to keep his involvement quiet,” Senior Associate Director of Athletics Daniel Feig wrote in an email to his colleague on Dec. 20, 2016.
April 11, 2017: Brett Favre met with USM Athletics about the volleyball facility
“FYI-Chris and I are meeting with Brett and Deanna Tuesday at 11 am to discuss the layout of the facility,” Athletic Director Jon Gilbert wrote in an email on April 7, 2017, the same day Favre started soliciting donations to corporations in exchange for their name on the facility. “Can discuss naming opportunities further if the group has a direction we should look at exploring.”
April 20, 2017: Brett Favre texted Gov. Phil Bryant for help with volleyball project
“Deanna and I are building a volleyball facility on campus and I need your influence somehow to get donations and or sponsorships. Obviously Southern has no money so I’m hustling to get it raised. We want to start this summer and finish in a year or less,” Favre texted the governor.
Bryant said in his filing that this was the first time he discussed the volleyball project with Favre.
“…We will have that thing built before you know it. One thing I know how to do is raise money,” Bryant responded.
April 20, 2017 – July 21, 2017: Bryant’s communication with Favre and welfare officials unknown
Bryant did not produce any of his text messages with Favre or then-MDHS Director John Davis, Bryant’s appointee to run the welfare programs, in the several months after Favre first asked the governor for help with the volleyball project. The messages produced and redacted suggest there could be more communication between the two during this time period.
May 16, 2017: USM Athletics compiled updated donor list
At this point, the USM Athletic Foundation had raised $425,500, including $150,000 from Favre.
May 30, 2017: Nancy New’s sons went hunting with USM athletics staff
On May 23, 2017, USM associate athletic director Brian Morrison invited Nancy New’s sons Zach and Jess New to attend a private hunting event and dinner at Providence Hill Farm with USM President Rodney Bennett and Director of Athletics Jon Gilbert on May 30. They both agreed by email to attend. At this point, MDHS and the News’ nonprofit Mississippi Community Education Center were already engaged in grant activities at USM.
May 31, 2017: MDHS wrote letter approving a non-volleyball related lease between USM and MCEC
MDHS writes a letter to Feig that said MDHS is aware that MCEC is leasing space with the university “because we believe it is important to help MCEC accomplish the purpose of their subgrant which is to provide services designed to stimulate employment, support family financial stability, promote literacy, and increase graduation rates while continuing to support positive youth development, impacting teen pregnancy rates, promotion positive father involvement and supporting MDHS county offices through parenting education and parenting/life skills development.”
While John Davis’ name appears at the end of the letter, it is actually signed by MDHS attorney Garrig Shields. This is the first reference to a lease agreement in emails between MCEC and USM Athletic Foundation.
June 1, 2017: AG reviewed USM’s lease with athletic foundation to build volleyball stadium
Special Assistant Attorney General Stephanie Ganucheau emailed Institutions of Higher Learning officials a copy of a lease between USM and USM Athletic Foundation “so that the Foundation can build a volleyball facility, which would then be transferred back to the university.”
Later that day, IHL’s David Buford emailed an insurance professional for advice on insurance terms. He explained the concept of the project: “USM leases the grounds (which is a vacant space and a parking lot next to a USM-insured building) and the Foundation gets financing, builds a new building, and gives the new building back to USM.”
Based on the emails, it appears IHL was unaware where the Athletic Foundation’s funding may be coming from.
June 7, 2017: AG recommended USM lease with athletic foundation for board approval
At this point, the lease does not involve Mississippi Community Education Center, MDHS block grant funds or any mention of serving the needy.
June 15, 2017: IHL Board approved USM leases with USM Athletic Foundation
During its board meeting, the Institutes of Higher Learning board approved two $1 leases with the Athletic Foundation, one for the volleyball project and one for the purpose of renovating M-Club.
