$94 million for Mississippi's poor spent on concerts, cars and wrestlers in state's 'largest embezzlement scandal'

Alex Woodward
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Nearly $100 million in federal grant funds intended to support programmes for Mississippi's poor were spent on cars, lobbyists, concerts, football games and companies run by former NFL quarterback Brett Favre and a family of professional wrestlers, among other charges listed in a 100-page audit revealing the state's largest-ever embezzlement scheme.

More than $94 million in grants from the Mississippi Department of Human Services (DHS) were "misspent, converted to personal use, spent on family members and friends of staffers and grantees or wasted" on dozens other expenses, according to a report from state auditor Shad White.

The audit "shows the most egregious misspending my staff have seen in their careers" in Mississippi, Mr White said in a statement. "When you read this one-hundred-plus page audit, you will see that, if there was a way to misspend money, it seems DHS leadership or their grantees thought of it and tried it."

Monday's report follows the February arrest of John Davis, the former DHS director, for his alleged role in the scheme.

Five others were also charged, including Nancy New, who led one of two nonprofit groups charged with misspending millions of dollars in funds for the state's poor. All have pleaded not guilty.

The misspending has put further scrutiny on how the state administers support for low- and no-income families with money from the federal Temporary Assistance for Needy Families (TANF) programme.

TANF replaced the previous federal welfare system in 1996 by issuing block grants to states, leaving it up to the states to determine how to spend the money.

Mr Davis had spent several decades working with the state's welfare agency before he took the helm in 2016, becoming responsible for administering hundreds of millions of dollars in annual funds intended to benefit Mississippi's poor.

But Mr Davis "saw it as an opportunity to build a kingdom" in the agency, Mr White said on Monday.

Ms New, director of the Mississippi Community Education Centre, had allegedly used funds to buy three cars, at more than $50,000 each, and pay cell phone bills and other costs "for a variety of members of the New family".

Her organisation also used funds to pay for one of her speeding tickets, the report says.

The nonprofit group had also paid $1.1 million to Favre Enterprises, a company run by the football Hall of Famer, to appear at speaking arrangements and autograph events at which he never actually appeared, according to the report.

With nearly 20 per cent of Mississippi residents live in poverty, the state continues to rank as the most-poverty-stricken state in the US, according to an annual report on the state of the nation's poor in US News & World Report.

According to the audit, large sums were also paid to former professional wrestling family of Ted DiBiase, Ted DiBiase J. and Brett DiBiase for "work that was not performed, for unreasonable travel costs, or with little proof" that the spending benefited needy residents.

The funds were also used to hire lobbyists and consultants without any paperwork that showed what the lobbyists did with the funds, according to the report.

Funds were also spend on fitness programmes for state legislators, religious concerts, football tickets, and advertising at the NCAA basketball tournament and a college football bowl game, the report says.

Mr White said the audit should serve as a "wake-up call to everyone in government" that "the old way of doing things, where you do whatever your boss or a person who controls a lot of money tells you to do, or you ignore the law around how to spend money because you think no one is looking — those days are over."

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