March 20, 2025 • 33 mins
The John Kobylt Show Hour 1 (03/20) - Michael Monks comes on the show to talk about LA's budget shortfall of almost $1 billion dollars. More on LA's budget shortfall. A gang leader from the Rollin 60s Crip gang received millions of dollars from the City of LA for his "gang intervention" programs.
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Speaker 1 (00:00):
Can'f I am six forty.
Speaker 2 (00:02):
You're listening to the John Cobel podcast on the iHeartRadio app.
Speaker 1 (00:06):
Welcome to the show.
Speaker 2 (00:07):
Every day, we're here from one until four o'clock, and
then after four o'clock John Cobelt Show on demand. You
demanded we give it to you after four. It's the podcast,
same as the radio show, and we want to welcome
you warmly to bankrupt Los Angeles.
Speaker 1 (00:21):
It is official.
Speaker 2 (00:23):
LA is blown through the budget so badly that it
looks like there's going to be a lot of layoffs.
I mean, this is really not any different than what
Elon Musk is doing in Washington, d C. I wonder
if we're gonna hear just as much criticism for these
layoffs because the budget, the budget deficit is close to
a billion dollars. And Michael Monks, who never tires of
(00:47):
covering Los Angeles government, bless you.
Speaker 1 (00:50):
I'm glad to be here.
Speaker 3 (00:51):
To talking John. I've been talking about this for months.
I mean, going back to last fall. I had a
conversation with the LA City Controller looking at the numbers
that he had posted, and I said, this doesn't look good.
But I wasn't feeling a sense of urgency from city
Hall about how they were going to deal with this thing,
and all it has done since then is balloon to
the point where they had a pretty terrifying meeting at
(01:12):
city Hall, at the city council meeting yesterday with the
city administrator, who delivered some pretty horrifying news.
Speaker 2 (01:17):
So the city controller was public that the ship was
going down, and everybody kept dancing.
Speaker 1 (01:23):
That's exactly right.
Speaker 3 (01:24):
I mean, he was saying, look, these are the areas
where we're overspending, particularly in their legal settlements.
Speaker 1 (01:29):
We've talked about this before.
Speaker 3 (01:30):
I mean, they are paying out the wazoo legal settlements.
Just this week they approved another eight million dollars in
legal payouts. This particular case involved the shooting death at
the hands of an LAPD officer, So those are always
very expensive settlements. But at the budget committee meeting after
that council meeting, they had twenty eight more lawsuits to
(01:53):
go through.
Speaker 1 (01:54):
That's just this week. The bulk of these.
Speaker 3 (01:57):
Lawsuits, what are they everything. The tyranny that I have
found in these lawsuits is they're often related to infrastructure.
Sometimes they're simple, I tripped on your bad sidewalk. Pay
me two hundred and fifty thousand dollars, or maybe a
poll fell on me and the injury was quite severe,
pay me more. And so when they pay out these lawsuits,
(02:20):
they find that they have less money to invest in
the infrastructure to prevent these injuries from happening in the
first place. They are hundreds of millions of dollars over
budget just in legal payouts alone. But that's not the
only problem. Sales tax down, property tax down, business tax down,
tourist tax all down. And then of course the fires came,
(02:41):
and now they are looking at a billion dollar budget
shortfall just as the new budget is set to be crafted.
Speaker 1 (02:48):
And this is before the fire lawsuits come through. This
is only going to get worse.
Speaker 3 (02:52):
Do you want to hear how city ministry man's able
to put it in perspective?
Speaker 1 (02:56):
Yes, let's hear it if Eric has that sound.
Speaker 4 (03:01):
The severity of the revenue decline paired with rising costs,
has created a budget gap that makes layoffs nearly inevitable.
We are not looking at dozens or even hundreds of layoffs, but.
Speaker 3 (03:17):
Thousands, thousands of layoffs, thousands of layoffs. And think about
where that's going to come from, because right now, politically
impossible to lay off firefighters. Right, you can't do that.
You've already got that problem going on. The police can't
do the police. And those are the two most expensive departments.
So again, let's think about the infrastructure, your sidewalks, your
broken potholes, your overcrowded animal shelters, the people that you
(03:39):
need to call at the various city offices to get
permits or any of that stuff done. Those are the
departments that tend to be most vulnerable when the budget
hits the fan, which is going to.
Speaker 1 (03:49):
Create more hazards, more lawsuits, and a wider deficit.
Speaker 3 (03:54):
And so what I will be looking for, as you're
intrepid reporter at city Hall, yes, is will they finally
have a sense of urgency? Will I hear passion in
the voices of the council members on how they're going
to fix this? I'll tell you this much Mayor Bass
has she The way the budget works, the mayor releases
a budget first, and then the city council sort of
goes through it. The departments come in, they make their
(04:15):
case on what they need, the public gets the weigh in,
and it's usually about an eight billion dollar thing. They
move some things around and Ultimately they vote and approve it.
The mayor signs that, Well, the mayor has come out
with like, don't worry, We've got a plan that we're
gonna deal with this. And I'll show you. I'm holding
in my hand so you can see. I know our
listeners can't see it. But it's basically like the first
page of a PowerPoint presentation. This isn't a plan. I mean,
(04:37):
these are stating the obvious. We want to reduce our
liability costs. Those are those legal settlements, and that's all
it says about it. No, no one needs to reduce
the We got to lower that down because that's too much.
Speaker 2 (04:48):
We got to spend a ton of money repairing all
the infrastructure that's causing people to a trip and fall,
and it's falling on their edge exactly.
Speaker 3 (04:55):
And I'll point out an interestingly worded piece of this
image that she put out on social media. Realize payroll
and benefit savings. That sounds like layoffs. That's layoffs.
Speaker 1 (05:06):
That sounds like layoffs, but either on the payroll or
off the payroll.
Speaker 3 (05:09):
There are many unionized employees who are set to get
pay raises very soon.
Speaker 1 (05:14):
There are union contracts that are in effect.
Speaker 3 (05:17):
They may have to delay pay raises for these employees,
they may have to renegotiate these union contracts to bring
those costs down.
Speaker 1 (05:23):
There's going to be a lot of this.
Speaker 2 (05:23):
This has been a very badly managed city for twenty years,
going back to Viragosa days. He dug a hole for
them back in the late two thousands with a whacko
set of union contracts that had pay raises, and it's
been downhill ever since.
Speaker 3 (05:37):
In this time last year, I was sitting through all
these budget meetings and when we think about layoffs, let
me tell you how difficult this is going to be.
There were proposals this time last year as the budget
was being crafted where the city administrator came out and said,
let's get rid of positions that are not filled. These
are positions that have just been on the payroll. They're
funded because the position could be filled, but some of
(05:58):
these positions had remained empty for years, and he was like,
let's get rid of these, let's put that money in
the general fund and we'll stave off some of the
problems that that we might have.
Speaker 1 (06:06):
This was before the situation.
Speaker 3 (06:07):
Looked as dire as it does now, and there was
a lot of pushback over that. I mean, there was
fighting over retaining some of these positions that were empty.
So think about the debate that's ahead of us about
getting rid of people that exist.
Speaker 2 (06:18):
So we were paying, at least on paper, it was
in the budget for positions that were never filled. Yeah,
and what happened to that money. That money was supposed
to go in the general fund?
