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Texts Reveal How Former Mississippi Governor Helped Brett Favre Secure Millions In Welfare Funds For Volleyball Stadium; UN Chief Says War Is Far From Over After Putin Call; Mourners Spend Hours In Line To Pay Respects To Queen. Aired 11:30a-12p ET

Aired September 15, 2022 - 11:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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KATE BOLDUAN, CNN HOST: Court documents now show that former Mississippi Governor Phil Bryant was allegedly working behind the scenes to help NFL Hall of Famer Brett Favre secure at least $5 million in federal welfare funds to build a volleyball Stadium at Favre's alma mater, the University of Southern Mississippi. The media outlet, Mississippi Today, has also helped uncover some of the details that led to a state investigation. Overall, statewide state auditors are finding that tens of millions of dollars in welfare funds were misused in what the state auditor has deemed the largest public fraud scheme in the state's history. CNN's Dianne Gallagher has more.

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DIANNE GALLAGHER, CNN NATIONAL CORRESPONDENT (voiceover): New court documents filed this week include text messages that appear to show Mississippi's former governor helping NFL Hall of Famer Brett Favre secure millions to build a volleyball facility. Money that came from funds meant for needy families in one of the nation's poorest states. Affect that Favre's attorney claims the former quarterback did not know at the time.

PAUL H. 'BUD' HOLMES: Brett couldn't have been more honorable in any of it. He had no idea where it came from.

GALLAGHER: The text messages first revealed by Mississippi Today as part of its years-long investigative reporting into the scandal were entered into the state's civil lawsuit on Monday by an attorney for the nonprofit founded by Nancy New who was already pleaded guilty to charges related to the overall welfare fund scheme, which the state auditor has called the largest public fraud scheme in Mississippi history. New's son has also pleaded guilty to charges related to the scheme. Court documents show that he knowingly transferred public funds intended for needy families for the construction of the volleyball facility.

The batch of Nancy New's texts starts in 2017 and appears to show former Governor Phil Bryant, Favre, New, and others working to secure the money to build a volleyball Center at Favre's alma mater, the University of Southern Mississippi where his daughter then played the sport. On August 3, 2017, court documents show that Favre texted Nancy New. "If you were to pay me, is there any way the media can find out where it came from and how much?" She responded. No. We have never had that information publicized. I understand you being uneasy about that though. The next day adding wow I just got off the phone with Phil Bryant. He is on board with us. We will get this done.

Bryant texted New just left Brett Favre. Can we help them with this project? We should meet soon to see how I can make sure we keep your projects on course. Favre and New text regular updates on their continued conversations with the governor forwarding each other messages from Bryant on the funding status. In August 2019, Favre tells Nancy New he sent to me just a second ago that he has seen it but hint that you need to reword it to get it accepted. He then forwarded a message allegedly from the governor instructing how to rework the funding proposal.

At one point, New asked, confidential. Do you get the impression the governor will help us? Favre responded I really feel like he is trying to figure out a way to get it done without actually saying it. Months later, Governor Bryant asked New whether she had gotten any of the new programs from the state's Department of Human Services. New responded in part, someone was definitely pulling for us behind the scenes. Thank you, Bryant responded with a smiley emoji.

Neither Favre nor Bryant had been charged with anything related to the welfare fund scheme. In a statement, the former governor's attorney told CNN in part. Cases should be tried in courts of law where rules of evidence govern and privileges are respected. They should not be tried in the press where innuendo and speculation sometimes get confused with actual facts. Mississippi Today reporter Anna Wolfe told CNN she began digging on the volleyball Center funding in 2020 asking both Favre and Bryant about the project then.

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ANNA WOLFE, INVESTIGATIVE REPORTER, MISSISSIPPI TODAY: And Brett Favre told us that he did not discuss the volleyball project with the governor which is obviously flat out, you know proven to be incorrect by the text messages that we uncovered this week. And the governor also, you know, trying to distance himself from the project, said that he didn't know anything about it.

GALLAGHER: This is not the first time the former quarterback's name has been associated with the scheme. Last year, he was forced to repay hundreds of thousands of dollars that the state auditor said was illegally paid to Favre from welfare funds for speeches the auditor claimed Favre never gave. The Mississippi native said in May of 2020 that he had no knowledge the money he'd received was misappropriated.

