The Brief

Sonja Verdugo lost her husband to an opioid overdose last year. She regularly delivers medical supplies to people using drugs who are living — and dying — on the streets of Los Angeles. And she advocates at Los Angeles City Hall for policies to address addiction and homelessness.

Yet Verdugo didn’t know that hundreds of millions of dollars annually are flowing to California communities to combat the opioid crisis, a payout that began in 2022 and continues through 2038.

How we got here

The money comes from pharmaceutical companies that made, distributed, or sold prescription opioid painkillers and that agreed to pay about $50 billion nationwide to settle lawsuits over their role in the overdose epidemic. Even though a recent Supreme Court decision upended a settlement with OxyContin maker Purdue Pharma, many other companies have already begun paying out and will continue doing so for years.

California, the most populous state, is in line for more than $4 billion.

“You can walk down the street and you see someone addicted on every corner — I mean it’s just everywhere,” Verdugo said. “And I’ve never even heard of the funds. And to me, that’s crazy.”

Across the nation, much of this windfall has been shrouded in secrecy, with many jurisdictions offering little transparency on how they’re spending the money, despite repeated queries from people in recovery and families who lost loved ones to addiction.

How the money is allocated

Meanwhile, there’s plenty of jockeying over how the money should be used. Companies are lobbying for spending on products that range from medication bottles that lock to full-body scanners to screen people entering jails. Local officials are often advocating for the fields they represent, whether it’s treatment, prevention, or harm reduction. And some governments are using it to plug budget gaps.

In California, local governments must report how they spend settlement funds to the state’s Department of Health Care Services, but there’s no requirement that the reports be made public.

California Healthline obtained copies of the documents via a public records request and is now making available for the first time 265 spending reports from local governments for fiscal year 2022-23, the most recent reports filed.

The reports provide a snapshot of the early spending priorities, and tensions.

What's the money been spent on so far?

As of June 2023, the bulk of opioid settlement funds controlled by California cities and counties — more than $200 million — had yet to be spent, the reports show. It’s a theme echoed nationwide as officials take time to deliberate.

The city and county of Los Angeles accounted for nearly one-fifth of that unspent total, nearly $39 million, though officials say that since the report was filed they’ve begun allocating the money to recovery housing and programs to connect people who are homeless with residential addiction treatment.

Among local governments that did use the cash in the first fiscal year, the most popular object of spending was naloxone, a medication that reverses opioid overdoses and is often known by the brand name Narcan. The medication accounted for more than $2 million in spending across 19 projects.

One of those projects was in Union City, in the San Francisco Bay Area. The community of about 72,000 residents had five suspected fentanyl overdoses, two of them fatal, within 24 hours in September.

The opioid settlement money “was invaluable,” Corina Hahn, the city’s director of community and recreation services, said in her report. “Having these resources available helped educate, train and distribute the Narcan kits to parents, youth and school staff.”

Union City bought 500 kits, each containing two doses of naloxone. The kits cost about $13,500, with an additional $56,000 set aside for similar projects, including backpacks containing Narcan kits and training materials for high school students.

Among local governments that did use the cash in the first fiscal year, the most popular object of spending was naloxone, a medication that reverses opioid overdoses and is often known by the brand name Narcan.

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Union City also plans to expand its outreach to homeless people to fund drug education and recovery services, including addiction counseling.

Those are the sorts of lifesaving services that Verdugo, the Los Angeles advocate, said are desperately needed as deaths of people living on the streets pile up.

She lost her 46-year-old husband, Jesse Baumgartner, in June of last year to an addiction that started after he was prescribed pain medications for a high school wrestling injury. He tried kicking his habit for six years using methadone, but each time prescribers lowered his dosage the cravings drove him back to illicit drugs.

“It was just this horrible roller coaster of him not being able to get off of it,” Verdugo said.

By then the couple had survived 4½ years of being homeless and had been in stable housing for about two years.

Verdugo regularly distributes naloxone, clean needles and drug-smoking pipes, medical supplies, and other products aimed at reducing risk among those living in homeless encampments around Los Angeles.

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Arlene Mejorado

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KFF Health News

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Verdugo's husband died in June 2023 following complications from an opioid addiction. She wears a ring made partly with his ashes and has a tattoo honoring him.

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Arlene Mejorado

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KFF Health News

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Fentanyl use, particularly among homeless people, “is just rampant,” she said. People sometimes are initially exposed to the cheap, highly addictive substance unknowingly when it is mixed with something else.

“Once they start using it, it's like they just can't backtrack,” said Verdugo, who works as a community organizer for Ground Game LA.