Speaker 1 (06:29):
Yeah, and it never did.
Speaker 3 (06:30):
It did, And now that money's money's gone.
Speaker 1 (06:34):
And then what is worse is.
Speaker 3 (06:36):
Because another another piece of Marabas's plan to deal with
is I'm sure she'll give us more details very soon.
She's supposed to release her budget in April. She wants
she here now, Yeah, she's not in Africa currently, Okay,
she is in the city.
Speaker 1 (06:48):
She says.
Speaker 3 (06:49):
Preserve our reserve fund. Now, this is what you might
have some savings in case you lost your job or something.
I need to have a certain amount of months. Sure
I can pay for stuff while I'm looking at it.
Fall at this place, there's nothing on my desk. Everybody
here has big savings accounts. What a business, right, Yeah? Yes,
but their reserve fun They like to keep it at
(07:10):
least five percent of the total budget. So about four
hundred million dollars. It's less than two and a half percent,
so less than half their goal. One of the things
they want to do before the new budget is created,
they want to fill that back up because it's raining,
the rainy days.
Speaker 2 (07:25):
You know, my love about math. It's unforgivable completely, And
when stupid people fall into a big math hole, they
don't know what to do because you can't bs, you
can't put out a pressure release, you can't do a
lie and a dance and all the other tricks that
they have. Math is math, and they can't print money. See,
the federal government is printed thirty six trillion dollars. That's
why they can run up that huge debt. LA City
(07:48):
can't do that.
Speaker 3 (07:49):
And LA doesn't expect as much federal money this year.
They ought a weird relationship right with the Church administration,
so they don't expect that. They've got to deal with
these fires and they already have their own.
Speaker 2 (07:58):
So I gotta do something about you know, a billion
four they spend on homeless.
Speaker 1 (08:04):
They can't keep doing that without the results.
Speaker 3 (08:07):
I mean, at some point there's gonna be I mean,
the voters of La County said, yeah, we'll give you
more this time around. We'd like to see some results.
They're promising results this time, but we'll have to see it.
Speaker 1 (08:16):
All those audits indicated nothing has changed. That's right.
Speaker 3 (08:21):
And this is a city that has known about this
being on the horizon for a long time. If you
had known six months ago that you were gonna have
less money coming in and your expenses were creeping up,
you and your wife would have sat down and talked
about it. I think households across the county have probably
done that. Now, Like, let's think about what we can get.
What streaming service can I get rid of? Can I
get a second job?
Speaker 2 (08:40):
But I don't understand. Do they live in some magic fairyland.
What do they do all day? Where do they talk
about all day? I mean when you had I mean,
when you have this kind of deficit looming, it should
be the only thing they're talking about and planning for
and gradually making the cuts leading up.
Speaker 1 (08:57):
To the big moment. This is what I expressed.
Speaker 3 (09:00):
You know, I try not that editorialized, but it has
shocked me since last fall, that lack of urgency, the
fact that they don't stop everything and say, oh, there
is a bad financial situation, because not only is this
just bad in general for any city government, but we're
talking about Los Angeles, one of the most important cities
in the entire world, that is going to be hosting
the Olympics in a few years, It's going to go
Super Bowls, All Star Games, the World Cup, and the
(09:22):
city already looks like hell yeah, and when are they
going to be able to address basic needs that residents
have when they can't pay their own bills? All right,
Michael Monks, excellent, Thank you, always a pleasure. We will
talk more about this when we come back. And this
is this is this is huge. A billion dollars for
(09:46):
an LA city budget is gigantic, and they're going to
have to do the big doge.
Speaker 5 (09:51):
I think you're listening to John Cobalt on demand from
KFI AM six forty.
Speaker 2 (09:58):
John Cobalt. I understand that the moist line has some vacancies,
and today is what is today, Thursday? Ah, we're only
twenty four hours away eight seven seven moist eighty six.
So if you've got something welling up inside you and
it needs to burst, I don't know if that sounded great.
Eight seven seven moist eighty six, eight seven seven, Moist
(10:20):
eighty six, or use the talkback feature on the iHeartRadio app. Well,
I hope you heard Michael Munk's report that we started
the show with. The LA City Council has got a
huge problem. And it's not the fire it's they're almost
a billion dollars in deficit for this fiscal year. Los
(10:41):
Angeles has overspent by about a billion dollars and it's
only a twelve billion dollar budget overall. So this is
a big cut and much of the spending is fixed.
Speaker 1 (10:54):
They can't do.
Speaker 2 (10:55):
Anything about the fire department is already only fifty percent funded.
You can't touch the police department and that's way understaffed.
They have a lot of union contracts that they're locked into.
They're going to have to cut a tremendous amount of jobs.
(11:15):
And this is I'm gonna I'm gonna enjoy this. All
the squealing about how terrible Elon Musk is and dozing
a lot of jobs out of existence, they're gonna have
to do the same thing. Because it's math. You know,
the federal government has a thirty six trillion dollar debt
and the only way to slow the rate of increase
(11:40):
is to cut jobs. Cut departments, stop spending money, stop
giving out grants. There's nothing else you can do. At
least we can print money, but that only goes so
far before you end up with a huge economic crisis
crash and it'll come out of nowhere. But this, this
is stupidity. I told you I have to do and
(12:04):
I told you so.
Speaker 1 (12:05):
Dance here.
Speaker 2 (12:06):
I told you Karen Bass is not up to the
job of being there because she had no executive experience,
including that executive experience in running anything in the city. Like,
she never had a budget she had to keep track of.
(12:27):
She was a legislator. Yeah, she had a few people
in her office whenever she was I forget. She's in
a state senate, the Assembly. She was a congresswoman. You know,
you got a small budget. You got a few people
in your office. Their salaries are pretty much set.
Speaker 1 (12:45):
You don't have to think too hard.
Speaker 2 (12:49):
Maybe you have to worry about how much you're going
to spend on the office Christmas party.
Speaker 1 (12:52):
That's it.
Speaker 2 (12:53):
Now she's inherited a city with thousands of employees, dozens
and dozens of departments, billions of dollars, and she, I
guess can't do math. The other day I saw that
(13:13):
sixty to seventy percent of California kids are not proficient
at math. You get up to eighth grade, right, it's
it's let's say sixty five percent kids are not proficient
at math. Well, five years later those kids are out
in the world, maybe they're going to community college for
a little remedial math. Eventually they're out in the workforce
(13:39):
and they still can't do math. You've heard of the
word illiterate. Illiterate means you can't read.
Speaker 1 (13:45):
Right.
Speaker 2 (13:46):
Well, there's another word you don't hear very often. It's
called enumerate. If you're enumerate, it means you can't do math.
You can't add some track, multiply, divide, just the basics. Okay,
we're not asking you to do high level calc. We're
not asking you do to the math required to send
a rocket to Mars. Elon Musk can do that because
(14:07):
he's really really smart. Karen Bass is really really not smart.
And I don't think it's so hard to read a budget,
to read a spreadsheet to see what your income is
and what your outgo is. But it was too much
for her. She's not good at this. Clearly, there was
(14:29):
no fire preparation. She had the bad judgment to leave
the country. She had cut the fire department quite a bit.
