Mississippi News
Nancy New: Civil case not about recouping misspent welfare money
Nancy New defense: MDHS civil case not actually about recouping misspent welfare money
Nonprofit founder Nancy New and former welfare director John Davis, defendants in the state’s civil litigation over the misspending of millions of federal grant funds, have asked the court to stay the case until the criminal investigation concludes.
Mississippi Department of Human Services, the agency that administers welfare programs and is bringing the suit, is objecting against the stay, arguing that defendants are attempting to “avoid, or at least delay, liability for their actions.”
Now, the attorney representing New and her son Zach New is questioning the motives of the state agency, which was responsible for managing the funds in question, especially since it omitted at least one key recipient of improper welfare payments from the defendant list.
“Of course, MDHS would love nothing more than to rush this case through discovery with the cloud of criminal prosecution looming large, thereby muzzling witnesses who would reveal the depth of its wrongdoing,” wrote the News’ attorney Gerry Bufkin.
Both New and Davis have pleaded guilty to charges related to the welfare scheme and have agreed to aid officials in prosecuting other individuals “up the ladder,” Hinds County District Attorney Jody Owens said after Davis’ plea hearing in September. They have not been sentenced.
Under the leadership of Davis and the politician who appointed him, former Gov. Phil Bryant, officials stole or wasted at least $77 million in federal grant funds, many of which flowed through Nancy New’s nonprofit Mississippi Community Education Center to the pet projects of celebrities and politically connected figures. Some of the purchases were criminal while others simply violated federal spending regulations. Communication obtained by Mississippi Today reveals Bryant’s involvement in many conversations about the projects.
In its Oct. 11 response to the News’ motion to stay, MDHS shot back a fiery response to the defendants’ claims that the welfare agency is also responsible for the misspending.
“The New Defendants nevertheless seek to have the Court and the public absolve them of liability by pointing the finger back at MDHS, despite the fact that the New Defendants admit that they bribed MDHS’s Executive Director,” the filing reads. “But no public official or employee can approve fraudulent payments or waive statutory requirements. This strategy may generate media attention, but it is no legal defense to civil liability.”
Bufkin has argued his clients have already taken responsibility for their actions. But in response to the state Tuesday, he said the threat of an ongoing criminal investigation hinders the News from providing testimony in the civil case.
“The civil suit is the best opportunity the New Defendants have had in years to tell their story. The evidence will show that politicians, MDHS bureaucrats, and well-connected powerbrokers funneled tens of millions in welfare funds to pet projects in a series of sad and disturbing examples of TANF-flexibility gone wild,” Bufkin wrote. “The New Defendants look forward to telling their story, but unfortunately the opportunity is premature.”
Gov. Tate Reeves, who is overseeing the state’s civil lawsuit, said in July that civil cases should come after parallel criminal cases.
In the civil case — filed more than two years after the state auditor’s initial findings — the state is attempting to recoup roughly $24 million from 38 individuals or companies that misspent or received improper welfare payments.
“The aim of MDHS’s civil suit is the same as any civil tort case: to recover damages, whether through settlement or through obtaining and executing on a judgment. It is in the public’s best interest that MDHS do so without unnecessary delays,” MDHS argued in its response.
Bufkin argued delaying the civil litigation until the criminal cases have concluded is necessary “to ensure the thorough, complete and efficient discovery of one of the most sprawling and complex cases in Mississippi history.”
The single largest purchase within the misspending scandal is the $5 million in welfare money that Mississippi Community Education Center paid the University of Southern Mississippi Athletic Foundation to build a volleyball stadium at the university on behalf of former NFL quarterback Brett Favre. MCEC also paid Favre’s company an additional $1.1 million, which texts indicate was also intended for the volleyball project, bringing the possible total to $6.1 million. Reeves’ office and the welfare agency chose not to include the athletic foundation as a defendant when it filed the complaint in May.
MDHS then terminated the private attorney it had contracted, former U.S. Attorney Brad Pigott, who spent a year crafting the case, after Pigott filed a subpoena on the athletic foundation in July. Pigott was attempting to examine the events surrounding the volleyball stadium project, including Bryant’s involvement.
“Not only has MDHS refused to pursue recovery of this $6.1 million in welfare funds, but it has actively thwarted its former counsel’s efforts to uncover facts related to the expenditure of these funds,” Bufkin wrote.
If the purpose of the state’s civil suit is to recover as much welfare money as possible, Bufkin questions why it would not pursue the single largest purchase, which has already resulted in a criminal conviction. Zach New pleaded guilty in April to defrauding the government by paying for the volleyball stadium construction under a sham lease agreement.
“MDHS argues it ‘aims’ to recover money damages, and, therefore, Defendants should not be concerned with allegations of criminality in the Complaint. Whatever motives lurk beneath the civil suit, in the post-termination of former counsel Brad Pigott era, the efficient recovery of welfare money is not one of them,” Bufkin wrote.
Current MDHS Director Bob Anderson answered questions about Pigott’s firing Tuesday during the Mississippi Legislative Democratic Caucus hearing on the scandal. He told lawmakers that the agency terminated Pigott because the attorney subpoenaed the athletic foundation without discussing the filing with him first and while he was out of town. Pigott did email a copy of the subpoena to a MDHS attorney before filing it, but Anderson said that was not sufficient notice as he was not copied on the email. Anderson also said that the agency felt that Pigott did not have the capacity to handle the breadth of the case, which includes hundreds of thousands of pages of discovery documents.
Bufkin also represents the nonprofit, Mississippi Community Education Center, that Nancy New founded and ran alongside Zach New.
Bufkin stated in his Tuesday response that even though MDHS filed the complaint in May, it did not request discovery from the nonprofit until October. He also said MDHS has not produced documents that MCEC requested through discovery in August. The court will address several motions and filings in the case, including multiple subpoenas on Bryant, at a hearing in early 2023.
This article first appeared on Mississippi Today and is republished here under a Creative Commons license.
Mississippi News
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The post Events happening this weekend in Mississippi: July 18-20 appeared first on www.wjtv.com
Mississippi News
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The post Events happening this weekend in Mississippi: July 11-13 appeared first on www.wjtv.com
Mississippi News
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The post Death toll from catastrophic Texas flooding passes 100 appeared first on www.wjtv.com
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