June 15, 2017: Nancy New signed a $192,840 sublease with USM Athletic Foundation
Nancy New and Grant Dyess, then-president of the University of Southern Mississippi Athletic Foundation, signed a sublease for a building within the Jim and Thomas Duff Athletic Center known as the M-Club Room, a space used for USM Athletics meetings and activities. The agreement said the money will be used for renovations and upgrades to the space. The sublease said plainly that MCEC will use the space “for business purposes, educational purposes and for meetings and conferences.”
The M-Club charged membership dues of $50 a year, according to the university’s website.
July 1, 2017: USM signed two leases with Athletic Foundation
USM signed two leases with USM Athletic Foundation, one for M-Club and one for the volleyball project. At this point, MCEC was already engaged on a sublease for M-Club, but not for the volleyball project.
July 16, 2017: USM Athletics reached out to Nancy New about volleyball facility
Gilbert emailed Nancy New, indicating they had met the prior week. He attached a copy of the current volleyball facility design.
“We have not formally announced this project but expect to do so in the next week to ten days. We have hired Weir Boerner Allin out of Jackson as the architect. The facility will be plus/minus 25,000 square feet with an approximate cost of $4 million. Brett and Deanna have agreed to help with fundraising for the facility. We currently have $1.2 million in hand from a variety of people that have committed to the project … Based on our discussion last week, we are interested in presenting this project as once that will benefit women student athletes. We would be interested in presenting to anyone that you would thing have interest in Southern and women’s athletics. I will find out what Brett’s schedule is Tuesday and coordinate a time he can stop by that works for everyone.”
“I am glad to help and look forward to seeing this project to fruition,” Nancy New responded. “I believe it can be done. I, too, was glad to visit with Brian and you. As soon as we get everything put back together after all the renovations, I want you to come back for lunch and a tour of New Summit and our Family Resource Center. The Center offers a good example of the one that we will be organization on Southern’s campus, hopefully in the near future.”
July 18, 2017: Brett Favre met with Nancy New about funding the volleyball project
Favre met with Nancy New, according to Mississippi Community Education Center’s Sept. 30 filing.
July 19, 2017: John Davis met with Phil Bryant about DHS projects
Davis texted Nancy New, “Been with Gov for last two days. He’s loving what we are doing.”
July 21, 2017: Brett Favre and Phil Bryant texted about volleyball project
Screenshots of texts entered into court show Favre texted Bryant on the evening of July 21, 2017, but Favre’s initial message and Bryant’s lengthier response are redacted.
Favre responded to Bryant’s redacted message: “Not sure how we you can help get this facility built for Vball. But you are the governor and on our side and that’s a good thing. Actually a great thing.”
“We can do that,” Bryant responded. “Just get me some numbers and I’ll find a way. Maybe USM or the Coach can call me and we’ll get on it.”
July 22, 2017: Favre sent Bryant construction proposal
Favre texted Bryant a document containing the construction proposal and building renderings. “Latest plans. I’m trying to get sponsors,donations etc…. if we can find a contractor that would say hey rater that give you money I’ll build for free!! Maybe you know of someone,” Favre texted.
“I all over it,” Bryant texted, followed by a bicep emoji.
“Thanks that would help a ton!!” Favre said.
Bryant’s next text, as well as its date and time, are redacted.
July 22, 2017 – May 8, 2018: Bryant’s communication with Favre and welfare officials unknown
Bryant did not produce any of his messages with Favre or Davis for a ten month period, including the time period in which Davis committed to funding the project and Nancy New paid $5 million to the volleyball project and $500,000 million to Favre.
July 24, 2017: Favre, welfare officials and USM athletic staff met
Two days after texting Bryant the construction proposal, Favre met with Bryant’s appointed welfare director John Davis, Nancy New, USM athletics officials and others at the university. During the meeting, Davis verbally committed $4 million to the project.
“Nancy thank you again!!! John mentioned 4 million and not sure if I heard him right. Very big deal and can’t thank you enough,” Favre texted Nancy New after the meeting.