She has blown billions of dollars on homelessness to no
good outcome. I mean, there's only so many stupid things
you can do. And Eric Garcetti is responsible for a
lot of this. Eric Carsetti was a Karen Bass disaster
(14:53):
for nine and a half years. Karen Bass has been
a Karen Bass disaster for only two. So these are
bad people who make bad decisions, and they can't do math,
and they've got all kinds of excuses and nonsense. But
it really comes down to basic computing power in your brain.
(15:15):
How much brain power do you have? And she doesn't
have it, and neither does anybody on the city council.
Well there's a couple, but I'd say thirteen out of
the fifteen members of the city council don't have it.
And as Michael Monks pointed out, they knew about this
months ago. They knew about this, let's say six months
(15:36):
ago it was coming. They didn't do anything. They don't care.
They don't care. They wake up in the morning, their
brain is clouded with all their progressive political obsessions and
the nuts and bolts of governing is it's not why
(15:57):
they got in the business. They out of the business
is to do social justice. Nonsense. These are the people
who graduated from school without the capability of doing basic math. Now,
you can't have thirteen people on the council and the
mayor and all the administrators without the basic capability to
(16:20):
add and subtract. If you do, you end up with
this mess. And you know I already talked about root causes.
That's the root cause. The root cause is nothing more
than the inability to do the basic math that if
you're a good parent, you expect your child to master,
certainly by time they graduate high school. That's what you
(16:42):
expect of Well, Karen bask can't do that. She's had
over seven hundred days now, seven hundred and fifty days
to wake up in the morning, look at a budget
and do the addition and subtraction, and she can't. Will
We'll talk more about the specifics here. I want to
(17:02):
touch on some of the stuff Michael talked about, the
insane number of lawsuits and the death spiral. This is
a death spiral. You'll see.
Speaker 1 (17:12):
The biggest mistake.
Speaker 2 (17:14):
Let's put it to you this a way if Fort
Caruso is mayor do you think this would be a
story today?
Speaker 1 (17:22):
Talk more, we come back.
Speaker 5 (17:24):
You're listening to John Cobel's on demand from KFI AM sixty.
Speaker 2 (17:30):
So Los Angeles city is broke. They have about a
billion dollar deficit for this year, which is big, and.
Speaker 1 (17:42):
They don't know what to do.
Speaker 2 (17:44):
The Karen Bass made a stupid one of many stupid
mistakes a few years ago. She gave out huge raises
which are coming due.
Speaker 1 (17:54):
Uh, and.
Speaker 2 (17:57):
They they're stuck in a hole here. They blow a
billion three on homelessness and gee, look at that. The
deficits about a billion dollars just with homelessness alone. If
they weren't giving away a billion three to crooked nonprofits
(18:18):
that steal the money and don't produce any results, just
that alone would solve the problem. But according to the
La Times, council members cannot unilaterally put a stop to
raises that are already part of an approved contract. See,
(18:39):
they thought when they gave away the store, they would
have labor peace as they call it, until twenty twenty six.
And that's when Karen Bass assumed she was going to
get reelected. And also six of the six or seven
of the council members. So they thought, Okay, we'll pay
(19:00):
off the unions to shut up and be quiet, and
then we'll all get re elected and deal with the
problems down the road. Legal settlements. The city doesn't take
anything to court. They don't challenge any lawsuits. They just
pay whatever the plaintiff wants. Yeah, sure, we'll write a check.
(19:21):
And now they're broke. You know, the police stuff they're
terrified of. You know, if cop goes crazy and beats
up some guy, that guy is gonna make so much
money it makes you want to volunteer to get beat
up by a police officer. It's like, yeah, give me
a beating. I'd like to walk away with many millions
of dollars.
Speaker 1 (19:44):
The uh.
Speaker 2 (19:46):
There's also all these people apparently are tripping over sidewalks,
or they claim they're tripping over sidewalks, and there's broken,
busted sidewalks everywhere. There's uprooted trees, you know, the roots
are coming out of the ground. Sidewalks get pushed out
a whack. People are always tripping on that, and it
(20:08):
adds up to hundreds and hundreds of millions of dollars.
They can't pay why is it in LA and other
cities don't have this problem because LA's infrastructure is broken.
They don't want to spend the money on it. They
give it away to unions. Well, if you don't spend
money on the infrastructure, then people are going to get
hurt because of the collapsed infrastructure, and it costs you
(20:31):
more money. Now, an intelligent person would figure that out.
Karen Bass doesn't have the firepower there. I'll tell you
how stupid things have gotten. You're not going to believe this.
But in the fiscal year that ended in June of
twenty twenty four, the City of Los Angeles lost money
(20:51):
on parking tickets. They lost money handing out parking tickets.
Now they the city gives out two million parking tickets
a year, two million tickets, and they lost money. They
lost a lot of money. The city collected one hundred
and ten million dollars in parking fines, but the costs
(21:15):
for salaries, equipment, processing, pensions, and other liabilities it cost
them one hundred and seventy six million dollars. They pay
so much, They pay so much money to parking enforcement agents,
that wonder those people have such a bad smug snotty attitude.
(21:35):
I've never the people have come across to have the
worst attitudes are these parking enforcement agents.
Speaker 1 (21:44):
And now I understand why.
Speaker 2 (21:46):
I don't know what the hell they're making, but it's
one hundred and seventy six million dollars in costs and
only one hundred and ten million dollars in revenue they're
getting in parking fines. Used to be a profit center
for the city, but not since twenty sixteen. And if
(22:08):
you can't make money handing out parking tickets and you're
handing out two million of them, that is gross and competence.
Who's in charge of that? What blockhead? What brainstem? What vegetable?
Is running a parking ticket department? And actually lost lost
(22:30):
sixty five million dollars. How do you lose sixty five
million dollars writing tickets? That's not that's not possible, But
they did. I mean that that's helpless.
Speaker 1 (22:47):
Here.
Speaker 2 (22:48):
I thought the reason they hand out somebody stupid tickets
is because it makes a lot of money. Actually, the
more tickets they hand out, the more they lose. If
they fired all the parking enforcement agents, they'd make more money.
(23:08):
That would be one hundred and seventy six million off
the books. Wow, they'd be sixty five million dollars ahead
on the budget if they just fired all the parking
enforcement agents. I don't know what kind of golden contracts
these people got. How could that be? I mean sometimes
(23:29):
things boil down they're just flat out stupidity. So they
don't have much of a reserve. And the city controller,
Kenneth Maheas said, all this is not caused by an
outside crisis, but decisions made at city hall. We didn't
(23:50):
have a COVID crisis or a global recession. This is
something from happened that happened from the inside. Now Zabo claims, well,
what's his name? Uh, what's his first name? Mad Zabo?
He's been a political hack for Bass city administrative officer.
He's trying to blame tariffs. There's no tariffs. No tariffs
(24:18):
have happened yet, what's he talking about. He's such they
blame Trump. You believe this. They lose sixty five they
lose sixty five million dollars on parking tickets and they
actually blamed Trump.
Speaker 1 (24:29):
Oh. The plan to crack down and immigration.
Speaker 2 (24:33):
Right, getting rid of the legal aliens who are a
huge cost to government that's creating a bunch of deficit.
Speaker 1 (24:41):
What a bunch of stupid liars.
Speaker 2 (24:48):
All right, when we come back, I want to play it.
