Los Angeles homeless war comes to a head at explosive showdown over federal assistance
The future of Los Angeles’ homelessness agency — and $240 million in federal funding — hung in the balance Thursday as a federal judge pressed officials over who should control the money and why years of alleged mismanagement were allowed to continue.At the center of the legal battle is the Los Angeles Homeless Services Authority (LAHSA), which oversees an $845 million budget and contracts with more than 100 service providers.
The agency has faced years of criticism from city, county and federal audits over weak financial controls and oversight.The latest crisis erupted in June when the US Department of Housing (HUD) suspended LAHSA after opening an investigation into alleged false statements, financial mismanagement, internal control failures and conflicts of interest.
LAHSA sued to block the suspension, while the federal government argued the freeze should remain in place, allowing providers to seek funding directly from HUD.The hearing drew a packed courtroom filled with lawyers for the federal government, LAHSA, the city, county and other agencies — but no elected city or county leaders, prompting U.S.
Attorney Bill Essayli to publicly criticize their absence.“I am extremely disappointed that not one county supervisor, not one city council member bothered to show up to this hearing today,” Essayli told U.S.District Judge David O.
Carter.“This is not an attorney problem.
This is a leadership problem,” he added.Essayli said the federal government can no longer pour taxpayer money into a system repeatedly warned about its failures.HUD alleged LAHSA failed to track whether taxpayers paid for vacant motel rooms, improperly shifted funds between contracts, couldn’t verify nearly 2,300 housing sites and didn’t adopt a written conflict-of-interest policy until September 2025.Federal attorney Joshua Ha pointed to nearly two decades of audits flagging problems at LAHSA, including repeated concerns over grant oversight, performance, accounting and ...