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--:-- Noel King: What about Brett Favre? Brett Favre is in trouble. You've probably heard some about this. Millions of dollars that were meant for poor people in Mississippi instead went to fund Favre's pet projects, including a volleyball stadium for his alma mater.
--:-- Noel King: The question many of us have been asking... What the hell is Brett Favre doing here? ...is a legitimate one. What the hell is he doing here? Why does a multimillionaire need to rip off welfare money? Well, he didn't need to, but he did it anyway. And it wasn't just him. This powerful and well-connected celebrity athlete had some powerful and well-connected friends who facilitated his fraud and cheerfully committed their own along the way.
--:-- Noel King: Coming up on Today Explained, the Mississippians who stole from the poor and gave to themselves.
--:-- Noel King: Support for Today Explained comes from Adio. Adio is an AI-native customer relationship management platform that Adio says is built for the next era of companies.
--:-- Noel King: Anna Wolf is a reporter for an independent news outlet called Mississippi Today. Anna's been credited with uncovering the fashion in which very powerful people in Mississippi misused and outright stole money that was meant for poor Mississippians.
--:-- Anna Wolf: I think it's important to note that, you know, we're in a state that bottoms the list in almost everything good, tops the list in all the bad things. But one thing that we do really well is we produce great athletes. And so we exalt these people. We hold them up. They are our role models in Mississippi.
--:-- Anna Wolf: Hall of Fame quarterback Brett Favre is a legend at his alma mater, the University of Southern Mississippi. He's now facing growing backlash over his connection alleged to Mississippi's largest public fraud case.
--:-- Anna Wolf: Earlier this year, the state filed civil suit against 38 people and entities, including Brett Favre. We heard the word guilty 24 times as Nancy New and her son admitted to their central role in the massive $77 million welfare fraud scheme.
--:-- Anna Wolf: When I started talking to people after they began learning about his involvement in this scandal, a lot of people I talked to were simply not surprised that he would be involved in this kind of activity. He's, you know, apparently known for having these big idea projects, but not really wanting to pony up his own money for them.
--:-- Anna Wolf: So it's not that big of a surprise to people that he would have been trying to use his celebrity and his influence to cause state officials to find taxpayer money for him that they could use for his pet projects.
--:-- Anna Wolf: You know, at one point, Brett Favre even texted Nancy New, the nonprofit founder that was spending this money. After he received the first $500,000 check from the promotional gig, and this was in December of 2019, he said to her, Santa came today. Thank you, my goodness, thank you.
--:-- Anna Wolf: And I think that that shows kind of what his mentality was about this money. You know, it's free money for him. Brett Favre is a very rich man. He has millions of dollars. He earned them over the course of a very successful career.
--:-- Anna Wolf: Why was Brett Favre even in the vicinity of welfare funds in Mississippi? His celebrity afforded him a door to reach the state's top officials, which includes welfare officials. And he used that opportunity to seek funding for his pet projects so that he didn't have to pay for them himself.
--:-- Anna Wolf: What were some of his pet projects? The volleyball stadium at USM that received $5 million in welfare funds. It'll seat 1,000 fans and has locker rooms for both indoor and beach volleyball teams.
--:-- Anna Wolf: As well as the pharmaceutical startup company. Coming up next, a cure for concussions. NFL legend Brett Favre will talk about a new treatment helping to protect players.
--:-- Anna Wolf: He also received $1 million himself for the speaking engagements and a promotional contract. to promote the Families First program.
--:-- Anna Wolf: He's just kind of been known among people in Mississippi as being behind some of these projects. And welfare was a fund that the state officials knew that they could manipulate for his benefit.
--:-- Anna Wolf: Tell me about this volleyball stadium. So Brett Favre wanted to see this state-of-the-art volleyball stadium built at the campus at University of Southern Mississippi, which is his alma mater, and also the school where his daughter was playing volleyball at the time.
--:-- Anna Wolf: And so when he was going around asking for support from state officials and other wealthy Mississippians, he ended up having a conversation with former Governor Phil Bryant about getting private donations to build this stadium.
