FINALLY: Bryant subpoenaed regarding his role in embezzling federal money intended for Mississippi’s poorest people

NEMiss.News:  Former Mississippi Governor Phil Bryant has been subpoenaed in a civil lawsuit regarding the embezzlement of $77-million intended for the poorest of the poor. These funds came to the state between 2017 and 2019, when Phil Bryant was governor and Tate Reeves was lieutenant governor.

In February 2020 State Auditor Shadrack White, a Bryant protégé’ arrested Nancy New, her son, Zack New, and several others. White said those arrested had perpetrated “the largest embezzlement in Mississippi history.”

Since then it has come to light that then-Governor Bryant and his wife Deborah, a close friend of Nancy New, were deeply involved in directing the illegal use of the federal welfare money.

The money came to the state in a federal block grant under a program called Temporary Assistance for Needy Families (TANF). The grant specifies that the money is to be spent to help the poorest people in the state.

Five million dollars for a volleyball stadium

Among those who received money was Brett Favre, formerly a top NFL quarterback- a chum of Bryant and current Governor Tate Reeves. Favre got over a million dollars for personal appearances he never made. After the February 2020 arrests, Favre paid a part of the million back to the state.

July 2019: Brett Favre, Tate Reeves and Phil Bryant in a photo Reeves posted on Facebook

In a convoluted scheme inspired by Bret Favre, the University of Southern Mississippi (USM) received 5 million of the illegally spent dollars to build a volleyball stadium.

According to page 31 of Auditor White’s report of charges:

University of Southern Mississippi Athletic Foundation – In October 2017, Nancy New’s Mississippi Community Education Center (MCEC) signed a “sublease” with the University of Southern Mississippi Athletic Foundation for $5,000,000 as “lease prepayments” for rental of a multi-purpose wellness center on the University’s campus.

• • When the lease from USM Athletic Foundation was viewed under scrutiny, auditors determined that the substance of the $5,000,000 payment to USM is a donation to the USM Athletic Foundation for the construction of the Wellness Center and not a lease of the property.

-(Further scrutiny of the situation showed that the wellness center was, in fact, a volleyball stadium.)

The most recent twists to the plot

New and her son Zack have since pled guilty to several felonies, but they claim Governor Bryant directed New to send the money to Favre and many other illegal beneficiaries.

After Attorney Brad Pigott’s firing by the state for subpoenaing USM documents, New’s lawyer has subpoenaed Phil Bryant’s own text messages and other communications that discussed the illegal transfer the money to USM. Her lawyer apparently believes the information he asks for will show that Phil and Deborah Bryant, not New et al, directed that TANF money be paid to Favre, USM and other unlawful recipients. And, he has said he has little confidence that the state will now pursue that information.

Read more about the massive embezzlement in this story republished with permission from Mississippi Today.

Former Gov. Phil Bryant subpoenaed for USM volleyball stadium documents.

An attorney for key welfare scandal defendants subpoenaed former Gov. Phil Bryant and others following the abrupt firing of Brad Pigott, a decision the defense attorney called “a patent attempt by the state to obfuscate truth and to protect itself and its political allies.

BY:  Anna Wolfe

Nancy New’s attorney has filed a subpoena directly on former Gov. Phil Bryant for documents related to the use of federal welfare funds to build a volleyball stadium at his alma mater, University of Southern Mississippi — information the state has appeared intent on concealing.

“We have no confidence that the state will follow through with its subpoena or pursue the evidence wherever it leads,” said Gerry Bufkin, the attorney for New and the nonprofit Mississippi Community Education Center. “We’re going to find the truth, even if we have to drag it kicking and screaming into the light.”

Bufkin’s subpoena asks Bryant to produce any of his communication surrounding the USM volleyball stadium and efforts to fund it. This marks the first known time the former governor, who oversaw the welfare agency while the misspending occurred, has been compelled to provide documents related to his involvement in the scheme.

The attorney also filed subpoenas on the USM Athletic Foundation, and on the Attorney General’s Office and Institutes of Higher Learning — two state agencies that approved the project. These three entities, as well as a spokesperson for Bryant, did not return requests for comment to Mississippi Today on Wednesday morning.

The Monday subpoena comes just days after Mississippi Department of Human Services fired the private attorney representing the agency in a massive civil suit that attempts to claw back $24 million in misspent grant funds from 38 individuals or companies. The suit is heavily based on audits conducted by State Auditor Shad White, a Bryant appointee, and private forensic auditors the welfare agency hired in 2020.

The welfare agency’s lawsuit targets New, her son Zach New, former welfare director John Davis, NFL legend Brett Favre, and many others — but not Bryant.

The agency said it removed the attorney on the case, former U.S. Attorney Brad Pigott, because Pigott had recently filed his own subpoena on the University of Southern Mississippi Athletic Foundation. Pigott was poking into why and how New, former First Lady Deborah Bryant’s close friend, paid $5 million in welfare funds to satisfy Brett Favre’s desires to see a new stadium on USM’s campus, where his daughter played volleyball.

“Although USM Athletic Foundation is not yet a party in this case, Brad Pigott issued an extensive subpoena to that entity without any prior discussion of the matter with MDHS,” current welfare director Bob Anderson said in a statement Saturday.

MDHS originally told the public that it would include the volleyball stadium in its civil suit, but Pigott told Mississippi Today the governor’s office prohibited him from doing so.

“All I did, and I believe all that caused me to be terminated from representing the department or having anything to do with the litigation, was to try to get the truth about all of that,” Pigott told Mississippi Today hours after his firing Friday. “People are going to go to jail over this, at least the state should be willing to find out the truth of what happened.”

The federal government prohibits states from spending funds from the federal Temporary Assistance for Needy Families block grant on brick and mortar, such as building an athletic facility. To get around this prohibition, the parties crafted a $5 million lease agreement, pretending that the New nonprofit would use the athletic facilities on campus to provide services to needy families. The athletic foundation would use the money to build the volleyball stadium, which it called the Wellness Center.

The volleyball facility represents the single largest known purchase in the welfare scandal, and with approved IHL meeting minutes revealing the nature of the project and the source of the funds, it’s also the scheme with the potential to ensnare the widest group of powerful people.

A text Favre sent to his business partner in late 2018, obtained by Mississippi Today, illustrates the attitude surrounding the payment: “(Nancy New) has strong connections and gave me 5 million for Vball facility via grant money.”

Favre was the inspiration behind at least three major expenditures in the scandal: the volleyball facility, $2.1 million in payments to a pharmaceutical startup, and a $1.1 contract directly with Favre to promote services for needy families — all of which now have some alleged proximity to former Gov. Bryant.

Nancy New, who has pleaded guilty to state charges of fraud, bribery and racketeering in the overall welfare scandal, has argued in responses to the state’s complaint that she has taken responsibility for her role in the scheme, but that she was acting on the direction of others who have been shielded from consequences.

For example, Bryant was the one who directed Nancy New to give Brett Favre the $1.1 million contract, she alleged in a recent filing. A spokesperson for Bryant denied this.

“Nancy and Zach have been cast as the ring leaders in this spending circus since the beginning. The auditor’s office focused on them to the exclusion of others and now MDHS has fired Brad Pigott to ensure that the cast of characters remains small,” Bufkin said. “This certainly appears to be a patent attempt by the state to obfuscate truth and to protect itself and its political allies.”

Original link to Mississippi Today story by Anna Wolfe: https://mississippitoday.org/2022/07/27/phil-bryant-subpoenaed-usm-volleyball-documents/