So why is an AIDS nonprofit suing to halt construction and pushing … – Los Angeles Times

The AIDS Healthcare Foundation oversees a global philanthropic empire that extends from its Hollywood headquarters to 15states and 38countries.

The 30-year-old nonprofit organization treats hundreds of thousands of patients. It hands out tens of millions of condoms annually. And it puts up provocativebillboards urging people to get tested for sexually transmitted diseases.

But in recent months, it has become known forthe kind of activism usuallyassociated withhomeowner groups, spurring criticism that it has strayed too far from its mission.

In April, the foundation sued to stop construction of two residential towers next toits headquarters on the 21st floor of the Sunset Media Center. A few months later, the group filed a lawsuit challenging plans for a 15-story office building down the street.

And over the past year, the organization has been the driving force behindMeasure S, which would impose new restrictions on the construction of housing, shops and offices in Los Angeles.As of last week, the grouphadspentmore than $4.6million or nearly99% of the campaigns contributions to support the controversial measure,bankrolling billboards, door-to-door canvassers and splashy brochures, a Times analysis found.

Michael Weinstein, the foundations top executive, says the March 7 ballot measure falls firmlyin line with the groups mission to help residents with HIV and AIDS, as well asits track recordof waging social justice battles against governments that fail to serve the people.

Measure S, he argued,would take aim at high-priceddevelopment projectsthat are gentrifying neighborhoods and driving up housing costs. Those projects are making it difficult for people with AIDS and HIV to remain in L.A., Weinsteinsaid.

We have witnessed how San Francisco, where AHF has clinics for testing and treatment, has become a rich ghetto, he said. Low-income people by the tens of thousands have been displaced and diversity is harder and harder to find. The same thing is unfolding in Los Angeles.

Opponents of Measure S accuseWeinstein of using millions in nonprofit moneyto pursue a personal grudge over a building that would block his office views. Weinstein, they say, is just another NIMBY obstructionist, restricting the supply of new housing and jacking up rents across the city.

If voters want toavoid San Franciscosfate, they should reject the ballot measure, opponents say.

MeasureS is going to hurt the people the foundation serves,said Silver Lake resident Bobby Peppey, afoe of Measure S who was diagnosed withAIDS more than a decade ago.The people they serve are mostly lower-income persons, and people of color. And this is going to affect their ability to get affordable housing.

Proponents of Measure S say it would crack down on the citys long-standing practice of amending the General Plan the document that regulates what gets builtcitywide to enable big projects proposed by well-connected real estate developers. Foes warn the measure would eliminate thousands ofjobs and halt construction of affordable housing, since those projects frequently need changes to the General Plan to getbuilt.

The AIDS Healthcare Foundationhas waded into politics before. In the past five years, it hasspent millionsonballot measures to require condoms on pornography shoots in Los Angeles County and statewide. It has also backedcampaigns in California and Ohio torestrict the prices that state agencies pay for prescription drugs.

During those fights, critics accused the foundationof floutingrestrictions on political activityby charitable organizations.But the battle over so-calledmega-developmentshas spurred a new round of criticism of how the foundation and itsleader are spending its money.The Los Angeles County Federation of Labor, one of the biggest opponents of Measure S, recently released a video accusing Weinstein of funding campaign activities that have zero to do with healthcare.

The foundation has definedits mission asthe provision of hospice and healthcare services to AIDS, HIV and other patients, and engaging in related educational activities, according to state records. Michael Eisman, a critic of the group, said money spent on Measure S should have gone toward HIV medication or other services.

Measure S is a blatant abuse of the resources of AIDS Healthcare Foundation, considering it has absolutely nothing to do with the mission of the organization, said Eisman,who worked closely with the foundation as part ofa volunteer group until 2015.

Foundation representatives say that they have no difficulty serving their clients while fighting for Measure S.

The foundationhas a wide array of operations, running 43 pharmacies and 20 Out of the Closetthrift stores across the U.S. It has nearly400 clinics and employsmore than 5,000 people worldwide.

Under federal law, nonprofits like the AIDS Healthcare Foundation are allowed to weigh in on legislation, but too much lobbying can jeopardize theirtax-exempt status. To preserve their status, charitable organizations can either comply with spending limits or refrain from spendinga substantial part of their time, money and other resources to influencing legislation.