--:-- Anna Wolf: He eventually met with welfare officials in 2017 who committed almost immediately $4 million in welfare funds to him to build this facility.
--:-- Anna Wolf: They also had conversations with the governor after that about getting the ball rolling on actually getting the money there
--:-- Anna Wolf: Is there any evidence that when Brett Favre went looking for money to build this volleyball stadium at the university that he knew some of the money that would come his way was money that was supposed to go to poor people in Mississippi?
--:-- Anna Wolf: The reason that he had to have some idea was because they couldn't just take this money from the welfare program and put it into the volleyball stadium. They had to come up with a plan, a proposal that told the state of Mississippi that the volleyball facility was going to be a place where people in poverty would receive programming that would help them escape poverty.
--:-- Anna Wolf: The way that they got the money from the welfare program to the athletic foundation, which is the entity that built the stadium, is through a lease agreement. It wasn't a direct payment to contractors to build the stadium. It was a lease that the nonprofit entered for $5 million.
--:-- Anna Wolf: The lease was for the purpose of providing programming for poor people at the campus at USM. And it says that in the lease agreement.
--:-- Anna Wolf: What shape is the stadium in now? It's up, it's finished and, you know, volleyball matches are being held there.
--:-- Anna Wolf: What's not being done there is any programming for people in poverty. They held one event and it was a healthy teens rally. It was a rally that they were holding at places across the state that they would bring teenagers in and talk to them about things like cyber bullying and suicide prevention and teen pregnancy.
--:-- Anna Wolf: And they held one rally at USM that justified $5 million in lease payments in 2018.
--:-- Anna Wolf: Can you give me context for why a volleyball stadium was seen as so important that people would go about stealing money to get it done?
--:-- Anna Wolf: Brett Favre's daughter was playing volleyball at the university at this time, and that's why he wanted to see this stadium built.
--:-- Anna Wolf: I wish I had a better answer. It is as absurd as you think it is.
--:-- Anna Wolf: When you start to pull these threads and the bombshells start dropping about Brett Favre, what happens? Does he return the money? Does anyone say, okay, the university is now going to have to pony up the money that it got from the state and pay us back?
--:-- Anna Wolf: So it's important to note that, you know, from 2020 near the beginning, Brett Favre has denied knowing that this money came from this Temporary Assistance for Needy Families program and denies really, you know, being the architect for the money going to the volleyball stadium.
--:-- Anna Wolf: He can't deny that he received $1 million in welfare payments that was outlined in the audit, and he did pay back half of that money at the beginning when it was first uncovered in the audit that he had received this $1.1 million.
--:-- Anna Wolf: He promised to pay the entirety of the $1.1 million back. He did not pay the remainder of it back until more than a year later after a separate forensic audit came out in October of 2021.
--:-- Anna Wolf: The auditor's office says that he owes interest on that money for the time that he had had it, and he has not paid the interest on it.
--:-- Anna Wolf: Do you think Brett Favre is going to be indicted on any criminal charges? Where is this headed?
--:-- Anna Wolf: Brett Favre certainly was the inspiration behind this welfare expenditure. Whether he is criminally liable is going to be up to prosecutors and the court system.
--:-- Anna Wolf: We're going to continue to make sure that this case is thoroughly investigated. As everyone knows, we have turned over every piece of evidence that we have over to federal investigators.
--:-- Anna Wolf: This case is going to be thoroughly investigated top to bottom.
--:-- Anna Wolf: Can you tell me what is happening to Brett Favre's reputation in Mississippi right now?
--:-- Anna Wolf: You know, I think that people in Mississippi recognize that Brett Favre is almost a sideshow of this larger corruption that took place.
--:-- Anna Wolf: It certainly has captured the national attention and people know about this story because of Brett Favre.
--:-- Anna Wolf: But I think people in Mississippi are really tired of the systemic issues that brought us here.
--:-- Anna Wolf: And they want to see that interrogated, not Brett Favre as an individual.
