Feds Create Task Force to Investigate Fraud, Corruption in California’s Homeless Services

A potential scandal has been brewing in southern California. Back in February I wrote about what may have been just the tip of the iceberg. The person in charge of the LA Homeless Services Authority (LAHSA) was caught signing a $2.1 million contract with her husband’s employer.

A LAHSA spokesperson told LAist the contracts had inadvertently ended up in front of Adams Kellum to sign…

The $2.1 million contract signed by Adams Kellum authorized federal taxpayer funds for Upward Bound House to pay rent for unhoused people in the region and help them find homes. The money also covered case management and administration costs at the nonprofit.

The records show Adams Kellum signed the three documents directly above the names of her husband’s employer and his boss.

This was a clear violation of conflict of interest rules but the news would only get worse from there. Last month a court-ordered audit found that billions in LAHSA funds were not being carefully tracked.

The report paints a blistering picture of a lack of accountability for taxpayer dollars in recent years.

Auditors said the document trail provided by the agency was so poor that it made tracking the spending nearly impossible. The agency “failed to verify whether the services invoiced were provided,” auditors also found…

There was “a high level of noncompliance” among the small number of service provider contracts that were reviewed, auditors added. And a lack of oversight, they wrote, has “made it challenging” to determine how program funds were used and “whether they achieved the intended outcomes.”

Everyone from Mayor Bass on down agreed this was no good and finally last Friday the head of LAHSA resigned, albeit only after the Board of Supervisors pulled funding from the organization. That funding will now got to a new agency set to replace LAHSA.

The head of the Los Angeles Homeless Services Authority, Dr. Va Lecia Adams Kellum, resigned on Friday after the Board of Supervisors pulled hundreds of millions of dollars of funding…

The new county department replacing LAHSA, which was jointly operated by city and county officials, will manage $1 billion and staff more than 1,000 employees, according to Supervisor Janice Hahn. The board expects the agency to open by Jan. 1, 2026.

But incoming U.S. attorney for Los Angeles Bill Essayli doesn’t think that should settle it. He formed a criminal task force which will now look into how funds were spent at LAHSA.

“Taxpayers deserve answers for where and how their hard-earned money has been spent. If state and local officials cannot provide proper oversight and accountability, we will do it for them,” said Essayli, who was appointed to his post by Atty. Gen. Pam Bondi last week.

The Homelessness Fraud and Corruption Task Force will “investigate crimes related to the misappropriation of federal tax dollars intended to alleviate homelessness” in the Central District of California, which covers an estimated 20 million people across seven counties.

Along with reviewing federal, state and local programs that receive federal grants and funding, the task force will “investigate fraud schemes involving the theft of private donations intended to provide support and services for the homeless population,” according to the U.S. Attorney’s office.

All of this seems years overdue but of course you were never going to see the Biden administration taking action which might embarrass their fellow Democrats in the US’s most populous county and 2nd biggest city. Indeed, that concern comes up in the LA Times story.

A wide-ranging investigation into homelessness programs could create a new distraction for Mayor Karen Bass, who made the issue a centerpiece of her administration. Since 2022, her Inside Safe program has been moving people off the street and into hotels, motels and permanent housing.

Bass might be nervous but not everyone in city government is against this:

Los Angeles County Supervisor Kathryn Barger welcomed the creation of the task force, saying accountability in homelessness spending was “long overdue.”

“I believe this task force will add a much-needed layer of oversight that will help restore public trust and ensure resources actually reach those in need,” Barger said in a statement.

Maybe some of that talk about Democrats creating cities that actually work is catching on. Councilmember Monica Rodriguez told the Times, “I think we can’t be apologists for a failed system.” Hopefully in the coming months we’ll find out just how bad and how expensive this particular Democratic failure was.