Pallotta TeamWorks, the event-organizing company that coordinates several fund-raisers for AIDS and cancer charities, has canceled a planned Experimental AIDS Vaccine Ride that had been set for September 22-28 and plans to hold no additional vaccine rides after the Canada-U.S. AIDS Vaccine Ride wraps up in early September, Steve Bennett, president of Pallotta TeamWorks, told Advocate.com. The organization had initially planned to hold additional vaccine rides in 2003 but is canceling those plans because of poor turnout for the 2002 events.

"The returns were not good and people were not signing up, and when they were singing up they weren't showing up," Bennett said. He noted that at the recently completed European AIDS Vaccine Ride, about 1,100 cyclists had signed up for the event but just over 500 actually participated. In a letter sent from Pallotta TeamWorks founder and chief executive officer Dan Pallotta to the registrants of the European event five days before it began, Pallotta said the low registration numbers would severely cut into the amount of money the group hoped to return to vaccine researchers. "We had budgeted to register 2,615 riders for the European ride," the letter states. "Right now we have registered 1,270 riders.... However, we want to let you know that, with these numbers, we now know that returns to charity from the ride will be extremely low--below 10% at best."

Bennett didn't have specific numbers as to what percentage of the money raised from the European ride would go to the two beneficiaries of the event--University of California, Los Angeles, AIDS Institute and Emory Vaccine Research Center in Atlanta--but did note that the return would be "not even close" to what the agency had hoped. "Our goal is always to [return] 50%, and we budgeted for scenarios to hit 60%," Bennett said. "We take a flat fee [for organizing the events], and we're not taking a fee on the European ride. We didn't take a fee on the California AIDS Ride this year. If the events aren't doing well, we can't justify our fee--even if we've done the work."

The Canada-U.S. AIDS Vaccine Ride, in which bicyclists will ride from Montreal to Portland, Maine, will take place as planned from August 28 to September 1, Bennett said. But that event will be the last AIDS vaccine ride that Pallotta TeamWorks will hold, marking an end to the vaccine bicycling fund-raisers that were launched in 2001.

A message on the Pallotta TeamWorks Web site for registrants of the planned-but-canceled Experimental AIDS Vaccine Ride explains that because only 188 people had registered for the event, it would not be held. But organizers hoped the registrants would instead participate in the Canada-U.S. AIDS Vaccine Ride or the upcoming AIDS Vaccine 3-Day, a three-day, 60-mile fund-raising walk from Bear Mountain, N.Y., to Manhattan scheduled for July 19-21.

Mother demands accountability in daughter's wrongful death

Lawsuit filed against AIDS Ride producer

Washington, DC June 2002
Members of the AIDS advocacy and protest group ACT UP in Washington DC are hailing a landmark lawsuit to be filed in the US District Court for the District of Columbia early tomorrow against Pallotta TeamWorks, the controversial for-profit California firm that produces several charity fundraisers including AIDSRide. The lawsuit cites negligence by Pallotta Teamworks in the wrongful death of Eve Jaffe, a 31 year old woman who died on the DC AIDSRide in 2000. The suit was filed by Rochelle Jaffe, Eve's mother, who is a District of Columbia resident.

"Rider safety is just one of our many concerns with Pallotta's AIDSRides," states ACT UP/DC coordinator Wayne Turner. "AIDS activists salute the courage of Rochelle Jaffe in her demand for accountability from Pallotta Teamworks, in the tragic and needless death of her daughter Eve."

The suit claims that Pallotta Teamworks failed to provide appropriate medical services, personnel, and equipment, including an on-site Advanced Life Support ambulance, for the 2000 AIDSRide participants, many of whom are living with HIV and AIDS.

As a result, Eve Jaffe was misdiagnosed and improperly treated: "As a direct and proximate result of the aforementioned breaches of the standard of care and negligence of the defendant, Eve Jaffe suffered a full cardiopulmonary arrest resulting in her death," the suit claims.

AIDSRides have long drawn criticism from many in the AIDS community for their high overhead and low returns for AIDS services. Earlier this year, Pallotta Teamworks sued two AIDS charities, the San Francisco AIDS Foundation, and the Los Angeles Gay and Lesbian Center, after the groups severed all ties to the firm, and produced their own bike ride fundraising event.

Dennis Jaffe, no relation to Eve, commented, "there's something unseemly about one man profiting so much behind the shield of raising money for AIDS. For me, suing the two California AIDS charities, because they had the audacity to hold their own ride, is a real good reason to make Pallotta persona non grata."

Mr. Jaffe lived in Pennsylvania when that state's attorney general fined Pallotta TeamWorks over $100,000 for fundraising improprieties before Pallotta moved his event out of state. "So many people were disgusted by the small percentage going to fight AIDS, they didn't want to have anything to do with him."

