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No On Government Waste Committee Calls AIDS Healthcare Foundation Campaign Claims Baseless And Laugh

No On Government Waste Committee Calls AIDS Healthcare Foundation Campaign Claims Baseless And Laugh

October 31, 2012
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AHF Has Long Record of Billing Improprieties Affecting Taxpayers

The No On Government Waste Committee, a broad coalition of healthcare, business, entertainment and community groups, responded forcefully to allegations by the AIDS Healthcare Foundation regarding a single contribution coming from Manwin USA, the U.S.-based subsidiary of a global entertainment firm, by calling the charge “baseless” and “idiotic” and a shallow attempt to divert attention from the overwhelming community support building against Measure B, the so-called “Safer Sex” initiative on the Nov. 6th ballot.

“Once again, AHF has ably demonstrated they have no idea what they are talking about with this ridiculous allegation. They are so clueless, they even filed their complaint with the wrong government agency,” said James Lee, communications director for the No on Government Waste Committee. “They know the polling as well as we do as voter sentiment throughout the county has turned against them and against Measure B and now they are trying desperately to do anything to save what is arguably the dumbest initiative ever to make a ballot.”

In the beginning of the campaign, a clerical error resulted in a contribution being misidentified as coming from Froytal Services LTD, when in fact it came from Manwin, USA, a U.S.-based firm registered in Delaware, RI. The error was corrected and all campaign disclosures were updated, said Lee. Federal and state election law clearly allows for contributions from overseas corporate entities so long as it comes from a subsidiary based and registered in the U.S. As an example, both the Romney and Obama presidential campaigns and related Super PACS have taken in hundreds of millions of dollars in campaign contributions from U.S.-based subsidiaries of foreign companies.

“The irony in AHF citing a campaign violation when it has willfully violated disclosure requirements in not telling voters that former porn actors Darren James and Derrick James were both paid by Yes on B for their endorsements is almost laughable, if it wasn’t so serious,” Lee said. “It’s even more pathetic when you consider how AHF has conducted its bookkeeping operations in its own business at the expense of taxpayers.”

The No on Government Waste Committee revealed government audits which showed a long pattern of double-billing and over-charging by AHF that potentially cost taxpayers millions of dollars, including:

  • August 16, 2012 audit by the Los Angeles County Department of Auditor-Controller showed that AHF overbilled the Department of Public Health by $1.7 million for contracts worth $8.5 million from January 2008 to March 2009. The audit also found about $20,000 in undocumented and unallowable expenditures. The Auditor-Controller has asked AHF to determine the amount of overbilling for subsequent years;
  • Two separate audits by the Florida Agency for Health Care Administration on February 16, 2010, and August 29, 2006, showed AHF billed Medicaid for pharmaceutical drugs that were not purchased or dispensed to patients. The 2010 audit showed Medicaid overpaid AHF by $8,117.42 and the 2006 audit showed the overpayment was $73,595.80. The agency also fined AHF $3,435.22 in 2010 and $5,000 in 2006;
  • In a June 3, 2010, examination by the California Department of Managed Care of 59 claims paid by AHF, auditors found problems with AHF’s accounting and billing practices that resulted in AHF underpaying claims submitted to them for medical services provided to policyholders of Positive Healthcare, AHF’s privately-owned insurance plan; and
  • In May 13, 2005, the Los Angeles County Auditor-Controller found AHF was double-billing L.A. County and Medi-Cal for the same patients receiving hospice service at the Carl Bean House over an eight-month period from March 2004 through December 2004. AHF kept $348,000 in overpayments and refused to repay it to the county and argued that it had been double-billing since 1992 and were entitled to the additional funds due to the low-reimbursement rate from Medi-Cal.

“AHF has a long history of shoddy bookkeeping that has costs taxpayers and with Measure B it has once again put forth another taxpayer-funded debacle. For a non-profit organization that receives the bulk of its funding from taxpayer-supported Medicare and Medicaid insurance payments, the question should be at the top of every regulator and elected official’s mind ‘Just what the heck is AHF doing with scarce taxpayer dollars?’” Lee said. “If nothing else comes out of this election, a thorough investigation of AHF’s books, especially its use of potential taxpayer dollars to fund political activity, should be at the top of every investigators to-do list.”

Measure B, funded and placed on the ballot by the AIDS Healthcare Foundation, would require the Los Angeles County Department of Public Health to license and permit adult movie productions in the county and require performers to wear condoms and create an unworkable system of on-set inspections and enforcement by county personnel. The county estimates initial start-up costs for the program to be in excess of $300,000, but acknowledges that regardless of the level of compliance by the adult film industry, there would be significant cost to the Department of Public Health.

According to the California Dept. of Public Health, from June 30, 2008 to June 30, 2011, there were 6,447 new cases of HIV reported in Los Angeles County, but only two were adult performers who did not contract the disease on-set. Since 2004, there have been no documented cases of HIV transmission on an adult entertainment set.  In fact, with the industry’s strict testing protocols – requiring testing at least every 14 and 28 days for HIV, chlamydia, gonorrhea and syphilis – adult performers are the most tested workforce in the nation.

No on Government Waste Committee

The Committee is comprised of entertainment companies, local business organizations, community activists, adult entertainment performers and healthcare advocates who oppose Measure B’s plan for creating an underfunded government inspection program diverting badly needed resources from local community clinics and underserved minority communities. For more information, please visit the campaign website.


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