--:-- Noel King: Coming up next, why was Mississippi's welfare system that susceptible to fraud?
--:-- Noel King: Support for today's show comes from Adio. What is Adio?
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--:-- Noel King: I was pretty mischievous and when we were little, while my dad was practicing after school, we would go sneak into the cafeteria and steal milk.
--:-- Noel King: We'd sneak in the locker room, we'd steal Gatorade. Or we'd steal his jocks and socks and all that stuff because we wanted to be like the grown-ups.
--:-- Noel King: It's Today Explained.
--:-- Anna Wolf: Anna Wolf, you broke this story wide open. There is a world in which you don't start reporting and we don't learn any of this. That's kind of the point of people doing fraud.
--:-- Anna Wolf: What made you start looking into what was happening with welfare money in Mississippi?
--:-- Anna Wolf: I really began earnestly looking at this welfare program. It's called Temporary Assistance for Needy Families in 2018 after I took over the poverty beat at Mississippi Today.
--:-- Anna Wolf: There was a story that came out the year prior that said that the state had denied nearly 99% of people who were applying for cash welfare assistance.
--:-- Anna Wolf: I wanted to know how the state was spending the rest of the money, and more importantly, who was being helped and how.
--:-- Anna Wolf: DHS, Mississippi Department of Human Services, is the agency that administers these funds, and I wasn't able to get expenditure reports or invoices showing how the money was spent.
--:-- Anna Wolf: At one point, I filed a complaint against the agency.
--:-- Anna Wolf: So Anna is down this rabbit hole for about two years. Where was all of the welfare money in Mississippi going if it wasn't going to poor people?
--:-- Anna Wolf: A state auditor also started looking into that question.
--:-- Anna Wolf: And in early 2020, the auditor discovered what was going on. There was criminal activity.
--:-- Anna Wolf: The auditor announced the arrest of these six individuals, including the former welfare director.
--:-- Anna Wolf: Within weeks of that, we uncovered the connections between one of the companies that received $2 million in stolen welfare funds and Brett Favre and Phil Bryant, the former governor.
--:-- Anna Wolf: And we've been closely following that trail ever since.
--:-- Anna Wolf: Can I ask you how this begins, like how it is possible for this to begin?
--:-- Anna Wolf: And this begins with welfare reform in the 90s because what happened wouldn't have been possible without welfare reform.
--:-- Anna Wolf: When I ran for president four years ago, I pledged to end welfare as we know it. To transform a broken system that traps too many people in a cycle of dependence to one that emphasizes work and independence.
--:-- Anna Wolf: So when welfare reform happened in the 1990s, the TANF program was created and it replaced the former entitlement program, Aid to Families with Dependent Children.
--:-- Anna Wolf: And when it did that, it turned the welfare program into a block grant.
--:-- Anna Wolf: And it allowed states to create their own state plans around what they would do to solve poverty.
--:-- Anna Wolf: And those plans go to the federal government. The federal government doesn't even have the authority to sign off and approve those plans.
--:-- Anna Wolf: And it also allows states to use the money in ways that simply further this ideology about people in poverty and what people in poverty need.
--:-- Anna Wolf: So in Mississippi, programs are not created based on what people in poverty are telling the state that they need.
--:-- Anna Wolf: They're really more focused on what the state's pre-existing notion about people in poverty is.
--:-- Anna Wolf: So you see a lot of the money being spent on things that the state is calling fatherhood programs because there's a notion that families without fathers are at the root cause of poverty.
--:-- Anna Wolf: And so you have mentorship programs, but really that's just turned into giving celebrities money to go around and talk about the welfare program.
--:-- Anna Wolf: And you don't see any outcomes from those programs on how what the state's doing is actually improving the lives of people in Mississippi.
--:-- Anna Wolf: So the federal government has essentially kicked decisions about welfare over to the states.
--:-- Anna Wolf: And when does the abuse of the system begin in Mississippi?
--:-- Anna Wolf: 2016 is also a natural starting point for this story because that is when John Davis became director.