Eric Leonard from NBC four former star KFI reporter, Uh,
he has another aspect of this. You may have heard
this story about a guy in the rap music business
(25:09):
who was a gang leader. His name is Eugene Henley Junr,
also known as Big U. Well, the Big U was
shaking millions of dollars out of LA. Apparently he had
a set of corrupt nonprofits and the city was handing
money to Big U. Handover fist. Listen to this report
from Channel four's Eric Leonard when we come back.
Speaker 5 (25:33):
You're listening to John Cobels on demand from KFI Am
six forty.
Speaker 2 (25:39):
John Cobelt's show Moistline is eight seven seven Moist eighty
six eight seven seven Moist eighty six. You used the
talk back feature on the iHeart app. We have vacancies.
We didn't do it for a couple of weeks and
we have vacancies now. We have been covering for much
of the hour. This massive budget is in La. The
(26:02):
dunches that are on the city council and Chief Karen
bass have a billion dollar deficit, which is huge for
a city of LA's size. It's not the federal government
and it's a city, and they can't print their own money,
which is how the federal government can rack up thirty
six trillion dollars. Apparently, they lose money on parking tickets,
(26:26):
and they give a huge amounts of money to the
homeless industry. Much of that is stolen. They don't give
money to the fire department, it's only half funded. One
of the other places they give is they give to
rap industry players who were formerly gang members. I'm talking
(26:51):
about Eugene Henley Junior, known as Big U. They've heard
this news story. He used to lead the gang Rolling Six,
and then he reinvented himself as a gang interventionist, among
other things. Turns out, according to the prosecutors, he was
shaken down the city with his fake nonprofits for millions.
Speaker 1 (27:14):
Eric Leonard from NBC four has the story.
Speaker 6 (27:17):
The most surprising discovery that we've had so far is
that this nonprofit called the Ex Offender ex Offender Fellowship,
which was also doing business under another nonprofit's name called
Developing Options, that the city says were essentially one in
the same and they say the state has told us
that those entities have faced suspensions by the state tax authority,
(27:40):
the Franchise Tax Board. Meanwhile, the City of LA has
been paying millions of dollars into these organizations, and the
amounts have increased in.
Speaker 1 (27:48):
The last few years.
Speaker 6 (27:50):
The California Franchise Tax Board issued a suspension notice in
April twenty twenty four for one of the nonprofits operated
by Eugene Henley Junior, who federal secutors in LA announced
wednesday faces racketeering and corruption charges for allegedly misusing money
meant for the city's gang intervention efforts. Henley's most recent
(28:10):
contract with the city shows a payment of nearly eight
hundred thousand dollars due in July twenty twenty four, the
final installment of a four year agreement that paid his
groups more than two point two million dollars for intervention. Henley,
seen here in a red carpet photo, began forming the
nonprofits in two thousand and nine. According to state records,
(28:31):
they began receiving city gang intervention funding as far back
as twenty eleven.
Speaker 1 (28:35):
Between twenty eighteen and twenty twenty three.
Speaker 6 (28:38):
LA Controller payment records show Henley's groups received around half
a million dollars a year then in twenty twenty three,
a significant increase that followed then Mayor Eric Garcetti's efforts
to increase funding for intervention work after the rise in
violent street crime that followed the COVID nineteen pandemic. Looking
at the tax records for the Ex Offender Fellowship, which
(29:00):
includes the city money and private donations, you can see
its revenue went from around half a million dollars a
year to nearly eight hundred thousand, then to nearly two
million for twenty twenty three, the last tax return available.
Where was the money going? The tax return show while
Eugene Henley Junior was paid ninety five thousand dollars as
president and director, nearly all the money collected went to
(29:22):
compensate unnamed top staff members, including corporate officers, directors, and trustees.
According to the criminal complaint, Henley diverted much of that
money to his personal bank accounts, and.
Speaker 1 (29:34):
The FED say he allegedly.
Speaker 6 (29:35):
Pocketed tens of thousands of dollars in donations intended for
the groups, including a twenty thousand dollars contribution from an
NBA All Star. As part of this wide ranging criminal complaint,
Henley is also accused by the FEDS of failing to
file accurate tax returns for many years and a scheme
that was designed to boost his apparent income in order
(29:55):
to qualify for a home loan.
Speaker 1 (29:57):
Now, we asked the.
Speaker 6 (29:58):
Mayor's office about it's oversight of the U the programs.
The Mayor's office didn't respond to our specific questions, but
said in a message this afternoon the city has strict
oversight over these programs, but the complaint alleges a sophisticated
effort to thwart the rules. The state's Franchise Tax Board
gave us some general information about what should happen to
(30:18):
a nonprofit that's been suspended from doing business, but said
it could not discuss this specific case.
Speaker 2 (30:23):
Of course, nobody can discuss it the mayor's office. Why
did you call up any random kindergarten. You could probably
get those five year olds to give you a better guidance.
They know that these people are ripping off the city.
They don't care, and I think that's a hard.
Speaker 1 (30:43):
Thing for people to understand. I am sure many people
in office knew that Eugene Henley Big U was ripping
off Garcetti's gang intervention funding programs. They don't care. This
is part of the social justice movement.
Speaker 2 (31:07):
By the way, what they laid out, that's the blueprint
for all the homeless nonprofits too.
Speaker 1 (31:12):
You take a big chunk.
Speaker 2 (31:13):
Of money, several million dollars, you pay yourself, then you
pay all your friends and relatives. You make them board
members and trustees, and you give them titles, and it
looks like you have a busy, corporate style operation going on.
None of the money went to gang in revenge, like,
(31:34):
none of the money goes to get the homeless off
the streets, like, none of the money goes to lay
down high speed rail. These are all criminal rackets that
the people handing out the money in government know is
going on. I mean, they know the homeless people are
still on the street. They know that the gangs are
(31:55):
still doing what gangs do. They know there's no high
speed rail built. They're in charge of handing out the money.
You don't see them complaining, do you. It's always some
outside investigation. It's always a federal investigation or an audit,
or maybe a media expose. You notice the people handing
out the money, never say hey.
Speaker 1 (32:15):
We've been robbed. I mean, if.
Speaker 2 (32:20):
If I was robbed, I'd know and I'd say something
about it. I'd try to do something about it. Report
the crime. The people who are victims of the crime, Well,
the public is the victims of the crime. But the
people who are supposed to be safe keeping our money,
the money is stolen right out from under their noses.
(32:42):
You notice they never complain, like Karen Bass, never says, Wow,
look at all that homeless money that was stolen by
the nonprofits. Wow, look at all the money gang invenged
money stolen by this Eugene Henley Jr. You never see
the high speed rail executives gone, hey, hey.
Speaker 1 (33:02):
Who took the money? We don't have any high speed rail.
Speaker 2 (33:06):
No, all that COVID unemployment money did Did the labor
secretary say, hey, people stole millions?
Speaker 1 (33:14):
What we come back?
Speaker 2 (33:17):
We're going to have Brad Garrett on from ABC News.
Brad is the crime and terrorism analyst. He's been looking
at this huge release of JFK papers on the assassination.
There's some interesting stuff in here about Lee Harvey Oswell
being tracked by the CIA for years before the assassination.
Speaker 1 (33:38):
Tell you about it.