So she leaves boxes of naloxone at homeless encampments in the hope of saving lives.

“They definitely use it, because it's needed right then — they can't wait for an ambulance to come out,” she said.

Cities backtrack on spending for law enforcement

By contrast, the cities of Irvine and Riverside, both in Greater Los Angeles, listed plans to prioritize law enforcement by buying portable drug analyzers, though neither city did so in the first fiscal year, 2022-23. Their inclination mirrored patterns elsewhere in the country, with millions in settlement funds flowing to police departments and jails.

But such uses of the money have stirred controversy, and both cities backed away from the drug analyzer purchase after the Department of Health Care Services issued rules that opioid settlement funds may not be used for certain law enforcement efforts. The rules specifically excluded “equipment for the purpose of evidence gathering for prosecution, such as the TruNarc Handheld Narcotics Analyzer.”

In Hawthorne, also near Los Angeles, the police department had already spent about $25,000 of settlement funds on an initial installment to buy 80 BolaWraps, devices that shoot Kevlar tethers to wrap around a person’s limbs or torso.

After the state said BolaWraps were not an allowable expense, the city said it would find other funding sources to pay the remaining installments.

Santa Rosa, in California’s wine country, spent nearly $30,000 on police officer wellness and support.

The funds allowed the police department to boost its contracted wellness coordinator from a part-time to a full-time position, and to buy a mobile machine to measure electrical activity in the brain, said Sgt. Patricia Seffens, a spokesperson.

The goal is to use the technology on police officers to help “assess the traumatic impact of responding to the increasing overdose calls,” Seffens said in an email.

In Dublin, east of San Francisco, officials are using part of their $62,000 in settlement cash for a D.A.R.E. program.

D.A.R.E., which stands for Drug Abuse Resistance Education, is a series of classes taught by police officers in schools to encourage students to resist peer pressure and avoid drugs. It was initially developed during the “Just Say No” campaign in the 1980s.

Studies have found inconsistent results from the program and no long-term effects on drug use, leading many researchers to dismiss it as “ineffective.”

But on its website, D.A.R.E. cites studies since the program was updated in 2009, which found “a positive effect” on fifth graders and “statistically significant reductions” in drinking and smoking about four months after completing the program.

“The D.A.R.E. program when it first came out looks a lot, lot different than what it looks like right now,” said Nate Schmidt, the Dublin police chief.

Schmidt said additional settlement money will be used to distribute naloxone to residents and stock it at schools and city facilities.

Verdugo advocates for policies to address addiction and homelessness in Los Angeles.

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Arlene Mejorado

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KFF Health News

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Other local governments in California spent modest sums on a wide range of addiction-related measures. Ukiah, in Mendocino County, north of San Francisco, spent $11,000 for a new heating and air conditioning system for a local drug treatment center. Orange and San Mateo counties spent settlement funds in part on medication-assisted treatment for people incarcerated in their jails. The city of Oceanside spent $16,000 to showcase drug prevention art and videos made by middle school students in local movie theaters, in public spaces, and on buses and taxis.

The Department of Health Care Services said it plans to release a statewide report on how the funds were spent, as well as the individual city and county reports, by year’s end.

This article was produced by KFF Health News, a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF — the independent source for health policy research, polling, and journalism.

Topline:

The case: In September, the city settled a lawsuit brought forward by two brothers in their 70s who said they suffered serious injuries after an LAPD officer crashed into their car. Days before the $18 million settlement was reached, lawyers for the brothers said Feldstein Soto called an expert witness testifying for the plaintiffs and “attempted to ingratiate herself with him and asked him to make a contribution to her political campaign,” according to a sworn declaration to the court by the plaintiffs’ attorney, Robert Glassman.

The response: Feldstein Soto did not respond to an interview request. Her spokesperson said the settlement “had nothing to do” with the expert witness. Her campaign manager told LAist the city attorney had been making a routine fundraising call and did not know the person had a role in the case, nor that there were pending requests for her office to pay him fees.

What Jurado says: In a statement to LAist, Jurado said she wants to “make sure that the city’s legal leadership is guided by integrity and accountability, especially when their choices affect public trust, civic rights and the city’s limited resources."

What’s next: The motion needs to go through a few committees before reaching the full City Council. If it passes, the motion calls for the city attorney to “report to council in closed session within 45 days regarding the ethics breach violation and give updates to the City Council."

Every year in Santa Ana, Luis Cantabrana turns the front of his home into an elaborate altar in honor of La Virgen de Guadalupe that draws hundreds of visitors.

