# Mississippi Welfare Funds Scandal The Mississippi welfare funds scandal is the largest public embezzlement case in the state's history, in which at least $77 million in federal anti-poverty money was misspent between roughly 2016 and 2019. The funds came from the Temporary Assistance for Needy Families (TANF) block grant — about $86.5 million a year that Washington sent Mississippi to help its poorest residents. Instead of reaching needy families, the money was funneled through politically connected nonprofits to pet projects, favored insiders, and celebrities, including former NFL quarterback [[Brett Favre]]. The scandal matters for the KB as a case study in how federal block grants to states become vehicles for elite self-dealing under weak oversight — and as a test of accountability, since the most powerful figure implicated, former Gov. [[Phil Bryant]], has never been criminally charged while lower-level participants pleaded guilty. ## How the scheme worked The Mississippi Department of Human Services (MDHS), under director [[John Davis (Mississippi)]], passed large sums of TANF money to two nonprofits — most notably the Mississippi Community Education Center (MCEC), founded by [[Nancy New]]. Because the funds were laundered through nonprofits rather than spent directly by the agency, they could be redirected to projects with little public scrutiny: a $5 million volleyball facility at the University of Southern Mississippi (where Favre's daughter played), $1.1 million in payments to Favre for speeches and ads the auditor said never happened, money toward a concussion-drug startup (Prevacus), and payments to others including members of the DiBiase pro-wrestling family. ## Timeline - **2016–2019** — TANF funds are diverted through MDHS to MCEC and other recipients. Favre first contacts Bryant about the volleyball project in April 2017; Davis agrees to back it that July. August 2017 texts show Favre asking New whether payments to him could be hidden from the media. - **June 2019** — Concerned MDHS employees alert Gov. Bryant to possible misspending; Bryant forwards the information to State Auditor Shad White, who opens an investigation. - **February 5, 2020** — State auditor agents arrest John Davis, Nancy New, her son Zach New, and others on embezzlement charges. Days later, Mississippi Today's [[Anna Wolfe]] reports that $5 million in TANF funds went to the volleyball facility. - **2020–2021** — Favre repays $1.1 million; the auditor says he still owes interest. - **September 2022** — John Davis pleads guilty to conspiring to defraud the state of millions in federal funds. Nancy and Zach New also plead guilty. - **2023** — Anna Wolfe wins the Pulitzer Prize for Local Reporting for the "Backchannel" series exposing Bryant's role. - **March 2025** — The federal Administration for Children and Families asks Mississippi to repay roughly $101 million in misused funds. - **January 2026** — Ted DiBiase Jr.'s federal trial is set to begin — the first trial in the case nearly six years after it broke; he is the only defendant contesting the charges rather than pleading. ## Accountability gap Despite text messages and conversations that appear to show involvement, [[Phil Bryant]] has never been charged. Favre, too, has avoided criminal charges, though he is a defendant in the state's civil suit to claw back the money. The pattern — guilty pleas for officials and operatives, no charges for the governor or the celebrity, and most defendants still unsentenced years later — is the scandal's defining feature and the reason accountability reporting by [[Anna Wolfe]] remained central long after the arrests. ## Connection to the KB Ecosystem - **[[Phil Bryant]]**: the governor who presided over the diversion and remains uncharged. - **[[John Davis (Mississippi)]]**: the MDHS director and central state-official defendant. - **[[Nancy New]]**: ran the nonprofit conduit (MCEC). - **[[Brett Favre]]**: the celebrity recipient who made the scandal national news. - **[[Anna Wolfe]]**: the reporter whose work exposed the governor's role. ## See Also - [[Phil Bryant]] - [[John Davis (Mississippi)]] - [[Nancy New]] - [[Brett Favre]] - [[Anna Wolfe]]