When people throw around the phrase welfare fraud, it usually refers to individuals bilking the system by falsely claiming to be in need. A lawsuit in Mississippi alleges that it also includes funding for a college volleyball facility and cash payouts to a Pro Football Hall of Fame quarterback.
Phil Bryant, a Republican, served as Mississippi's governor from 2012–2020. During that time, the state's poverty rate hovered between 20–25 percent. Today, it has the highest rate of any state in the country, with more than 19 percent of residents living under the poverty line.
The Mississippi Department of Human Services (MDHS) administers Temporary Assistance for Needy Families (TANF), a welfare program funded by a federal block grant. It spent over $77 million in 2020, just over half of what it spent two years earlier.
But during that time, the MDHS was rocked by scandal: In February 2020, the Office of the State Auditor arrested six people on charges including fraud and embezzlement, including John Davis, former MDHS director, and Nancy New, director of the nonprofit Mississippi Community Education Center. New and her son Zach have pleaded guilty and are cooperating with prosecutors.
In all, the state alleged that nearly $100 million was diverted from anti-poverty programs, to the benefit of local officials and well-connected individuals. One of those individuals was allegedly Brett Favre, a native Mississippian and one of the most decorated quarterbacks in the history of the NFL.
In January 2020, Favre bragged that "it's hard to get people to donate for volleyball. But we'll be opening an $8 million facility that will be as good as any in the country" at the University of Southern Mississippi (USM), his alma mater and the school where his daughter played volleyball. But as Mississippi Today reported at the time, at least $5 million of that total came from New's nonprofit, which according to the state auditor acted as a funnel through which MDHS officials illicitly laundered state funds. Between 2016 and 2019, the nonprofit received more than $60 million in funding from the state's welfare programs, while raising less than $1.6 million from any other sources. In all, the auditor alleges that New misused at least $77 million, the same amount the state spent on welfare funding in 2020.
According to the state auditor, Favre was also paid more than $1.1 million in speaking fees for appearances he never made, paid by the nonprofit with money from state welfare funds. The state auditor claimed that Favre was unaware of the money's origin, and Favre agreed to pay the money back (though he has struggled to do so in a timely manner).
But a state civil lawsuit reveals that Favre was intimately aware of the misuse of state funds, and even enlisted Bryant's help.
The MDHS agreed in 2017 to help Favre fund the volleyball facility, even structuring the deal to circumvent regulations that prevent TANF funds from being used toward construction. But the MDHS funds were not enough: In July 2019, Bryant texted New, "Just left Brett Favre…Can we help him with his project." Favre's $1.1 million payment for speaking fees was actually intended to finance the project as well, in exchange for ads for the state welfare agency. In a text to New, Favre offered, "I could record a few radio spots…and whatever compensation could go to USM." He also worried, "If you were to pay me is there anyway the media can find out where it came from and how much?"
This is not even the first whiff of scandal. In April, Mississippi Today reported that Bryant had set up a meeting in December 2018 between Favre and MDHS officials in order to secure $1.7 million for Favre to invest in a pharmaceutical startup, Prevacus. Just days before the meeting, the former football star texted Bryant, "It's 3rd and long and we need you to make it happen!!" That money was laundered through New's organization as well. After Bryant left office in 2020, he agreed to a "company package" including Prevacus shares in exchange for introducing the company to investors.
Neither Favre nor Bryant has been charged, though Favre has apparently been questioned by the FBI.
The entire saga, in which a legendary professional athlete uses state funds in a purely personal endeavor that eventually draws the attention of law enforcement, is reminiscent of Curt Schilling's foray into video game development. After helping the Boston Red Sox clinch their first World Series win in 86 years, Schilling founded video game company 38 Studios, which he established in Rhode Island after the state offered him a $75 million loan. The company ultimately defaulted on the loan, leaving the state on the hook for over $100 million.
But Favre's deal is considerably worse: For all of the faults in Schilling's deal, it was overwhelmingly approved by the state legislature. Meanwhile, Favre took part in a series of backroom deals meant to benefit a few well-connected players from the largesse of the state's coffers.