ELIOT'S ANALYSIS -
“It’s ALL a Scam” – Spencer Pratt on X
Los Angeles built a homelessness system that rewards contractors, excuses lawlessness, and leaves addicted and mentally ill people to rot on the street.
Housing First is a euphemism for more tents, encampments, psychosis, fentanyl, methamphetamine, public defecation, fires, assaults, robberies, and corpses. Drug overdoses alone kill more than six people a day across Los Angeles County.
Housing costs matter. A family priced out after losing a job needs rent assistance and a roof. But the population terrorizing neighborhoods, dying in encampments, cycling through emergency rooms, and decomposing mentally in public is not the same problem as the legitimate hard-working people who cannot afford an apartment.
The profoundly impaired group will never afford rent because they are suffering from severe addiction, serious mental illness, or both. Calling Skid Row’s profoundly damaged street population merely “homeless” is not compassionate. Homelessness describes where they sleep; it does not capture the addiction, psychosis, cognitive impairment, and incapacity that keep most of them trapped there.
The word Homelessness is a politically convenient misdiagnosis that allows government to fund NGOs, enables claims there is not enough housing, and pretends to care through harm reduction strategies that only encourage more drug use and more theft from the public coffers, businesses, and private citizens. It is also an excuse for insanely high taxes.
That misdiagnosis and words are deliberately chosen. Elected officials chose the slogans, approved the budgets, appointed the commissioners, renewed the contracts, and then act with indifference when their agencies could neither account for the money nor show results. Los Angeles does not merely have the wrong policy. It has elected leaders who repeatedly show they cannot competently lead the Homeless Industrial Complex.
The Public Policy Institute of California (PPIC), not a right-wing propaganda mill, has now produced evidence that California’s criminal-justice experiment worsened the street crisis. PPIC estimates that Proposition 47 — the 2014 initiative reducing certain drug and property crimes from felonies to misdemeanors caused roughly a 10 percent increase in unsheltered homelessness between 2015 and 2019: approximately 7,000 additional people outside, or about one-fifth of the statewide increase during that period.
The study also estimates that Proposition 47 increased serious drug use by 7 to 8 percent while drug-treatment admissions fell roughly 20 percent, driven by fewer court and criminal-justice referrals. Sacramento removed the stick, promised services would replace coercion, and to nobody's surprise, fewer people entered treatment.
This was sold as enlightened reform. In practice, California weakened the mechanism that had forced some repeat offenders to confront their addiction before it killed them. We were told that jail was not treatment, which is true. So, out of “benevolence”, we just dumped these people on the sidewalk.
PPIC does not claim Proposition 47 caused the entire homelessness crisis. Housing costs rose, the drug supply changed, and homelessness has multiple pathways. But its central finding is difficult to evade: reducing penalties without building an effective treatment system increased unsheltered homelessness and drug harm while reducing treatment participation.
Temporary shelter, treatment, conservatorship, court-supervised diversion, psychiatric beds, appropriate sobriety expectations, apprenticeships, and public order all matter. Permanent housing may be the destination, but it is not an intervention.
Instead of building a system organized around those realities, Los Angeles built an industry organized around contracts that too often resembles a legalized slush fund. At its center is the Los Angeles Homeless Services Authority (LAHSA), an agency that has become extraordinarily skilled at moving money yet remarkably poor at showing what taxpayers received for the funding.
LAist reviewed more than 7,000 pages of public records and found that LAHSA continued steering money to Abundant Blessings after its own compliance officials formally designated the provider “High-Risk” in May 2024. The warning cited significant problems across four Abundant Blessings contracts. On one of their contracts, the nonprofit continued billing throughout 2023 even though it reported having no participants to receive financial assistance.
Just weeks after LAHSA’s compliance officials formally designated Abundant Blessings “High-Risk,” LAHSA staff asked its governing commission to authorize $2.6 million in contract renewals without disclosing that warning in the recommendation or during the public discussion. The commission approved the funding. A month later, Mayor Karen Bass’s office directed funding for another Inside Safe contract after LAHSA represented that Abundant Blessings had the capacity to do the work. LAHSA now admits that recommendation was “errant.”
The money continued flowing. LAHSA made $1.5 million in direct payments after issuing the high-risk notice, including approximately $771,000 paid after auditors say the agency possessed credible evidence of possible federal crimes. LAHSA also approved another $447,000 for Soofer’s for-profit company as a subcontractor after that evidence was known. This was not one missed warning or an invoice that slipped through the cracks. It was a sustained institutional failure.
