When I called AIDS Healthcare Foundation (AHF) to get some quotes from its founder and president, Michael Weinstein, on criticism about his activities outside the HIV/AIDS realm, the director of communications, Ged Kenslea, told me to call the next day, because the organization had just had a big victory and he was swamped. That victory was the defeat of a bill in the California legislature, SB-50, which would have allowed denser housing construction near transit lines and job-rich areas. And that goes to the point of my phone call: Why is the largest global AIDS organization exerting its lobbying power on legislation concerning zoning and housing construction?
It’s a question asked indirectly by the author of SB-50, California state Sen. Scott Wiener (D-San Francisco), who—in a tweet a week before the bill was defeated by three votes in the Senate—accused Weinstein and AHF of misusing health care money by spending $1 million attacking him and the legislation. Weinstein wasn’t the only detractor of SB-50. Many said the bill was a giveaway to big real estate and developers that would do little to solve the state’s affordability crisis.
A few days later, AHF scored another win, again in the development sphere, not HIV. It was part of a coalition that obtained enough signatures to certify a ballot initiative expanding rent control statewide. That effort comes two years after AHF spent $23 million on another rent control effort, which was ultimately defeated. Among other recent activities, AHF has spent $5 million on a ballot measure that, if successful, would have restricted the building of apartment towers.
AHF has also used its political clout in issues more closely related to health. In recent years, it has spent millions on ballot measures to require condoms on pornography shoots in Los Angeles County and statewide. It has also backed campaigns in California and Ohio to restrict the prices that state agencies pay for prescription drugs.
The foundation pays for provocative billboards throughout Los Angeles, urging testing for sexually transmitted infections (STIs). But it also sponsors billboards denouncing gentrification and raising awareness about homelessness.
Critics say the 33-year-old organization, which, according to its website, serves one million people in 43 countries, has moved far from its original mission by dabbling in the politics and policy of urban planning. Its communications director, Ged Kenslea, told TheBody that its efforts in health care and housing are not contradictory. “In fact, AHF started as a housing provider. In 1987, we gave hospice care to predominately gay men, people dying of AIDS who were being shunned by families, thrown out by landlords. AHF formed a house in our first logo.”
In recent years, AHF has expanded into more direct intervention in housing and urban planning, Kenslea said, through its housing advocacy division, Housing Is a Human Right, because the government isn’t doing enough to solve the intertwined crises of affordability and homelessness.
“Housing is a critical determinant of the health of someone with chronic disease, whether it’s HIV or diabetes. The bulk of our population is low income and at risk, one step away from being homeless. And we do have some homeless clients. Even our staff has to move farther from their jobs to search for affordable housing.”
AHF’s efforts in housing and urban planning have largely been in opposition to new construction that doesn’t benefit very low-income residents. It is opposing one proposed development near its offices in Hollywood, because that would replace rent-stabilized units with about the same number of affordable units, while lavishing the developer with incentives, Kenslea said.
Few dispute that California, especially its coastal cities, has a dire affordability crisis, which is one cause of growing homelessness. For both owners and renters, California has the highest share of “cost-burdened” households—those spending more than 30% of their income on housing—in the nation, according to the Harvard Joint Center for Housing Studies.
Some detractors also accuse the foundation of skirting restrictions on political activity by charitable organizations, and AHF may be facing new scrutiny from the state on that front. Last year, a California state senator, Sen. Ben Hueso (D-Chula Vista) formally asked the state attorney general to investigate whether AHF is fraudulently misusing savings from a federal drug-discount program, 340B. The program requires pharmaceutical companies to sell drugs at steep discounts to participating hospitals and providers that serve a significant number of very poor patients. The providers, including AHF, are allowed to charge Medicare and Medicaid (or in California’s case, MediCal), for the list price and use the difference to offer services for low-income patients.
Neither Attorney General Xavier Becerra’s office nor Hueso’s office responded to queries from TheBody about whether any investigation into AHF was launched. Kenslea said, however, in the more than seven months since Hueso sent the letter, nobody from the attorney general’s office contacted the foundation. “If they were going to put us under investigation, we probably would have known by now,” he said. “I think the AG assumed the letter sent by Hueso was just political payback.”
AHF’s revenue comes from a network of clinics and a chain of 55 pharmacies in the U.S., as well as 20 Out of the Closet thrift stores, and those funds fuel its lobbying efforts. “Government grant money we receive is tiny,” Kenslea said.
Tim Horn, director of medication access and pricing with NASTAD, told TheBody in an email that he was not familiar with AHF’s finances but, in general, “there are no hard-and-fast rules when it comes to what 340B-covered entities can do with the savings generated on the spread between the discounted price and the insurer’s payment rate.” But there are a few wrinkles for federally qualified health centers (FQHCs) and hospitals receiving Ryan White funding.
“HRSA [Health Resources and Services Administration] has very strict regulations as to how Ryan White HIV/AIDS Program must use 340B program income—all dollars must flow back into the program in close alignment with the grant terms (e.g., program income must support RWHAP core medical and/or support services),” said Horn.
And there are IRS rules about how much lobbying a 501(c)(3) organization can do without jeopardizing its tax-exempt status, although those limits are somewhat squishy as well. Charitable organizations are prohibited from devoting a “substantial part” of their time, money, and other resources to influencing legislation, and they can support or fight political causes, policy, and legislation, but not political candidates.
Kenslea said that AHF complies with federal regulations in that it lobbies in attempt to persuade a legislator to enact or not enact a bill—but not to support individual candidates for elective office—and that those efforts take up an “insubstantial” part of its projected $1.7 billion fiscal year 2020 budget. He didn’t give a precise dollar figure on those efforts.
In a follow-up email, Kenslea clarified that AHF spends no money from government contracts, including Ryan White contracts and other government contracts related to testing and STI services, on lobbying. “AHF only spends contract dollars on costs allowed by the contract. Each contract gets audited regularly. In short, AHF complies with IRS guidelines regarding spending limits for lobbying activities.”
Answering its critics who have said AHF should stay in its health care lane, Kenslea concluded by asking: Why wouldn’t an HIV organization get involved in housing? “None of the prevention and treatment services developed in the last three decades of the HIV response work unless people living with HIV or at risk of acquiring HIV have stable housing, much like any chronic disease or health condition.”