Miami
Congressman says Los Angeles fraud cases point to broader failures in homelessness policy
Michael Cloud argued that the criminal cases in Los Angeles highlight a system that rewards spending and program activity more than outcomes. He also questioned oversight of federal money aimed at reducing homelessness.
Federal fraud cases tied to homelessness programs in Los Angeles have intensified a wider debate over how the United States funds and evaluates those efforts. Fox News Digital reported that Rep. Michael Cloud, a Texas Republican, said the issue goes beyond corrupt providers and also includes programs that are not succeeding in moving people off the streets.
Cloud made the remarks after a House Oversight hearing on federally funded homelessness programs in Los Angeles, Seattle and other places. He argued that the system appears to benefit the people running the programs rather than measuring whether participants are actually moving toward independence.
Fox News Digital reported that federal prosecutors charged three defendants on Wednesday in separate homelessness fraud cases. The allegations include misuse of taxpayer money, including funds that prosecutors say were spent on a nightclub and an adjacent bingo hall, as well as alleged bribes tied to fake housing referrals.
According to federal prosecutors cited by the outlet, Los Angeles’ homelessness agency paid more than $75 million to one of the nonprofit groups under suspicion. Cloud said the cases reflect a broader structure in which success is often judged by how much money is sent out rather than whether the spending helps people or whether sufficient safeguards exist for public funds.
The congressman said some programs can keep people in cycles of dependency that preserve the positions of program managers. He also criticized what he sees as resistance in some Democrat-led jurisdictions to stronger controls, and pointed to Los Angeles Mayor Karen Bass stepping down from the LAHSA commission.
Fox News Digital added that Cloud also took aim at the federal approach commonly described as Housing First, which generally prioritizes placing homeless people into housing without giving immediate priority to sobriety requirements, mental health treatment or other stabilizing services. The outlet noted that Cloud did not use that specific term in the interview, though he described concerns associated with that critique.
In Los Angeles, LAHSA leads the local Continuum of Care structure, which HUD says received nearly $1 billion in taxpayer funding over the past five years. Under Secretary Scott Turner, HUD moved this year to suspend LAHSA, citing alleged weaknesses in financial management, internal controls and protections against conflicts of interest. LAHSA has challenged the move in court.
Fox News Digital also reported that when HUD announced a $4.04 billion Continuum of Care funding opportunity in June, Turner said the Housing First experiment had failed. According to HUD, the funding plan will support organizations focused on treatment and recovery, set aside $1.3 billion for new projects prioritizing transitional housing and supportive services, and add measures meant to prevent fraud, waste and abuse.
Sources
About this piece. Written by El Notero with AI assistance, from reporting published by the outlet cited above. El Notero did no original reporting on this story.
