/Connecting the dots Players in massive welfare embezzlement case got millions from taxpayers, but helped few

Connecting the dots Players in massive welfare embezzlement case got millions from taxpayers, but helped few

Families First for Mississippi’s newly-opened State Street Center, managed by the non-profit Mississippi Community Education Center promises to lift families from poverty. According to state expenditures, Human Services has given the nonprofit $53 million since fiscal year 2018. This is reportedly to accomplish this goal. Will Lamkin, the center’s operation coordinator, stated Wednesday morning that the main goal was to get them off TANF. Lamkin was referring specifically to the Temporary Aid for Needy Families cash assistance program. According to the State Auditor, Nancy New, the nonprofit’s founder, was arrested by law enforcement agents. John Davis, the former Human Services director, was also taken into custody in what is believed to be the biggest public embezzlement case in state history. New and Davis allegedly stole millions of dollars from federal TANF, which was intended to provide basic assistance as well as work support to the nation’s most vulnerable residents. The federal government grants states wide discretion over how to spend the money. Mississippi spent $130 million of that money last year. The state spent only 5.4 percent on cash assistance, formerly known as welfare, for poor families in 2018. Human Services has funneled substantial amounts of its TANF funding in recent years to New’s organization for a statewide program called Families First for Mississippi. Advocates and legislators criticized the program over the past year, questioning the large contracts and vague objectives. State Rep. Chris Bell (D-Jackson) stated that they had inflated the numbers by claiming that they were helping many people, but that there was an office that was only barely open and that barely acknowledged anyone who came in to ask for help. The Mississippi Community Education Center had received $30 million from Human Services by the end of fiscal 2018. According to state agency outcome reports, the nonprofit helped 94 people to complete their resumes and 72 to fill out job applications. There are many mistakes in the reporting, including declining year-to-date numbers in certain months. Human Services spokesperson Danny Blanton stated Thursday that there weren’t adequate controls or monitoring to accurately gauge the outcomes of TANF dollars being spent. Blanton stated that while things may not have been done correctly in the past, they are putting in place the necessary measures to ensure they will be in the future. These include revising the subgrantee manual of the agency and training subgrantees. The Mississippi Community Education Center does not receive any money from the state to pay for food, books, or clothing that it distributes to the needy. Lamkin stated that the center collects all the materials through donations. Mississippi Today was able to obtain copies of the center’s state contracts. These include objectives like “Connect the Dots” between state agencies and nonprofits in the state. The first objective is to “increase employability” among the TANF population through resume writing and soft skills training. It must also provide credit recovery and high school diploma courses, parenting classes, teen education, abstinence education, and credit recovery courses. The tens of million dollars that taxpayers paid to Mississippi Community Education Center were not intended to directly assist poor families. It was meant to help them find partner agencies that could provide the services they needed. In a 2018 interview, New said that Mississippi Today funds other services in the state using some of that money. Families First didn’t receive all of the money to fund Families First activities every single day. It was a flow through.” New, who couldn’t be reached Wednesday evening on her cellphone, stated that Families First doesn’t have the money to do Family First activities every day. In 2017, Mississippi’s Temporary Assistance for Needy Families received national attention after Human Services reported rejecting 98.5 per cent of welfare applicants. Nearly $50 million was also left unutilized in TANF funds by the agency. The agency also stopped publishing its approval rates in annual reports. They were 108 pages long in 2004, and 20 pages in 2019. This was one of the ways Davis managed the agency’s programs in secret. Davis refused to allow any of his employees to speak with the media, even spokespeople for taxpayer-funded agencies. The auditor concluded that Davis embezzled TANF money using the structure of Families First. This essentially privatized a large part of the welfare program. According to the release by the state auditor, New, her son, and Zach New, allegedly transferred millions in welfare dollars to their private companies and used the funds for their own use through fraudulent documents, at most one forged signature and deceptive accounting methods. The News and Davis allegedly used TANF money to pay professional wrestler Brett DiBiase to stay in a Malibu luxury rehab