US Congress hearing targets $8bn homelessness fraud, Los Angeles in spotlight
A House subcommittee hearing has examined fraud and mismanagement in federally funded homelessness services, focusing on Los Angeles and its $8bn annual federal spend.
US Congress puts LA homelessness funding under scrutiny amid fraud allegations
A congressional subcommittee convened in Washington on Wednesday to examine what oversight.house.gov describes as widespread fraud and systemic failure in federally funded homelessness services, with Los Angeles at the centre of the inquiry.
Tim Burchett, Republican congressman from Tennessee and chairman of the Subcommittee on Delivering on Government Efficiency, opened the hearing by noting that the federal government spends roughly $8 billion annually to prevent homelessness — with states and localities contributing further funds on top of that — yet the scale of the problem continues to grow.
According to a recent federal report cited by Burchett, there are 745,000 homeless Americans. Around two-thirds live in emergency shelters, while the remaining quarter million are on the streets. Overall homelessness has risen 27 percent since 2013; street homelessness is up 36 percent.
Los Angeles singled out
Los Angeles, which has the largest homeless population of any US city at around 50,000, and a further 75,000 in the surrounding county, was the primary focus of the hearing. Burchett argued that the city exemplifies the failure of current policy, pointing to conditions on Skid Row, where he said open drug markets operate and small businesses — many minority-owned — struggle to survive.
Central to the subcommittee's concern is the Los Angeles Homeless Services Authority (LAHSA), a public body jointly controlled by the City and County of Los Angeles and described as the main conduit for public homelessness funds in the area. Burchett said LAHSA "is rife with corruption and financial mismanagement."
The authority is housed in a downtown Los Angeles high-rise that features a private helipad and a Mercedes-Maybach car service for tenants, according to Burchett's prepared remarks.
Allegations against Mayor Bass
Burchett directed pointed criticism at Los Angeles Mayor Karen Bass, who controls several appointments to LAHSA's governing board. He said Bass appointed herself to the board in 2023 but has since missed most meetings.
The subcommittee chairman alleged that LAHSA awarded a $40,000-per-month contract to a former Bass campaign advisor, who was subsequently hired as the authority's chief executive. That individual then allegedly gave a $2 million LAHSA contract to her husband's employer, an LA-based nonprofit.
Burchett further alleged that LAHSA provided $25 million over five years to a nonprofit whose chief executive received $1.6 million in compensation over a two-year period while residing in Hawaii. He also stated that LAHSA had recently allocated funds to another nonprofit whose chief executive had been indicted for fraud by the US Department of Justice.
A court-ordered independent assessment of LAHSA's finances, Burchett said, found "alarming financial-control weaknesses" that leave the authority exposed to fraud. He added that the chair of LAHSA's audit committee — described as an advocate for greater scrutiny of spending — was recently removed by Stephanie Graves, LAHSA's board chair and another former Bass campaign advisor.
Bass declines to appear
Mayor Bass was invited to testify at the hearing but declined. Her office described the hearing and the associated document request as "a waste of time and money," according to Burchett's account.
Burchett said Bass removed herself from the LAHSA board last week, shortly after receiving the invitation to appear. He warned that if she does not cooperate voluntarily, he would work with House Oversight Committee Chairman James Comer to compel her appearance before the subcommittee.
"She knows we will not let her off the hook," Burchett said in his prepared statement.
Proposed legislation
Burchett announced that following the hearing he intends to introduce the Recovery First Housing Act, which would require federally funded housing services to offer substance abuse treatment to recipients. He said he has also introduced separate legislation to ensure that federally funded housing services are limited to US citizens, and to codify measures aimed at reducing crime and disorder on public streets.
The subcommittee hearing included the screening of video footage depicting conditions on Skid Row. No response from Mayor Bass's office was included in the materials published by oversight.house.gov.
Source: Google News MT — Crime (en)