WASHINGTON — Minutes before the U.S. House Committee on Ways and Means held a hearing Tuesday on the topic of the Temporary Assistance for Needy Families, the subject of a still unfolding scandal in Mississippi, Chairman Rep. Jason Smith huddled with his colleagues.
The other congressmen wanted to know why the chairman had invited former NFL quarterback Brett Favre — who is facing civil charges for his alleged role in diverting TANF funds to a volleyball stadium and a pharmaceutical startup — to testify.
Then, Smith revealed, one of the congressmen asked a question that underscored the larger problem: “What is TANF?”
Temporary Assistance for Needy Families is a $16 billion-a-year federal block grant administered by states to address poverty. While it is known for providing cash assistance, known as the welfare check, to low-income families, states have been spending the vast majority of the money in other ways, “including some with tenuous connections to a TANF purpose,” the federal agency that oversees the funds recently concluded.
The unnamed lawmaker is about four years late to the game.
Favre said he learned what TANF was in 2020, when Mississippi State Auditor Shad White released an audit naming Favre as one of the improper recipients of an estimated $94 million in misused funds.
“Now I know, TANF is one of our country’s most important welfare programs to help people in need,” Favre told members of House Ways and Means, the budgeting committee responsible for revenue-related legislation within the nation’s social safety net programs. “Importantly, I have learned that nobody was — or is — watching how TANF funds are spent.”
Smith said he invited Favre to testify about rampant abuse in the program, which ensnared the athlete in a reputation-marring scandal, as part of a conversation about how to transform TANF to reach needy families and move people into work. Tuesday’s hearing, which lasted more than four hours, followed a subcommittee of Ways and Means held a similar hearing more than a year ago.
But four years after the original audit, Mississippians have more to learn about how the misspending occurred, who all was responsible and how the government plans to hold them accountable. A federal criminal investigation quietly drags on as seven people who pleaded guilty await prison sentencing; a slow-moving state civil lawsuit against Favre and three dozen others gags defendants and their attorneys from speaking publicly about the case; and the federal human service agency has yet to enact meaningful guardrails around the program.
A report that the committee requested last year, and was released Tuesday, found that accounting deficiencies within the TANF program occur in all 50 states and little is done to correct them.
The committee heard Tuesday from a beneficiary of Missouri’s TANF work program, Matt Underhile, a corrections officer and father of seven children.
Underhile was in his early 40s when he took action to turn his life around after nearly two decades of drug abuse and unstable employment. He learned about the state’s TANF-funded work program called the Missouri Excel Center on Facebook. Through it, he received transportation assistance to get to and from class and earned his high school diploma. He said the program offered to pay for things like steel-toe boots or scrubs to help people succeed at work.
He said the program taught him “that there is always a way to remove any barrier you may have; that there are people and programs out there that care and can help you.”
But Mississippi’s TANF program hardly works this way. In 2022, the cash assistance program — no more than $260 a month for a family of three — served just 291 adults. Of those, fewer than 1% were employed, according to federal data.
TANF is supposed to be a work program, but Mississippi imposes such strict eligibility requirements and such harsh sanctions if an applicant gets it wrong — such as taking away a person’s food benefits — that low-income Mississippians are scared to apply, said Jarvis Dortch, director of the ACLU of Mississippi.
When the state has contracted with outside agencies to provide work training like Underhile described, it has not produced reports to say what the programs offered or who they served.
The largest subrecipients of non-assistance funds are not workforce training agencies, but organizations that work with children — the child abuse and neglect investigations department, the Boys & Girls Club, a children’s mental health organization and a global humanitarian nonprofit.
“Mississippi continues to spend little on direct cash assistance while continuing to provide TANF dollars to unaccountable third parties,” Dortch said in his testimony on Tuesday.
The federal government gathers little information about how states choose to use their TANF grants, except for periodic reporting of how they divvy up the money among several vague categories — basic assistance, child welfare services, work, education or training activities, work supports, child care out of wedlock pregnancy prevention, fatherhood and two-parent family formation and maintenance programs, etc.
Mississippi consistently spends a much greater share of its TANF grant on “work, education and training activities” than most states — 40% in 2022. With that statistic, Mississippi’s TANF program might seem as if it’s prioritizing solutions to generational poverty.
