IHL Board president says USM should repay welfare funds

by Molly Minta, Mississippi Today
November 3, 2022

STARKVILLE — Tom Duff, the president of the Institutions of Higher Learning Board of Trustees, said in an interview Thursday that the University of Southern Mississippi should repay $5 million in welfare funds used to construct a volleyball stadium. 

Though the state has, so far, opted not to include the volleyball stadium – the single largest known purchase in the sprawling welfare scandal – in a civil suit that attempts to claw back the funds, Duff said he thinks the federal government will make the state recoup the money. 

“I could be wrong, that might not happen,” he said. “But that's probably what should happen, because USM did it incorrectly.” 

Appointed by former Gov. Phil Bryant, Duff has served on the IHL board, which governs Mississippi's eight public universities, since 2015. Duff, a billionaire, is also one of USM's most prominent alums and a high-dollar donor to universities across Mississippi.

Duff said that when he and other IHL board members signed off on the lease agreement that provided the funds in 2017, they did not know that they were approving the construction of the volleyball stadium because the project was listed as an item on the consent agenda. Trustees typically approve consent agenda items in one fell swoop; sometimes, Duff admitted, without reading them. 

“They should've, and I probably should've, but I didn't see it,” he said. 

Duff went on to say that he didn't know the volleyball stadium – a pet project of former NFL quarterback Brett Favre – was under construction in Hattiesburg until he drove past it one day. After he learned about the new facility, he said he reached out to then-U.S. Attorney General Mike Hurst and State Auditor Shad White. 

“I live there, and I didn't even know the building was built until I drove by and said, ‘What is that?'” Duff said. “We didn't approve a building, we didn't know about a building. It all got done kind of around everybody – and improperly.”

“It's not something that should ever have happened,” he added. 

The comments came hours after USM announced in a five-paragraph statement that the university engaged in the lease agreement “in good faith.” It also announced that it would make the volleyball stadium, known as the Wellness Center, and other unspecified campus facilities available for the Mississippi Department of Human Services to provide services in south Mississippi for an initial five-year period. 

In 2017, the University of Southern Mississippi Athletic Foundation signed a lease with the Mississippi Community Education Center, Nancy New's nonprofit, for proposed programming and services that USM now acknowledges were never provided. 

“Although MCEC shared projections of planned programming with the University, its actual utilization of the facilities did not align with those projections,” USM said in the statement. 

USM did not say in the statement if it intends to repay the welfare funds. Despite repeated requests, university officials have not granted interviews to Mississippi Today regarding the use of welfare dollars for the volleyball stadium.

Duff said he saw the university's statement, but did not finish reading it, as he was flying to Starkville for the opening of a new music building at Mississippi State University. 

“When it started off with all the legalese, I glazed over,” he said. “Right's right, and wrong's wrong. That's just the way I look at it.”

A subsidiary of IHL, USM must seek board approval for contracts worth more than $250,000. 

After much back and forth between officials from USM, Mississippi Department of Human Services, Nancy New and Brett Favre, USM's former president, Rodney Bennett, brought the lease agreement before the IHL board.

IHL had already approved a $1 lease between USM and the Athletic Foundation, but this lease was different, because it had the $5 million sublease between the foundation and Mississippi Community Education Center attached to it.

READ MORE: ‘Timeline: How an NFL star, state officials and a university funded the USM volleyball stadium' 

The Attorney General's Office reviewed and approved the amended lease for IHL before it was placed on the agenda. 

“Everything has an attorney general opinion, but that doesn't mean it's smart or what you're supposed to do,” Duff said. “I don't care what the attorney general said, this was a stupid thing to do.” 

The IHL trustees approved the amended lease at its October 2017 meeting. 

The board's meeting minutes state that the nonprofit's funding for the project would come “via a Block Grant from the Mississippi Department of Human Services.”

The trustees who served on the board's finance committee, Duff said, should have known about the project. Duff now chairs that committee, and he said the volleyball project didn't go through IHL's typical “expense checks.” 

“The finance committee should've known about the expenses but see, it didn't go through any expense checks that we saw,” he said. “It went through the foundation. And the $5 million from Nancy went in and went out, I guess, to the contractor.” 

Duff's comments are the most candid from IHL since the scandal broke.

In 2020, IHL commissioner Alfred Rankins previously told the state auditor that trustees only approved the lease between USM and the athletic foundation, not the $5 million sub-lease from MCEC, Mississippi Today reported. Rankins called White's audit inaccurate. 

“IHL cannot claim ignorance of this fact,” White responded. “That assertion flies in the face of your own minutes. If IHL objected to the arrangement with MCEC, then the time to voice that objection was when the matter came up for a vote, not after the State Auditor pointed it out.”

Had USM gone through the proper channels, Duff said that IHL would have funded the construction of the volleyball stadium. He drew a connection between the volleyball stadium and the new music building at MSU as he left for the ribbon-cutting ceremony. 

“I'm glad they (MSU) can build the building,” he said, “which they built legitimately.”

Editor's note: Mississippi Today Editor-in-Chief Adam Ganucheau's mother signed off on the language of a lease agreement to construct a University of Southern Mississippi volleyball stadium. Read more about that here.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.