Days before the Mississippi Department of Human Services director was ousted from his job in 2019, he was testifying to Congress about one of the very initiatives that landed him with a felony conviction in a now-infamous welfare theft scandal.
As director of the agency tasked with helping some of the neediest people in one of the poorest states in the country, John Davis had secured contracts for his new friend, former WWE wrestler Ted “Teddy” DiBiase, in 2018 to deliver leadership development workshops to state employees.
And the reaction to their efforts was swell.
While testifying Tuesday in the criminal trial against DiBiase, Davis said he met with a top official at the attorney general’s office at the time, and they discussed including the attorney’s staff on DiBiase’s circuit.
Davis said a director at the federal office that oversees the national Temporary Assistance for Needy Families block grant, which funded the DiBiase training, recommended that Davis expand the program.
Even a representative in Congress remarked during Davis’ testimony, “It’s interesting how well your program is working.”
DiBiase is facing 13 counts including conspiracy, wire fraud, theft and money laundering. But his defense lawyer’s cross-examination of Davis, which began Tuesday, revealed how much of the alleged scheme was carried out in broad daylight.
“Would you agree that if you were trying to hide something, you were going about it in a terrible way?” defense attorney Scott Gilbert asked Davis.
Davis said he thought everybody was aware of what he was doing, but that he “evidently” didn’t go about it the right way.
It was after delivering this answer, on his third day on the stand, that Davis displayed the largest emotion so far, his face puckering and voice cracking. The defense briefly halted its questioning for him to compose himself.
“Hindsight is 20/20 and until someone told me what conspiracy was, I would have told you I did exactly right,” Davis said earlier in the day. “When someone told me what conspiracy was, I admitted I did what I was told I did, so I have to accept responsibility. But my intention would have been as legal as possible.”
Davis pleaded guilty to state and federal charges in 2022 and he is cooperating with the prosecution as he awaits sentencing. DiBiase’s defense counsel is expected to resume cross-examination of Davis Wednesday.
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Much of the defense’s questioning of Davis Tuesday touched on the difficulties he faced at the Byzantine welfare agency, with its outdated technology and constant political pressure.
One might think an agency with billion-dollar federal spending power would have automated spreadsheets in its accounting division, Davis said, but instead, employees used pencils on paper ledgers.
“Sometimes the pencil stroke would be so light or wrong,” Davis said, that he personally witnessed a scenario in which a $2 million deficit was mistaken as a $200 million shortfall.
In an agency with a budget made up primarily of federal funding, subject to a maze of everchanging federal regulations, Davis relied on his executive staff, roughly 70 staff attorneys and several assistant attorneys general who were assigned to his agency to keep him on track.
Davis testified he was steered wrong on several occasions, leading to an inappropriate course of action. “You always lived on the edge, scared to death,” Davis said.
He was also appointed by the governor and had no civil service protection.
“I was at the whim and pleasure. I said ‘whim and pleasure,’ and that’s what it was,” Davis said.
This made him more susceptible to politics. Davis said he would travel to Washington to meet with Mississippi’s delegation and would visit state lawmakers at the Capitol in Jackson several times a week. When Gilbert suggested powerful people must have constantly been asking Davis to do things for them, Davis said he received 1,000 emails a day.
“Everything I did was influenced by a political process,” Davis said.
His direct supervisor was then-Gov. Phil Bryant, a Republican who served from 2012 to 2020. Davis said he interacted with Bryant every day or most days.
“I learned that as an eligibility worker,” Davis said. “The only way things worked is to please your boss.”
It wasn’t about pleasing the people in need, the clients of the agency, Davis added.
“I know I’m saying something controversial,” he said.
When asked if he was able to carry out these directives, even the unpleasant ones, Davis responded, “No compunction about that. That was my job.”
Davis testified he was working under Bryant’s orders to outsource and consolidate functions of the agency when Davis authorized granting tens of millions of TANF dollars to just two nonprofits, one being Mississippi Community Education Center founded by Nancy New.
New has also pleaded guilty in the scheme and is also awaiting sentencing.
Davis said Bryant and his wife had known New for years and would at times call New “rather than go through me.”
The subgrants with the two nonprofits, together dubbed Families First for Mississippi, presented the vehicle for officials to allegedly steer TANF money to their friends, family and celebrities without the kind of restrictions and oversight that would exist if the money came directly from the state agency.
This structure was underway by the time Davis met DiBiase, the defense pointed out Tuesday.
Gilbert also strove to show that it would not be unusual for Families First to seek out celebrities like DiBiase to spread their message. Gilbert asked Davis to talk about the array of stars that Families First sought for endorsements, such as Oprah Winfrey or Morgan Freeman. Davis said he thought New had actually spoken with Winfrey “or her people.”
Gilbert displayed reports of social media analytics showing that of MDHS-related posts, DiBiase’s tweet about his leadership development program received the most page views.
DiBiase called his training program, which he delivered to hundreds of employees until the Davis’ scheme collapsed under an auditor’s investigation, “Law of 16.”
“He had a fascination with the number 16,” Davis said.
“Fear is INEVITABLE,” reads screenshot from a power point former Mississippi Department of Human Services Director John Davis and wrestler Ted DiBiase Jr. used during their leadership training program called Law of 16.The Law of 16 curriculum contains four types of self-help actions – love, yearn, fight, empower (LYFE) – among four areas of life – self, family, business, community – to create 16 different commands for living, according to an information packet.
Law 1, for example, is SELF+LOVE.
Standing before a gospel choir in a banquet room at the Westin hotel in downtown Jackson during what the agency called the “Law of 16 celebration,” Davis declared to the large crowd, “If we don’t know who we are, if we haven’t mastered self, we will never, ever master the master’s plan,” according to a video the welfare agency produced.
When Gilbert asked Davis if he ever offered, or if DiBiase ever requested, a “no work” contract, Davis said it was quite the opposite. If anything, he said, he probably invested too much of himself ensuring that DiBiase succeeded.
Davis said he knew the situation was dysfunctional. Especially now, being on the other side of it, Davis said, “complicated, convoluted and crazy are terms that don’t even begin to describe it.”
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