Nearly half a decade after the worst TANF scandal in Mississippi’s history, the state remains largely secretive about how partner nonprofits are spending state money.
The Mississippi Department of Human Services was careful to refuse all questions at a Sept. 6 oral proceeding on its upgrade of the agency’s subgrant manual, which sets the standards for all third-party contractors requesting TANF money for services. Minor revisions in the manual suggests the state does not appear to have substantially improved the process that allowed former Department of Human Services Director John Davis to use clandestine contracts to waste millions of dollars of public money primarily on politically-connected Republican allies and campaign supporters. The agency’s updated manual proposal for 2024 lays out new rules by which it will pay nonprofits and third parties for services, but it contains no process ensuring public scrutiny of how nonprofits spend contract money once it is in-hand.
Republican leadership, which dominates the House, Senate and state departments, appears slow to update rules that helped many Republican wrongdoers snatch at least $77 million from impoverished Mississippi families.
Pulitzer prize winning Mississippi Today reporter Anna Wolfe claimed throughout her coverage of the widening TANF scandal the state did not consider contractor spending information, including nonprofit partners’ annual spending reports, subject to freedom of information act requests, even though they spend public money. This shroud of secrecy obscured public-funded contractor investments in a pharmaceutical company allegedly in exchange for lucrative stock options and the construction of a Hattiesburg sports stadium in defiance of restrictions on brick and mortar construction.
The administration’s subgrant manual was one of many ways state leaders might have discouraged exploitation and perfidy by demanding nonprofits prepare annual reports to be made available for public FOIA requests.
Critics like Rep. Omeria Scott, D-Laurel, say contractors would be less likely to steer money to shady dealings if they know expenditure reports will be available for public review. However, the only addition to the “Discovery of Possible Fraud, Mismanagement, or Program Abuse” section of the DHS update is a new entry stating: “During any active investigation, all payments to the subgrantee will be paused and the funding division will not answer questions about the investigation.” The new rules also inform nonprofits that the disposal of records must be “in compliance with federal law,” and it now provides an address for third parties contact for permission to do so.
However, weeks after accepting media and public inquiries regarding the contracting rule updates, the department has yet to respond to BGX questions on whether nonprofit records are more accessible to the public. The Department of Human Services instead dedicated the brunt of red ink in its updates to capitalizing the “S” in “subgrantee.”
The department also did not clarify if updates conceal any elusive sunshine rules that BGX and critics might have overlooked.
Rep. Robert Johnson, D-Natchez, said this latest failure continues the trend of state leadership refusing to protect TANF money from nonprofit wrongdoers.
“The House and Senate Democratic Caucus is the only body that has held a hearing, but we’re in a minority. What power do we have?” Johnson told BGX. “Why don’t you call the House Speaker and the Lt. Governor, the people who actually have control and do have the power? Why don't you ask them why they haven’t had an oversight committee or a follow-up investigation with DHS? Or, better yet, call the governor.”
The offices of House Speaker Jason White, Lt. Gov. Delbert Hosemann, and Gov. Tate Reeves did not immediately respond to BGX requests for updates on recent legislative hearings or investigations regarding DHS malfunction in TANF diversions.
Johnson said state officials keep him just as much in the dark as state media, despite being an elected official.
“I’ve asked DHS to do an examination of how the money is being spent correctly. They haven’t done that. They let contracts all the time, but the problem remains that there’s no requirement that an audit be performed on whether or not the money is being spent correctly and there’s no internal examination on whether or not these contracts are actually doing any work.”
Critics in the legislature say Republican leadership, which dominates the House, Senate and state departments, appears slow to update rules that helped many Republican wrongdoers snatch at least $77 million from impoverished Mississippi families. . Nancy New, one of the most notorious offenders caught up in the scandal, provided a film setting for Republican Gov. Reeves’ campaign commercials. SuperTalk Radio, a mouthpiece for the Mississippi Republican Party, boosted the work of New's fraudulent nonprofit, Families First, while also accepting more than $630,000 in money meant for food and care. Republican leadership appears to have passionately excluded Democrat-connected individuals from TANF contracts. Christi Webb, former director of the Family Resource Center of North Mississippi (which also embroiled itself in the TANF scandal) told Mississippi Today that an agent of former Republican Gov. Phil Bryant threatened to pull TANF funds from the Family Resource Center if it did not fire employee Debbie Hood, the wife of former Mississippi Attorney General Jim Hood, a Democrat.
Critics say GOP efforts to exclude non-Republicans from the more lucrative TANF contracts helped ensure that it was Republicans who occupied the upper echelons of TANF grift. This makes Republican leaders’ apparent lack of political will to plug holes in the contracting process look suspect, and it will continue to look suspect until GOP leadership takes the issue seriously.
For the time being, however, leadership’s response is laughably lax. State employees who tweaked contracts to deliver TANF cash to disreputable nonprofits are still on the state payroll, complete with raises. The state even settled a racism-based civil suit against that same employee using money from the same TANF fund the employee helped nonprofits raid.
“Right now, nonprofits can literally not spend money on anything of any substance and still not break the law because there’s no rule requiring they do anything but meet the requirements to get the money,” said Johnson. “There’s no follow up to see if they’ve actually done what they put in their proposal.”
Only one party is holding meetings, he added. The other is dodging phone calls.
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