“Sounds good until you look under the hood,” Dortch said.
A closer look shows that roughly 80% of that spending is on a college scholarship program serving many middle-class families, Mississippi Today first reported in 2019.
Dortch offered an alternative: More child care funding for working parents. Mississippi is allowed to transfer up to 30% of its TANF funding to the existing Child Care Development Fund to provide vouchers to more families, though it hasn’t opted to do this in recent years. Dortch also pointed to the success of Magnolia Mother’s Trust universal basic income program created by Jackson-based Springboard to Opportunity.
“People that get cash assistance … they’re able to get the space to breathe to be able to do things like apply to go to school, look for other jobs, they aren’t so pressured in life by trying to make ends meet,” Dortch said.
In Mississippi, $5 million of the spending that it labeled work activities, work supports or fatherhood programs was actually the construction of a new volleyball stadium.
In 2017, Favre started lobbying for money from a nonprofit funded almost entirely by TANF funds to build a volleyball stadium at his alma mater, University of Southern Mississippi. The nonprofit founder, Nancy New, informed him that federal restrictions prevented her from using the money on construction projects. But, they thought, if they called the facility a “Wellness Center,” and included classrooms where the nonprofit could ostensibly hold classes for needy parents, the nonprofit could provide the funding through a $5 million upfront lease of the property.
Lawyers hired by the state welfare department in 2022 filed civil charges against the university’s athletic foundation and seven people they say are responsible for this sham, including Favre. New is awaiting sentencing on state charges for her role in the overarching scheme.
U.S. Rep. Adrian Smith, R-Nebraska, asked Favre on Tuesday how officials characterized the source of the funding he was seeking. Favre said it was his understanding that they were grants.
“Never was TANF or welfare funds mentioned in any conversations,” Favre said.
“Were public funds mentioned?” Adrian Smith asked, and Favre didn’t immediately respond. “Was it your understanding that it was private funds from a wealthy individual or some source?”
“I don’t recall. I just remember that grant money,” Favre said.
Favre and New also arranged an additional $1.1 million payment in exchange for Favre to record a radio ad promoting the welfare program, which aired the following year.
“If you were to pay me is there anyway the media can find out where it came from and how much?” Favre once texted the nonprofit operator.
U.S. Rep. Linda Sanchez, D-California, enlarged and printed the text message on a display board that she brought to the hearing. Favre returned those funds to the state in 2020 and 2021.
After Favre secured the funds for the initial groundbreaking on the volleyball stadium, he returned to New for an additional investment in a startup pharmaceutical venture claiming it was going to produce a drug to treat concussions — an injury with which Favre was familiar. The project received over $2 million in welfare funds, but no drug was developed.
“Sadly, I also lost my investment in a company that I believed was developing a breakthrough concussion drug I thought would help others,” Favre said in his testimony. “As I’m sure you’ll understand, while it’s too late for me — I’ve recently been diagnosed with Parkinson’s — this is also a cause dear to my heart.”
The founder of the company, Jake Vanlandingham, pleaded guilty within the ongoing federal probe in July. The revelation of Favre’s Parkinson’s diagnosis made national headlines before the TANF hearing concluded.
Testimony from Sam Adolphsen, policy director for the conservative think tank Foundation for Government Accountability, challenged whether states should be entirely to blame for TANF misspending.
When Adolphsen served as the chief operating officer of the Maine Department of Health and Human Services, he said his agency exercised policy that allows states to transfer TANF funds to another federal program, the Social Services Block Grant, which involved home-based services for seniors and people with disabilities, domestic violence support centers, transportation, and other services.
This resulted in a similar comingling of funds that got Mississippi officials in trouble.
Adolphsen said in his written testimony that Maine officials sought guidance from the federal agency that administers the funds, the U.S. Department of Health and Human Services, “with often unclear communications from the officials.” Maine auditors eventually raised concerns about some of this transfer spending and the state reversed the expenditures.
In Mississippi, at least one defendant in the ongoing civil case has said that federal welfare officials were present in the planning of programs that auditors later found unlawful.
