Part 116: “A Failure of Moral Judgment” – Judge David Carter and the Crisis of the Unhoused

Published October 4, 2024. Updated October 12, 2024.

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Oct 04, 2024

Photo of the First Street U.S. Courthouse in Los Angeles where the LA Alliance and West LA Veterans Affairs Hearings are taking place by Zachary Ellison (GoPro Hero 11 Black).

By Ruth Roofless & Zachary Ellison, Independent Journalists

The city of Los Angeles is undoubtedly going broke, warned Controller Kenneth Mejia on September 26 in social media posts on Instagram and X, formerly known as Twitter: “In the last year, the City has spent HALF its RESERVES,” he wrote, noting that “Just ONE year ago, the Reserve Fund was historically strong, at $648 million.”

Controller Mejia cited three reasons for the impending financial crisis:
1. Lower revenues (short $222 million)
2. Higher labor costs, starting w/ a $1 billion raise for LAPD over four years
3. Record level liability payouts.

This last Wednesday, October 2, 2024, Democratic Socialists of America (DSA-LA) aligned controller, who won in a landslide victory, was testifying before U.S. District Court Judge David O. Carter in another LA Alliance for Human Rights hearing for the lawsuit launched by the City’s business interests. The suit had been filed with the secret backing of real estate developer Izek Shomof, a shadowy figure also known for proposing a mega-shelter in Boyle Heights in the abandoned Sears, Roebuck & Company Mail Order Building. The project has stalled due to community and political opposition. To assuage the concerns of the LA Alliance that the City and County hadn’t been transparent enough about its spending on homelessness, Controller Mejia’s office created a dedicated website cataloging spending as part of the legal settlement.

For the calendar year 2024, according to the Controller’s website, the City of Los Angeles, in response to the LA Alliance settlement concluded on June 14, 2022, under Mayor Eric Garcetti and former City Council President Nury Martinez. Along with Mayor Karen Bass’s Inside Safe program and the Freeway Agreement, which is much like the LA Alliance settlement, the deals locked in spending by both the City and County of Angeles to meet the crisis of the unhoused. We’ll be the first to admit, as journalists, one whistleblower, and one unhoused, that the legal landscape here has become exceedingly complicated and difficult for laypersons to understand, but the dollar signs are unignorable.

Between those three programs, the City of LA has spent a record amount: $138,457,260.75. This still pales in comparison to spending on the Los Angeles Police Department (LAPD), which according to Mejia’s accounting is far and away the biggest slice in the City’s budget, as he explained last Saturday night at a fundraiser for DSA-LA Council District 14 candidate Ysabel Jurado. How much of the spending on homelessness is simply ending up in LAPD coffers is unknown. Mejia’s presentation to Judge Carter was clear, though, that the costs have been enormous. Carter, in executive-like fashion, slowed the youthful controller down to make his point, asking, “How much money is hitting the streets?” Carter then clarified he wasn’t the Mayor, before dismissing the officials, saying to them respectfully, “You have a city to run.”

Seeing dental and vision items in Mejia’s accounting for one Inside Safe location, Carter was excited, and who could blame him with the City apparently finally making progress in managing its finances? The hearing, convened in the glass cube-shaped First Street Courthouse in Downtown Los Angeles, just a block away from City Hall, featured a presentation from auditors Alvarez & Marsal that suggested the City is still far away from having a full accounting of spending going back to Garcetti’s mayorship. The amount unaccounted for is potentially into the hundreds of millions and is without proper invoicing. How much of those funds may have been pilfered (and by whom) is also unknown, at least at this point, an unsatisfactory answer.

Between City Hall and the Federal Courthouse, with the old Times Mirror building in between, homeless encampments still line the street. One features a U.S. flag, synonymous with someone who has served in the U.S. military, and the man looks the part. Fencing had gone up around the awnings of the old building, abandoned since The Times fled to El Segundo under billionaire owner Patrick Soon-Shiong. Later that same afternoon, Carter would again convene an “Injunctive Relief” hearing for the West LA Veterans Affairs Campus, more correctly known as the National Soldiers’ Home for Disabled Volunteer Soldiers.

The two judicial affairs, separate but in some ways related, have in some ways become spectacle with the colorful veteran jurist, himself a U.S. Marine with combat service in Vietnam, one day declaring to the audience, “Do you know why Marines believe in God? They believe in God because they’re afraid of dying.” One observer described the judge as a “quote machine.”

