The greatest theft of public welfare money in Mississippi’s history sparked the state’s Democratic legislators into action for a second time on Thursday, December 15, two months after an earlier hearing on October 18 on the woefully misused and broken Temporary Assistance for Needy Families (TANF) system.
The legislators in their meeting last week and on Oct. 18 had the two goals of (1) fixing a corrupt system and (2) helping Mississippi families in need.
Both Representative Robert Johnson III of Natchez, the hearing chair, and State Senator David Blount of Jackson called for an end to the “roadblocks” applicants face when seeking to qualify for TANF, seemingly punitive barriers put in place by the Department of Human Services (DHS) and the Republican dominated legislature.
“The program has not been administered well because of roadblocks put up by this legislature and by DHS,” Blount said. “We need to get rid of all that, and we need to make sure that the poor families that are eligible for (TANF) money…get it.”
In October 2021, State Auditor Shad White dropped his bombshell disclosure that he had “served demands for more than $77 million of misspent TANF money.”
The TANF program displaced the old Aid to Families with Dependent Children (AFDC) system in 1996, and almost from its beginning became a system of corruption and oppression in Mississippi that denied assistance to families who needed it or set such stringent rules to qualify that over 90 percent of applicants were consistently rejected.
Mississippi has a poverty rate of 19.6 in a population of 2.9 million. Yet, in 2021, only 1.4 percent of Mississippi’s impoverished children were assisted through TANF, the hearing committee disclosed. Data on display at the hearing showed that in May 2021, during the height of the COVID-19 pandemic, only 176 adults received TANF benefits.
The program, nevertheless, became a “slush fund” for 38 individuals now under indictment or who already have pled guilty in the theft of a lot more than the $77 million in stolen and misused TANF money the state auditor reported for the 2018-2020 two-year span alone. Most of the TANF funds were given to wealthy athletes and a close network of scammers, including governors and other state officials who created the channels for dispensing the money.
Even after the mind-boggling fraud and theft calculated to be $77 million was dispensed, the Department of Health Services left $47 million “on the table” rather than using the money to help the nearly 600,000 Mississippians who needed it.
Education entrepreneur Nancy New and her two sons, Zach and Jesse Jr., were the main recipients of the illicit largesse funneled through their nonprofit agency called the Mississippi Community Education Center. Although tens of millions of dollars of the misused TANF money was given to the New family operations, the auditor charged them with actually stealing only $4.5 million. Department of Human Services Executive Director John Davis pled guilty in federal court to the charges brought against him.
An exhibit at last week’s hearing was labeled “How Nancy New Spent Her TANF Dollars.” Over $5.1 million was given to retired pro-wrestler Ted DiBiase and his two sons; $9,500 a month was used to “lease” a horse ranch owned by the Marcus Dupree Foundation; $1.3 million was paid to Paul Lacoste, personal trainer to then-Lt. Governor Tate Reeves; and $2.15 million to finance Prevacus, a biomedical company that was being promoted by Brett Favre and Gov. Phil Bryant. The exhibit was a very short list compared to the millions unaccounted for – either stolen or misused – in the two decades before the state auditor’s investigation.
A common factor among these alleged wealthy cheats of Mississippi’s welfare allocations was their close connection to the governor, the state auditor, and the director of the state’s Department of Human Services (DHS).
Investigative Attorney Brad Pigott accused former Gov. Phil Bryant of setting up the mechanism for directing the vast amounts of TANF welfare money to benefit his Republican friends.
“Governor Bryant gave tens of millions of dollars of this TANF welfare money to a nonprofit led by a person who he knew well and who had more connections with his political party than with the good people in Mississippi who have the heart and the skills to actually cajole people out of poverty or prevent teenage pregnancies,” Pigott said.
Pigott was fired by Reeves, who had hired him to help recoup the millions of lost and stolen TANF money.
A common theme at last Thursday’s hearing was a call for more “cash payments” to TANF recipients. A special emphasis was also given to lifting the many restrictions on the requirements for TANF payments.
The amount of money allowed a family of three remained at the low figure of $170 per month from 1996 until the recent scandal was exposed. An increase of $90 a month was granted on May 1, 2021, three months ahead of the July fiscal term. Families of three saw their TANF benefits increase from the original $170 to $260 per month.
