Welfare defendant alleges Gov. Phil Bryant used federal funds to hurt political rival

Inside Mississippi’s ever-unfolding welfare scandal, authorities officers didn’t simply use federal funds to lavish their family and friends.

Additionally they allegedly leveraged the cash to quell their political foes, based on a defendant within the case and one other particular person linked to a nonprofit inside scheme.

Christi Webb, director of the welfare-funded nonprofit Household Useful resource Heart of North Mississippi, supported her good friend and then-Lawyer Basic Jim Hood, a Democrat, in his race for governor in opposition to then-Lt. Gov. Tate Reeves in 2019.

To the obvious dismay of state Republican management, Webb employed the Democrat’s spouse, Debbie Hood, in mid-2018 to run the native Chickasaw County workplace of the statewide anti-poverty program referred to as Households First for Mississippi. The state welfare division was pushing tens of tens of millions of welfare {dollars} via Webb’s nonprofit – $11.5 million forensic auditors discovered was misused over a four-year span.

However round April 2019, because the governor’s race started heating up, an area Republican lawmaker allegedly took that dismay a step additional and delivered a risk to Webb: Fireplace Debbie Hood or lose your public funding.

“FRC won’t ever obtain one other greenback from the state in the event you don’t hearth Debbie Hood,” a north Mississippi Republican lawmaker advised Webb, Webb’s lawyer Casey Lott alleged.

“He explicitly mentioned, ‘I’m the governor’s messenger,’” Lott added, referencing then-Gov. Phil Bryant.

Mississippi At this time spoke with one other individual linked to the nonprofit who additionally witnessed and confirmed the lawmaker’s demand however didn’t want to be named.

Bryant, who oversaw over the Mississippi Division of Human Providers and appointed the welfare company’s director, has more and more confronted public scrutiny for his function in what has been referred to as the most important embezzlement scheme in state historical past.

The previous governor, who has not been charged with a criminal offense, wielded management over how the welfare company and its accomplice nonprofits spent federal welfare funds, Mississippi At this time has uncovered in its ongoing investigative collection “The Backchannel.” And Bryant even appeared to assist NFL legend Brett Favre and a nonprofit official write a grant to skirt round federal laws, based on textual content messages first printed by Mississippi At this time this week.

Bryant’s lawyer within the civil case, Ridgeland-based lawyer Billy Quin, declined to remark Saturday for this story. Quin is a former particular assistant lawyer common underneath Hood, and the lawyer publicly supported Hood for governor in 2019, social media posts present.

Shortly earlier than the alleged risk to the nonprofit chief, Bryant had met with the native lawmaker, Sen. Chad McMahan, a Republican from Guntown.

McMahan additionally had direct contact with Davis concerning the company’s spending choices, textual content messages obtained by Mississippi At this time present, and he took a particular curiosity in serving to safe funding for the Autism Heart of North Mississippi — a cost auditors later discovered improper. When reached for remark for this story, McMahan denied ever threatening Webb’s funding.

“I by no means mentioned that. I don’t keep in mind ever saying. I don’t even keep in mind a dialog like that in any respect,” McMahan advised Mississippi At this time. “… I’m troubled that that’s been mentioned, after I was engaged on behalf of the autism heart to get them their funding restored, and Households First, too. I might have appreciated to have seen Households First get their grant again. However I’m actually troubled by it.”

The Mississippi Division of Human Providers is suing Webb for misusing practically $4 million from the federal program referred to as Short-term Help for Needy Households, or TANF, a block grant that officers focused for widespread misuse through the Bryant administration. The civil lawsuit makes an attempt to recoup again roughly $24 million from 38 people or firms. Whereas Webb faces civil prices, she has not been accused of a criminal offense. Due to the continuing prison investigation, Webb spoke to Mississippi At this time fully via her lawyer for this story.

Davis is going through a number of prison prices, together with bribery and fraud, associated to welfare spending. His lawyer didn’t return calls to Mississippi At this time for this story. Mississippi At this time couldn’t affirm what BC in his textual content stands for, however two sources believed it could possibly be a typo.

Bryant, who just isn’t included within the civil lawsuit, has thus far escaped any prices – civil or prison.

The state’s civil lawsuit in addition to parallel state and federal prison investigations, each of which may ultimately ensnare new figures, are ongoing.

Hood was a viable Democratic candidate — a rarity in Mississippi — within the 2019 race in opposition to then-Lt. Gov. Reeves. Reeves, now governor, additionally communicated with Davis about Webb, based on textual content messages Mississippi At this time obtained, and appeared to help Davis’ remedy of Webb.

