Shad White is the Mississippi state auditor who exposed the misspending of nearly $100 million in funds from the Temporary Assistance for Needy Families (TANF) program — federal money meant to aid the poorest people in the nation’s poorest state. Eight individuals have pleaded guilty to crimes in the scandal, and the state is suing 38 others in an effort to recover nearly $77 million improperly funneled through the Department of Human Services. NFL Hall of Fame quarterback Brett Favre, who has not been charged with any crimes, is one of those being sued by the state. Even though he has already repaid $1.1 million that he acknowledges he was not entitled to receive, Favre claims he has been unfairly smeared in the media and has brought a defamation suit against White. White has called that suit meritless, and on behalf of the citizens of Mississippi, has countersued Favre for more than $729,000 he says is still owed on the $1.1 million. In his forthcoming book MISSISSIPPI SWINDLE: Brett Favre and the Welfare Scandal That Shocked America (Steerforth Press; August 6, 2024), White recounts meeting Nancy New, one of the ringleaders of the scheme.
Mustering a serious look and surrounded by a carefully curated group of children — boys and girls, Black and white — gubernatorial candidate Tate Reeves looked straight into the camera. When it came to teachers, he said, “We’ve got to pay them more.” In the background behind him stood full bookshelves and the colorful charts of names and gold stars typical of any classroom. The campaign commercial Reeves was filming was about his plan for public schools. The classroom he filmed in was at a private school owned by Nancy New.
When the commercial aired, Reeves’s opponent, Attorney General Jim Hood, a Democrat, pounced. Hood assembled the media at his campaign office. Standing in front of a “Jim Hood for governor” sign the size of a refrigerator — a swoop of gray hair, a little shorter in the front than the back, hair-sprayed solidin place on his head — Hood called the commercial “fraudulent” and a “con.”
“[Reeves has] done nothing for public education,” Hood said. The fact that Reeves shot an ad about public schools while standing in a private school, along with the fact that Reeves had taken thousands of dollars in campaign donations from New, was proof of Reeves’s hypocrisy, according to Hood. Reporters gently pointed out that Hood, too, had taken thousands from New.
The first time I heard Nancy New’s name was from someone who described her as a mega-donor, or a person who bankrolls political campaigns. Campaign finance reports confirm there was some truth to this.
New’s biography didn’t shed any light on where all that money came from. In the early 1970s, a young Nancy New, with big hair and a Cheshire cat grin, started her freshman year of college at the University of Southern Mississippi, where she struggled. She had trouble remembering the right word to say at the right time. Math gave her fits. Eventually, with the help of a professor, she discovered something important about herself: She was dyslexic.
Pushing through that challenge, New graduated and later earned a doctorate. She then went to work as a teacher and school administrator. By the time Hood and Reeves were locked in their election battle, her claim to fame was that she’d founded a school for children with disabilities like her own.
But running a school was hardly the stereotypical profile for big campaign donors, who tended to be owners of lucrative private businesses or lobbyists.
One large source of income for Nancy was TANF, as we later found out. Nancy acquired that money through a nonprofit she created called the Mississippi Community Education Center (MCEC). Founded in 1992, MCEC didn’t make waves for its first few decades. It was housed in a nondescript office building — white walls, brown roof, few windows — on the frontage road of an interstate. Its purpose was the “promotion, improvement and expansion of community education.”
But by 2017, Zach New, Nancy’s younger son, was involved. Even though he was by this time in his thirties, he still looked like a Southern Miss frat boy. He had a permanent five o’clock shadow and wore some beer weight around his face. Once he set his hands to MCEC’s business, the place took on a more entrepreneurial feel, if you can call it that. MCEC started to draw millions in TANF funds. In the fall of 2019, the numbers were so big that Attorney General Hood accused Reeves of taking campaign dollars from the News in exchange for the grants that went to MCEC. Hood waved away concerns about New’s donation to his own coffers.
A few days after the Reeves ad aired, on October 31, 2019, the Mississippi Economic Council held its annual event called Hobnob, which was attended by every major business leader in the state. Politicians spoke and shared their thoughts about where the state was headed. I was invited and took the stage midmorning, using the opportunity to announce the arrest of a corrupt mayor we’d been investigating.
As I walked off the stage and headed for the exits, I saw a woman making a beeline for me. By the time she was a few feet away, I recognized her.
“Shad, I’m Nancy New,” she said, pushing her hand out. She was sporting a bright-green top and beaming a smile behind thick makeup. Shiny bangles hung from her wrists. She gave me a triple dose of eye contact.
“Hi, Nancy,” I said.
“Someone told me I should meet you,” she said. She was warm in the way of a distant, older aunt who was eager to connect at a family reunion. Her voice was firm, though — a woman who punches the air with her fingers to make a heartfelt point.
“Well, it’s nice to meet you, Nancy,” I replied. There was a pause, so I politely walked away. It was the first and only time I ever spoke to her. As I was told once by a mentor, sometimes the people who want to impress the state auditor are the people the state auditor finds himself investigating.
Nancy wasn’t just working the room at Hobnob, though. Around this time, she was working new DHS director Chris Freeze for money, just as she had Davis.