Speaker 2 (33:39):
Debormark live in the KFI twenty four hour Newsroom.
Speaker 5 (33:42):
You're listening to John Cobels on demand from KFI AM
six forty
Can'f I am six forty.
Speaker 2 (00:02):
You're listening to the John Cobel podcast on the iHeartRadio app.
Speaker 1 (00:06):
Welcome to the show.
Speaker 2 (00:07):
Every day, we're here from one until four o'clock, and
then after four o'clock John Cobelt Show on demand. You
demanded we give it to you after four. It's the podcast,
same as the radio show, and we want to welcome
you warmly to bankrupt Los Angeles.
Speaker 1 (00:21):
It is official.
Speaker 2 (00:23):
LA is blown through the budget so badly that it
looks like there's going to be a lot of layoffs.
I mean, this is really not any different than what
Elon Musk is doing in Washington, d C. I wonder
if we're gonna hear just as much criticism for these
layoffs because the budget, the budget deficit is close to
a billion dollars. And Michael Monks, who never tires of
(00:47):
covering Los Angeles government, bless you.
Speaker 1 (00:50):
I'm glad to be here.
Speaker 3 (00:51):
To talking John. I've been talking about this for months.
I mean, going back to last fall. I had a
conversation with the LA City Controller looking at the numbers
that he had posted, and I said, this doesn't look good.
But I wasn't feeling a sense of urgency from city
Hall about how they were going to deal with this thing,
and all it has done since then is balloon to
the point where they had a pretty terrifying meeting at
(01:12):
city Hall, at the city council meeting yesterday with the
city administrator, who delivered some pretty horrifying news.
Speaker 2 (01:17):
So the city controller was public that the ship was
going down, and everybody kept dancing.
Speaker 1 (01:23):
That's exactly right.
Speaker 3 (01:24):
I mean, he was saying, look, these are the areas
where we're overspending, particularly in their legal settlements.
Speaker 1 (01:29):
We've talked about this before.
Speaker 3 (01:30):
I mean, they are paying out the wazoo legal settlements.
Just this week they approved another eight million dollars in
legal payouts. This particular case involved the shooting death at
the hands of an LAPD officer, So those are always
very expensive settlements. But at the budget committee meeting after
that council meeting, they had twenty eight more lawsuits to
(01:53):
go through.
Speaker 1 (01:54):
That's just this week. The bulk of these.
Speaker 3 (01:57):
Lawsuits, what are they everything. The tyranny that I have
found in these lawsuits is they're often related to infrastructure.
Sometimes they're simple, I tripped on your bad sidewalk. Pay
me two hundred and fifty thousand dollars, or maybe a
poll fell on me and the injury was quite severe,
pay me more. And so when they pay out these lawsuits,
(02:20):
they find that they have less money to invest in
the infrastructure to prevent these injuries from happening in the
first place. They are hundreds of millions of dollars over
budget just in legal payouts alone. But that's not the
only problem. Sales tax down, property tax down, business tax down,
tourist tax all down. And then of course the fires came,
(02:41):
and now they are looking at a billion dollar budget
shortfall just as the new budget is set to be crafted.
Speaker 1 (02:48):
And this is before the fire lawsuits come through. This
is only going to get worse.
Speaker 3 (02:52):
Do you want to hear how city ministry man's able
to put it in perspective?
Speaker 1 (02:56):
Yes, let's hear it if Eric has that sound.
Speaker 4 (03:01):
The severity of the revenue decline paired with rising costs,
has created a budget gap that makes layoffs nearly inevitable.
We are not looking at dozens or even hundreds of layoffs, but.
Speaker 3 (03:17):
Thousands, thousands of layoffs, thousands of layoffs. And think about
where that's going to come from, because right now, politically
impossible to lay off firefighters. Right, you can't do that.
You've already got that problem going on. The police can't
do the police. And those are the two most expensive departments.
So again, let's think about the infrastructure, your sidewalks, your
broken potholes, your overcrowded animal shelters, the people that you
(03:39):
need to call at the various city offices to get
permits or any of that stuff done. Those are the
departments that tend to be most vulnerable when the budget
hits the fan, which is going to.
Speaker 1 (03:49):
Create more hazards, more lawsuits, and a wider deficit.
Speaker 3 (03:54):
And so what I will be looking for, as you're
intrepid reporter at city Hall, yes, is will they finally
have a sense of urgency? Will I hear passion in
the voices of the council members on how they're going
to fix this? I'll tell you this much Mayor Bass
has she The way the budget works, the mayor releases
a budget first, and then the city council sort of
goes through it. The departments come in, they make their
(04:15):
case on what they need, the public gets the weigh in,
and it's usually about an eight billion dollar thing. They
move some things around and Ultimately they vote and approve it.
The mayor signs that, Well, the mayor has come out
with like, don't worry, We've got a plan that we're
gonna deal with this. And I'll show you. I'm holding
in my hand so you can see. I know our
listeners can't see it. But it's basically like the first
page of a PowerPoint presentation. This isn't a plan. I mean,
(04:37):
these are stating the obvious. We want to reduce our
liability costs. Those are those legal settlements, and that's all
it says about it. No, no one needs to reduce
the We got to lower that down because that's too much.
Speaker 2 (04:48):
We got to spend a ton of money repairing all
the infrastructure that's causing people to a trip and fall,
and it's falling on their edge exactly.
Speaker 3 (04:55):
And I'll point out an interestingly worded piece of this
image that she put out on social media. Realize payroll
and benefit savings. That sounds like layoffs. That's layoffs.
Speaker 1 (05:06):
That sounds like layoffs, but either on the payroll or
off the payroll.
Speaker 3 (05:09):
There are many unionized employees who are set to get
pay raises very soon.
Speaker 1 (05:14):
There are union contracts that are in effect.
Speaker 3 (05:17):
They may have to delay pay raises for these employees,
they may have to renegotiate these union contracts to bring
those costs down.
Speaker 1 (05:23):
There's going to be a lot of this.
Speaker 2 (05:23):
This has been a very badly managed city for twenty years,
going back to Viragosa days. He dug a hole for
them back in the late two thousands with a whacko
set of union contracts that had pay raises, and it's
been downhill ever since.
Speaker 3 (05:37):
In this time last year, I was sitting through all
these budget meetings and when we think about layoffs, let
me tell you how difficult this is going to be.
There were proposals this time last year as the budget
was being crafted where the city administrator came out and said,
let's get rid of positions that are not filled. These
are positions that have just been on the payroll. They're
funded because the position could be filled, but some of
(05:58):
these positions had remained empty for years, and he was like,
let's get rid of these, let's put that money in
the general fund and we'll stave off some of the
problems that that we might have.
Speaker 1 (06:06):
This was before the situation.
Speaker 3 (06:07):
Looked as dire as it does now, and there was
a lot of pushback over that. I mean, there was
fighting over retaining some of these positions that were empty.
So think about the debate that's ahead of us about
getting rid of people that exist.
Speaker 2 (06:18):
So we were paying, at least on paper, it was
in the budget for positions that were never filled. Yeah,
and what happened to that money. That money was supposed
to go in the general fund?
Speaker 1 (06:29):
Yeah, and it never did.
Speaker 3 (06:30):
It did, And now that money's money's gone.
Speaker 1 (06:34):
And then what is worse is.
