Auditor White counter-sues Brett Favre in pending defamation case

Amid a defamation suit filed by Favre, Auditor Shad White has counter-sued the former NFL quarterback for money allegedly paid to him as part of a larger DHS welfare fraud scandal.

Brett Favre is one of dozens of named defendants in a lawsuit filed by the Mississippi Department of Human Services in an effort to recoup funds DHS alleges were misspent in a sprawling welfare scandal. The NFL Hall-of-Famer is also the plaintiff in a separate defamation lawsuit against State Auditor Shad White, stemming from White’s commentary on Favre’s role in the scandal.

On Monday, White announced his office was filing a counter-suit against Favre in his defamation case. The counterclaims seek to recover funds paid to Favre by the Mississippi Community Education Center (MCEC), a non-profit run by Nancy New. New has pled guilty to a series of charges related to the misuse of Temporary Assistance for Needy Families (TANF) funds.

“Mississippi’s Constitution and laws require that the State Auditor act to protect the taxpayers and fully collect all public funds which Mr. Favre received from Nancy New and John Davis. Mr. Favre’s meritless defamation suit provides the opportunity for the recovery of the principal and interest which Mr. Favre failed to repay,” said Auditor White.

White’s counter-complaint alleges that Favre was improperly paid a total of $1.1 million under the guise that these funds were compensation for Favre cutting public service announcements and appearing at functions for MCEC. According to the filing, White contends that this scheme was designed to circumvent a prohibition on TANF funds being used for “brick and mortar” investments (in this case, a volleyball facility on the University of Southern Mississippi’s campus), but that even if used for PSAs and appearances, the payments were not appropriate.

Specifically, White contends that Favre received $500,000 on December 27, 2017, and another $600,000 in June of 2018. According to the counter-complaint, on May 5, 2020, the State Auditor’s office made a demand for repayment of the $1.1 million. Favre eventually repaid the $1.1 million.

However, because of statutory interest that accrued between the time Favre received payments from MCEC and when he returned the funds to the state, White alleges that Favre still owes $437,000 in principal, plus nearly $293,000 in interest.

On May 7, 2020, Favre furnished a payment of $500,000. According to White, this payment reduced the principal owed to $740,000, plus $132,000 in accrued interest, calculated at the time of repayment. Favre paid $600,000 back to the state on October 25, 2021, which White alleges brought the principal owed down to $437,000. The counter-complaint alleges that $292,790 in additional interest have accrued since the October of 2021 payment.

“It boggles the mind that Mr. Favre could imagine he is entitled to the equivalent of an interest-free loan of $1.1 million in taxpayer money, especially money intended for the benefit of the poor. Now that lawyers from the Office of the State Auditor are trying this case, we are going to ensure Mr. Favre is held accountable for his acts and omissions,” added White.  

The Mississippi Department of Human Services lawsuit, which names Favre as a defendant, acknowledges and alleges the impropriety of the $1.1 million in payments to Favre.

However, the MSDH filing insinuates that the particular matter of the $1.1 million is resolved:

“Favre received a demand from the Office of State Auditor requiring the $1.1 million to be repaid with interest. Recognizing that he had no right to payment for services never performed with funds designed for needy families, Favre repaid the $1.1 million to the State.”

This allegation in the DHS lawsuit precedes an explanation that there were other TANF expenditures Favre was involved in — the volleyball facility and a pharmaceutical startup named Prevacus — where the state had not yet recouped improperly spent funds.

Auditor White was originally represented by State Attorney General Lynn Fitch in Favre’s defamation suit. However, earlier this month, Fitch withdrew her office’s defense of the Auditor in two defamation lawsuits that were filed, one pertaining to Favre and the second involving an Ole Miss professor who went on a “Scholar Strike” and was ordered to repay a portion of his salary for the missed class days.

Fitch contended an upcoming book written by White had created a conflict of interest for the AG’s office. According to White, the withdrawal occurred because the AG believed the upcoming book called into question the integrity of the Attorney General’s office.

AG Fitch removed her office’s involvement in representation by issuing a letter to Auditor White which stated:

In the course of the Attorney General’s representation of you in these matters, it has come to light that you are in the process of publishing a book, authored by you, entitled Mississippi Swindle: Brett Favre and the Welfare Scandal that Shocked America. As you know, Mr. Favre’s attorneys are aware of the forthcoming publication of this book and have already injected it as an issue in Mr. Favre’s defamation action against you. As we have previously advised, because the book’s publication falls outside the scope of your official duties as State Auditor, our office is precluded from representing you in connection with matters arising out of the book’s publication. We have accordingly advised that you will need to retain separate counsel to address those matters.