Shortly after Freeze was appointed DHS director, he cut off funds for MCEC and instead instituted a formalized procurement process. Now Nancy’s MCEC would have to compete with every other nonprofit in the state to obtain welfare grants. But Nancy wasn’t a woman who took no for an answer. She requested a meeting with Freeze at Governor Bryant’s office.
At the meeting in front of the governor, Freeze walked through his new process. If Nancy wanted a grant, she could submit a proposal along with everyone else. It would then be scored by a team of experts from the agency. The meeting concluded, and Nancy and Freeze left the governor’s presence. Outside the door, Nancy asked when they could meet to get the ball rolling on the grant.
Freeze laughed. It was as if she hadn’t heard a word that was said in the meeting. Or, more troubling, Nancy was accustomed to a song and dance in front of the elected officials, and then the real business would be done without the constraints of the rules that had been discussed in the company of the governor. Either way, Freeze said there would be no next meeting.
Just as the News seemed to materialize everywhere at political events and government offices, mentions of the News appeared in document after document at DHS.
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The News treated TANF like their own piggy bank, spending as they saw fit.
It also appeared that the News had moved TANF money to a bank account for their private business, New Learning Resources. Welfare money was being used to pay expenses for the business, and there was no evidence that those expenses were TANF-eligible. At least one transfer of funds to New Learning Resources looked like it was accomplished by forging the signature of a New Learning employee, a principal at Nancy’s school.
After all the documents obtained in the MCEC raid had been analyzed, Bo, Richie, Jerry, and I sat in the conference room and walked through everything. “There’s one final scheme we think we’ve got,” Bo said. “It’s weirder than the rest.”
“Look at this,” Jerry said. He opened a video on his laptop showing a local news story. It featured Dr. Jacob Vanlandingham, a bespectacled Florida State professor with a hard part in his hair down the middle. He was standing on a football field, but he looked like he’d never laced up a pair of cleats in his life. Next to him was Brett Favre, the legendary football player and Mississippi native. The report was about a new concussion treatment Dr. Vanlandingham had invented. Vanlandingham described how a short straw, with one end inserted in the mouth and one end in a nostril, could be used to deliver a drug. The drug could allegedly reduce brain inflammation after a hit to the head. Favre demonstrated the straw and concussion treatment by blowing air out of his mouth, cheeks puffed out, and into his nose.
“What does this have to do with TANF?” I asked.
“Exactly,” said Bo.
Jerry and Bo recounted how Nancy and Zach used TANF money to buy shares in Dr. Vanlandingham’s companies. I was in disbelief.
“How in the world?” I asked. Jerry stated that Nancy had some connection to Favre, maybe through her role on the board of the University of Southern Mississippi’s Athletic Foundation. Favre had played at the university and was next to godlike for fans of the school. Nancy was a graduate of USM herself, though I still could not understand how the founder of a school for children with disabilities landed on a board populated by the uber-rich. One of her fellow board members was the richest man in Mississippi. Favre was an honorary member.
Richie’s team guessed that, at some point, Favre pitched the News on investing in the concussion company. The News then pulled from the large pool of free money they had access to: TANF funds.
My curiosity about these TANF schemes turned to anger. I rubbed my eyes with my palms and thought about the chutzpah one would need to misspend welfare money, especially for their own benefit. This was Missisippi, with the highest poverty rate of any US state. Staring out the office window above our coffeepot on the eighth floor of Woolfolk, I could see blighted homes, caved-in roofs, and impassable streets.
My eyes locked on the city, I reflected on all that I’d read about welfare in the past few years. My mind tracked back to a few articles by a young investigative reporter named Anna Wolfe. Wolfe was a fish out of water in Mississippi. She’d moved here from Washington State wearing big, horn-rimmed glasses and hair that occasionally changed colors.
For years, Anna wrote about something strange happening at DHS: Few poor people were being served despite DHS spending millions. In 2017, Anna noted while working at the Clarion-Ledger newspaper in Jackson that just 1.5 percent of people who were applying for TANF funds were deemed eligible. She also noted that the state spent $90 million in TANF funds that year, but only $10 million went directly to recipients. The rest was going to something else.
Anna also wrote that MCEC, the News’ nonprofit, had received $30 million in TANF grants by around 2018. The nonprofit could only point to ninety-four people they had helped write a résumé and seventy-two people they had helped complete a job application from 2017 to 2019 to show for it. Those articles made more sense in light of what I’d just heard.
Late in 2019, the investigators returned to my office with another update. We had just moved Jennifer Morrow, a data analytics wiz, to the investigations division from our finance audit division. Jennifer “scheduled” out payments (tracked and recorded money movements) from DHS to the News’ nonprofit and company. She could now tell the News were using public money to pay for things like a new home for Nancy.
In fact, Jennifer and the other investigators showed Nancy had received a grant and then quickly moved the public money—taxpayer dollars—through a series of accounts over forty-eight hours in early June 2019. When the money stopped moving, it landed in a $255,495 check Nancy made out to “Cash.” The check had the number “1800” in the memo line. That same day, Nancy purchased a new home at 1800 Sheffield Drive in Jackson. Again, we had identified intentionally misspent money, concealed through rapid transfers of the funds, that personally benefited New.
The question now was simply when to approach a prosecutor, not if.
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