Speaker 3 (06:36):
Because another another piece of Marabas's plan to deal with
is I'm sure she'll give us more details very soon.
She's supposed to release her budget in April. She wants
she here now, Yeah, she's not in Africa currently, Okay,
she is in the city.
Speaker 1 (06:48):
She says.
Speaker 3 (06:49):
Preserve our reserve fund. Now, this is what you might
have some savings in case you lost your job or something.
I need to have a certain amount of months. Sure
I can pay for stuff while I'm looking at it.
Fall at this place, there's nothing on my desk. Everybody
here has big savings accounts. What a business, right, Yeah? Yes,
but their reserve fun They like to keep it at
(07:10):
least five percent of the total budget. So about four
hundred million dollars. It's less than two and a half percent,
so less than half their goal. One of the things
they want to do before the new budget is created,
they want to fill that back up because it's raining,
the rainy days.
Speaker 2 (07:25):
You know, my love about math. It's unforgivable completely, And
when stupid people fall into a big math hole, they
don't know what to do because you can't bs, you
can't put out a pressure release, you can't do a
lie and a dance and all the other tricks that
they have. Math is math, and they can't print money. See,
the federal government is printed thirty six trillion dollars. That's
why they can run up that huge debt. LA City
(07:48):
can't do that.
Speaker 3 (07:49):
And LA doesn't expect as much federal money this year.
They ought a weird relationship right with the Church administration,
so they don't expect that. They've got to deal with
these fires and they already have their own.
Speaker 2 (07:58):
So I gotta do something about you know, a billion
four they spend on homeless.
Speaker 1 (08:04):
They can't keep doing that without the results.
Speaker 3 (08:07):
I mean, at some point there's gonna be I mean,
the voters of La County said, yeah, we'll give you
more this time around. We'd like to see some results.
They're promising results this time, but we'll have to see it.
Speaker 1 (08:16):
All those audits indicated nothing has changed. That's right.
Speaker 3 (08:21):
And this is a city that has known about this
being on the horizon for a long time. If you
had known six months ago that you were gonna have
less money coming in and your expenses were creeping up,
you and your wife would have sat down and talked
about it. I think households across the county have probably
done that. Now, Like, let's think about what we can get.
What streaming service can I get rid of? Can I
get a second job?
Speaker 2 (08:40):
But I don't understand. Do they live in some magic fairyland.
What do they do all day? Where do they talk
about all day? I mean when you had I mean,
when you have this kind of deficit looming, it should
be the only thing they're talking about and planning for
and gradually making the cuts leading up.
Speaker 1 (08:57):
To the big moment. This is what I expressed.
Speaker 3 (09:00):
You know, I try not that editorialized, but it has
shocked me since last fall, that lack of urgency, the
fact that they don't stop everything and say, oh, there
is a bad financial situation, because not only is this
just bad in general for any city government, but we're
talking about Los Angeles, one of the most important cities
in the entire world, that is going to be hosting
the Olympics in a few years, It's going to go
Super Bowls, All Star Games, the World Cup, and the
(09:22):
city already looks like hell yeah, and when are they
going to be able to address basic needs that residents
have when they can't pay their own bills? All right,
Michael Monks, excellent, Thank you, always a pleasure. We will
talk more about this when we come back. And this
is this is this is huge. A billion dollars for
(09:46):
an LA city budget is gigantic, and they're going to
have to do the big doge.
Speaker 5 (09:51):
I think you're listening to John Cobalt on demand from
KFI AM six forty.
Speaker 2 (09:58):
John Cobalt. I understand that the moist line has some vacancies,
and today is what is today, Thursday? Ah, we're only
twenty four hours away eight seven seven moist eighty six.
So if you've got something welling up inside you and
it needs to burst, I don't know if that sounded great.
Eight seven seven moist eighty six, eight seven seven, Moist
(10:20):
eighty six, or use the talkback feature on the iHeartRadio app. Well,
I hope you heard Michael Munk's report that we started
the show with. The LA City Council has got a
huge problem. And it's not the fire it's they're almost
a billion dollars in deficit for this fiscal year. Los
(10:41):
Angeles has overspent by about a billion dollars and it's
only a twelve billion dollar budget overall. So this is
a big cut and much of the spending is fixed.
Speaker 1 (10:54):
They can't do.
Speaker 2 (10:55):
Anything about the fire department is already only fifty percent funded.
You can't touch the police department and that's way understaffed.
They have a lot of union contracts that they're locked into.
They're going to have to cut a tremendous amount of jobs.
(11:15):
And this is I'm gonna I'm gonna enjoy this. All
the squealing about how terrible Elon Musk is and dozing
a lot of jobs out of existence, they're gonna have
to do the same thing. Because it's math. You know,
the federal government has a thirty six trillion dollar debt
and the only way to slow the rate of increase
(11:40):
is to cut jobs. Cut departments, stop spending money, stop
giving out grants. There's nothing else you can do. At
least we can print money, but that only goes so
far before you end up with a huge economic crisis
crash and it'll come out of nowhere. But this, this
is stupidity. I told you I have to do and
(12:04):
I told you so.
Speaker 1 (12:05):
Dance here.
Speaker 2 (12:06):
I told you Karen Bass is not up to the
job of being there because she had no executive experience,
including that executive experience in running anything in the city. Like,
she never had a budget she had to keep track of.
(12:27):
She was a legislator. Yeah, she had a few people
in her office whenever she was I forget. She's in
a state senate, the Assembly. She was a congresswoman. You know,
you got a small budget. You got a few people
in your office. Their salaries are pretty much set.
Speaker 1 (12:45):
You don't have to think too hard.
Speaker 2 (12:49):
Maybe you have to worry about how much you're going
to spend on the office Christmas party.
Speaker 1 (12:52):
That's it.
Speaker 2 (12:53):
Now she's inherited a city with thousands of employees, dozens
and dozens of departments, billions of dollars, and she, I
guess can't do math. The other day I saw that
(13:13):
sixty to seventy percent of California kids are not proficient
at math. You get up to eighth grade, right, it's
it's let's say sixty five percent kids are not proficient
at math. Well, five years later those kids are out
in the world, maybe they're going to community college for
a little remedial math. Eventually they're out in the workforce
(13:39):
and they still can't do math. You've heard of the
word illiterate. Illiterate means you can't read.
Speaker 1 (13:45):
Right.
Speaker 2 (13:46):
Well, there's another word you don't hear very often. It's
called enumerate. If you're enumerate, it means you can't do math.
You can't add some track, multiply, divide, just the basics. Okay,
we're not asking you to do high level calc. We're
not asking you do to the math required to send
a rocket to Mars. Elon Musk can do that because
(14:07):
he's really really smart. Karen Bass is really really not smart.
And I don't think it's so hard to read a budget,
to read a spreadsheet to see what your income is
and what your outgo is. But it was too much
for her. She's not good at this. Clearly, there was
(14:29):
no fire preparation. She had the bad judgment to leave
the country. She had cut the fire department quite a bit.
She has blown billions of dollars on homelessness to no
good outcome. I mean, there's only so many stupid things
you can do. And Eric Garcetti is responsible for a
lot of this. Eric Carsetti was a Karen Bass disaster
(14:53):
for nine and a half years. Karen Bass has been
a Karen Bass disaster for only two. So these are
bad people who make bad decisions, and they can't do math,
and they've got all kinds of excuses and nonsense. But
it really comes down to basic computing power in your brain.
