Bank seizes HIV, AIDS donations to AIDServe Indiana

According to Gina Barton, the Indianapolis Star:

Nearly $175,000 worth of donations for people with HIV and AIDS was seized by Fifth Third Bank to pay off the debts of AIDServe Indiana, a troubled statewide agency that closed in November.

The money, raised at the annual AIDS walk in October, was placed in an unrestricted account. The bank took the money to pay off the organization’s credit line, AIDServe board member Coby Palmer confirmed.

“The bank took the walk money because the loan came due,” Palmer said.

Palmer and others are concerned that the fiasco will have a negative effect on future AIDS fund-raisers throughout the city.

“I think it’s going to be hard for anyone to do an AIDS walk this year,” said Diana Gray, executive director of the Damien Center, a regional AIDS service organization based in Indianapolis. “It’s clearly out in the community that the AIDS walk money was taken by the bank and did not go to the people it was supposed to go to, and clients have suffered because of that.”

Gray said she hoped people would recognize the Damien Center as an independent entity from AIDServe, which still owes the Damien Center $104,000.

Herb Schlotterbeck, 62, has participated in the walk for the past 10 years. He said he would sign up again to show his support for people with AIDS, regardless of what happened to the money.

“I’m not concerned about AIDServe; I’m concerned about people who need the support,” said Schlotterbeck, who walked with a group from All Saints Episcopal Church.

The Damien Center is planning to sponsor a walk later this year. Officials likely will work in cooperation with Palmer and another AIDS activist, Jack Batty, who are organizing a new group, Indiana Still Cares. The organization will not distribute federal funds or enter into contracts with the Indiana State Department of Health, as AIDServe did. Rather, Indiana Still Cares would plan and execute fund-raisers to help people with HIV and AIDS.

AIDServe, with 800 to 900 clients and an annual budget of $5million, was the only statewide agency serving needy residents with HIV and AIDS. About a dozen regional groups received funding through AIDServe, which administered federal grants through contracts with the Health Department.

In November, AIDServe Director Mark St. John resigned after admitting he had mismanaged the agency’s funds. A week later, the Health Department terminated all its contracts with AIDServe, in essence shutting it down.

Many low-income people with HIV and AIDS were left unable to afford housing, drugs and medical services. Doctors who took care of them were not paid. Several board members have resigned, but some, including Palmer, agreed to stay on to tie up loose ends.

Both the Damien Center and Indiana Still Cares hope to distance themselves from any implied affiliation with AIDServe, which remains the target of both criticism and legal action.

The $175,000 raised at last year’s AIDS walk wasn’t enough to cover the organization’s $400,000 debt to Fifth Third Bank, according to a lawsuit the bank filed earlier this month in Marion County. The suit seeks permission to take any assets at the organization’s former offices at 3951 N. Meridian St.

Thomas Mariani, the attorney representing the bank, said all parties agree the bank has the right to take the materials, which he guessed are valued at no more than $10,000.

Meanwhile, Health Department officials are trying to repay the regional groups for outstanding expenses that should have been paid by AIDServe. They also want to keep helping clients.

“We’ve continued to provide direct medical assistance and housing assistance, the things we consider essential services,” said Michael Butler, director of the Health Department’s HIV/sexually transmitted disease division.

The department hopes to have AIDServe’s former contracts reassigned to different providers by July 1.

Palmer believes AIDServe’s cash-flow problems resulted in part from the Health Department’s failure to reimburse the organization in a timely manner. Palmer said he thinks the Health Department owes AIDServe about $250,000.

Health Department officials say they have not received documentation to substantiate that claim. An audit now under way could help resolve the differences.

“The audit results will dictate what our next move will be,” Butler said.

The bank and several regional service organizations also are awaiting the results of the audit in hopes they can lay claim to additional money. The audit likely won’t be finished for several months.

AIDServe plans to file for bankruptcy, Palmer said.

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