Southern Miss Athletic Foundation added to state welfare suit

The University of Southern Mississippi Athletic Foundation has been added as a defendant to a lawsuit centered around the misuse of state welfare money that already included NFL Hall of Famer Brett Favre, according to a court filing Monday.

The Mississippi Department of Human Services (MDHS) is seeking damages of $5 million from the athletic foundation, Favre and several other defendants, according to the filing. It says that the athletic foundation is liable for "negligence [and] breach of contract" and that Favre was one of the "co-conspirators."

Text messages show that Favre, a former USM star quarterback, pushed state officials for funding for a new volleyball facility on campus during the time his daughter was on the team. The athletic foundation later received $5 million in TANF money from a nonprofit called the Mississippi Community Education Center (MCEC).

MCEC founder Nancy New, a Southern Miss alum and former athletic foundation board member, has since pleaded guilty to fraud.

According to the filing, then-Southern Miss athletic director Jon Gilbert, assistant athletic director Daniel Feig and a group of university administrators met with two MDHS officials. The officials "advised at this meeting that the source of the funds would be TANF funds," the 96-page filing read in part.

"Through its directors and agents including Brett Favre, Nancy New, and Jon Gilbert, the Foundation understood that the source of the funding was federal grant funds paid to MDHS," the filing said.

The university and the athletic foundation did not respond to requests for comment.

The athletic foundation was not included in the initial lawsuit filed on May 9, which named Favre and 38 other defendants. Mississippi Today previously reported that Gov. Tate Reeves' office told MDHS to remove the athletic foundation from the initial suit before it was filed.

Favre was paid $1.1 million in TANF funds for speeches Mississippi's state auditor said he never made. Favre paid the money back, but the lawsuit sought the amount it says he owes in interest. Monday's filing recognized the repayment but said "Favre has not, however, repaid the $5 million in TANF funds that he orchestrated for MCEC to pay to the Foundation to satisfy his personal guarantee to fund construction of the volleyball facility."

Favre's lawyer Eric Herschmann said Monday's amended suit was "as frivolous as its original complaint" and omits that state officials, including the attorney general, approved of the transfer of funds.

"That a private citizen, like non-lawyer Brett Favre, could have any liability under these circumstances is baseless," Herschmann told ESPN in a statement. "Accordingly, we will oppose, on Brett's behalf, MDHS's motion to amend the complaint to the extent it adds these new groundless allegations."

Favre has denied any wrongdoing and has said that he has been "unjustly smeared in the media." On Nov. 28, Favre filed a motion through his lawyers in Mississippi judicial court to dismiss the complaint against himself and Favre Enterprises.

According to a Mississippi state audit in 2020, at least $77 million in TANF funds, which originated from MDHS before flowing to nonprofits, were diverted from the poorest people in America's poorest state toward rich and powerful Mississippians. Six people have been arrested in the case, five of whom have pleaded guilty to state charges.