July 25, 2017: Zach New, MDHS attorney and USM Athletics officials discussed volleyball project
“Are you available for a conference call with Garrig and I tomorrow morning?” Zach New emailed Feig the evening of July 24, after the meeting at USM. “I am open to anytime in the morning that will fit your schedule. We would like to discuss options for the new project. I have also copied Garrig in so you will have his contact information as well.”
July 26, 2017: Brett Favre told Nancy New that USM is uneasy about accepting grant
“Nancy I spoke with Jon Gilbert this evening and between you and I he is very Leary of accepting such a large grant. Got me very uneasy,” Favre texted Nancy New. “He did mention 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. I passed same info to John and of course he sent back we will find a way to make it work.”
At some point after USM expressed hesitations, discussions changed so that the lease would include not only money for the volleyball stadium, but $500,000 for renovations to Reed Green Coliseum, the basketball stadium, and $500,000 for maintenance, potentially causing a $1 million shortfall for the volleyball project, which was already under budgeted.
July 29, 2017: Favre reiterated USM’s fears about taking grant money, suggested including the governor
“Nancy do I need to involve the governor and or Dr.B if need be. Jon made the comment about using money you allocated to athletic dept thus far and although signed off on by all could raise negative concerns etc… with this project and others,” Favre texted Nancy New. “My fear is he doesn’t except all that you and John can allocate even if it is legally signed off on. It’s obvious that you and John are tremendous assets for USM and in order for us to get ahead in the game we have to utilize you guys in every way.”
July 29, 2017: Favre suggested to Nancy New that she pay him for radio spots “and whatever compensation could go to USM.”
“Ok. I could record a few radio spots here initially I’m sure right here,” Favre texted Nancy New. “See how it is received and whatever compensation could go to USM.”
“4 million dollars,” Nancy New responded, followed by three emojis of a face wearing a mask. “Just kidding. The first phase could be $500,000 and after Sept. we can renew. This is a good approach. What do you think?”
“Was just thinking that here is the way to do it!!” Favre responded.
Aug. 2, 2017: Favre texted Nancy New that “the facility is gonna be more than we thought.”
“John said you guys have a big meeting Monday with university. Hope we hit a homerun. Looks as though the facility is gonna be more than we thought which is always the case,” Favre texted Nancy New.
Favre also texted New, “They are scared to death it seems,” and while this text is entered without context, New’s attorney said it referred to university officials’ fears about taking the grant money.
Aug. 3, 2017: Favre asked Nancy New if the media can find out where the money came from and how much
“If you were to pay me is there anyway the media can find out where it came from and how much?” Favre texted Nancy New.
“No, we never have had that information publicized. I understand you being uneasy about that though. Let’s see what happens on Monday with the conversation with some of the folks at Southern. Maybe it will click with them. Hopefully.”
Aug. 4, 2017: Nancy New informed Favre of Bryant’s support
“Wow, just got off the phone with Phil Bryant! He is on board with us! We will get this done!” Nancy New texted Favre.
Nancy New alleged in a court filing that around this time, Phil Bryant directed her to make this deal with Favre.
Aug. 10, 2017: Nancy New texted Favre sharing message from USM counsel
Nancy New texted Favre a copied message from USM general counsel Gordon Cannon that says “we are moving ahead to get this done.”
“Wow wow wow!! Great news,” Favre responded.
Aug. 14, 2017: Nancy New met with USM Department of Research about volleyball funding
Aug. 19, 2017: Nancy New texted Favre an update about approval
“Morning. I got a call yesterday from Gordon Cannon that their meetings went well on accepting the money, etc. Next Wed. there is another meeting with MDHS attorney and USM to make sure all the wording is good before it goes to IHL. Still keeping my fingers crossed. I still think it will happen,” Nancy New texted.
“Thanks Nancy. Jon Gilbert said the same thing yesterday,” Favre responded.
Aug. 23, 2017: Nancy New texted Favre USM counsel said “everything is a go.”