“Tate Reeves simply referred to as me mentioned he wished me to know they don’t give two shits concerning the BC or Christi to maintain doing what I’m doing. Growth,” Davis texted Ted “Teddy” DiBiase Jr., his shut affiliate, in March of 2019. Cellphone data present Davis additionally saved Reeves quantity two days after this textual content. 

Round this time, Reeves additionally met with Davis about MDHS partnering with Reeves’ health coach Paul Lacoste – one other goal of the civil go well with. Two days after the assembly, Davis requested his deputy to search out $2.5 million for the nonprofit funding the Lacoste venture, calling it “the Lt. Gov’s health difficulty,” Mississippi At this time first reported.

Lacoste lower an advert endorsing Reeves for governor later within the yr.

“It’s completely correct to say that Tate Reeves ‘doesn’t give two s**** about’ the gamers on this conspiracy and that’s the reason his administration is suing to get better misspent TANF {dollars} from earlier than his time as Governor,” mentioned Reeves’ deputy chief of workers in exterior affairs Cory Custer in a press release to Mississippi At this time on Saturday. “Attention-grabbing revelations on this story: Jim Hood’s spouse was working at one of many entities that acquired misspent TANF {dollars}? The identical AG that signed off on contracts in query? The identical Democrat that Mississippi At this time has fully ignored in your reporting of this scandal?”

Mississippi At this time has reported on at the least 4 events that the lease settlement permitting for $5 million in welfare funds for use on the development of a volleyball stadium at College of Southern Mississippi — a purchase order Reeves’ workers has to date chosen to not pursue within the state’s civil go well with — was accredited by the Lawyer Basic’s Workplace, as is routine for such agreements.

“The Governor has no reminiscence of ever calling John Davis and doesn’t actually know Christi Webb. (Evidently—just like the staff at Mississippi At this time—she was an enormous Hood supporter.),” Custer continued. “However folks have been throwing round Tate Reeves’ title in claiming authority for years, and it actually seems like Davis was one of many individuals who usually did so.”

READ MORE: Gov. Tate Reeves impressed welfare cost focused in civil go well with, texts present

Davis had additionally reprimanded Webb, Lott mentioned, after the nonprofit director refused to proceed pushing cash to DiBiase, a retired WWE wrestler, and his relations. Davis was intent on showering the DiBiases, to whom he’d grown shut personally, with welfare funds. Talking via Lott, Webb advised Mississippi At this time that the DiBiases didn’t provide the nonprofit with proof of what they have been undertaking underneath their grants, which totaled over $5 million from the nonprofits at MDHS, and Webb had objected to funding them additional.

In September of 2018, on the identical day Mississippi At this time despatched a number of emails to the company questioning its TANF spending, Davis held a gathering with a number of company and nonprofit workers, Lott mentioned. Davis advised the group that the nonprofits mustn’t share any documentation about monitoring or auditing its subgrantees to MDHS, Lott mentioned.

“He defined that he was in control of the cash, and he may do no matter he wished to do with it,” Lott defined. “He mentioned he solely answered to the Governor.”

A yr earlier, the state contracted with Webb’s nonprofit, Household Useful resource Heart of North Mississippi, to manage the multi-million greenback Households First program within the northern a part of the state, and Mississippi Group Schooling Heart, the nonprofit based by Nancy New, one of many key figures within the scandal, to run the southern half. Reeves filmed a marketing campaign advert at New’s non-public faculty in Jackson New Summit College in 2019.

New additionally just lately alleged within the civil lawsuit that then-Gov. Bryant directed her to make $1.1 million in funds to former NFL quarterback Brett Favre in 2017 and 2018, supposedly to advertise the Households First program.

“So many high-ranking officers have been actively concerned on this program and knew precisely what he (Davis) was doing with the cash,” Lott mentioned. “And he (Davis) brazenly says he solutions to nobody besides the governor. Properly, which means you’re speaking to the governor about it … I believe he (Bryant) was actively concerned in it.”

In early 2019, Davis notified organizations who acquired grants from the company that resulting from “finances considerations,” their funding can be lower considerably. Webb’s preliminary $10.6 million award can be lowered to $5 million. Household Useful resource Heart had acquired $16.8 million the earlier fiscal yr, based on a Mississippi At this time overview of state expenditures.

Whereas Webb pushed out a lot of her funding to secondary companions, the group itself did present some providers to needy households, comparable to parenting lessons, which folks are generally court-ordered to attend as a way to get their kids again from state custody.

After receiving notification of the funding lower, Webb introduced that her group must lay off 100 workers and shut greater than half of its 18 facilities.

