Borrowing from novelist James Hilton, who coined the word “Shangri-La” to describe a Tibetan utopia in a 1933 novel, Franklin Roosevelt gave that name to the peaceful retreat we know as Camp David.
For California Gov. Gavin Newsom and Los Angeles Democrats, Shangri-La hasn’t become synonymous with a place that connotes peace on earth. It stands for a hellish homeless housing nightmare, eye-popping alleged fraud, and the ease and scale with which alleged con-artists rip off taxpayers.
In October, federal agents arrested Cody Holmes, the 31-year-old former CFO of Shangri-La Industries, a downtown Los Angeles-based developer who was supposed to be providing housing for homeless people in Southern California. First Assistant U.S. Attorney Bill Essayli for the Central District of California, a Trump appointee, charged him with mail fraud.
Holmes, who pleaded not guilty, is accused of embezzling more than $2 million in taxpayer funds slated for homeless housing construction to host extravagant parties; a $46,000-per-month Beverly Hills mansion; private jet travel; leases of exotic cars; high-end handbags totaling $128,000; a $35,000 diamond watch; and 20 VIP passes for the 2023 Coachella Music and Arts Festival.
Meanwhile, Shangri-La Industries executives showered Newsom and Los Angeles County Democrats with political donations as they were applying for some $100 million in state contracts that the CFO later allegedly looted to fund his and his ex-girlfriend’s lavish lifestyle.
Even after federal prosecutors exposed the massive fraud, Newsom and L.A. Democrats haven’t severed ties with the embattled developer and have kept political donations from the firm’s executives. Newsom has also allowed the construction firm to continue to tout his endorsement on its social media.
Powerful Friends
Holmes allegedly defrauded the California Department of Housing and Community Development by submitting fabricated bank accounts in its applications for state contracts to build homeless housing. Acting on behalf of Shangri-La, Holmes allegedly falsified $160 million in assets controlled by Shangri-La and its affiliates to demonstrate that the firm had liquid funds to contribute to the construction projects, according to court documents.
According to the government, most of those funds never existed. The FBI traced only an estimated $24,000 that the developer had on hand at the time of the applications for Newsom’s signature Homekey contracts, a program launched amid the COVID pandemic lockdowns that converted empty motels into homeless housing. Holmes is accused of providing false bank statements for Shangri-La Industries to acquire the more than $100 million in state grant money for seven Homekey projects, according to an affidavit filed with the complaint and other court documents.
Former President Bill Clinton has been linked to Shangri-La Industries and served as a strategic adviser for the firm. (AP Photo/John Raoux)
Shangri-La Industries has historic roots to billionaire Steve Bing and Bill Clinton, whom the Bing-led company paid more than $2.5 million to serve as a strategic adviser. Bing died by suicide in 2020, more than a decade after founding the investment, entertainment, and philanthropic empire.
California housing authorities are also suing Shangri-La Industries for breaching contracts under Newsom’s signature Project Homekey homeless housing project in a likely futile attempt to recover the missing millions. Yet, no criminal action was taken against anyone involved until Essayli issued his indictment against Holmes last fall. --->READ MORE HERE
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Liberal: Newsom’s 2028 Problem
Gov. Gavin Newsom is the “undeniable front-runner” for the 2028 Democratic nomination, observes Ruy Teixeira at The Free Press, largely because of his uncanny “ability to be everything to — well, not quite everybody, but every Democrat.” He “reliably presents” the most effective message “at any given time to any given audience.” He has made himself “chairman of the anti-Trump resistance” but also signaled “that he is more moderate than the average Democrat.” But unlike message master Bill Clinton, Newsom “never had to run in a competitive election and beat a viable Republican.” Mass appeal to California Dems doesn’t prepare you to face “a general electorate that doesn’t share the basic assumptions of partisan Democrats. Just ask Kamala Harris.”
Fraud beat: Gavin’s Shady ‘Housing’ Pals
“For California Gov. Gavin Newsom and Los Angeles Democrats,” Shangri-La “stands for a hellish homeless housing nightmare” and “eye-popping fraud,” reports Real Clear Politics’ Susan Crabtree. Cody Holmes, the former Shangri-La Industries CFO, “is accused of embezzling more than $2 million in taxpayer funds slated for homeless housing construction.” “California housing authorities are also suing Shangri-La Industries for breaching contracts under Newsom’s signature Project Homekey homeless housing project,” which paid it “more than $100 million in state grant money.” Newsom won’t say if he’ll “return any of the funds Shangri-La employees have donated to his campaigns over the last decade.” The firm’s CEO “showered donations on state and local officials” and the LA County Democratic Party. “More arrests” are expected after feds found “‘massive’ fraud in California’s homeless services.”
Legal take: Church-goers Have Rights, Too
“Thanks to criminal indictments, the [Minneapolis] battlefront has moved from city streets to federal courts,” observes The Wall Street Journal’s William McGurn. “Yes, Don Lemon, arrested for joining agitators in a “coordinated takeover-style attack” on Cities Church in St. Paul had “a constitutional right to report” there. But the protesters “violated” the congregants’ right to the “ ‘free exercise’ of their faith” — a right “mentioned in the same amendment that protects” Lemon’s speech. “We’ll see how it all plays out in the courts,” but one “basic fact” is relevant: “The First Amendment doesn’t give journalists a right to disobey laws.” --->READ MORE HERE
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