(Credit: Allen J. Schaben / Los Angeles Times via Getty Images)

The Trump administration has suspended federal funding to the scandal-plagued Los Angeles Homeless Services Authority (LAHSA), the Democrat-run agency tasked with managing homelessness services across Los Angeles.

The Department of Housing and Urban Development (HUD), under Secretary Scott Turner, took immediate action following an investigation by the HUD Office of Inspector General.

The agency stands accused of obvious fraud, wanton mismanagement, repeated false statements, and a complete breakdown in financial controls and safeguards against conflicts of interest.

The powerful homelessness bureaucracy has received nearly $1 billion in taxpayer funding from the HUD since 2021, while Los Angeles remained the epicenter of America’s drug-fueled homelessness crisis.

According to HUD, officials concluded that the agency “lacked sufficient financial controls and safeguards” to protect taxpayer dollars. The agency further stated that the Trump administration will no longer continue sending tens of millions of dollars to an organization facing mounting allegations of waste, mismanagement, and potential fraud.

A 2022 HUD Inspector General audit found that LAHSA failed to fully comply with federal program requirements, allowed millions of dollars in grants to expire unused, lacked supporting documentation for expenditures, and failed to submit required reports on time.

HUD’s findings paint a devastating picture of systemic rot:

LAHSA could not even determine whether it used funding to pay for empty hotel rooms.

It failed to provide documentation verifying the existence of nearly 2,300 housing sites.

The agency’s former CEO resigned after violating federal conflict-of-interest rules by directing more than $2 million in federal funds to her husband’s employer.

LAHSA made false certifications and didn’t even have a written conflict-of-interest policy until September 2025.

It misused government money by paying for services under another funder’s contract before receiving the grant funds to cover the cost.

In fiscal year 2024 alone, LAHSA failed to spend $513 million in budgeted public funds due to poor staffing and outdated technology.

Meanwhile, the results speak for themselves. Since HUD mandated the failed “Housing First” policy in 2013:

Homelessness in Los Angeles increased 100%

Free housing placements increased 212%

Funding per homeless person increased 39%

“Under President Trump’s leadership, HUD will fund results, not corrupt failure or the homeless industrial complex,” said Secretary Scott Turner. “Year after year, hundreds of millions of taxpayer dollars were funneled to LAHSA with little accountability. Meanwhile, homelessness skyrocketed. Taxpayers will no longer bankroll an organization that puts its own self-interests ahead of the Americans it was created to serve.”

“For years, American taxpayers have been sending billions of dollars to Los Angeles to house the homeless and other vulnerable Americans. The result? Fraud and corruption. That ends today. None of this would be possible without the leadership of Secretary Turner,” said Scott Brady, White House Task Force Executive Director.

In April 2026, The Gateway Pundit reported on explosive undercover footage from the O’Keefe Media Group in which a Los Angeles Housing Department finance officer admitted that $10 to $20 million were disappearing into people’s pockets, with homeless developers embezzling money and LAHSA showing “not a whole lot to show for it” despite being allocated “a ton of money.”

Local Democrats, including Mayor Karen Bass, have long claimed “zero tolerance” for mismanagement while defending the status quo and complaining about any attempt to cut off the gravy train.

Now that the Trump administration is actually holding them accountable, the predictable outrage has begun.

Read the full letter here.

Jim Hᴏft Jim Hᴏft is the founder and editor of The Gateway Pundit, one of the top conservative news outlets in America. Jim was awarded the Reed Irvine Accuracy in Media Award in 2013 and is the proud recipient of the Breitbart Award for Excellence in Online Journalism from the Americans for Prosperity Foundation in May 2016.

You can email Jim Hᴏft here, and read more of Jim Hᴏft's articles here.

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