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GALLAGHER (on camera): Now, Nancy New was one of six people who've been criminally charged in this welfare scheme. The State of Mississippi filed a civil suit against 38 people, including Brett Favre. Former Republican Governor Phil Bryant has not been criminally charged and has not been named as a defendant in any civil suits. There is an FBI investigation as well, Kate. And look, I just want to point out here again, the breadth of this welfare scheme, according to the state auditor. We're talking about $77 million of welfare funds that were misspent in again, the poorest state in the country, where at least 200,000 children live below the poverty line.

BOLDUAN: Dianne, thank you so much. Really appreciate it. Thank you very much for pointing that out.

Joining me right now is Mississippi State Auditor Shad White. Auditor White, thank you so much for coming in. I think we should start where Dianne just left off, the real impact on the state. $77 million misspent of -- misspent, misused of welfare funds that were supposed to go to the states -- the states -- the people who need it most in your state. How were people in Mississippi hurt by this?

SHAD WHITE, MISSISSIPPI STATE AUDITOR: It's an incredible tragedy. And thank you for having me, Kate. If you look back in early 2020, agents from my office -- auditors from my office were investigating this. We disclosed this to the public for the first time. And for the first time as a result of our investigation, our audit people were made aware that tens of millions of dollars of welfare money was misspent in the state of Mississippi, some of it was obviously the subject of fraud. And so now we have to reflect on what that means.

It's a tragedy because there are tons of people who could have benefited from that money. And very simply, they will not. I hope the state is able to get as much money back as possible. But the truth is a lot of that money was just simply set on fire, and we probably won't get some of it back. So it's an incredible tragedy. There's no other way to say it.

BOLDUAN: It really is. In this latest twist coming from these text messages revealed as part of the civil suit brought by the state, one person at the center of this, Dianne Gallagher pointed out as Nancy New. She's pleaded guilty to felony counts. And these text messages show that Brett Favre was talking to her and the former governor about securing millions for the volleyball stadium. One that stand -- that stands out is when Favre writes if you were to pay me, is there any way the media can find out where it came from, and how much? What was your reaction when you saw these?

WHITE: Frankly, I was angry because, in October of last year, Mr. Favre publicly said that I was lying about what we uncovered here, so my auditors, my investigators, document and prove everything that comes out of the auditor's office. We're the ones who told the world about the $1.1 million that went to Mr. Favre for speaking engagements that he did not give. Fast forward a little bit. Last year, he said that we were making this and that I personally was making this up.

And so now we know that Mr. Favre not only knew that he was receiving money from this nonprofit, which was funded by taxpayer dollars, we know that the funding for that was a sham and we know that he knows that too. And we now know that he didn't want the media or the public to find out about this. Thank goodness for the men and women of the State Auditor's Office who brought this to light to kind of foil his desires and make sure that you're able to see -- the public is able to see how taxpayer dollars were spent here in the state of Mississippi.

BOLDUAN: I do want to show because he did come at you personally. In one -- in one statement on Twitter that I found he wrote, of course, the money was returned. This is about the speaking engagements. Because I would never knowingly take funds meant to help our neighbors in need. But for Shad White to continue to push out this lie that the money was for no-show events is something I cannot stay silent about.

I mean, you just responded to it a bit. But what do you say to that now that this is wrapped up in this much bigger situation? I mean, this is linked to the biggest public fraud scheme in your state's history, and now you have these text messages.

WHITE: Well, I'd respond to the first piece of what he said by saying the only reason he fully repaid the principal of the $1.1 million that he received was because I demanded it back from him.

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So he voluntarily repaid 500,000 and then we had to demand back the remainder. He still has not repaid the interest on that which is why the state is suing him. And again, to go back to your main point, Kate, he can say whatever he wants to about me or the State Auditor's Office. We document and prove everything that I say. And not only that, we know that he did not want this to be made public. You know, I was always told if you're trying to hide something, you probably know you did something wrong. And that's the bottom line here.

BOLDUAN: Just taking, I think, a step back or maybe a 30,000-foot view of this, Auditor White, how did this happen -- how did this happen?

WHITE: You know, I think there were -- it's sort of like the crashing of a plane, you have to have multiple redundant systems fail in order to see a fraud of this size go down. I think what you had was a lot of money being pushed through a state agency that decided to then funnel that money to a nonprofit. There just were not a ton of checks on how that nonprofit was spending this money until the auditor's office started digging into it. And then, you know, going another step forward into the future, I think that it's important that we show the public that there are going to be consequences for this.