--:-- Anna Wolf: John Davis is the former director who was in charge of the Welfare Department when this scandal occurred, and he just pled guilty to federal charges last week.
--:-- Anna Wolf: A state judge today sentenced Davis to more than 30 years in prison and put him on house arrest until the federal sentencing in February.
--:-- Anna Wolf: The governor at the time, Phil Bryant, had apparently instructed him in 2016 to, instead of giving this TANF fund to different service organizations across the state, he instructed the director to consolidate the program.
--:-- Anna Wolf: And the idea was that DHS would put out tens of millions of dollars to one or two organizations who would then decide who to give that money to through private grants so that that money wouldn't be then publicly reported.
--:-- Anna Wolf: It was now private. They would call the initiative Families First for Mississippi.
--:-- Anna Wolf: And this is the program through which most of the misspending occurred.
--:-- Anna Wolf: Who was that money supposed to be for?
--:-- Anna Wolf: One in five people in Mississippi live in poverty. We rank near the bottom of all of these lists of median income or workforce participation rate or average wages.
--:-- Anna Wolf: Over the last year, I would say that I probably only earned like $5,000 to $6,000.
--:-- Anna Wolf: I actually had a bank account, but I don't right now. It was so much things needed.
--:-- Anna Wolf: It just got into negatives.
--:-- Anna Wolf: We've got a very low-income and low-wage population, and these funds would have actually helped people find self-sufficiency.
--:-- Anna Wolf: That is the mission statement of the program and of the agency.
--:-- Anna Wolf: So, you know, the state didn't want to put out this money through direct cash assistance to people in poverty because there's this notion in conservative states that social safety net programs create dependency on the government and that they de-incentivize working.
--:-- Anna Wolf: Okay, well, the money can be spent on programs that have been proven to help people find success and interrupt generational poverty, workforce development programs, you know, effective caseworker programs, afterschool and childcare programs, transportation.
--:-- Anna Wolf: These are the things that could have helped people find economic mobility that they did not.
--:-- Anna Wolf: What's notable is that all the welfare money that might have been spread out among lots of different programs was instead funneled into just a couple
--:-- Anna Wolf: Was the point of that just to make things simpler?
--:-- Anna Wolf: Yeah, I think that was essentially the reason that they give so they don't have to manage that many grants right.
--:-- Anna Wolf: I mean think about the administration that it takes to administer those grants and make sure that people are spending them properly.
--:-- Anna Wolf: Now, I think that that is the stated reason, but I also understand that since this money, and we're talking about tens of millions of dollars, were going to these private nonprofits who then had the ability to spend the money however they wanted, and there was no reporting back to the department to say how they were spending the money.
--:-- Anna Wolf: It created a black hole for this money to funnel through without anyone knowing about it.
--:-- Anna Wolf: All right. So what you end up with is a situation in which you have millions of dollars, you have very little oversight.
--:-- Anna Wolf: We all know what that can lead to, and it absolutely did in this case, when did people in Mississippi start to realize the extent of what was going on here?
--:-- Anna Wolf: There were two things that were happening in 2019.
--:-- Anna Wolf: First, a department employee, an employee of John Davis's, had gone to the governor's office with this small tip about suspected fraud on John Davis's part.
--:-- Anna Wolf: He takes this small tip to the governor's office, who takes that information to the state auditor.
--:-- Anna Wolf: Now, the auditor is already conducting an annual audit on DHS because there is a routine audit that the state auditor's office does every year on state agencies that receive federal funds.
--:-- Anna Wolf: And so there was the investigation into suspected fraud and the regular routine financial audit that were actually occurring at the same time in 2019.
--:-- Anna Wolf: The arrests were the result of the criminal investigation, and the audit report released in May was the result of the regular audit procedures.
--:-- Anna Wolf: The audit released in May of 2020 really opened up a whole new world of information and data about how the money had been spent.
--:-- Anna Wolf: We knew that this $4 million had allegedly been stolen, but we didn't know the breadth of the issue, the breadth of the breach at DHS.
