Former Assistant Attorney General Stephanie Ganucheau recommended IHL approve the transaction – twice.

Documents obtained by Y’all Politics show that former Assistant Attorney General Stephanie Ganucheau, while working for former Attorney General Jim Hood as the legal counsel for the Board of Trustees at the State Institutions of Higher Learning (IHL), recommended IHL approve the University of Southern Mississippi (USM) volleyball facility that used Mississippi Department of Human Services (MDHS) grant money on two separate occasions in both June and October of 2017 – a full two years before the MDHS scandal was made public.

Local and national media speculation has run rampant regarding former Governor Phil Bryant and NFL Hall of Famer Brett Favre, both of whom are alumni of USM and were supportive of the project.

However, very little media scrutiny has been applied to the actual approval process, which was reviewed and supported by the legal staff of then-Attorney General Jim Hood.  The Attorney General’s staff serves as the legal counsel at various Mississippi state agencies, including IHL.

Private text messages between Bryant, Favre and Nancy New, then the head of the Mississippi Community Education Center (MCEC), a non-profit Temporary Assistance for Needy Families (TANF) grantee from which funds ultimately were derived for the volleyball facility, have gained national tabloid-like attention.

New has since pleaded guilty to state and federal charges for fraud.

However, the decision to use the funds was made by the Institutions of Higher Learning Board of Trustees, an independent state agency with voting trustees represented and informed by legal counsel from the Attorney General’s office.

On May 31, 2017, then-MDHS head John Davis penned a letter to officials at USM that stated:

“The Mississippi Department of Human Services (MDHS) is aware Mississippi Community Education Center (MCEC) is leasing space with the University of Southern Mississippi Athletic Foundation. MDHS approves of this because we believe it is important to help MCEC accomplish the purpose of their subgrant which is to provide services designed to stimulate employment, support family financial stability, promote literacy, and increase graduation rates while continuing to support positive youth development, impacting teen pregnancy rates, promoting positive father involvement and supporting MDHS county offices through parenting education and parenting/life skills development.”

IHL Board minutes on October 19, 2017, also indicate that USM and IHL, and by extension the AG’s office who acted as its legal counsel, knew that the source of the money was from a grant from the Mississippi Department of Human Services (MDHS).

Ganucheau, the attorney that vetted the structure of the lease and the use of those funds by the IHL institution (in this case the University of Southern Mississippi) blessed it, not once, but twice in memos to IHL staff.

In November of 2017, as reported by Anna Wolfe of Mississippi Today, the scope of the lease was expanded for the MCEC expenditures to comply with the requirements of the grant to include low-income people in the community.  Although the original lease was between USM and its Athletic Foundation, a sublease was created between the Athletic Foundation and MCEC that laid out the requirements of the community facing requirements that MCEC’s grant – received from MDHS – required.

Stephanie Ganucheau provided a memo 10 days before the October 19, 2017, IHL Board meeting supporting the amended lease and sublease to Dr. John Pearce, Associate Commissioner of Finance and Administration at IHL.

IHL Trustees would ultimately rely on that legal recommendation when they voted to approve the expanded lease and sublease involving New’s MCEC organization.

That approved sublease embedded as Exhibit A in the Amended and Restated Lease in October 2017 was described in Zach New’s plea agreement as a scheme “to disguise the USM construction project as a ‘lease’ as a means of circumventing the limited purpose grant’s strict prohibition against ‘brick and mortar’ construction projects in violation of Miss. Code Ann. 97-7-10.”

Approximately $5,000,000 of money from MDHS was run through MCEC and ultimately through the Southern Miss Athletic Foundation, of which Nancy New served on the Board, to build the facility.

 

Y’all Politics made several attempts to contact former Attorney General Jim Hood and Stephanie Ganucheau.  Neither responded for comment.

Ganucheau, as of the 2017 Mississippi AG Annual Report, was listed as counsel to IHL for Hood’s office and served under his direction.  The scope of the Attorney General’s service to IHL as described in the report included:

  • “Provided legal advice and assistance to numerous construction and renovation projects developing facilities on and off campus for each of the institutions.”
  • “Works closely with the IHL Office of Contracts and Grants reviewing and/or drafting all contracts for that office.”
  • “Works closely with the IHL Finance and Academic Departments, as well as with the Real Estate and Facilities Department addressing various legal issues”.