(15:15):
How much brain power do you have? And she doesn't
have it, and neither does anybody on the city council.
Well there's a couple, but I'd say thirteen out of
the fifteen members of the city council don't have it.
And as Michael Monks pointed out, they knew about this
months ago. They knew about this, let's say six months
(15:36):
ago it was coming. They didn't do anything. They don't care.
They don't care. They wake up in the morning, their
brain is clouded with all their progressive political obsessions and
the nuts and bolts of governing is it's not why
(15:57):
they got in the business. They out of the business
is to do social justice. Nonsense. These are the people
who graduated from school without the capability of doing basic math. Now,
you can't have thirteen people on the council and the
mayor and all the administrators without the basic capability to
(16:20):
add and subtract. If you do, you end up with
this mess. And you know I already talked about root causes.
That's the root cause. The root cause is nothing more
than the inability to do the basic math that if
you're a good parent, you expect your child to master,
certainly by time they graduate high school. That's what you
(16:42):
expect of Well, Karen bask can't do that. She's had
over seven hundred days now, seven hundred and fifty days
to wake up in the morning, look at a budget
and do the addition and subtraction, and she can't. Will
We'll talk more about the specifics here. I want to
(17:02):
touch on some of the stuff Michael talked about, the
insane number of lawsuits and the death spiral. This is
a death spiral. You'll see.
Speaker 1 (17:12):
The biggest mistake.
Speaker 2 (17:14):
Let's put it to you this a way if Fort
Caruso is mayor do you think this would be a
story today?
Speaker 1 (17:22):
Talk more, we come back.
Speaker 5 (17:24):
You're listening to John Cobel's on demand from KFI AM sixty.
Speaker 2 (17:30):
So Los Angeles city is broke. They have about a
billion dollar deficit for this year, which is big, and.
Speaker 1 (17:42):
They don't know what to do.
Speaker 2 (17:44):
The Karen Bass made a stupid one of many stupid
mistakes a few years ago. She gave out huge raises
which are coming due.
Speaker 1 (17:54):
Uh, and.
Speaker 2 (17:57):
They they're stuck in a hole here. They blow a
billion three on homelessness and gee, look at that. The
deficits about a billion dollars just with homelessness alone. If
they weren't giving away a billion three to crooked nonprofits
(18:18):
that steal the money and don't produce any results, just
that alone would solve the problem. But according to the
La Times, council members cannot unilaterally put a stop to
raises that are already part of an approved contract. See,
(18:39):
they thought when they gave away the store, they would
have labor peace as they call it, until twenty twenty six.
And that's when Karen Bass assumed she was going to
get reelected. And also six of the six or seven
of the council members. So they thought, Okay, we'll pay
(19:00):
off the unions to shut up and be quiet, and
then we'll all get re elected and deal with the
problems down the road. Legal settlements. The city doesn't take
anything to court. They don't challenge any lawsuits. They just
pay whatever the plaintiff wants. Yeah, sure, we'll write a check.
(19:21):
And now they're broke. You know, the police stuff they're
terrified of. You know, if cop goes crazy and beats
up some guy, that guy is gonna make so much
money it makes you want to volunteer to get beat
up by a police officer. It's like, yeah, give me
a beating. I'd like to walk away with many millions
of dollars.
Speaker 1 (19:44):
The uh.
Speaker 2 (19:46):
There's also all these people apparently are tripping over sidewalks,
or they claim they're tripping over sidewalks, and there's broken,
busted sidewalks everywhere. There's uprooted trees, you know, the roots
are coming out of the ground. Sidewalks get pushed out
a whack. People are always tripping on that, and it
(20:08):
adds up to hundreds and hundreds of millions of dollars.
They can't pay why is it in LA and other
cities don't have this problem because LA's infrastructure is broken.
They don't want to spend the money on it. They
give it away to unions. Well, if you don't spend
money on the infrastructure, then people are going to get
hurt because of the collapsed infrastructure, and it costs you
(20:31):
more money. Now, an intelligent person would figure that out.
Karen Bass doesn't have the firepower there. I'll tell you
how stupid things have gotten. You're not going to believe this.
But in the fiscal year that ended in June of
twenty twenty four, the City of Los Angeles lost money
(20:51):
on parking tickets. They lost money handing out parking tickets.
Now they the city gives out two million parking tickets
a year, two million tickets, and they lost money. They
lost a lot of money. The city collected one hundred
and ten million dollars in parking fines, but the costs
(21:15):
for salaries, equipment, processing, pensions, and other liabilities it cost
them one hundred and seventy six million dollars. They pay
so much, They pay so much money to parking enforcement agents,
that wonder those people have such a bad smug snotty attitude.
(21:35):
I've never the people have come across to have the
worst attitudes are these parking enforcement agents.
Speaker 1 (21:44):
And now I understand why.
Speaker 2 (21:46):
I don't know what the hell they're making, but it's
one hundred and seventy six million dollars in costs and
only one hundred and ten million dollars in revenue they're
getting in parking fines. Used to be a profit center
for the city, but not since twenty sixteen. And if
(22:08):
you can't make money handing out parking tickets and you're
handing out two million of them, that is gross and competence.
Who's in charge of that? What blockhead? What brainstem? What vegetable?
Is running a parking ticket department? And actually lost lost
(22:30):
sixty five million dollars. How do you lose sixty five
million dollars writing tickets? That's not that's not possible, But
they did. I mean that that's helpless.
Speaker 1 (22:47):
Here.
Speaker 2 (22:48):
I thought the reason they hand out somebody stupid tickets
is because it makes a lot of money. Actually, the
more tickets they hand out, the more they lose. If
they fired all the parking enforcement agents, they'd make more money.
(23:08):
That would be one hundred and seventy six million off
the books. Wow, they'd be sixty five million dollars ahead
on the budget if they just fired all the parking
enforcement agents. I don't know what kind of golden contracts
these people got. How could that be? I mean sometimes
(23:29):
things boil down they're just flat out stupidity. So they
don't have much of a reserve. And the city controller,
Kenneth Maheas said, all this is not caused by an
outside crisis, but decisions made at city hall. We didn't
(23:50):
have a COVID crisis or a global recession. This is
something from happened that happened from the inside. Now Zabo claims, well,
what's his name? Uh, what's his first name? Mad Zabo?
He's been a political hack for Bass city administrative officer.
He's trying to blame tariffs. There's no tariffs. No tariffs
(24:18):
have happened yet, what's he talking about. He's such they
blame Trump. You believe this. They lose sixty five they
lose sixty five million dollars on parking tickets and they
actually blamed Trump.
Speaker 1 (24:29):
Oh. The plan to crack down and immigration.
Speaker 2 (24:33):
Right, getting rid of the legal aliens who are a
huge cost to government that's creating a bunch of deficit.
Speaker 1 (24:41):
What a bunch of stupid liars.
Speaker 2 (24:48):
All right, when we come back, I want to play it.
