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iAUDIT! - In the early 20th century, residents and farmers in California’s Owens Valley noticed strangers in their towns. The men seemed well-off and were interested in buying land near the Owens River and Owens Lake, the only sources of water in that arid part of the Eastern Sierras. Soon, more than 300,000 acres of land—and their attached water rights—had been purchased, not by wealthy land interests, but by the City of Los Angeles, 230 miles to the south. The mysterious men were agents of L.A.’s water czar, William Mullholland, who intended to build an aqueduct from the valley to Los Angeles, supplying the growing city with water from the river and lake. While the Los Angeles Aqueduct is rightfully regarded as an engineering marvel, it was used to bring stolen water to a thirsty city. The deceitful way Mullholland pilfered the Valley’s water sparked the Los Angeles Water Wars, a period of recurring vandalism against the aqueduct that lasted well into the 1920’s. Disputes continued into the 21st century, as Owens Valley residents and conservation groups sued to restore some of the water to the river and mitigate the pollution from the dry lakebed. About one-third of the water we drink was obtained by fraud.
Los Angeles has a sordid history of corruption and scandal. In the 1930’s, the police and district attorney’s office were notorious for ignoring vice and other crimes—for a price. Buron Fitts. L.A. County’s District Attorney from 1928 to 1940, was known to take payments to keep Hollywood stars’ criminal activity out of the news. In the 1950’s, Police Chief William Parker implemented fundamental reforms in the department, making it more professional and reducing corruption, but he was an unredeemed racist and his heavy-handed policies contributed to the 1965 Watts Riots. Likewise, L.A.’s “reformist” Mayor in the 1940’s and 50’s, Fletcher Bowron, instituted changes in city government to reduce corruption, but was as virulently racist as Parker, enthusiastically supporting the relocation of Japanese-Americans to concentration camps in 1942.
Modern times have not been much better; three former City Council members are in prison for bribery (mostly connected with development) and one current member, Curren Price, is awaiting trial on similar charges. In 2022, DWP Chief David Wright was sentenced to six years in federal prison for accepting a bribe to grant a law firm a $30 million no-bid contract.
While corruption is nothing new in America’s big cities, Los Angeles’ voters seem to have a high tolerance for shady politics. Fitts was one of the few District Attorneys elected to three terms; Parker is regarded as the father of the city’s professional police force, and Bowron served as mayor for 15 years. Even now, Curren Price’s supporters insist he has been framed, and he sits on important City Council committees.
In such a permissive environment, it should be no surprise if homelessness programs, with their billions of dollars overseen by incompetent and ineffective managers, are ripe targets for corruption. As I have written here and here, elected leaders, advocates, nonprofits, and program managers have created a self-validating, self-contained system that ensures taxpayer money continues to flow to ineffective programs and unaccountable agencies. They are abetted by a diminished and complicit legacy media that is unable or unwilling to hold leaders accountable for at least $2 billion in homelessness funding. Examples of structural corruption abound:
- The most recent and egregious example is LAHSA’s CEO, Dr. Va Lecia Adams Kellum, granting more than $4 million in contracts to a nonprofit that employs her husband as a senior manager. In addition, as LAist reported, Dr. Adams Kellum is the only executive or senior manager who completes a state-required financial disclosure form, even though the County has identified at least 35 others who should be completing them.
In response to the LAist story, LAHSA issued a written explanation that just makes it look worse. The response points out the contract has to go through multiple layers of review. All public agency contracts do. When I managed contracts, I'd have it reviewed by the City Attorney, Purchasing, and Risk Management first. Once the contractor submitted all the required paperwork, I'd write an agenda letter for Council approval, and once the Council approved it, I'd sign the contract and it'd be processed by Purchasing. All this is ministerial and doesn't speak to how well a contract is managed or who will lead its administration. Also, all of LAHSA’s layers of review didn't stop the Upward Bound House (UBH) contract from landing on the CEO's desk by "mistake".
The response says LAHSA's Commission approved the funding. As I mentioned in the paragraph above, contracts must be recommended for approval by staff, then agendized and approved. Who controls the Board's agenda? The CEO. She knows what's coming up for approval. Most routine contracts are placed on the Consent Calendar, and approved en masse. It’s not the Board's job to make sure the right people signed it; they just approve the funding.
