Congress Targets LA Homeless Agency Over Nepotism, Phantom Camp Spending [WATCH]

Congress is turning up the heat on Los Angeles after more than $1 billion in federal money flowed to the city’s primary homeless services agency while the crisis kept getting worse.

Lawmakers are now examining whether taxpayer funds meant for vulnerable people instead disappeared into mismanagement, questionable contracts, and politically connected nonprofit networks.

The House Oversight Committee’s Subcommittee on Delivering on Government Efficiency announced Thursday that it opened an investigation into possible waste, fraud, and abuse.

The panel sent Democrat Mayor Karen Bass a letter seeking documents and communications concerning contracts and grants issued through the Los Angeles Homeless Services Authority, commonly known as LAHSA.

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Chairman Tim Burchett, a Tennessee Republican, said the inquiry centers on whether federal dollars were steered improperly.

“The Subcommittee on Delivering on Government Efficiency is investigating potential waste, fraud, and abuse of federal grant funding intended to address homelessness,” Burchett said.

He added, “Specifically, the Subcommittee is concerned about the potential misallocation of federal dollars by the Los Angeles Homeless Services Authority (LAHSA) to nonprofits in Los Angeles and the surrounding area.”

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That is bureaucratic language for a simple question: Where did the money go, and why are the streets still filled with encampments?

Bass has been asked to testify at a public hearing on September 15 and provide material detailing how the authority handled federal cash.

Congress wants to know what safeguards existed, whether conflicts were disclosed, and what city officials did when warning signs began flashing.

“Because Los Angeles officials have not adequately protected federal taxpayer dollars, it appears that many nonprofits to which those funds have been allocated are not using them for their intended purpose.

To understand the extent of the problem and the steps being taken to safeguard federal funds, we request certain documents and information from your office, and your testimony at a public hearing.”

The money involved is staggering.

Since 2021, LAHSA has received more than $1 billion in federal funds, including $220 million during 2024, yet federal housing data show California with nearly 182,000 homeless people and Los Angeles County with roughly 73,000.

About 45,000 homeless people are in the city itself, according to annual Department of Housing and Urban Development data.

The subcommittee said the latest figures amount to a 3.4 percent increase from the previous year, hardly a glowing return on Washington’s enormous investment.

Congress is not the only institution asking uncomfortable questions.

The HUD Inspector General is investigating LAHSA over alleged “repeated false statements and its irresponsible actions and failures, including its lack of financial management, internal controls, and safeguards against conflicts of interest.”

HUD has frozen the authority’s federal funding since June while that review proceeds.

Recent reporting has also raised concerns about favoritism in contracting.

Former LAHSA chief executive Va Lecia Adams Kellum personally approved a $2.1 million contract involving a homelessness assistance provider where her husband works, exactly the sort of arrangement that makes taxpayers wonder whether public service became a family business.

Another nonprofit, 1736 Family Crisis Center, has collected more than $36 million in federal grants since 2008.

Its chief executive, Carol Adelkoff, received $1.6 million in compensation from 2023 through 2024 while living in Hawaii, a payday reportedly above those of leaders at comparable Los Angeles nonprofits.

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Then there is the phantom camp problem, which sounds like satire but landed in an official oversight dispute.

Commission member Justin Szlasa, who pressed for audits, transparency, and accountability, discovered that one nonprofit was being paid to serve twice as many homeless camps as actually existed.

Szlasa was later removed from LAHSA’s governing commission without an explanation, according to LAist.

His departure arrived just as demands for deeper scrutiny were gaining force, creating another obvious question about whether reformers are welcome inside a system built around generous public spending.

The contrast could not be sharper.

Homelessness climbed, federal money poured in, nonprofit executives prospered, and an oversight advocate was shown the door, while ordinary residents continued navigating tents, public disorder, and deteriorating neighborhoods that years of expensive promises failed to restore.

LAHSA and Los Angeles officials now face a test that cannot be answered with another glossy initiative or carefully staged press conference.

Bass must explain how the money was awarded, who benefited, what controls failed, and why taxpayers should trust the same political machinery with another dollar.

For Congress, the mission is straightforward: follow the money and expose any abuse.

For Americans funding this sprawling bureaucracy, the hearing offers a chance to learn whether Los Angeles built a homeless services system or merely an exceptionally costly pipeline for insiders.

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