facility. They claimed that they were paying him to give classes on the dangers and consequences of drug abuse. According to the auditor’s office, they took welfare money together and invested it in Florida medical device companies. As the investigation continues, the auditor has not yet released the dollar amount of this scheme. According to the release, Davis, The News and other state and non-profit employees were indicted in what investigators described as a “sprawling plot” and could face hundreds of years imprisonment. Nancy New, the founder of Jackson’s private New Summit School, enjoys the support of the state and has often promoted her work on conservative SuperTalk radio. The then-Gov. Phil Bryant highlighted her organization’s role “helping restore and support the whole family” in his January 2019 State of the State address. Bryant, his wife Deborah, and Nancy New, a Bryant appointee were shoulder-to-shoulder at the ribbon-cutting ceremony for the original Families First Office in Jackson. Bryant said, “I grew in a family that had a mother.” She believed in doing right. That was something we had as children. Some of these children do not have this opportunity. “This (new Families First facility is for them.” Nancy New tried unsuccessfully in previous years to open a charter school within Leflore County, using the Mississippi Community Education Center’s potential operator. Bryant praised his collaboration with Nancy New’s group as recently as November 2019, when the final phase of his anti-obesity program that the Mississippi Community Education Center had cosponsored was launched. Bryant has never tolerated any form of public corruption,” Joey Songy (Bryant’s chief of staff) said to Mississippi Today. “The Governor was also informed about possible wrongdoing at DHS that afternoon. He called Shad White and reported it to the State Auditor.” Blanton stated that the agency’s executive team discovered the discrepancies following an internal audit. Jacob Black, currently acting interim director of the agency, reported this information to the then-Gov. Phil Bryant. In July 2019, Davis abruptly resigned. Blanton stated that John Davis was 30 years old and had been with the agency for over 30 years. This was why (TANF was) unilaterally distributed to subgrantees in July 2019 without an RFP (Request For Proposals). Bryant was replaced by Christopher Freeze, a former FBI agent. Freeze announced that Human Services would undergo more rigorous procurement practices before he resigned in January. In his release, Shad White, State Auditor, stated that “I don’t care how politically connected someone may be.” “You don’t have the right to take taxpayer money and lie to the taxpayers as to what you are doing with it. Other organizations doing the same thing are warned: this will not tolerated now.” New was not the only one to be awarded a contract by Human Services to manage Families First for Mississippi. The operation was split between Mississippi Community Education Center which managed the services in central and southern Mississippi and Family Resource Center of Northeast Mississippi which manages the offices in the north. Family Resource Center of Northeast Mississippi was not included in the charges that the auditor’s office announced. According to the Daily Journal, although the 2019 contracts were for $10.6 million each, state expenditure reporting showed that funding to the north office was significantly reduced as it made drastic cuts in staffing and services over the past year. The Family Resource Center received $7 million less than Mississippi Community Education Center during the contract period. Family Resource Center only received $1.5 million in the last six months while the investigation was still ongoing. Mississippi Community Education Center received $7million. Both nonprofits were awarded new contracts by the agency in December. None of these are listed on the state’s transparency site. Lamkin stated that the Families First website has been defunct. He said that although Mississippi Community Education Center’s operations are not being interrupted, Families First’s future is uncertain. This is also true for thousands of poor families who might not be able to receive the help they need, even though the center is still open. Lamkin described what happens to a person who is behind on their utility bills when they visit the center. It is located in the former Human Services government building. Lamkin pointed to the shelves of the Families First food pantry. They were almost entirely filled with canned corn and green bean. Lamkin replied, “I don’t have the funding.” He then explained, “Our grant does not allow for that.” Lamkin said that he could not just give cash to a client. He did not comment further on Thursday. The number of families receiving cash assistance through TANF has dropped from more than 12,000 a decade back to only 3,500 in 2019. This is less than 5 percent of Mississippi’s children living in poverty. Editor’s note: This story has been updated to reflect that an internal audit and the human-services management team revealed discrepancies that prompted the auditor’s investigation.