How does someone accidentally sign a contract, even if it is sent mistakenly? Is this like "Double Indemnity", where the crooked insurance salesman and the murderous wife get the clueless husband to sign a life insurance policy without knowing it? Does Dr. Adams Kellum approve whatever arrives in her Inbox? Most contracts are approved electronically these days, so when you click the "Approved" button, you're attesting you read it.
The response says Dr. Adams Kellum instituted broader financial conflict of interest reporting. But as LAist reported, the broadened reporting requirements have been languishing for more than two years. The BOS just approved the reporting requirements last Tuesday night, after the story about UBH hit the press. And at no time has a city or county official talked about asking Adams Kellum to resign, despite several experts saying she seriously breached ethics rules.
- Continuing the theme of doing favors for friends and family, in September 2023, Councilmember Katy Yaroslavsky, with minimal public notice, approved a no-bid “sole source” contract with the nonprofit L.A. Family Housing (LAFH) to run a shelter vehemently opposed by Rancho Park residents. It was later discovered her chief homelessness aide was, just a few months before being hired by the Councilperson, the Associate Director of Policy for LAFH.
- Apparently wanting ensure her favored recipients have a seat on the money train, in October 2024, Councilmember Nithya Raman granted $42,000 to SELAH, a nonprofit she founded, for vaguely defined “outreach and support” services at the Riverside Bridge Home. This was after promising constituents to increase “ambassador” security services at the shelter, something she has yet to do, despite multiple requests from area residents and the shelter’s clients.
- Turning from monetary reward to political retribution, in October 2023, Mayor Bass dismissed Eric Eisenberg, the chair of the City’s Transportation Commission, just three months after reappointing him. Although Bass’ office offered no explanation for the dismissal, Eisenberg said it was because he and the rest of the Commission unanimously opposed the shelter in Rancho Park, despite the mayor’s support. The shelter would have been built on the site of a public parking lot, and the Mayor tried to get the Commission to approve an environmental exception for the project with no input from staff. When the Commission refused to approve the exception without expert advice, Bass fired the Chair. (For more on Bass’ talent for retribution, see the recent firing of Fire Chief Crowley).
- Edging closer to outright fraud, in October 2024, court-appointed auditors told federal Judge David Carter there was a high risk of fraud in contracts between the City, LAHSA, and service providers. Contract management is so weak, and performance measures so poorly enforced that there is no way to connect millions in payments to actual services rendered.
- Illustrating how corruption is baked into homelessness interventions, Mayor Bass’ chief of homelessness, Lourdes Castro Ramírez, said she is a champion of “relentless outreach” as the best way to coax people from the streets to shelter. Since provider contracts pay per contact, Castro Ramierz has basically greenlit unlimited billing from providers, regardless of outcomes.
We could add many more instances of questionable practices to this list, but these examples should give readers a good picture of how extensively L.A.’s homelessness programs rely on close financial and personal relationships with elected officials, and even family connections, to ensure taxpayer money flows freely to corporate nonprofits with no pesky performance measures to get in the way.
Corruption isn’t always just financial. Looking at homelessness interventions as a whole, we can see how corruption can be philosophical and moral. Elected leaders and senior managers are not uneducated or ignorant. They know their programs don’t work. But HUD and the state will fund only Housing First/No Barrier programs, so that is what they support. Rather than having the intellectual honesty to advocate for change, they take the easy path; they follow the money. They complete the right forms, follow the prescribed processes, and submit their funding requests. Although this column has highlighted some instances of improper financial practices, any fraud pales in comparison to the billions wasted on ineffective programs that do little or nothing to help people on the street.
When leaders abdicate their financial and moral obligations, they violate the public’s trust. When they ignore corruption and fraud, they become complicit in its commission. When they try to disguise corruption as virtue, their hypocrisy has reached its greatest depths. Claiming their polices are “compassionate” when all they do is enrich their allies borders on depraved. Los Angeles may have a tradition of tolerating corruption, but crimes of the past pale in comparison to leaving thousands on the streets unsheltered and unserved.
(Tim Campbell is a resident of Westchester who spent a career in the public service and managed a municipal performance audit program. He focuses on outcomes instead of process in his iAUDIT! column for CityWatchLA.)