“Brett, I just received this info from Dr. Cannon,” Nancy New texted, followed by the copied message: “Nancy, just finished the meeting with Garrig and Jacob everything is a go. Daniel Feig will be in touch with you or Zack to ask for a draft lease. Our target date for having everything complete for board approval is Sept22. I know this a a short time line but that would get us approval 1. October which would not delay bidding the project as currently scheduled.”
Sept. 8, 2017: Zach New sent USM athletics and general counsel the nonprofit’s plans for the lease
Zach New sends an email to Feig and USM counsel Truett Roberts outlining several events MCEC claimed it would host at the university as a result of its $5 million lease. The events include Yellow Ribbon Events – meant to assist members of the National Guard and Army Reserves – MEMA Reservist Trainings, M-Club events, Healthy Teens Rallies, youth leadership camps by Heart of David, the Christian ministry started by former WWE wrestler Ted DiBiase, and other Families First programming.
When Mississippi Today requested records from the university in 2020 that described any programming the nonprofit conducted on campus, they provided records for exactly one event: The Healthy Teens Rally of 2018 hosted at Reed Green Coliseum.
Sept. 22, 2017: USM President Rodney Bennett sent a letter to IHL requesting board approval for the university’s amended lease with USM Athletic Foundation
Oct. 9 2017: AG approved the amended USM lease with the athletic foundation
Oct. 19, 2017: IHL board approved amended lease between USM and USM Athletic Foundation
On the agenda, the item reads: “The IHL Board approved the original Lease Agreement between the USM and Foundation at the June, 2017 Board meeting. Since that time, this project has been expanded in size and scope and the term has also been extended in accordance with the Amended and Restated Lease.”
The approved meeting minutes state: “This lease and subsequent sublease are being funded through the lease of athletic department facilities by the Mississippi Community Education Center (MCEC), a SO1(3)3 organization designed to provide schools, communities and families with educational services and training programs in South Mississippi. MCEC will use the subject facilities to support their programming efforts for South Mississippi. MCEC’s funding for the project is via a Block Grant from the Mississippi Department of Human Services. The funding from MCEC shall be prepaid rent to the Foundation in the amount of Five Million Dollars ($5,000,000) for the leasing of certain USM athletic facilities including but not limited to the to be constructed Wellness Center, Reed Green Coliseum and additional athletic space as agreed upon by USM and the Foundation.”
Oct. 19, 2017: Nancy New texted Favre about approval; Favre said USM is using part of the money for other projects
“It’s a go. All approved by IHL!” Nancy New wrote.
“Finally and thanks Nancy. I hope it’s enough now. Jon said 500k has to go to renovations for reed green and another 500 to maintenances fund,” Favre responded.
“We will still fundraiser, etc. we will get the rest,” Nancy New texted.
Nov. 2, 2017: Nancy New told Favre she saw the governor
“I saw the Gov last night. We will still plan the fundraiser as well when we can get another date from him that works with your time, too. Surely, Southern folks won’t say to postpone it again. At any rate it’s all going to work out,” Nancy New texted Favre.
Nov. 6, 2017: Nancy New made first payment of $2.5 million to USM Athletic Foundation
Nov. 14, 2017: Athletic Foundation received update from USM athletics about volleyball project
“Wellness and Volleyball Facility has received significant gift and also gift in kinds. A partnership with MCEC will make the facility useful to make groups once it is completed,” the meeting minutes read.
Dec. 5, 2017: Nancy New made second payment of $2.5 million to USM Athletic Foundation
Dec. 27, 2017: Favre thanked Nancy New for $600,000 payment
“Nancy Santa came today and dropped some money off,” Favre texted Nancy New, “thank you my goodness thank you. We need to set up the promo for you soon. Your way to kind.”
