Defendant: Tate Reeves should be target of welfare lawsuit

A defendant in Mississippi’s civil lawsuit to recoup millions in misspent welfare money is asking the court to examine whether Gov. Tate Reeves is controlling the case to protect himself and his supporters.

After Mississippi Today uncovered text messages Friday that connect the current governor to the funding of a defendant in the case, attorney Jim Waide argued Monday that Reeves should be a target of the lawsuit — not in charge of it.

The texts show former welfare director John Davis, who is facing criminal charges in the welfare scandal, said he was fulfilling then-Lt. Gov. Reeves’ wishes when he funneled over $1 million to Reeves’ fitness trainer, a defendant in the suit.

The Reeves administration also recently fired the attorney bringing the welfare suit, former U.S. Attorney Brad Pigott, after the attorney attempted to subpoena the University of Southern Mississippi Athletic Foundation for its communication with, among others, former Gov. Phil Bryant. Bryant oversaw the welfare department when the scandal occurred.

Reeves’ staff had already forced Pigott to remove the athletic foundation, whose board is made up of many Reeves supporters and campaign donors, from the suit before he filed it.

“It is an abuse of power for Governor Reeves to frustrate a state agency’s collecting monies owed it in order to protect his financial supporters,” wrote Waide, the Tupelo-based attorney representing Davis’ nephew Austin Smith, who received hundreds of thousands of dollars from the agency during his uncle’s administration. “It is an abuse of power for Governor Reeves to direct litigation in which he is a necessary party defendant.”

The suit targets 38 individuals or companies, including former NFL quarterback Brett Favre and three retired WWE wrestlers, in an attempt to claw back about $24 million in misspent funds from a federal block grant called Temporary Assistance for Needy Families, or TANF, which is supposed to serve the state’s poorest residents. The suit is based on a forensic audit that found $77 million worth of fraud or misspending. There are separate criminal cases against six defendants, four of whom have pleaded guilty and agreed to aid prosecutors in the ongoing state and federal criminal investigations.

Mississippi Today’s investigation “The Backchannel” provides evidence of former Gov. Bryant’s involvement in the scandal and one of the defendants in both the civil and criminal cases, nonprofit founder Nancy New, alleged that Bryant directed her to pay Favre. State and federal authorities reached their plea deal with New days after Mississippi Today’s series finished publishing in April.

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Pigott, who had been on the civil case for a year and filed the suit in May, told Mississippi Today he believed his firing was political. Reeves confirmed as much, saying he believed Pigott, a semi-retired former President Bill Clinton appointee, was the one with a political agenda.

Mississippi Department of Human Services, the agency bringing the lawsuit, is prepared to hire Jackson-based law firm Jones Walker to replace Pigott on the case. The State Personnel Board is expected to review the contract, which the Attorney General must also approve, at its Aug. 18 meeting. MDHS has not released the contract or its dollar amount.

“MDHS worked quickly to identify a firm that would continue the important civil litigation,” reads a statement from the agency.

In a motion opposing Pigott’s withdrawal, Waide argues that Reeves has an interest in protecting members of the University of Southern Mississippi Athletic Foundation, which is curiously absent from the suit despite receiving $5 million in welfare funds to build a volleyball stadium on campus on behalf of Favre – an alleged violation of federal regulations, at the least. Mississippi Today reported that several members of the foundation’s board are Reeves campaign donors.

Citing a recent Mississippi Today article, Waide also asserts that Reeves “also has a financial interest in this case because he played a substantial role in obtaining welfare funds (TANF funds) for Defendant Paul Victor Lacoste.”

Waide’s filing Monday asks for a hearing to determine:

Whether Reeves unlawfully caused Pigott’s firing because Pigott was gathering evidence against Reeves supporters
Whether Reeves caused the allegedly illegal payments to Lacoste, and should therefore be added as a defendant to the suit
Whether Reeves is trying to steer the department to hire a new firm that will protect his supporters and focus on lower-level figures
Whether the court should intervene to prevent Reeves from controlling the case
Whether the state should be forced to hire a new firm on a contingency basis only to prevent any more use of taxpayer money on the case

Waide, who filed a similar motion in July arguing that Bryant should be a defendant in the suit based on Mississippi Today’s reporting, also said in his most recent filing that most of the current defendants do not have the assets necessary for the state to successfully recoup damages.

But the civil suit also serves the purpose of finding answers for the public, especially since there have been no criminal trials more than two years after the initial arrests.

Pigott had set several dates in the following weeks for depositions in the civil case, but the state has since canceled those. Meanwhile, Davis has filed a motion to stay, which is pending and will determine if the case will be postponed until after the criminal cases conclude.

Waide also filed on Monday a separate objection to Davis’ motion to stay, arguing that any delay is not in the public interest.

“A stay will delay and frustrate discovery so as to cause all necessary defendants not to be joined, including both former Governor Bryant and Governor Reeves,” Waide wrote.

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Defendant: Gov. Tate Reeves should be target of welfare lawsuit — not in charge of it

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Anna Wolfe