In November, California voters will decide whether to re-write the law regarding home ownership and real estate investment in our state. To me, the most alarming aspect of Prop. 10 is not what it seeks to achieve – wiping out policy that has governed California rental property ownership for more than two decades – but how it originated.
Prop. 10 is on the ballot for one reason: Michael Weinstein, the head of the AIDS Healthcare Foundation, wants it on the ballot. Weinstein’s nonprofit spent more than $2 million of AHF money to hire professional signature gatherers to get Prop, 10 on the ballot. On Aug. 3, Mr. Weinstein announced that his group had donated another $10 million to support the rent control measure.
For those who know the AHF’s history, this is not that surprising. This tax-exempt organization claims it is dedicated to “hospice and health care services to AIDS, HIV, and other patients, and engaging in related educational activities.” But it turns out that the group has spent millions of dollars on Weinstein’s pet political projects for years.
In 2017, the AIDS Healthcare Foundation contributed more than $5 million to advocate for Measure S, a local initiative that would have greatly restricted new real estate development projects in Los Angeles County. Measure S would also have prevented the development of a high-rise that would have obstructed the view from Mr. Weinstein’s office.
After Measure S was soundly defeated by voters in March 2017, Weinstein decided to take another crack at real estate developers. He started using AIDS Healthcare Foundation funding to back a statewide proposition – now Prop. 10 – to repeal the Costa-Hawkins Rental Housing Act and allow for widespread rent control across California. That’s right — money targeted for healthcare and AIDS prevention is being used to promote Weinstein’s real estate interests, and tell mom-and-pop real estate investors how much they can charge to rent out their homes.
Perhaps most troubling is that the AHF is one of the nation’s largest recipients of Medicare funding, receiving $42 million from Medicare in 2016 alone. This is obviously not how tax-exempt Medicare recipients, like the AIDS Healthcare Foundation, should be using their government subsidies. Those subsidies should be going to help patients – the underserved, the needy – the very people the Foundation was founded to help 30 years ago. It is offensive for Medicare dollars to go to a tax-exempt, non-profit organization that then turns around and spends taxpayer dollars on unrelated pet political causes of its director.
Page 9 of AHF’s 2016 IRS Tax Return
There is no justification for our tax code to allow organizations like the AIDS Healthcare Foundation to operate without paying taxes, to accept tax dollars and then to use their surplus revenue to advocate for political campaigns.
No matter which side of the healthcare debate you are on, it’s more important than ever to advocate for proper use of Medicare and Medicaid. These government-supported programs allow millions of people with limited financial means to receive critical medical care they otherwise could not afford. Those funds should not be diverted for political purposes.
The time to act is now so that these programs and their funding will be there for those who need them.
In addition to my concerns about Medicare recipients funding political campaigns, it baffles me that our tax code prevents tax-exempt organizations from financially supporting candidates for elected office, but allows charitable funds to be spent promoting propositions. The code views campaigning for or against ballot propositions as lobbying. This means that 501(c)(3) public charities can campaign for (or against) ballot measures, as long as they accurately report their lobbying to the IRS and do not exceed lobbying limits. Funny, but proposition campaign ads sure seem like politics to me.
It’s time for our Legislature to re-examine whether nonprofits should be allowed to use tax-exempt monies to campaign for initiatives – especially initiatives with little or no connection to a nonprofit’s mission.
And it’s time to prevent Medicare monies being used to bankroll political activity.