Federal prosecutors now allege that Abundant Blessings executive Alexander Soofer fraudulently obtained approximately $23 million in homelessness funding and diverted at least $10 million for himself. According to the federal complaint, the money helped finance a $7 million Westwood house, a $125,000 Range Rover, private school tuition, private jets, luxury shopping, and resort travel. Meanwhile, homeless residents at two Inside Safe motels were allegedly being fed instant ramen, canned beans, and breakfast bars instead of the three healthy daily meals taxpayers had purchased. Soofer has pleaded not guilty and is presumed innocent unless proven guilty.
That presumption of innocence protects Soofer; it does not absolve LAHSA. LAHSA’s high-risk notice, undisclosed contract renewals, continued payments and eight-month delay in making a legally required report to federal funders are documented facts. LAHSA management did not dispute the auditors’ findings. The entire record should be referred immediately to federal prosecutors, HUD’s inspector general, the FBI and other appropriate authorities to determine whether LAHSA officials knowingly concealed warnings, approved unsupported payments, obstructed mandatory reporting or otherwise facilitated the diversion of public money.
At best, this was staggering incompetence and gross mismanagement. At worst, it was willful blindness or complicity. Either conclusion disqualifies LAHSA from continuing to control billions of dollars intended for vulnerable people. The agency should be dismantled, its functions transferred to a replacement organization with independent financial oversight, and every responsible official held accountable and, if warranted, prosecuted. Another reorganization, another new protocol and another promise to “do better” would merely preserve the same failed institution.
Then there is the person assigned to guard the money. LAist found that LAHSA chief financial officer Janine Trejo did not list the education or experience required by the agency’s own job description: accounting, finance, or management education; an MBA and/or CPA; and specified accounting coursework. Her application listed a bachelor’s degree in cultural anthropology.
Only in Los Angeles could an agency responsible for hundreds of millions of dollars apparently decide that accounting was optional for its chief financial officer. Perhaps they needed another DEI hire in the C-suite? However, LAHSA's refusal to release records of $800,000 in payouts for wrongful termination claims is an expensive HR problem.
Trejo was reportedly informed of the concerns and participated in the commissioners' deliberations on renewals, but the warning was not disclosed during that discussion. Why? She later signed an Inside Safe contract increase of about $770,000. Bass’s office says it was unaware of the provider’s potential misconduct. That may absolve the mayor of knowledge, but not responsibility for a system central to her administration. “Nobody told me” is not a leadership defense when you selected the structure, supplied the money, and failed to hire responsible people capable of warning you.
It is institutional incompetence because elected officials delegate authority to deny responsibility. They appoint boards, route money through nonprofits, and distribute accountability so widely that nobody can be fired when the machine fails. They revel in the press conference when money is announced and hide behind plausible deniability when the audit fails.
This is the political genius of the homeless industrial complex. When homelessness rises, advocates demand more money. When auditors cannot track it, the system needs “capacity building” for the people who lost track of the original money. Failure is the business model.
Not every homelessness dollar is stolen. Many frontline workers and providers do valuable, honest work. The evil is institutional: Los Angeles permits contractors to prosper while addicted and mentally ill people visibly decay on sidewalks. Money keeps flowing after internal alarms; qualifications are waived; performance goes unverified; responsibility dissolves into a miasma of city and county officials, LAHSA, commissioners, contractors, and subcontractors. Nobody owns the failure, but the politically connected cash in on it. Maybe all you need to know is that the City of LA won’t let the City Controller audit homeless spending.
The answer is not another blank check to LAHSA. The government must distinguish among the newly homeless, the economically displaced, the vagrants from other States who come to do drugs and stay, the chronically addicted, and the gravely mentally ill. It must use the appropriate tool for each: rapid rent assistance, or perhaps relocation assistance to cheaper parts of the State; mandatory treatment for repeat drug offenders; jail for those who refuse treatment; secure psychiatric care for those with extreme insanity; and merciless auditing of every provider receiving public money.
Los Angeles does not lack empathy. It lacks leaders willing to describe the problem, competently supervise the agencies they fund, and accept responsibility. There is something sadistic and evil about a political culture that lets contractors become wealthy while human beings putrefy in tents, then denies responsibility, calls treatment cruel and the anarchy of encampments compassionate.
(Eliot Cohen is a longtime civic advocate who has served on the Neighborhood Council, the Van Nuys Airport Citizens Advisory Council, and the Board of Homeowners of Encino, where he was president of HOME for over seven years. A retired Wall Street executive with a 35-year career, Eliot brings a sharp eye to local governance. He critiques the bureaucratic missteps of City, County, and State officials. Eliot and his wife split their time between Los Angeles and Baja Norte, Mexico.)