Rejection rates for TANF applicants is 93 percent, according to figures published by the Mississippi Low-Income Child Care Initiative (MLICCI). Between 2003 and 2010, the rejection rate was nearly 50 percent, the figures indicated. Then, in 2011, the rejection rate suddenly jumped to 80 percent. And the rate has kept rising ever since.
Carol Burnett, the founder and executive director of MLICCI, told the hearing that the state should use its own money and not depend wholly on the federal funds to solve childhood poverty in Mississippi. The state doesn’t spend any of its money on welfare, she said. It only mitigates poverty.
TANF is supposed to be a safety net, Burnett said. But it is more given to imposing punitive sanctions and bureaucratic red tape than offering relief. Over $30 million of the $86 million received annually from the federal government for TANF is used for administration, she said.
Dr. Aisha Nyandoro, CEO of the Springboard to Opportunities, said her organization provides 100 single mothers $1,000 a month for 12 months “without catches.” She also launched the Magnolia Mother’s Trust in Jackson to break the cycle of poverty.
Mothers in federally subsidized housing who receive the $1,000 monthly are able to pay bills they otherwise would have difficulty paying, she pointed out. They are also able to provide health insurance for their family and to set up an emergency savings account. Springboard operates in 11 housing communities in Mississippi, Alabama, and Maryland, she said.
Oleta Garrett Fitzgerald, regional director of the Children’s Defense Fund, said that young mothers and women from the Black Belt have fallen through the cracks in the state’s economy.
Fitzgerald said the state has been “successful in moving women from welfare.” But it has not had success in getting them to work.
“You need resources to get resources,” she said, pointing out the unavailability of transportation and childcare for young mothers who are trying to get into the workforce. Many women stop applying for work programs due to this lack of resources, she said.
With the promise of a billion-dollar broadband development in rural Mississippi, Fitzgerald recommended the use of the $40-plus million of TANF money sitting idle in the state’s account to train people for jobs related to the development and implementation of the new broadband system.
One Voice Mississippi policy analyst Kyra Roby, Esq. pointed out that the state raised the TANF allotments in July 2021, as news of the theft scandal rose to its heights. This move increased the original amount of $170 for a family of three that had been in place since 1996 to $260 a month for a family of three. This still is not enough to sustain a family with little or no income, she said.
Roby said there are no state models that can be used for Mississippi. She instead called for an increase in benefits to bring household income to within 25 percent of the federal poverty level. For a family of four the poverty level was $36,156 in 2020.
She also recommended increasing the number of TANF caseloads and to improve access to the program.
Increased cash payments to TANF recipients is a core recommendation by Dr. LaDonna Pavetti, Senior Fellow, Center on Budget and Policy Priorities.
Increase the amount of TANF funds going directly to families, expand the number of families in the program, and improve the effectiveness of TANF work programs to help them meet their basic needs, she advised.
The $47 million left on the table in 2020 should be allocated to the TANF recipients, she said.
“For every $1 million in unspent funds, Mississippi could provide a $1,000 cash payment to 1,000 families in need, reducing the significant hardship that many families with children face.”
Childhood poverty directly affects children’s mental and emotional health and their learning ability, she said.
“Evidence links more assistance with healthier birth weights, lower maternal stress (measured by reduced stress hormone levels in the bloodstream), better childhood nutrition, higher school enrollment, higher reading and math test scores, higher high school graduation rates, higher rates of college entry, and other benefits.
“The current TANF crisis in Mississippi cannot be undone and will be resolved through the appropriate legal channels,” Pavetti said. “But the state legislature and the Department of Human Services have an opportunity now to make investments that will improve the life chances of its youngest and most vulnerable citizens.”
Last Thursday’s hearing was declared a “partisan” event and that forced the hearing organizers to resort to Facebook Live Streaming to broadcast the hearing.
Republicans stayed away and called the investigation a partisan Democratic project. By refusing to attend the hearing, the Republicans were able to block the Democrats from using the state’s YouTube channel to broadcast the hearings.
The state’s Republican legislative majority, whose top leaders in government are accused of creating the corrupt conditions and opportunities for the theft, have shown only a minimum interest in dealing with the problems, the hearing announcement said.
Democrats said they will present legislation to correct the TANF problems in the 2023 session that begins in January. They want to avoid the possible loss of federal support that provides an essential part of Mississippi’s economy.