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Shady AIDS Charity With a Big Web Campaign

March 26: This post has been updated.

New York Times

Peter Taback's first reaction to the Center for AIDS Prevention's prominent advertisement on the New York Times'Web site was jealousy. Taback, communications director for the San Francisco AIDS Foundation, was impressed another organization had cast its reach so far.

But on closer inspection, his envy shifted to outrage.

The Beverly Hills-based Center for AIDS Prevention has mobilized a nationwide fundraising campaign, but members of the tight-knit AIDS community in California have never heard of the group. Its history is shrouded in mystery, and even people who have interacted with the group are uncertain of its purpose. The Web site offers incorrect information about AIDS prevention and treatment -- such as the suggestion that birth control pills prevent the spread of HIV (PDF). The charity's proprietor also has ties to a for-profit company that sold ineffective herbal AIDS remedies to replace antiretroviral drugs.

The center is committing "public health malpractice," Taback said. "To have misinformation like that on the Web site is profoundly disturbing."

As charitable giving constricts with the economy, many AIDS foundations and treatment facilities are struggling to stay afloat, and AIDS advocates were also concerned that funding could be diverted from urgently needed services.

Meanwhile, the center's own financial and legal history is, at best, questionable. So far, the ad campaign has fallen well short of its "six-figure" fundraising goals, according to Lomax Burnett, the Center for AIDS Prevention's chief fundraiser. The center's tax filings with the IRS were available for 2006 (PDF) and 2007 (PDF), and they show no revenues, expenses or assets. Steve Neely, the center's director, said those were the first he'd ever filed on behalf of the charity.

However, Neely originally incorporated a charity two decades ago, in 1987 in Illinois. Neely told us that after a cousin died of AIDS, he started the charity to raise money for funeral expenses, and when the relative was buried, closed shop. A clerk at the Illinois attorney general's Charitable Trust Bureau said the center's nonprofit status was revoked after only 2.5 months of existence for "noncompliance." However, the Internal Revenue Service continued to list it as a nonprofit.

In 2007, Neely decided to restart his charity. He was required to file the center's first tax returns to the IRS and restore his good-standing status in Illinois to qualify as a corporation doing business in California. By October 2007, his paper work was in order. The center's Web site displays the motto, "Fighting the AIDS Epidemic for Over 20 Years" (PDF).

"We're taking that down," Neely said, conceding that the center had not actually fought AIDS for all 22 years of its existence. Neely said he's also revised other misinformation on the site, such as the touting of herbal remedies for AIDS.

In Neely's telling, the center is simply suffering growing pains. "Ninety percent" -- of the information on the site -- "is accurate and correct," Neely told ProPublica. According to Neely, consultants who built the site copied from information published by the World Health Organization and the CDC, though both organizations specifically say birth control pillsdo not protect against HIV.

The advertisements on the New York Times Web site are part of "a little fundraising campaign to pay the rent," he said.

The Times declined to comment on how much the Center for AIDS Prevention paid for their advertisement, which has run for over a week. Diane McNulty, a spokeswoman for the Times, said all 501(c)3 organizations are offered a "nonprofit rate." Neely said the rate was affordable. (Here's a screenshot of the ad (PDF).)

McNulty said the paper received complaints about the ad late last week, and that the center had not yet replied to a request for information Monday morning. As of Tuesday morning, the ads are still on the site. The Times' advertising guidelines prohibit ads "that contain fraudulent, deceptive or misleading statements or illustrations."

Neely also uses his charitable Web site to promote herbal remedies for AIDS, which have not been shown to be effective in scientific studies. A now-defunct, for-profit company, Herbal Hope, shares the charity's address, as well as its California corporate agent, Alexander Neely, Steve's brother, who died last year. We could not identify any other living person with ties to the company, but someone logged on to its page earlier this month.

Neely said he had no financial stake in the company, but he is thanked in testimonials on Herbal Hope's still-active Web site for providing herbal remedies. "I'm the one that was referring people to Herbal Hope," Neely told us. The product is no longer available, he added, but the Center for AIDS Prevention promotes any "promising" treatment options.

