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Possible TANF Misuse for Civil Settlement Appears in Court

Missisippi's alleged use of TANF money to pay settlement fees for racist behavior got cited in court last week. Pictured is state Information Technology Manager Jacob Black, who's settlement payout allegedly came of TANF money intended for struggling MS families and children.

Tupelo attorney Jim Waide filed an April 18 memorandum in Hinds County Circuit Court citing information BGX collected for a March report. Waide, who is representing Lincoln County resident Austin Garrett Smith against a state civil investigation over Smith’s alleged misuse of TANF funds, wants Mississippi Gov. Tate Reeves to stop paying private law firm (and Reeves' campaign donor) Jones Walker LLP federal TANF money to pursue his client.

Reeves launched his civil suit in 2022 and the state auditor has since issued a demand for Smith to repay almost $379,000 in misspent TANF money. But Smith accused the governor of also “wasting  … taxpayer dollars” while ignoring the biggest offender in the ongoing TANF scandal: former Gov. Phil Bryant. Smith claims Reeves is deliberately overlooking political allies, including Mississippi GOP propaganda outlet Telesouth Communications and Bryant, who shared incriminating texts in the lead-up to the scandal.

"A lawsuit is not a TANF program. Filing a lawsuit is not “necessary” to operate a TANF program."


Smith argues Reeves is blowing “millions” on civil litigation when it is the state attorney general’s job to pursue TANF-connected clawbacks. Mississippi Attorney General Lynn Fitch recently aided Smith’s argument by ordering State Auditor Shad White to cease his investigation of millionaire NFL quarterback Brett Favre, who the state accused of accepting TANF diversions to build a sports facility on his daughter’s USM college campus.


A lawsuit “is not a TANF program,” Smith insists, and filing a lawsuit is not “necessary” to operate a TANF program. Furthermore, federal regulation pertaining to litigation costs disallows payment of attorneys’ fees or accountants’ fees in suits “involving an allegation of fraud or similar misconduct, [and] a determination of non-Federal entity liability.”

Waide’s memorandum points out that the state is illegally paying attorneys with TANF money even while pursuing other private attorneys, namely Magnolia Strategies LLC, for allegedly taking TANF money.


In his concluding argument, Waide said Reeves’ administration has a habit of treating TANF like an ATM for state transactions, and he cited the possibility that it even used TANF cash to pay the settlement costs for a state employee sued for racist behavior. As BGX reported last month, the Miss. Dept. of Human Services settled the accusations of a disgruntled employee with a $240,000 payment from what appears to be TANF-sourced cash, according to Since March, DHS spokespeople have neither confirmed nor denied the source of the legal payout, although the Mississippi Office of State Auditor describes the fund as “related to federal funding received through grants.”


This, argues Smith, is “just as illegal as any of the misexpenditures” for which Reeves is accusing his client.


“Under the doctrine, in pari delicto (where the plaintiff is equally or more culpable than the defendant), (Reeves) should not control the Welfare Suit for misexpenditure of welfare funds. The purpose of TANF does not include using welfare funds intended for needy families to settle a civil rights suit against the State,” the memorandum states.


Reeves’ team has not yet responded to the April 11 filing. Meanwhile, Waide appears to be trying to bait Lynn Fitch into launching her own prosecution by pointing out she “has not declined to represent MDHS in the Welfare Suit, nor has [she] claimed that she disagrees” with the “legal strategy” of the state’s civil suit against Smith and others. Waide all but dares Fitch to rouse her sleepy legal team and sic them on his client by pointing out the “Mississippi Attorney General’s office has signed every pleading filed” in Reeves’ civil suit against his client, “thus agreeing with the [state’s] legal strategy” in chasing the suit.


Reasons Waide might prefer a confrontation with Fitch over Reeves are unclear. He is bound by a court gag order and could not confirm his ulterior motives to BGX, however Fitch has fashioned herself as a reliable ally to certain politically aligned high-profile targets. She is passionate about shutting down fentanyl dealers,  women’s bodily autonomy, and human traffickers (with three whole traffickers imprisoned in Mississippi prisons for the combined years of 2022 and 2021). But she has refused to chase Republican Sen. Chris McDaniel for alleged campaign violations, as well as the alleged campaign violations of Republican former U.S. Rep. Steven Palazzo, pictured below posing with Fitch.

Fitch also has not prosecuted Nancy New, a former GOP radio darling who aided Tate Reeves’ Republican gubernatorial campaign before pleading guilty with her son Zach New for unlawfully diverting TANF benefits. Neither has the Republican attorney general announced the prosecution of William Longwitz, Jacob Black, Garrig Shields, Jesse Steven New Jr., Christi H. Webb, Amy S. Harris, and a host of potentially GOP-aligned people and companies listed as clawback targets in the state’s TANF-related Mississippi’s 2022 civil complaint.


Fitch blames her years of dithering on State Auditor Shad White, claiming her team has “sought to recoup funds misspent in the TANF lawsuit,” but lamenting that her people have been “hamstrung from the beginning by a slow drip of information” from the auditor’s investigation, particularly from his “repeated miscalculations, and now by a book” that White “rushed to print while we remain embroiled in a suit against nearly four dozen defendants.”



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