You probably know, Kate, my title is state auditor. I'm not the state attorney general, I don't get to decide who faces criminal charges for any of the facts that we dig up. But I think it's important for the public to know that there are multiple Prosecutors' Offices looking at this and they're going to make a decision about who faces criminal charges at the end of it. And my hope is that going forward in the future that those charges create enough of a deterrent so that something like this doesn't ever happen in the state of Mississippi ever again.

BOLDUAN: Yes. For people to think they could get -- they could do something like this. That's a real statement. Auditor White, thank you so much for coming on. Thank you for your work. Appreciate your time.

I do want to tell all of you that we did extend an invitation to Brett Favre to come on the show. Through his attorney, he declined but his attorney did dictate a statement to my team saying this in part. Mr. Favre in fundraising efforts regarding the volleyball facility has been honorable and wouldn't at one time think that he was taking money from funds that were not designated for that type of venture.

We will continue to follow this for sure. Coming up for us. The war in Ukraine is far from over. That is the latest assessment from the UN Secretary-General after speaking with Vladimir Putin despite those bruising losses that Russia has recently suffered. We're live in Ukraine next.

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BOLDUAN: New this morning, Russian President Vladimir Putin and Chinese President Xi Jinping face to face for the first time since Russia's invasion of Ukraine, Putin seeking to get some backup for his war effort and Xi saying that he is reportedly happy to meet "my old friend again." Yet that old friend is right now facing a humiliating retreat as Ukrainian troops have made big moves to reclaim key territory. And the UN Secretary-General is offering this sobering assessment in this moment that Putin's war is still far from over. CNN's Ben Wedeman is live in Kyiv with much more on this. Ben, what's the latest for you?

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, what we see, Kate, at this point, is that the offensive in the Kharkiv area seems to have perhaps taken a pause. Within the last two weeks, the Ukrainians have managed to regain 8000 square kilometers of territory, and in the process, really humiliating Russian forces with this rapid advance. But what we are seeing is that the Russians perhaps taking advantage of their superiority in terms of long-range missiles are striking civilian infrastructure.

You'll recall a few days ago, the electrical system was knocked out by the Russians in the city of Kharkiv. That's Ukraine's second largest city. And yesterday, the Russians struck with cruise missiles, a water pumping station on a major dam to the south of here causing flooding and civilians to flee their homes for dry ground. And today, there was another missile strike in -- on an industrial estate. So it does appear that they are making up for this defeat in the Kharkiv area with these missile strikes. And today, we attended a press conference of the -- President Zelenskyy, who said that his government is in touch with France, Germany, Italy, the United States, and Israel to get advanced air defense systems so they can prevent the kind of strikes on civilian targets that we've seen over the last few days, Kate.

BOLDUAN: All right, Ben, thank you so much for that update. Really appreciate it. Joining me now, CNN military analyst, retired General Wesley Clark. He's a former NATO Supreme Allied Commander, and CNN contributor, Jill Dougherty. She's a former CNN Moscow Bureau Chief.

You know, General, if we can start with a quote from the UN Secretary- General on the state of the war, which when he says we're far -- we're far away from the end of this war, a ceasefire is not in sight. Do you think Putin -- with that in mind, do you think Putin could be more dangerous now since suffering these battlefields setbacks and embarrassments as Ben Wedeman was laying out?

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WESLEY CLARK, CNN ANALYST: Well, I think Vladimir Putin has to recalculate his timing and his approach to this. And I think he's certainly not going to show that he's ready to give in publicly to the UN chief. He wants to maintain the pressure on the west. He wants to intimidate. He wants to threaten. No, I don't think he's going to use nuclear weapons, but he could do anything he wants to do, really.

If he uses nuclear weapons, it's not going to help him. It's not going to take the Ukrainians out of the war. It is going to bring NATO and we end in a much more forceful way. So I don't think that's a realistic option. His most realistic option is to hope for Chinese support, hoped that the winter really crushes the spirits of the West European and East European populace and that they lose support for Ukraine, and then maybe he can do something next year. His army is in somewhat difficult circumstances right now. It's going to be difficult to reshape it and regroup it in the coming weeks.

BOLDUAN: Jill, in Russia, nearly 50 municipal officials there have now signed this petition demanding Putin's resignation over the war. One of them joined CNN last night, joined Erin Burnett. I want to play for you what he said.