Mar. 28, 2018: Favre texted Nancy New, telling her the construction bids came in larger than expected
“Nancy I wanted to update you on facility. The bids all are in and shockingly the lowest is 6.9. The architects were confident it would come it lower than what we have saved. Really frustrating. Jon said he wanted to go back to lowest bed and talk to them about getting it down to 5.9. I’ll keep you updated,” Favre texted Nancy New.
“…We can still have the fundraiser at the Governor’s mansion, too. We can use Phil’s business list that he offered earlier. I will be thinking and hopefully there will be something in the new budget for Families First to offer.”
April 19, 2018: USM Athletics shared an updated list of volleyball facility donors
USM Athletics staffers shared by email an updated list of 23 volleyball donors for a total of $6,045,325. There is an entry for a $4.4 million donation labeled from the donor “CMEC”—presumably a typo for MCEC. The line item for MCEC does not contain any more identifying information, such as the date of donation, the donor’s address or contact information, as it includes for all other donors.
The email also said Favre’s original gift of $500,000 was reduced to $250,000 after he instructed the university to transfer $250,000 to the beach volleyball project.
April 25, 2018: Architect sent updated cost sheet for volleyball facility to USM
In the spreadsheet, the total projected construction cost is $6.3 million, the amount needed to begin construction is $500,000 and the amount needed to finish construction is $1.4 million.
Gilbert sent the document to Favre.
April 30, 2018: USM Athletics sends Favre a donor agreement totaling $1.4 million
“Thank you very much for your generous support of this project and your commitment and loyalty to Southern Miss,” Gilbert wrote to Favre.
Mississippi Today did not find a signed copy of the agreement.
May 9, 2018: Favre reaches out to Bryant for help building lockers at the volleyball facility
“Governor this Brett. I’m still trying to save money on Vball facility,” Favre texted Bryant. “We have visitor and Home lockers yet to build and Warren Hood is donating any lumber. If someone would build them on there spare time. Poncho mentioned the prison industry as a builder. The architects can provide all specs.”
“Let me get on it. Turkey hunting in Nebraska. Will be back this P.M.,” Bryant responded, attaching a picture of his kill.
May 18, 2018: Favre and Bryant texted about lockers
“Hey Governor [redacted]…. Any luck with lockers?” Favre texted, followed by a long block of redacted text.
“I think I have some guys in the lockers. Will know more today. They are in Summeral a,” Bryant wrote.
“And do this type of work,” Bryant texted, followed by a long block of redacted text.
Favre’s response is also redacted.
Bryant responded with a thumbs up and “where can I sent a donation for the Volleyball Complex?”
Favre sent Bryant the USM Foundation’s P.O. Box. Bryant then told Favre that he had found a cabinet maker to construct the lockers. “I am also going to reach out to Poncho and see if we can’t get a fundraiser in Hattiesburg put together,” he added.
May 18, 2018 – July 15, 2019: Bryant’s communication with Favre unknown
For this 11-month period, Bryant did not produce any of his texts with Favre, with the exception of one Jan. 12, 2019 text Bryant sent Favre asking him to retweet a post about the HGTV star who helped connect Bryant with the cabinetmaker.
June, 2018: Nancy New paid Favre an additional $500,000 under advertising contract
June 21, 2019: Bryant received and relayed a tip about suspected fraud to auditor
In communication after this point, which includes Bryant advising Favre on how to reword the proposal to get accepted by the welfare department and has been heavily reported, Bryant is aware of the auditor’s investigation into spending at the welfare department.
July 16, 2019: Bryant said he learned for the first time that MDHS was involved in funding the volleyball project
Favre texted Bryant with concerns that Nancy New wouldn’t be able to “fund her part” of the volleyball project. Favre told Bryant that he paid for three-fourths of the construction. Bryant said in his recent court filing that July 16 was the first time he learned about MDHS’s involvement in funding the stadium. Bryant promised to help, and consulted Favre and Nancy New on how to rewrite the proposal to get MDHS approval, but with the ongoing auditor’s investigation, the welfare department ultimately turned them down.
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.