Carter would repeatedly show a picture of a U.S. Agency for International Development camp in the Republic of Georgia, explaining that he helped build it for refugees spilling over from South Ossetia and wondering why the same couldn’t be done in Los Angeles. Judge Carter was serious; he wanted results, and he wanted them sooner rather than later.

Jurado’s rival, current District 14 Councilmember Kevin de León, had made a grave mistake, perhaps even worse than the University of California, Los Angeles, which would see its Jackie Robinson Stadium closed by Department of Veteran’s Affairs security on Judges’ orders. UCLA, as of October 3, has yet to make a proposal for what was described in the Judges’ opinion as an “exit strategy,” with the goal being to ensure adequate housing for veterans will be constructed on land that is rightfully theirs.

Whereas UCLA had simply failed to come to the table, De León had rather come to Court with ulterior motive. Carrying over a “spat,” as Judge Carter called it, from his first debate with Jurado, not with his opponent, but rather from social media with LA County Supervisor Hilda Solis over the County’s progress on homelessness. Unlike Brentwood School, which at least seems to be trying to negotiate a resolution to preserve some usage of their facilities built on the Veteran’s land, De León didn’t take the hint. Even after being scolded, he continued to campaign openly in the courtroom despite the judge’s admonishment to be on point.

In reference to the Co-ordinated Entry System (CES), which promises to do exactly what A&M’s auditors flagged as most problematic, the coordination of housing, care and services for the unhoused, De León instead resorted to finger-pointing. Writing to the Judge night prior, “This is not merely a failure of system design but of moral judgment, compelling us to question the County's commitment to equitable service delivery.” De Leon’s argument was just divisive.

If other elected officials, such as new Council President Marqueece Harris-Dawson, Councilwoman Nithya Raman, Controller Kenneth Mejia, and County Supervisor and LAHSA Commissioner Lindsey Horvath, were there in good faith trying to solve the problem together. The LA Alliance previously successfully argued that the City and County were acting in “bad faith.” De León stood out like an unruly politician even as he told the story of how his staff had helped “Miguel,” who was unsheltered in Eagle Rock. Undoubtedly, Los Angeles County is not meeting its goals on homelessness, with an officially counted 75,312 people on the streets, of whom 2,991 are veterans, a significant 23% decrease from the preceding year. How that goal is met, though, will require more competence and cooperation, not grandstanding in what some have called the “Nation’s Capital for Veteran Homelessness.”

Also present, lawyers for oil company Bridgeland Energy had already announced plans to appeal Carter’s ruling, so even as some have alleged that Carter is failing, he can be seen fervently seeking to negotiate temporary and permanent housing for veterans. At one point, Carter even yelled across the courtroom at VA officials that he wanted veterans off the streets before the “winter rains.” Carter chided Plaintiff’s expert witness Steven Soboroff to get to work figuring out how to get the upscaled housing goals for the campus met quickly. At the end of Wednesday’s hearing, the third such day across two weeks beginning on September 25, Carter summoned fellow Plaintiff’s expert witness, developer Randy Johnson, and Soboroff back to his chambers for further discussion on how to get things moving.

Two months after running a piece about the “speakeasy” at Dodgers’ stadium, the site of another baseball-related displacement, the Los Angeles Times had erroneously reported that a proposed “Town Center” would feature a hotel complete with a “hotel bar” in it’s headline, to the consternation of many in the veterans community. Times journalist Doug Smith was apologetic, noting that he wasn’t personally behind the story’s widely questioned header.

Carter’s opinion had all but ordered the VA to simply figure out where to come up with money from their budget to complete the project. Noting that when the VA fails to meet the needs of veterans to keep them off the street, the cost so often is simply transferred to the City and County. The challenge is scalability while avoiding the “mission creep” of past illegal leases.

The truth is that no one to date has come up with a perfect model for what the re-housing system should look like for the veteran population, much less for the unhoused in general in Los Angeles. This is deeply problematic, as the recent scandal opened up by investigative reporting in the Westside Current from journalists Jaime Paige and Chis LeGras on Project Homekey has exposed. Finding that dozens of facilities acquired at significant cost to the State were sitting inexplicably empty, followed by widespread outcry.

Developing the WLA VA to meet the needs of veterans housing is a huge task, and although court was again in session today, it’s unlikely to be quickly resolved. There are still significant questions over the planning on whether the new construction will be mixed-use development or stand-alone facilities, according to one source in the courtroom. Neighbors are also concerned.