“More work can be done in federal law to provide states with more clarity on the flexibility of these transfers in advance of such expenditures,” Adolphsen said in his testimony.
Adolphsen’s organization, FGA, lauded Mississippi for policies it enacted during the scandal, including the HOPE Act — a law that imposed some of the strictest eligibility requirements in the nation, creating a maze of bureaucratic red tape that current Mississippi Department of Human Services Director Bob Anderson said burdens the department and should be repealed.
Last year, the House Ways and Means Committee requested that the Government Accountability Office conduct a nationwide review of non-cash TANF spending, which is where 78% of the funds go. The committee wanted to know, among other things, how states track the performance of their non-assistance programs, how they ensure they are submitting accurate financial reports, and what the federal government does with the annual TANF audit findings it receives.
The report, released in conjunction with the hearing, shows that from 2021-2023, all 50 states had unresolved audit findings in their TANF programs, 50 of which were “severe” and the majority of which were repeated findings from previous years.
Before the Mississippi welfare scandal became known, these audit deficiencies proved to be a warning sign of the larger program breakdown.
West Virginia has recorded an accounting deficiency for 15 years. Thirty-one of the 155 findings contained questioned costs, like the ones cited in Mississippi’s widely publicized 2019 audit. One state’s questioned costs involved over $107 million and repeated for two years.
As for how the federal government follows up on these unresolved findings, the Government Accountability Office didn’t have an answer, but said that it would examine this process in its ongoing work.
Movement in the civil case against Favre and roughly three dozen other people or companies — which attempts to claw back an implausible $80 million in misspending — picked up the day before Favre’s testimony.
On Monday, Favre’s lawyers fired off 10 new subpoenas requiring depositions from the state auditor’s office, deputy state auditor Stephanie Palmertree, the attorney general’s office, the lieutenant governor’s office, Gov. Tate Reeves, former Reeves chief of staff Brad White, former First Lady Deborah Bryant, and three individual Mississippi Department of Human Services employees.
At the hearing, Favre predictably threw shade at State Auditor Shad White, the state official who launched the initial investigation into welfare spending and has since written a book about the ordeal with Favre’s name in the subtitle. The athlete is currently suing White for defamation.
Favre called White “an ambitious public official who decided to tarnish my reputation to try to advance his own political career.”
White wrote a letter to the Ways and Means committee Monday evening in an effort to preempt any negative impression Favre may give of him. White included photos of Favre’s text messages to remind lawmakers of the athlete’s interest in keeping the payments confidential.
Favre also questioned the current leadership of the state welfare agency, which has paid Jones Walker law firm nearly $1.5 million in TANF funds to bring the ongoing civil action.
“Those same lawyers, before they sued me, came to my home town to try to convince me to retain them in this very dispute,” Favre said.
University of Southern Mississippi attempted to resolve the claims against it by setting up a scholarship program for TANF-eligible students, Favre said, but the plaintiff rejected the settlement, which “would have shut off the spigot of TANF funds to the lawyers.”
Back to the original question by Chairman Smith’s colleagues: What’s the purpose of inviting Favre to speak before Congress?
“If someone in Mississippi is accused of misspending $50 in SNAP benefits, that person’s life will be turned upside down. Mr. Favre’s right here and he’s accused of misspending a million dollars and he’s speaking before Congress,” Dortch told the committee. “Something is wrong.”
For years in Mississippi, state employees and politicians scrambled to please Favre when he reached out about funding for projects or requests for meetings. One of the state’s favorite and most notable sons was in their corner, and they often responded accordingly.
Similar behavior was on full display in the House committee hearing on Tuesday. When Favre entered the Longfellow Office Building hearing room, cameras clicked and attendees turned their heads to catch a glimpse of the NFL Hall of Famer.
U.S. Rep. Beth Van Duyne, R-Texas, said it seemed Favre had become a victim of his own celebrity.
Sanchez, the California representative, delivered the most aggressive questions about Favre’s involvement in the welfare scandal, to which U.S. Rep. Drew Ferguson, R-Georgia, responded, “Unlike my colleague, I’m not mad at you about much, but I am mad that you couldn’t stay with the Atlanta Falcons.”
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