The great conceit of progressive governance is that it is, above all, managed. The bureaucratic state, its defenders insist, is not merely a redistribution mechanism — it is a system of interlocking safeguards, audits, oversight bodies, and accountability frameworks standing perpetual watch over the public trust. California has built this apparatus larger than perhaps any other state in the union. It has also, apparently, defunded the people responsible for running it.
On Tuesday, O’Keefe Media Group released undercover video of Bismarck Obando — the Acting Deputy Controller of Public Affairs and press secretary for California State Controller Malia Cohen — speaking with candid resignation about the condition of the office theoretically responsible for safeguarding the state’s finances.
Obando told an undercover journalist that the Controller’s Office “just can’t conduct the audits.” Asked directly whether fraud was present in California, he did not hedge. He replied: “Everywhere, cities, counties, special districts, hospitals, insurance companies.” He acknowledged that auditing teams have been cut and that the audits are “just not getting done.”
This is not a mid-level bureaucrat speculating about things outside his purview. The Controller is the chief fiscal officer of California, responsible for accountability and disbursement of the state’s financial resources, and the office independently audits government agencies that spend state funds. Auditing is not peripheral to the Controller’s mission — it is the mission. And the man who speaks for the office says it cannot be accomplished because the legislature has cut the staff required to accomplish it.
California’s ruling class has long presented its homelessness spending as evidence of its moral seriousness. Billions of dollars flow annually through a constellation of nonprofits, authorities, and service providers — all of it predicated on the implicit promise that someone, somewhere, is checking the receipts. Obando told the OMG journalist that there is “no statewide plan” on homelessness, and that counties and cities are requesting $1 billion this year for homeless spending alone. A billion dollars requested. No statewide plan. No functioning audit apparatus. The math of this arrangement points in one direction only.
O’Keefe’s team visited two South Los Angeles nonprofits that had received substantial public contracts — Abundant Blessings and Urban Alchemy — and found at both locations something remarkable for organizations collectively receiving tens of millions of dollars: essentially no homeless people being served.
The case of Abundant Blessings is now in federal court. Between 2018 and 2025, Alexander Soofer received more than $23 million in homeless housing funding. Prosecutors allege he used those funds to support a lavish lifestyle that included a vacation property in Greece and shopping sprees at Chanel and Hermès. Soofer’s arrest in January marks the third case brought by a federal task force investigating fraud in California’s homelessness spending, with more than two dozen investigations still ongoing. Meanwhile, residents at Soofer-run sites were sometimes fed only ramen noodles, canned beans, and breakfast bars heated in a microwave — while he allegedly stayed at the Maui resort made famous by HBO’s The White Lotus.
Urban Alchemy presents a somewhat different profile — not yet the subject of criminal charges — but one that raises serious questions about how California’s contracting apparatus actually functions. At its founding in 2018, Urban Alchemy’s annual revenue was a mere $35,000, gleaned mainly from contracts to operate public toilets. Within a few years, it had grown into a multimillion-dollar operation spanning several cities, built almost entirely on government contracts. San Francisco alone has paid the nonprofit more than $69 million since 2020. LAHSA has paid Urban Alchemy more than $12 million to operate the Lincoln Safe Sleep Village since 2021. A federal judge reviewing one of its Los Angeles sites described what he found there as “obvious fraud.” While Los Angeles paid Urban Alchemy $2.3 million to operate 88 tents at one site, an inspector found half the tents were missing.
Across the fraud task force’s growing case load, the pattern is consistent: public money earmarked for California’s most vulnerable residents, dispersed to contractors operating with minimal oversight, disappearing into private luxury while the homeless remain on the streets. A 2024 state audit found that over $24 billion was spent on homelessness programs across California without any tracking of effectiveness or outcomes.
This is the thing that Bismarck Obando’s candid remarks make clear — not that fraud exists in California government, which was already obvious — but that the machinery intended to check it has been deliberately starved. The legislature funds the programs. It does not fund the auditors. The resulting arrangement is not oversight theater; it is something more troubling than theater, because it lacks even the pretense of accountability. Money flows outward, unexamined, into a network of vendors and service providers who have learned, quite rationally, that the examining will never come.
Scripture has always understood this temptation. “A faithful man shall abound with blessings,” Proverbs tells us, “but he that maketh haste to be rich shall not be innocent.” Alexander Soofer named his organization Abundant Blessings. He was arrested at a $7 million home in Westwood. The homeless he was contracted to serve were eating ramen.
California’s response to the homelessness crisis has functioned, in practice, as a transfer mechanism — not from taxpayers to the homeless, but from taxpayers to the administrators of homelessness. The suffering continues not despite the spending, but alongside it, because the spending was never seriously designed to end it. It was designed to fund an industry. And as Obando noted with weary matter-of-factness, nobody at the state level is particularly interested in auditing that industry’s books.
What California has built is not a safety net. It is a system with no floor and no ceiling — no floor beneath those who fall, and no ceiling on what can be extracted by those who administer the falling. The auditors are gone. The money keeps moving. And somewhere in South Los Angeles, a shelter sits empty while its executive director allegedly wired $475,000 to a Greek property developer.
“Yea, they are greedy dogs which can never have enough,” Isaiah wrote, “and they are shepherds that cannot understand: they all look to their own way, every one for his gain, from his quarter.” The prophet was addressing a different situation in a different century. But Sacramento is a very old story.
