It turns out that Hollywood accounting isn’t limited to Hollywood. It’s everywhere in Los Angeles.
In a famous case that exposed the techniques publicly, actor James Garner sued Universal for cheating him out of his share of the profits from the hit show, “The Rockford Files.” Although the show had made $120 million in gross revenues from syndication, foreign sales and other deals, Universal insisted that the show was practically losing money. Garner, whose contract entitled him to 37.5% of the net profits, saw a total payout of $249,313.
Here’s how the trick was done. Universal charged the production company wildly high fees for distribution, charged interest on the production costs, charged excessive rental fees for props and costumes from Universal itself, and generally made sure that the expenses, one way or another, ran neck-and-neck with the revenue.
The case was settled for an undisclosed amount in 1989.
U.S. District Judge David Carter is trying to find out what happened to the money Los Angeles has spent on homelessness, and he might find more answers in the case of “The Rockford Files” than he got out of L.A. officials at his latest hearing over the city’s inadequate actions to end street encampments. “I ran because I knew the system was broken and I wanted to come here and make a difference,” Mayor Karen Bass told the court. “I think we work hard and have a lot more to do, but it needs to be focused on the people and what their needs are.”
This is like a local version of the Ukraine war. Billions of dollars have been spent, the needs appear to be infinite, and the easiest course of action for politicians is to support infinite spending as the only way to prevent mass death.
Despite L.A.’s massive spending on homelessness, “the problem has gotten worse,” said a lawyer for the L.A. Alliance for Human Rights, the group that filed the federal lawsuit in 2020 that Carter is still overseeing.
The lawsuit was settled in 2022 but the L.A. Alliance went back to court with a complaint that the city was not living up to the terms. As he’s done before, Carter summoned top city and county officials to a hearing to rip into them, this time over the findings of a court-ordered independent assessment of L.A.’s homelessness spending and programs. The auditors found a lack of accurate documentation of contracts, incomplete records and an absence of performance monitoring by the city and by the Los Angeles Homeless Services Authority (LAHSA), which is a city-county entity formed in the 1990s to oversee homelessness spending.
“It’s dawning on me that the providers now are keeping these documents in-house and nobody is asking the providers what they did or what services they performed,” Carter said. “So, because we’re not asking that, we may have providers who are committing fraud. We’ll never know.”
There are a few things we do know.
We know that when the government hands out billions of dollars to non-governmental organizations with instructions to spend it as they see fit, they see it fits very well into salaries and contracts that benefit people other than the homeless. For example, LAist reporter Nick Gerda uncovered the signature of Va Lecia Adams Kellum, the highly paid top executive of LAHSA, on a $2.1 million contract with a homeless services provider that employs her husband, a violation of conflict-of-interest rules.
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DEI at universities will continue despite feigned compliance with Trump policies In California’s Capitol, some political fights span decades Debra J. Saunders: DOGE or runaway debt? Matt Fleming: Norwalk pushes back on state homelessness policies Trump is setting precedents future Democrats will also abuse. Why doesn’t he care? We know that the sales tax in L.A. County went up on Tuesday to fund more homelessness services, and people in Palmdale and Lancaster are now paying 11.25%.We know that the L.A. real estate market has been hurt by a “mansion tax” to pay for more homelessness services, a tax that confiscates 4% of the sale price of commercial and residential properties between $5 million and $10 million in value and 5.5% above $10 million.
We know that these tax increases were put on the ballot by “citizens’ initiatives” sponsored by the groups that get the money. And we know that California courts have enabled this racket by asserting that initiative tax increases are exempt from the state constitution’s requirement for a two-thirds vote.
What a Hollywood ending. The people living outside have become a cash machine for insiders.
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