Herbal Hope marketed "Immunity" as a drink that would reduce viral loads of HIV patients, priced at $5,000 for a two-week supply. A testimonial (PDF) on the Center for AIDS Prevention's Web site, attributed to "A Grateful[sic] Doctor," promotes a similar product.

"The Center for AIDS Prevention does not practice any kind of medicine, nor should it be recommending any types of treatments," said Burnett, the fundraiser who likes to be called "doctor" on the strength of his honorary degree in divinity from the Institute of Divine Metaphysical Research in Los Angeles. "That should not be there."

Some aspects of Neely's past business dealings also raise questions. In the summer of 2005, Neely's company, World Preferred, a cellular phone retailer, dissolved, and he filed for bankruptcy in the Central District of California, claiming only $3,500 in cash and personal property, as well as two cars to his name. Court documents show he owed creditors more than $1.2 million, including $328,059 to the IRS. Five months later, an Illinois bank sued him in the same court, alleging he'd sold a Toyota Land Cruiser the bank had financed and pocketed the money instead of paying off his loans.

Neely's biographical information is hazy, too. The center's Web site suggests he's an experienced telecom executive -- World Preferred and at least two other companies were registered in his name -- and the winner of the 1995 "Ernst Young [sic] Entrepreneur of the Year Award." But Ernst & Young has no record of Neely receiving an award, said Katie Johnston, a spokeswoman for the awards program.

Other charities are wary of the Center for AIDS Prevention's more recent behavior. Its name is a near match to the San Francisco-based Center for AIDS Prevention Studies, a research group that is part of the University of California system and opened two years earlier than its Beverly Hills doppelganger.

The center's Burnett called Dr. Susan Kegeles, a social psychologist and co-director of the well-established, San Francisco-based research group to suggest a partnership earlier this month. Burnett told her about a Valentine's Day fundraising event and implied that her research group could become involved in future events if it disseminated the information Neely's organization produced, Kegeles said. Her doubts were confirmed when she discovered the Web site.

"What's infuriating is that someone would trade on our name, and someone could get this crazy information from him about these herbal drinks and incorrect information about risk reduction," Keegles said. "Some of it, it's just plain dangerous."

To publicize the Valentine's Day fundraising gala at the Montage Hotel in Beverly Hills, Neely's center announced that it would honor two high-profile Los Angeles personalities, Mayor Antonio Villaraigosa, and Phill Wilson, the director of the Black AIDS Institute. Villaraigosa's office said he skipped the event due to a scheduling conflict.

Wilson could not be reached, but his staff told ProPublica, "When we found out about the organization, we pulled out. [The advertising campaign] means they're taking resources from real organizations. We need to make sure that money people are giving to AIDS organizations is going to AIDS and HIV services."

The event was hastily assembled, and actors and political figures who gave pro bono performances left troubled by questions about the organization. "I asked a lot of questions because naturally I like to speak with as much depth and authority on a charity, an event, whatever [as possible]," said Patrick Kilpatrick, a veteran action movie actor who attended the event. "I thought it was very weird that I couldn't get anything substantive out of these people."

The keynote speaker at the event was Eric Bauman, the chairman of the Los Angeles County Democratic Party, and a well-known leader in the local AIDS community. Bauman was asked by a Democratic activist to make the appearance a couple of weeks before the event.

Bauman speaks at many AIDS events, but something seemed strange to him at the Montage. Throughout the night, he had only brief contact with the center's staff.

"I gave such a damn good speech there, too," Bauman said. "My partner's going to be pissed, [be]cause that was not how he wanted to spend Valentine's Day."

ProPublica Director of Research Lisa Schwartz contributed reporting to this piece.

March 25 -- Update: We have updated the phrasing of the New York Times advertising rates for nonprofts.

March 26 -- Update: The New York Times is still running as for the Center for AIDS Prevention, two days after we published our investigation. A spokeswoman told us: "It is important to note that we review the ad, not the organization. We do not read a book in order to accept advertising for it." Here's the full story.

March 26 -- Update: After our investigation was published, the Center for AIDS Prevention withdrew some incorrect tips on HIV/AIDS treatment and prevention from the Web site. Here's the story.

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