“You simply don’t understand how a lot good work they have been doing,” McMahan advised Mississippi At this time Saturday. “They have been offering many of the social providers to the courts, to the native courtroom system. They have been offering GED training. They have been funding the autism heart. They have been supporting a whole lot of different charities via their subgrants.”

In February of 2019, Davis’ deputy Jacob Black mentioned that due to the cuts to welfare subgrantees, he was capable of finding an extra $2.5 million for New’s nonprofit, partly to pay for what Davis referred to as “the Lt. Gov’s health difficulty” – $1.3 million in funding to Reeves’ health coach Paul Lacoste.

Shortly after that, based on Davis, Reeves made the comment that he “don’t give two shits” about Webb.

When Mississippi At this time requested Lott concerning the remark, Webb responded via Lott, “That doesn’t shock me within the least.”

“I knew they didn’t care about me. I knew I used to be at their mercy,” Webb mentioned, based on Lott.

In March of 2019, after Webb had complained about her nonprofit’s funding cuts to native officers, together with McMahan, the lawmaker met with Davis to debate funding to Webb and the autism heart — funds auditors would later say violated federal guidelines.

“I requested John Davis to satisfy with me on a number of events. And he wouldn’t. And eventually, I mentioned, ‘I’m coming to Jackson to satisfy with you.’ And he mentioned, ‘Properly, I’ll solely meet with you–’ he mentioned, ‘That’s positive, we’ll simply meet on the governor’s mansion.’”

McMahan mentioned Bryant agreed with the mission of the autism heart and advised Davis to “assist Sen. McMahan in the event you can, however observe the regulation,” McMahan mentioned.

After the assembly, McMahan texted Davis, “Thanks for all the data. I’m so glad we took time to satisfy yesterday. That was very useful. Additionally, I appreciated the governor’s positions.”

“Sure sir,” Davis responded. “We are going to proceed to make good issues occur. I’m decide how we will bear assist those that misplaced a job as effectively. So, if any of these 60 name you, please inform them to succeed in out to me as effectively.”

Quickly after the assembly, Lott mentioned, the lawmaker demanded Webb hearth Debbie Hood or lose her heart’s funding.

“You’ll be able to’t inform me he didn’t get these directions at that assembly,” Lott mentioned.

McMahan denied discussing something about Debbie Hood with Bryant.

Following the alleged risk, Webb relayed the information to Debbie Hood, who after an emotional assembly agreed to voluntarily resign, Lott mentioned. Jim Hood didn’t return calls to Mississippi At this time.

Inside weeks of Debbie Hood’s resignation, MDHS despatched Webb an e mail on Could 24, 2019 notifying her that Household Useful resource Heart’s grant award can be elevated by $1 million, based on an e mail obtained by Mississippi At this time.

The state’s database of public expenditures displays funds to FRC of $1.3 million in February of 2019 and $500,000 in June of 2019, in addition to many different smaller funds. MDHS didn’t all the time ship Webb’s nonprofit their funds instantly, however New’s nonprofit despatched Household Useful resource Heart $500,000 on April 18, 2019, based on a ledger from the New nonprofit. Regardless of the proposed cuts and threats, FRC nonetheless acquired a complete of $10.1 million in fiscal yr 2019, expenditure experiences present. MDHS additionally notified the nonprofit in December of 2019 that it had gained an extra welfare grant for the next yr, however the division by no means moved ahead with the contract after arrests in February of 2020.

As many governors do, Bryant saved an inexpensive distance, at the least in public view, to the choices of his company administrators.

“He (Bryant) has finished a superb job of semi-insulating himself so he can plead ignorance however such as you say, it’s very disingenuous for a (former) state auditor to say he didn’t know the place the cash was coming from. Particularly in a state as poor as Mississippi, it’s clear all that cash was not coming from state coffers,” Lott mentioned. “So far as him (Bryant) directing the best way the funds have been to be spent, I’m gonna say little question he did that, however I believe he gave John Davis that course. After which John Davis despatched it downhill from there. And so Christi wasn’t instantly aware of that.”

New and Webb principally took their course from Davis, that means he might doubtlessly have essentially the most direct testimony about Bryant’s function within the misspending scheme. New has pleaded responsible to a positive deal that might preserve her out of state jail, and permit her to serve any time within the welfare case concurrently to her sentence in a separate federal case associated to defrauding the Mississippi Division of Schooling, in change for her cooperation with prosecutors.

Davis remains to be pleading not responsible, and should determine to both lower a deal in coming months or go to trial, presently scheduled to start on Nov. 28.