News earlier this year about spending practices at the Mississippi Department of Human Services made the agency a shameful example of corruption. But further revelations this week are almost turning it into a punchline for humor.
State Auditor Shad White, whose investigators discovered $94 million worth of questionable spending at the agency during a recently completed audit, summed it up nicely when he said Monday, “If there was a way to misspend money, it seems DHS leadership or their grantees thought of it and tried it.”
Six people, including the founder of Greenwood’s North New Summit School and a former DHS director, were indicted in February on charges of embezzling $4 million. At the time White called it one of Mississippi’s largest public corruption cases, but this week’s revelations are poised to increase the graft many times over.
If even a portion of the $94 million flagged by auditors turns out to be wasteful, corrupt spending, this could go down as one of Mississippi’s largest financial scandals of any kind. It’s even more embarrassing because it involves taxpayer money that was supposed to help poor people but instead got horribly and shamefully misdirected.
The net of embarrassment will be wide.
Nancy New, a Greenwood native who was heralded for years as an innovative leader in special needs education, was one of the supposed ringleaders in the scheme. According to the criminal indictment against her and the audit report, New used her Mississippi Community Education Center, which was supposed to help show the poor the way out of poverty, as a front to funnel money and luxuries to family, cronies and herself. Among the purchases made with federal welfare funds, according to the auditors, were three vehicles, each worth more than $50,000, for New and two sons. In fact, according to White, MCEC received $52 million of grant money from DHS over three years, and nearly all of it was either misspent or auditors were unable to verify the expenditures were lawful.
Brett Favre was another supposed MCEC beneficiary. The Hall of Fame quarterback got paid $1.1 million to make at least three speeches, but White said his auditors verified that Favre did not attend the events in question. Though Favre will not face criminal charges, if the story laid out by the auditor is accurate, the former NFL star ought to give the money back to the state.
John Davis, the former DHS head whom White fingers as the kingpin in the fraud, allegedly brought a wicked crooked streak to the agency when former Gov. Phil Bryant promoted him in 2016. But there also was a conservative ideology on which Davis, New and others seem to have capitalized. Welfare reformers for the last couple of decades have said the nation needs to wean the poor off handouts — to implement the proverbial teach them to fish rather than giving them fish. The philosophy was fine, but it also put a whole lot more money on the table for the unscrupulous to rake in — apparently with lax oversight at several levels, including from the Legislature.
It was not too long ago that legislative policymakers, determined to reduce fraud in the many programs DHS runs, devised ideas such as making sure that state welfare recipients passed a drug test before getting assistance.
The policymakers were looking for ripoffs in the wrong place.
Even if some DHS beneficiaries tricked the system into giving them more benefits than they deserved, it was small potatoes.
The real fraud was obviously occurring at the agency itself, perpetrated by those deciding how to spend the money.