Mississippi: How Haley Barbour Turned $570 Million for Low-Income Housing into a Port that Benefited Few

Ellen Ann Fentress is a Mississippi writer who dug deep into a state tradition of converting federal funds for the poor into a boondoggle for the few. She writes here in an upstart online investigative journal called the Mississippi Free Press. (To learn more about this brave entry into investigative journalism in Mississippi, read this post.) Federal money intended to supply housing for poor and middle-income Mississippians was diverted by politicians to refurbishing a port, which benefitted the casino industry.

She writes:

The plantation-owner model lingers in the Mississippi imagination. It’s manifested, for example, in the local soft spot for white columns on McMansions and even gas stations in suburban communities.

The plantation archetype, however, is not a yokel, but the opposite. To make money off his cash crop—that’s the definition of a plantation over a self-sustaining farm—the plantation owner had to master credit lines and commodity futures in a far-off financial market and put that mastery into play on his home soil. His success rested on being a bifurcated practitioner. His feet in his home dirt, his head attuned elsewhere.

I wrote a version of those words in mid-2008 for the Oxford American magazine about how then-Mississippi Gov. Haley Barbour had channeled $570 million in Hurricane Katrina housing recovery funds away from rebuilding housing for poor Gulf Coast residents and toward improving the state port at Gulfport.

In words not that different from what we’re hearing now about the arrogant and greedy redirection of federal Temporary Assistance for Needy Families funds, Barbour’s excuse for hubristic diversion was economic development.

Sinking recovery money into the port would bring 6,500 direct jobs, the Yazoo City native declared in 2009. His economic trickle-down policy hit the right note with the national free-market conservative audience. The powerful Washington lobbyist and former head of the party tested the GOP presidential waters for 2008, in fact, stymied in part by his own words about racism in his hometown.

Barbour’s port move, however, was at the expense of low- and middle-income Coast residents cut out of the state’s recovery aid framework that was weighted toward homeowners with insurance policies. The promised high-paying jobs hardly materialized, either.

Amid the outrage around the money grab of $77 million in TANF funds discovered in a state audit of 2016-2020 TANF spending, Haley Barbour’s $570-million port gambit must not be forgotten. And it’s historically instructive. The willingness of Mississippi leaders to arbitrarily hijack federal funds away from specific needy recipients is not a new story.

The TANF scandal is only the latest rendition.

‘Not Asking the Hard Questions’

Reilly Morse was a Mississippi Center for Justice attorney involved in the court fight over the port funding. Morse sees the similarities in Barbour’s handling of Katrina funds from the U.S. Department of Housing and Urban Development and the recent TANF revelations that emerged in early 2020 during the administration of Barbour’s successor, Phil Bryant.

Bryant was state auditor during Barbour’s time in office, and current Gov. Tate Reeves was state treasurer.

“They count on people not asking the hard questions,” Morse said in an Oct. 4 telephone interview. “I think that’s another common theme here because all of these folks that lambast Washington adore disaster-response money or other block-grant money, social-services block-grant money, that they think they can just clear out regardless of whether it benefits the people.”

In December 2008, the Mississippi Center for Justice and other community groups sued HUD for allowing the port funding since Congress had appropriated the monies for low- and middle-income home repair. The litigation ended in 2010 when Barbour, HUD and the Mississippi housing advocates negotiated an agreement to provide $133 million to assist low-income Mississippians still in need of Katrina-damaged home repair.

HUD had expected the project to create 1,300 jobs and retain 1,300 more. By 2013, no new permanent jobs had been created, a 2013 PEER committee report found. That number is shocking in the way that learning that the State of Mississippi only qualified 1.5 percent of TANF applicants for cash assistance in the nation’s poorest state in 2016, the first year of the MDHS audit.

But shunting Katrina housing money toward the port wasn’t shocking enough to break through in Mississippi media outlets that tend to give Barbour a pass, nor has it re-emerged now in most outlets as important context for the current TANF scandal.

In 2019, HUD declared the job-creation goals met. Yet reaching the job-count goal required a fuzzy calculation, as journalist Anita Lee reported at the time in the Sun Heraldin Biloxi. During the Trump administration, HUD allowed Mississippi to count jobs that the Island View Casino Resort added at a new casino hotel facility since the resort was on port property. The job total still initially didn’t meet the project requirement until HUD then allowed recalculating part-time hotel jobs into full-time jobs through hours worked.

The State of Mississippi thus counted 1,167 jobs at the casino hotel as jobs creation, although the number of actual higher-paying maritime jobs at the port was only 262. Lee noted in her reporting that the state investment netted one job for every $2.2 million in recovery funds spent….

Barbour has long done his post-Katrina part for his team’s ideology—if not for the Gipper, at least for Milton Friedman. That favorite conservative economist taught that the best time to slip in a political change was in the wake of disaster. “Only a crisis—actual or perceived—produces real change,” the Nobel Laureate wrote. “When that crisis occurs, the actions that are taken depend on the ideas lying around.”

Blanco: ‘He Only Cared What He Got’

The casinos had ideas lying around when Katrina hit.

Ever since their 1992 debut in Mississippi, it was the widely held belief in this Bible Belt state that the industry was just waiting for their then-floating facilities to crumple up in the next hurricane to justify legalizing their expansion onto land. Katrina provided the scenario. The barge on which the Grand Casino sat actually managed to crush the new Frank Gehry-designed Ohr-O’Keefe Museum of Art in Biloxi.

Barbour’s first—and chief—legislative response was to convene the Mississippi Legislature to legalize the casinos’ move inland. The powerful Southern Baptist lobby howled. But, by December, three casinos had reopened on terra firma, and by 2007, the $1.3 billion in revenue from the 11 Coast casinos topped the old pre-Katrina tally.

The state legislation squared away, Barbour headed up to his Washington stomping grounds, where Mississippi proportionately outscored Democrat-led Louisiana in Congress’ $29-billion recovery appropriation in December 2005. Barbour was the closer, persuading then-House Speaker Dennis Hastert to accept the funding terms, the New York Times reported, calling it “using a lobbyist’s pull from the governor’s seat.”

Mississippi’s take was at Louisiana’s expense, its former governor, Democrat Kathleen Blanco, later said in a July 2008 telephone interview about Barbour: “He didn’t care how much anyone else got. He only cared what he got.”

Please open the link and read more about high-level corruption at the expense of the poor people of Mississippi.