US Attorney Launches SoCal Homelessness Spending Probe

Federal prosecutors have launched a probe into waste and corruption tied to money to fight homelessness in Southern California, without any evidence of wrongdoing.

Newly appointed U.S. Attorney Bill Essayli announced a Homelessness Fraud and Corruption Task Force to investigate spending on homelessness across seven counties, City News Service reported. Los Angeles Mayor Karen Bass called it a “fishing expedition.”

The task force will include federal prosecutors from the Major Frauds Section, the Public Corruption and Civil Rights Section and the Civil Division’s Civil Fraud Section of the U.S. Attorney’s Office for the Central District of California, based in Los Angeles

The probe will be assisted by the Federal Bureau of Investigation, the U.S. Department of Housing and Urban Development Office of Inspector General, and IRS Criminal Investigation.

Investigators will scrutinize spending to battle homelessness in Los Angeles, Orange, Riverside, San Bernardino, San Luis Obispo, Santa Barbara and Ventura counties.

“California has spent more than $24 billion over the past five years to address homelessness,” Essayli said in a statement. “But officials have been unable to account for all the expenditures and outcomes, and the homeless crisis has only gotten worse.

“Taxpayers deserve answers for where and how their hard-earned money has been spent.”

If investigators find that any federal laws were violated, “we will make arrests,” he added.

Essayli, a twice-elected member of the state Assembly representing parts of the Inland Empire, was sworn in April 2 as the U.S. attorney for the Central District of California after his appointment by Attorney General Pam Bondi.

Los Angeles County has more than 75,000 homeless residents, of which more than 45,000 are in the City of Los Angeles. The combined homeless population of the remaining six counties is more than 20,000, according to Essayli’s office.

For years, the Los Angeles Homeless Services Authority has faced allegations of waste, inefficiency and lack of transparency. The Los Angeles City Council and the Los Angeles County Board of Supervisors just moved to withdraw from the joint city/county agency responsible for spending hundreds of millions for homeless services.

Last month, a court-ordered audit found that homelessness services provided by the city and county of Los Angeles were “disjointed,” while containing “poor data quality and integration” and lacking financial controls to monitor contracts for compliance and performance.

“Any exploitation of the homelessness crisis via the theft of funds intended to improve conditions cannot and will not be tolerated,” Akil Davis, assistant director in charge of the FBI field office in Los Angeles, said in a statement.

Despite the hazy oversight at the Los Angeles Homeless Services Authority, federal prosecutors cited no evidence for the alleged waste and corruption, or a “theft of funds” and “fraudulent schemes and corrupt officials” alleged by Davis.

Bass worries the U.S. attorney could target the wrong people.

“I am very concerned that he could go off in a direction that would amount to a fishing expedition,” Bass told KNX News. “Our purpose is to end homelessness, and especially street homelessness, and we do not need to be distracted away from our No. 1 mission.”

Last year, the city bucked national increases with a 10 percent decrease in street homelessness, according to a homeless count.

“These results are in part due to increased accountability and transparency around results and budgeting,” Clara Karger, press secretary for the mayor, said in a statement.

— Dana Bartholomew