--:-- Anna Wolf: So the state of Mississippi had allowed tens of millions of dollars from this federal program and actually from other assistance programs as well to be used in ways that did little to nothing to help people in poverty.
--:-- Anna Wolf: Instead, the two nonprofits that I described were using the money on lobbyists, football tickets and promotional events with athletes, famous athletes, fitness programs, and they put on concerts, religious concerts as well.
--:-- Anna Wolf: And one of the things that stood out to me was that there was a line item in the audit that they had used TANF money to pay for a speeding ticket.
--:-- Anna Wolf: And I think that just really illustrates, you know, just how much this fund had turned into their piggy bank, right?
--:-- Anna Wolf: Whose names in that audit really stood out?
--:-- Anna Wolf: So we saw that during the last four years of the Bryan administration, for some reason, money from the Department of Human Services kept going to famous athletes.
--:-- Anna Wolf: Of course, you know about Brett Favre. That's the story that has been national here lately.
--:-- Anna Wolf: But there was $5 million that went to the family of Brett DiBiase, this wrestler whose dad is the million-dollar man.
--:-- Anna Wolf: I'm Ted DiBiase. I'm the million dollar man.
--:-- Anna Wolf: They say that money is the root of all evil. Well, I'm here to tell you that it's not.
--:-- Anna Wolf: So those are professional wrestlers who received welfare money, as well as the former football player Marcus Dupree.
--:-- Anna Wolf: I'm doing a foundation called the Marcus Dupree Foundation where I work with my horses and kids and mentor and seeing the kids face light up when they see the horses and stuff like that.
--:-- Anna Wolf: And another former football player, Paul Lacoste, was paid to put on fitness camps for Mississippians, but also for lawmakers and other powerful people.
--:-- Anna Wolf: 6.0 is the speed on the treadmills. Let's go. We don't have time to drink water. We're too fat to drink water.
--:-- Anna Wolf: These are the names that have really stuck out and made the headlines.
--:-- Anna Wolf: But the family members and friends of these welfare officials were also people who received money from this program.
--:-- Anna Wolf: And so the audit was essentially a laundry list of purchases that the auditor found.
--:-- Anna Wolf: The narrative that this audit report generated and the tone that was set at the beginning, you know, came pretty early on in this whole investigation.
--:-- Anna Wolf: And that was that Davis, John Davis, was this tyrant in charge of the welfare agency, sort of directing everyone to do these nonsensical things and pay out this money to wrestlers and football players.
--:-- Anna Wolf: But as we've learned more and more over the last two years, this corruption was really system-wide.
--:-- Anna Wolf: And I think investigators are looking to see how far it goes to the top, not just to John Davis.
--:-- Anna Wolf: Let's go back to the thing that the audit ultimately found, which is that tens of millions of dollars were misspent or stolen.
--:-- Anna Wolf: Is the state going to get that money back and be able to use it to help poor people?
--:-- Anna Wolf: The people who received this money improperly do not have it to pay back, generally.
--:-- Anna Wolf: The state civil suit is asking Nancy New to pay back $19 million.
--:-- Anna Wolf: Nancy New doesn't have $19 million.
--:-- Anna Wolf: Brett Favre is one of the only people who might actually have the money to pay back, but that's a small fraction of the larger, you know, amount of money that was misspent here.
--:-- Noel King: Today's show was produced by Hadi Muagdi and Avishay Artsy.
--:-- Noel King: It was fact-checked by Laura Bullard and Jillian Weinberger and Miles Bryan who is colorblind.
--:-- Noel King: And engineered by Paul Robert Mouncey Matthew Collette edited the show.
--:-- Noel King: I'm Noelle King. It's Today Explained.
--:-- Noel King: We all have moments where we could have done better, like cutting your own hair. Oh, yikes. Or forgetting sunscreen, so now you look like a tomato. Ouch. Could have done better.
--:-- Noel King: Same goes for where you invest. Level up and invest smarter with Schwab.
--:-- Noel King: Get market insights, education, and human help when you need it. Learn more at schwab.com.