Legal experts say there isno clear rule about what is substantial, though past cases have given attorneys some guidance.If you start to engage more than 5% of your resources toward lobbying, its probably time to consider whether youre violating the test, said Gene Takagi, managing attorney of the NEO Law Group in San Francisco.

In federal tax filings, the foundation reportedthat itspent more than $253 millionduring2015, dwarfing the nearly $7 million less than 3% of the reported total spending it said it spent to influence legislation that year. Financial statements provided by the group indicatethat the foundationand nearly a dozen other affiliated entities collectively spent more than $983 million that year.Foundation spokesman Ged Kensleasaid that, historically, no more than 2% of its expenditures go towardadvocacy efforts an insubstantial portion of its budget.

California also requiresnonprofits to use donations for their declared charitable purposes. After the foundationlaunched its campaign for Measure S,a coalition of business, labor and community groupssent a letter to the California attorney general, accusing the groupof misusing its charitable donations by funding the ballot measure.

That letter cited concerns raisedby the Free Speech Coalition, an adult entertainment industry group that clashedwith the foundation over condoms in porn shoots. That group hasbeen urging state and federal authorities to investigatewhether the foundation underreported its political spending and exceeded federal limits on such expenditures.

Kensleasaid neither the IRS nor the state attorney general had contacted the group about anycomplaints. The grouphasrelied on itsindependent accounting firm to determinehow to categorize political expenditures, he said. Both the ballot measure and the lawsuit over the towers proposed next doorare financed by revenue from its businesses such as its pharmacies and thrift stores, notgrants or donations, Kenslea added.

The foundation entered the debate over L.A.s recent real estate boom two years ago,after the Miami-based firm Crescent Heights proposedtwo 30-story towers next to the AIDS Healthcare Foundations headquarters.

City officials welcomed the 731-unit Palladium Residences project, noting that it would be a block from a subway station and go up on an empty lot, avoiding the demolition ofexisting apartments. But the foundationopposed the development, arguing that itwas too tall and too dense for its location on Sunset Boulevard.

Early in that fight, public affairs consultant Steve Afriat, who was lobbying City Hall on behalf of Crescent Heights,asked for a meeting with Weinstein to hear his concerns. Afriat said that during that meeting, Weinstein complained that the Palladium would block his views of the Hollywood Hills.

He saidif we loweredit to 12 stories, he would no longer oppose the project, Afriat said. If we didnt, he threatened to sue and do a referendum.

Weinsteinsaid he never said anything to Afriat about his view and did not recall mentioninga referendum. But he confirmedthat he wanted Afriat to drastically reduce the sizeof the towers and thought a dozen stories would be more acceptable.

Within months, the foundation had dozens of people showing up at Palladium Residences hearings wearing AIDS Healthcare Foundation T-shirts. The groups lawyer testified that construction in Hollywoodhad already caused hertwo-mile commute to drag out to 25 minutes.

Around the same time, the nonprofit drafted aballot measure that wouldimpose a moratorium on changes in city rules that permitbuildings to be built bigger than ordinarily allowedthe kind being sought by Crescent Heights for its two towers.

The foundation began puttingmoney into the Coalition to Preserve L.A., the campaign group set up to support the ballot measure, which they labeled the Neighborhood Integrity Initiative.

Crescent Heights quickly became the biggest donor to the opposition campaign, providing nearlyhalf of the more than $3.2millionin money and services raised so far. Sunset Bronson Entertainment, another developer being sued by the foundation, has donated at least $100,000.

With the election twoweeks away, its not entirely clear just how deeply the foundation isimmersed in L.A. real estate fights.

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In an interview with The Times, Weinstein refused to say whether his nonprofit is bankrolling a lawsuit by Friends of the Neighborhood Integrity Initiative seeking to overturn the citys approval of a 1,210-unitresidential complex on Jefferson Boulevard.

Weinstein also would not disclose whether his group is paying for a legal challenge against the Martin Cadillac project, which would bring offices, stores and 516 apartmentsto Olympic Boulevard on the Westside. In addition, hedeclined to say how many lawsuits over L.A. real estate development his group is funding.

Whatever were doing is between us and our lawyers, he said.

emily.alpert@latimes.com

Twitter:@LATimesEmily

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So why is an AIDS nonprofit suing to halt construction and pushing ... - Los Angeles Times