Eric Leonard from NBC four former star KFI reporter, Uh,
he has another aspect of this. You may have heard
this story about a guy in the rap music business
(25:09):
who was a gang leader. His name is Eugene Henley Junr,
also known as Big U. Well, the Big U was
shaking millions of dollars out of LA. Apparently he had
a set of corrupt nonprofits and the city was handing
money to Big U. Handover fist. Listen to this report
from Channel four's Eric Leonard when we come back.
Speaker 5 (25:33):
You're listening to John Cobels on demand from KFI Am
six forty.
Speaker 2 (25:39):
John Cobelt's show Moistline is eight seven seven Moist eighty
six eight seven seven Moist eighty six. You used the
talk back feature on the iHeart app. We have vacancies.
We didn't do it for a couple of weeks and
we have vacancies now. We have been covering for much
of the hour. This massive budget is in La. The
(26:02):
dunches that are on the city council and Chief Karen
bass have a billion dollar deficit, which is huge for
a city of LA's size. It's not the federal government
and it's a city, and they can't print their own money,
which is how the federal government can rack up thirty
six trillion dollars. Apparently, they lose money on parking tickets,
(26:26):
and they give a huge amounts of money to the
homeless industry. Much of that is stolen. They don't give
money to the fire department, it's only half funded. One
of the other places they give is they give to
rap industry players who were formerly gang members. I'm talking
(26:51):
about Eugene Henley Junior, known as Big U. They've heard
this news story. He used to lead the gang Rolling Six,
and then he reinvented himself as a gang interventionist, among
other things. Turns out, according to the prosecutors, he was
shaken down the city with his fake nonprofits for millions.
Speaker 1 (27:14):
Eric Leonard from NBC four has the story.
Speaker 6 (27:17):
The most surprising discovery that we've had so far is
that this nonprofit called the Ex Offender ex Offender Fellowship,
which was also doing business under another nonprofit's name called
Developing Options, that the city says were essentially one in
the same and they say the state has told us
that those entities have faced suspensions by the state tax authority,
(27:40):
the Franchise Tax Board. Meanwhile, the City of LA has
been paying millions of dollars into these organizations, and the
amounts have increased in.
Speaker 1 (27:48):
The last few years.
Speaker 6 (27:50):
The California Franchise Tax Board issued a suspension notice in
April twenty twenty four for one of the nonprofits operated
by Eugene Henley Junior, who federal secutors in LA announced
wednesday faces racketeering and corruption charges for allegedly misusing money
meant for the city's gang intervention efforts. Henley's most recent
(28:10):
contract with the city shows a payment of nearly eight
hundred thousand dollars due in July twenty twenty four, the
final installment of a four year agreement that paid his
groups more than two point two million dollars for intervention. Henley,
seen here in a red carpet photo, began forming the
nonprofits in two thousand and nine. According to state records,
(28:31):
they began receiving city gang intervention funding as far back
as twenty eleven.
Speaker 1 (28:35):
Between twenty eighteen and twenty twenty three.
Speaker 6 (28:38):
LA Controller payment records show Henley's groups received around half
a million dollars a year then in twenty twenty three,
a significant increase that followed then Mayor Eric Garcetti's efforts
to increase funding for intervention work after the rise in
violent street crime that followed the COVID nineteen pandemic. Looking
at the tax records for the Ex Offender Fellowship, which
(29:00):
includes the city money and private donations, you can see
its revenue went from around half a million dollars a
year to nearly eight hundred thousand, then to nearly two
million for twenty twenty three, the last tax return available.
Where was the money going? The tax return show while
Eugene Henley Junior was paid ninety five thousand dollars as
president and director, nearly all the money collected went to
(29:22):
compensate unnamed top staff members, including corporate officers, directors, and trustees.
According to the criminal complaint, Henley diverted much of that
money to his personal bank accounts, and.
Speaker 1 (29:34):
The FED say he allegedly.
Speaker 6 (29:35):
Pocketed tens of thousands of dollars in donations intended for
the groups, including a twenty thousand dollars contribution from an
NBA All Star. As part of this wide ranging criminal complaint,
Henley is also accused by the FEDS of failing to
file accurate tax returns for many years and a scheme
that was designed to boost his apparent income in order
(29:55):
to qualify for a home loan.
Speaker 1 (29:57):
Now, we asked the.
Speaker 6 (29:58):
Mayor's office about it's oversight of the U the programs.
The Mayor's office didn't respond to our specific questions, but
said in a message this afternoon the city has strict
oversight over these programs, but the complaint alleges a sophisticated
effort to thwart the rules. The state's Franchise Tax Board
gave us some general information about what should happen to
(30:18):
a nonprofit that's been suspended from doing business, but said
it could not discuss this specific case.
Speaker 2 (30:23):
Of course, nobody can discuss it the mayor's office. Why
did you call up any random kindergarten. You could probably
get those five year olds to give you a better guidance.
They know that these people are ripping off the city.
They don't care, and I think that's a hard.
Speaker 1 (30:43):
Thing for people to understand. I am sure many people
in office knew that Eugene Henley Big U was ripping
off Garcetti's gang intervention funding programs. They don't care. This
is part of the social justice movement.
Speaker 2 (31:07):
By the way, what they laid out, that's the blueprint
for all the homeless nonprofits too.
Speaker 1 (31:12):
You take a big chunk.
Speaker 2 (31:13):
Of money, several million dollars, you pay yourself, then you
pay all your friends and relatives. You make them board
members and trustees, and you give them titles, and it
looks like you have a busy, corporate style operation going on.
None of the money went to gang in revenge, like,
(31:34):
none of the money goes to get the homeless off
the streets, like, none of the money goes to lay
down high speed rail. These are all criminal rackets that
the people handing out the money in government know is
going on. I mean, they know the homeless people are
still on the street. They know that the gangs are
(31:55):
still doing what gangs do. They know there's no high
speed rail built. They're in charge of handing out the money.
You don't see them complaining, do you. It's always some
outside investigation. It's always a federal investigation or an audit,
or maybe a media expose. You notice the people handing
out the money, never say hey.
Speaker 1 (32:15):
We've been robbed. I mean, if.
Speaker 2 (32:20):
If I was robbed, I'd know and I'd say something
about it. I'd try to do something about it. Report
the crime. The people who are victims of the crime, Well,
the public is the victims of the crime. But the
people who are supposed to be safe keeping our money,
the money is stolen right out from under their noses.
(32:42):
You notice they never complain, like Karen Bass, never says, Wow,
look at all that homeless money that was stolen by
the nonprofits. Wow, look at all the money gang invenged
money stolen by this Eugene Henley Jr. You never see
the high speed rail executives gone, hey, hey.
Speaker 1 (33:02):
Who took the money? We don't have any high speed rail.
Speaker 2 (33:06):
No, all that COVID unemployment money did Did the labor
secretary say, hey, people stole millions?
Speaker 1 (33:14):
What we come back?
Speaker 2 (33:17):
We're going to have Brad Garrett on from ABC News.
Brad is the crime and terrorism analyst. He's been looking
at this huge release of JFK papers on the assassination.
There's some interesting stuff in here about Lee Harvey Oswell
being tracked by the CIA for years before the assassination.
Speaker 1 (33:38):
Tell you about it.
Speaker 2 (33:39):
Debormark live in the KFI twenty four hour Newsroom.
Speaker 5 (33:42):
You're listening to John Cobels on demand from KFI AM
six forty
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John Kobylt
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