As Paige and LeGras described, Governor Gavin Newsom had received $3.5 billion in federal funds distributed from 2021 to 2024 in 3 rounds, with $550 million going to LA County to acquire housing. Only to see 1,583 of 2,157 units going unused. Another Westside Current investigation found that the point-in-time “PIT” count used to arrive at approximately 75,000 was erroneous. The countywide figure is potentially an undercount, with Paige and Legras writing, “According to an exclusive, months-long investigation by the Westside Current, as an estimated 139,151 homeless people, both locals and newcomers, occupy streets, sidewalks, beaches, parks, playgrounds, and other public spaces throughout the County.” It’s important to distinguish the PIT as simply a snapshot of homelessness “on any given night.” The Current cites an annual estimate by Economic Roundtable. According to Ruth Roofless’s investigation, extrapolation methods and the tradition of including a phone survey component to detect “hidden homelessness” mean LAHSA’s PIT number, which USC has been calculated since 2017, could even be an overcount.

Even worse, according to reporting in the Los Angeles Times by journalist Anna Scott, Project Homekey, which is overseen by the California Interagency Council on Homelessness, “Cal ICH," has been a grave failure. With one contractor being accused of embezzlement in court, its former CFO stealing money from the homeless and instead “spending it on personal extravagances, including tickets to the Coachella Valley Music and Arts Festival, jewelry and rent for a Beverly Hills mansion.” Just how much money could potentially be clawed back?

This is a taxpayer's worst fear, and recent polling has suggested a diminishing appetite to allocate funds to what critics have termed the “homeless-industrial complex.” County Measure A, which proposes to permanently extend funding approved under County Measure H, a quarter-cent sales tax set to expire in 2027, may not pass with voters this November. Long-time Los Angeles Times journalist Doug Smith, this time correctly in writing about the estimated $1 billion in revenue, writes that the “Howard Jarvis Taxpayers Assn. opposes the measure, contending it is a special purpose tax put on the ballot by groups that will benefit from it.” The strange truth is that simply throwing money at the problem, even ostensibly for 60% services as Measure A promises and 40% housing, isn’t going to solve the problem. Mayor Karen Bass, who has arguably seen some success with Inside Safe despite it’s high cost, actually seems to have at least the right idea with the “locking arms” solution. It takes coordinated, ongoing direct action to get results. The time from motel room to permanent housing clearly has to go down; what people want is certainty, as well as treatment services and quality of life in care.

Certainty is on the ballot with Measure A because it makes the ¼ cent sales tax revenue a permanent source of funding for affordable housing. If it fails, many people in several housing and shelter programs will likely be displaced. One exception is Inside Safe, because it does not rely on the County for funding like A Bridge Home and Pallet Shelters, the State like Homekey, or the federal government like Roomkey, Inside Safe is more financially resilient to defunding that could happen at the County level if Measure A fails.

For Inside Safe to succeed in the long run, though, Bass has to refine the approach and amplify it in addition to creating better cost controls. Most importantly, it’s beyond evident that the accountability mechanisms here are completely broken. That has to change! For example, for months now, we’ve worked to advocate for the renewed creation of a City-specific Lived Experience Commission on Homelessness, first proposed in 2019 by now-Council President Marqueece Harris-Dawson and former Councilmember Mike Bonin with unanimous 14-0 Council approval in 2020. Ironically, the City has never even implemented this basic measure to give the unhoused a voice in City governance, despite its relatively low cost of only $50k, as estimated by the Chief Legislative Analyst (CLA) report.

Instead, Measure H, like Proposition HHH before, has solely relied on a citizens-oversight model in which the unhoused and formerly unhoused are essentially overseen by political appointees and service providers. The Los Angeles Homeless Services Agency (LAHSA) has such an advisory body, and they support the creation of a separate body just for Los Angeles City to help dial in its efforts. LAHSA’s Lived Experience Advisory Board (LEAB) wrote in their January 2023 letter of support for CF19-1020: “With over 300,000 constituents in every council district, perspectives from individuals with lived experiences from every corner of Los Angeles is necessary to properly address homelessness.” This is a simple step forward.

