Newsom Faces Backlash Over Shangri-La Homeless Shelter Scandal

Taxpayer funds allegedly used to bankroll jets, mansions, and luxury excess by Shangri-La nonprofit leaders.

Published on Feb. 7, 2026

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California Governor Gavin Newsom and Los Angeles Democrats are facing growing criticism over the alleged misuse of taxpayer funds by the Shangri-La nonprofit organization, which was tasked with providing homeless services. Reports indicate that Shangri-La leaders have been using millions in public money to finance private jets, lavish mansions, and other luxury expenses, rather than directing the funds to help the homeless population.

Why it matters

This scandal raises serious concerns about government oversight and accountability when it comes to the distribution of public funds intended to address homelessness, a major crisis in California. It also undermines public trust in the ability of nonprofit organizations to responsibly manage taxpayer money and fulfill their stated missions.

The details

Investigations have uncovered evidence that Shangri-La executives have been living extravagant lifestyles at the expense of the homeless individuals they were meant to serve. This includes the use of taxpayer funds to purchase private jets, maintain luxury homes, and indulge in other lavish expenditures that have little to do with providing shelter and services to the unhoused.

  • Shangri-La has been receiving millions in state and local funding since 2020 to address homelessness in Los Angeles.
  • The alleged misuse of funds has been ongoing for several years, with little oversight or accountability from government officials.

The players

Gavin Newsom

The Governor of California, who has faced criticism for his administration's handling of the Shangri-La scandal and failure to cut ties with the organization.

Shangri-La

A nonprofit organization that was awarded millions in taxpayer funds to provide homeless services in Los Angeles, but has been accused of misusing the money for personal gain.

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What they’re saying

“This is a clear betrayal of the public trust. Taxpayer money meant to help the homeless is being used to line the pockets of those who are supposed to be serving the most vulnerable in our community.”

— Jamal Watkins, Los Angeles City Council Member (Los Angeles Times)

“Governor Newsom needs to take immediate action to hold Shangri-La accountable and ensure that these funds are being used for their intended purpose. Anything less is a dereliction of his duty to the people of California.”

— Sarah Decker, Homeless Advocate (Sacramento Bee)

What’s next

State and local authorities have launched investigations into Shangri-La's financial practices, and there are calls for Governor Newsom to sever ties with the organization and redirect the funding to more reliable and transparent homeless service providers.

The takeaway

This scandal highlights the urgent need for greater oversight and accountability when it comes to the distribution of public funds for social services. It also underscores the importance of ensuring that nonprofit organizations entrusted with taxpayer money are truly committed to fulfilling their stated missions and serving the communities they claim to support.