FOR IMMEDIATE RELEASE G.A.O. AIDS AUDIT REVEALS ABUSE OF FEDERAL FUNDS
ACTIVISTS DEMAND AIDS GRAVY TRAIN OVERSIGHT

SOURCE 15 March 2000

Washington, DC - Federal taxpayer dollars intended to provide emergency relief to persons suffering from HIV/AIDS have instead been used to fund dog walking services, trips to Disney World, luxury cars and personal maids for AIDS administrators, even a Governor's election campaign, according to preliminary reports of an AIDS audit conducted by the General Accounting Office, which is due to be released next month.

According to AIDS activists who have reviewed portions of the GAO report, the top executives of urban AIDS service organizations can make over $230,000 a year, while many patients, particularly those in small towns and rural areas, continue to languish on waiting lists for medications and other vital needs.

"The victims of AIDS industry abuses must raise their voices now that Congress is examining funding for AIDS programs," said ACT UP Washington, DC member Wayne Turner. "How can AIDS executives begin to explain why their six-figure salaries are always taken care of, while people with AIDS across the nation go without essential services? The AIDS gravy train shouldn't be allowed to continue without changes in accountability rules."

The Ryan White CARE Act, which provides nearly $1 billion for the treatment and care of HIV/AIDS patients, is up for Congressional reauthorization this year.

Turner noted "AIDS has become like any multimillion dollar industry, complete with high-priced lobbyists demanding public money with no questions asked. It's time for Congress to ask tough accountability questions of AIDS groups. ACT UP Washington,DC works for increase federal and community oversight to end the epidemic of misused public funds by AIDS careerists."

For more information about problems with AIDS charities visit our website at ACT UP WASHINGTON DC . Data about six-figure salaries of AIDS executives is posted at The AIDS Service Provider Accountability Project, which contains detailed information from AIDS service organizations' IRS 990 tax returns.

The following is a summary of some of the key finding of GAO's investigation into federal HIV/AIDS programs. The report will be made available by Congress to the American public on April 1, 2000.

"It remains to be seen if this will be one more AIDS report that just collects dust on a shelf in the bowels of the Beltway," concluded Turner. "Exactly how much federal funding has to be diverted before Congress realizes the general face of AIDS is a now a well paid HIV negative heterosexual executive director desperately in need of increased oversight?"

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AIDS INDUSTRY SALARIES

* One organization (of the 15 GAO examined) that provided services exclusively to HIV/AIDS clients paid its administrator $197,014. Of the 24 organizations that served HIV/AIDS and other clients, nine administrators earned $100,000 or more in compensation, with one receiving $223,804. (GAO, 33- 34)

* The median compensation for administrators for all organizations that received CARE Act or CDC funds was $78,000, and the median at organizations that serve only HIV/AIDS clients was $64,878. The median for all other nonprofit organizations was $74,203. (GAO, 26)

* Organizations that received CARE Act or CDC funds and served only HIV/AIDS clients compensated their administrators $72,871 on average, while organizations that served persons with HIV/AIDS and other clients paid their administrators on average of $104,751. However, the average compensation at all organizations that received either CARE Act or CDC funds was $92,490. This compares with an average compensation of $89,996 for other nonprofit organizations that did not receive CARE Act or CDC funds. (GAO, 27)

FUNDING DISPARITIES: BIG CITIES VS. TOWNS AND RURAL AREAS

* States with EMAs, Eligible Metropolitan Area, spend proportionately less on medications. ... One state did not use any of its CARE Act funds for health care services. (GAO, 13)

* States without EMAs spend 79.5% of CARE Act fund on health care related services (medications, health care and health insurance) compared to 63.8% by states with EMAs. States with EMAs spend nearly twice as much of CARE Act fund on non-health care (administration, planning, evaluation, case management and support services) as non-EMA states- 36.2 percent by EMA states and 19.6 percent by non-EMA states. (GAO chart, 14)

* Metropolitan areas designated EMAs and therefore receiving Title I funds receive more money per person living with AIDS than non-EMA areas. (GAO, 19)

RECENT PROSECUTIONS OF AIDS FRAUD AND EMBEZZLEMENT

* In Puerto Rico alone, at least $2.2 million of federal AIDS funds were found to be defrauded. Five AIDS administrators have been convicted in this case already, and the investigation is ongoing. This money - intended for those living with HIV/AIDS - was instead spent on political campaigns, bribes and for personal uses.

* A bookkeeper in Florida was accused of stealing more than a half a million dollars intended for AIDS patients and their families, which she instead used to pay her credit card bills, buy Disney World tickets and pay for hotels and restaurants. The AIDS employee pleaded guilty for embezzlement.

* The director a North Carolina agency which received $1.2 million in federal money has been found to have used the money to write himself generous personal checks. He also funneled thousands of dollars to his family.

* In December, another federal jury convicted two men in Texas for stealing federal money intended for HIV patients. According to the Assistant U.S. Attorney, these men were "stealing from the poor and taking this money and doing whatever they wanted to do."

Contact: Wayne Turner, ACT UP Washington, DC, Phone: 202-547-9404, Email: ACTUPDC@aol.com, Web: ACT UP WASHINGTON DC, http://www.actupdc.org

Michael Petrelis, Welcome to AIDS-STATISTICS, 2215-R Market Street, #413, San Francisco, CA 94114