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NIKITA YUFEREV, RUSSIAN POLITICIAN CALLING FOR PUTIN'S RESIGNATION: Speaking in a foreign language.

UNIDENTIFIED MALE: We will continue to insist on his resignation. Perhaps our words about Putin having a harmful effect on Russia and he needs to leave power will continue to spread.

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BOLDUAN: That is so unusual, Jill, in Putin's Russia, what do you make of this?

JILL DOUGHERTY, CNN CONTRIBUTOR: It is. It's unusual, and I think significant. There's no question to even come out and say, you know, Putin ought to step down or be impeached. And that the war's mistake is really a big deal. However, it has to be put in context.

You know, these are kind of like local municipal officials. They're really pretty low on the political chain. And so they don't have a lot of, you know national significance directly. But just the fact that they did that and that there's so many of them, and the last figure I saw was 50 or so maybe even more and that I think that's important.

But don't forget Putin is also getting pressure from the other side, which is the really hard nationalists who are saying, Mr. Putin, you are too weak on this war, we want you to take it to the wall, we want you to attack civilian infrastructure, and really, you know, in essence, destroy Ukraine. So there is a lot going on. But I think this -- you know this pushback by the -- of the Russian troops right now in Ukraine, really is sending in train a lot of political movement in Russia.

BOLDUAN: Absolutely. Jill, it's great to see you. General, thank you very much, really appreciate it.

CLARK: Thanks, Kate.

BOLDUAN: Also, at this hour, thousands of mourners are standing in line to pay respects to Queen Elizabeth as she lies in state. We're learning new details this morning about her state funeral plans for Monday. CNN's Max Foster is live outside Buckingham Palace with more details for us. Max, what are you learning about the -- what more are you learning about the next few days?

MAX FOSTER, CNN ANCHOR & ROYAL CORRESPONDENT: Well, I think there's going to be a really poignant moment, but the next big poignant moment is on Friday, tomorrow evening, when Prince Charles is going to come back from his countryside retreat, and stand by the coffin there as it lies in state, alongside his siblings. So they'll stand at each corner of the coffin whilst the public's filing by, and they'll stand there for 15 minutes in tribute to the Queen. So I think that'd be a big powerful moment.

Then on Sunday, we have all of the heads of state due to go to the funeral on Monday, gathering here at Buckingham Palace. We think that will be the biggest gathering of heads of state in modern history. If you look at the list as it's currently building up, the palace is not telling us exactly who's coming but those heads of state are revealing it as they confirm their details, so President Biden, for example.

Then on Monday, they will all attend the church service and the funeral at Westminster Abbey. Because there's so many of them, they're not allowed to bring their own cars, they're going to be bused in effectively sharing a bus would you believe, going to the funeral service. And then there will be a procession after that. And after two minutes of silence for the nation, to Windsor, where the queen will be laid to rest in the chapel there, alongside her late husband, Prince Philip, but also next to her parents and her sister. So that's going to be very powerful to see lots of pomp and ceremony.

You'll also see the family walking behind the coffin. Again, you'll see Prince Harry and William walking along, side by side by each other. I think a huge amount of people both within the family also publicly really encouraged by seeing that show of unity within the family that had -- has had eruptions in recent times. But it's really come together around the death of the Queen, which I think would be very heartening to her indeed, Kate.

BOLDUAN: Absolutely. And also it's heartening just to see as we've been showing video of just -- as just people have just been taking their time and waiting hours and hours in line to come to pay their respects to the Queen. Just watching that over and over again has been hard as well. It's good to see you, Max, thank you so much. [11:55:02]

I want to end with this today. The founder of out -- the outdoor clothing company Patagonia is giving away his company to fight climate change. Patagonia announcing the company's ownership would be transferred -- will be transferred to two new entities, one nonprofit that will use all of Patagonia's profits to protect the planet and then a trust designed to protect the nonprofit.

Let me read a part of the statement from the company's founder about this. Saying, if we have any hope of a thriving planet 50 years from now, it demands all of us doing all we can with the resources we have. We'll use the wealth Patagonia creates to protect the source of all wealth. An amazing move, and quite an amazing statement to end on today.

Thank you guys so much for being here. I'm Kate Bolduan. "INSIDE POLITICS" with John King starts after this break.

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