Along the front of the house, the multi-colored altar is filled with lights, flowers and a stained-glass tapestry behind a sculpture of the Lady of Guadalupe. Cantabrana’s roof also is lit up with the green, white and red lights that spell out “Virgen de Guadalupe” and a cross.

Visitors are welcomed with music and the smell of roses as they celebrate the saint, but this year’s gathering comes after a dark year for immigrant communities.

Luis Cantabrana stands in front of the stunning altar he built in front of his home in honor of La Virgen de Guadalupe. Every year, his display draws hundreds of visitors.

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Destiny Torres

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Why do they celebrate? 

In 1513, the Virgin Mary appeared before St. Juan Diego between Dec. 9 and Dec. 12, asking him to build a church in her honor. Her image — a brown-skinned woman wearing a green veil with her hands together in prayer and an angel at her feet — miraculously appeared on his cloak.

To celebrate in Santa Ana, worshippers gathered late-night Wednesday and in the very early hours Dec. 12 to pray the rosary, sing hymns and celebrate the saint.

Cantabrana has hosted worshippers at his home for 27 years — 17 in Santa Ana.

The altar started out small, he said, and over the years, he added a fabric background, more lights and flowers (lots and lots of flowers).

“It started with me making a promise to la Virgen de Guadalupe that while I had life and a home to build an altar, that I would do it,” Cantabrana said. “Everything you see in photos and videos is pretty, but when you come and see it live, it's more than pretty. It's beautiful.”

The Santa Ana home's elaborate altar in honor of La Virgen de Guadalupe draws hundreds of visitors each year.

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Destiny Torres

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LAist

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Gathering in a time of turmoil 

Many also look to the Lady of Guadalupe for protection, especially at a time when federal enforcement has rattled immigrant communities.

“People don’t want to go to work, they don’t want to take their kids to school, but the love we have for our Virgen de Guadalupe,” Cantabrana said. “We see that la Virgen de Guadalupe has a lot of power, and so we know immigration [enforcement] won’t come here.”

Margarita Lopez of Garden Grove has been visiting the altar for three years with her husband. She’s been celebrating the Virgencita since she was a young girl. Honoring the saint is as important now as ever, she said.

“We ask, and she performs miracles,” Lopez said.

Claudia Tapia, a lifelong Santa Ana resident, said the Virgin Mary represents strength.

“Right now, with everything going on, a lot of our families [have] turned and prayed to the Virgen for strength during these times,” Tapia said. “She's a very strong symbol of Mexican culture, of unity, of faith and of resilience.”

See it for yourself

The shrine will stay up into the new year on the corner of Broadway and Camile Street.

California’s unemployment agency kept paying cellphone bills for 4 1/2 years without checking whether its workers actually were using the devices.

That’s how it racked up $4.6 million in fees for mobile devices its workers were not using, according to a new state audit detailing wasteful spending at several government agencies.

The Employment Development Department’s excessive cellphone bills date to the COVID-19 pandemic, when it shifted call center employees to remote work and faced pressure to release benefits to millions of suddenly unemployed Californians.

It acquired 7,224 cellphones and wireless hotspots by December 2020. State auditors analyzed 54 months of invoices since then and found half the devices were unused for at least two years, 25% were unused for three years and 99 of them were never used at all.

The investigation, which auditors opened after receiving a tip, identified 6,285 devices that were unused for at least four consecutive months, and said the department spent $4.6 million on monthly service fees for them.

From the beginning, the department had about 2,000 more cellphones than call center employees, according to the audit. The gap widened over time after the pandemic ended and the department’s staffing returned to its normal headcount.

As of April, the audit said the department had 1,787 unemployment call center employees, but was paying monthly service fees for 5,097 mobile devices.

“Although obtaining the mobile devices during COVID-19 may have been a good idea to serve the public, continuing to pay the monthly service fees for so many unused devices, especially post-COVID-19, was wasteful,” the audit said.

Department officials told auditors they were unaware of the spending, but auditors pointed to regular invoices from Verizon that showed which phones were not being used.

“We would have expected EDD management to have reconsidered the need to pay the monthly service fees for so many devices that had no voice, message, or data usage,” the audit said.

The unemployment department began acting on the auditors’ findings in April, when it canceled service plans for 2,825 devices. It has since implemented a policy to terminate service plans for devices that go unused for 90 days.

The California state auditor highlighted the mobile devices in its regular report on “improper activities by state agencies and employees.” The audit also showed that the California Air Resources Board overpaid an employee who was on extended leave as he prepared to retire by $171,000.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.