It’s still too difficult to report waste, fraud, and abuse, much less criminal misconduct, in Los Angeles in relation to these programs. In response to Inside Safe, Ruth Roofless created her own whistleblower hotline to monitor displacements related to the program: (818) 600-1846. The Controller’s Office recently created such a program, but more needs to be done to roll it out to the public so that when problems occur they’re quickly flagged, much like what happened in the recent so-called “Ramengate” scandal where food funds were being diverted. A dedicated line should be created specifically to monitor homelessness response. It needs to be well-publicized beyond the Auditor-Controller’s office so that everyday citizens know how to report, as well as those being served. This appears to exist as a “grievance” process, but it needs to be crystal clear, and complaints need to be responded to swiftly and correctly. Otherwise, there will absolutely be more corruption in Los Angeles County with this much money involved.

Most importantly, if Alvarez & Marsal are truly unable to determine where previous spending went, further investigations, including ethics and possibly criminal, need to be launched for complete accountability. It’s all fine and dandy to move forward together, but no one should be wrongfully walking off with public money. Los Angeles still has to submit a proposal to the LA Alliance on how it plans to create enough bedspace to meet demand for shelters, much less permanent housing. The next hearing to address this is scheduled for October 8 at 9:00 am, with a full hearing including Mayor Karen Bass to follow on October 16 at the same time.

The post-trial injunctive relief hearings in Powers v. McDonough regarding the West LA VA/Soldier’s Home resume today, Friday, October 4, and are ongoing as of publication.

Speaking on Wednesday, Judge Carter openly chastised the mindset that nothing can be done to address this crisis. Officials from the former administration of Eric Garcetti should be subpoenaed if needed so that A&M can complete their expanding audit. The County is now under scrutiny too. Most significantly, this includes Mark Ridley-Thomas, who figured prominently in this policy debate. Journalist Meghann Cuniff, writing in the Los Angeles Public Press, quixotically described how Ridley-Thomas remains free pending appeal despite having been convicted of bribery and fraud. Per his spokesperson, Ridley-Thomas, who has a 3.5 year federal prison sentence, “has maintained his priority policy focus on the homelessness crisis in Los Angeles.” Ridley-Thomas now argues that instead of committing a crime, he was simply receiving "gratuity” from the University of Southern California (USC), which took over the task of LAHSA’s Greater LA homeless PIT count in 2017. Judge Carter suggested that if the numbers need to be “spot checked,” volunteers from both USC and UCLA should be summoned.

On this most important issue, Los Angeles simply can’t afford “business as usual.” Collectively, government, including LAHSA, an independent joint-powers authority, has to do much better.

At the most recent City Homeless Strategy Committee meeting, convened under the City Administrative Officer’s authority, Ruth Roofless again called in as the only person to give public comment. This is undoubtedly the most important City meeting that very few know exists, much less the press regularly attends, but it’s truly significant. Noting their date with the judge with certitude, CAO Matt Szabo, Councilmember Nithya Raman, Deputy Mayor Dr. Etsemaye Agonafer, and John Wickham from the CLA’s office are charting the financial future of Los Angeles. The group meets next on November 7 at 2:00 pm in City Hall East, Room 1500.

The most recent “Report of the CLA” to be presented to the City Council, dated September 27, notes, “The instruction to develop a transparent funding formula for interim housing bed rates includes a more permanent and robust increase to the interim bed rate that is supposed to supplement the 10% interim increase that was approved in January 2024.” We are only left wondering how much it will cost in 2025 to address the human crisis on the streets of Los Angeles and what happens next. One thing is for sure: the unhoused of Los Angeles are not seeing the changes needed to put an end to the “emergency,” declared by the City’s authorities.

Link: Kenneth Mejia Post on X: RE Reserves Spending

Link: Kenneth Mejia Post on Instagram: RE Reserves Spending

Link: LA Alliance for Human Rights

Link: Dreams Don't Die: The Story of a Man on a Mission to Inspire a Generation of Dreamers

Link: Community Shuts Down Proposal for Homeless Resource Center at Sears Building

Link: Alliance Settlement Program, Freeway Agreement - Roadmap, & Inside Safe (2024)

Link: Auditors probing LA’s homelessness spending describe poor accounting and inconsistent care

Link: Under pressure, L.A. agrees to provide 6,000 new beds to clear homeless camps under freeways

Link: UCLA baseball stadium ordered to close until land is used to serve veterans

Link: The secret’s out on the ‘hidden’ Speakeasy under Dodger’s Stadium pavilion

Link: Letter from LA Councilmember Kevin de Leon

Link: Vets are pushing for a ‘Town Center’ on L.A.’s VA campus. But what is it? And will it have a hotel bar?