Because Pallotta Teamworks is a private, for-profit corporation and not subject to public disclosure provisions, there has never been an outside, independent audit giving a full account of where the proceeds actually go. "It's time the DC beneficiaries, the Whitman Walker Clinic and Food and Friends, ended their unholy alliance with Pallotta Teamworks," adds Turner.

"Shame on Pallotta," states Maxwell Lawton, who is living with AIDS, and is one of Food and Friends' longest surviving clients. "For us to have to witness his greed and unabashed profiteering off the good intentions of others. People with AIDS do not need his services. We can learn from Hawaii's Paradise Ride, a grass roots organization that donates directly to AIDS organizations themselves - www.paradiseride.org. This is a better way to help people with AIDS, and honor our loved ones, like Eve, rather than filling Mr. Pallotta's pockets."

ACT UP/DC also urges Food and Friends and the Whitman Walker Clinic to take every necessary precaution to protect the safety of participants in this year's AIDSRide, so that "no other families will experience the grief of losing a loved one to these potentially dangerous and poorly-performing 'fundraising' activities," Turner adds.

One of Rochelle Jaffe's letters

Eve and I did, indeed, receive his new, expensive catalogue. Would someone please remind him that EVE JAFFE IS DEAD and won't be able to make it this year.

How nice that in Dan's perfect world he doesn't want to think about the donated inadequate medical equipment that might be improved upon -- especially since someone died, folks. Everyone was told not to talk to me. Why? This ride was a charitable event. How can you not deal with the family's grief? Do you have any idea what this has done to us? I wonder if Eve Jaffe was remembered on the DC AIDSRide this year. I wonder if there might have been a moment of silence in her memory.

She really did care - Pallotta TeamWorks sold her a bill of goods and she was sure that the 19% of funds donated toward the safety and well being of each participant meant that all was in order in case of an emergency.

Does anyone know how that money is spent? I understand that all medical equipment is donated -- medical personnel volunteer -- medical supplies are donated. I am trying so hard to understand and the harder I try, the more devastated I become when I learn how PTW operates. All you good souls would be so much better off giving all of the money to AIDS research. We need a cure. That is the priority!"

Net return plunges in AIDS vaccine rides

Figures show 78.6% of 2001 money went to overhead costs

by LOU CHIBBARO JR.

Washington Blade [Washington, DC]
March 1, 2002

Three highly publicized AIDS Vaccine Rides organized last year by the fundraising firm Pallotta Teamworks pulled in more than $19 million in contributions from riders and corporate sponsors but incurred more than $16 million in overhead expenses, leaving only $4,012,000 for the three vaccine research institutions designated as recipients for the rides, according to a finance statement released this week by the Pallotta firm.

The finance statement, posted on the Pallotta Teamworks' Internet site, shows that the net yield for the three rides came to 21.37 cents for every dollar raised and that 78.63 cents on the dollar went to expenses. The finance statement shows that the return from the three AIDS Vaccine Rides in 2001 represents a decline from a 50.42 percent return for the single vaccine ride held in 2000.

The 2000 ride, which took place in Alaska and attracted 1,494 riders, pulled in $8,558,000 in income, and generated $4,163,000 in net proceeds for the vaccine research institutions. In a development that will likely raise concern among AIDS activists, the 2000 Vaccine Ride raised over $100,000 more in net proceeds than the three combined Vaccine Rides in 2001, even though the three 2001 rides attracted 3,972 riders who raised nearly $18.8 million in contributions. The remainder of the $19.5 million in income for the 2001 vaccine rides came from corporate sponsorship and other sources, such as advertising.

The finance statement comes at a time when some AIDS activists have criticized the Pallotta firm for incurring high overhead costs for many of its events. The firm has acknowledged that its overhead expenses are higher than that of other charitable fundraising groups but has said the size of the cash donations its helps to raise for various AIDS and breast cancer charities far exceeds that of other groups.

Concerns about high overhead expenses prompted the Los Angeles Lesbian & Gay Center and the San Francisco AIDS Foundation to break away from the Pallotta group and to establish their own San Francisco to Los Angeles AIDS bicycle ride. The new ride is set to take place less than a month before the Pallotta firm's annual California AIDS Ride begins its run between the same two cities. Organizers for both events predict the individual rides will draw far fewer riders and donors than the single California ride held last year. Animosity between the two competing parties appears to have reached a high point this week.

The Pallotta firm has said the L.A. and San Francisco groups will likely ruin the California AIDS Ride for both parties. The two groups accuse Pallotta Teamworks of refusing to agree to a compromise contract for the ride that would have protected the groups from cost-overruns that the groups say approached $400,000 for the 2001 ride in California.

Gustavo Suarez, a spokesperson for the San Francisco AIDS Foundation, called the just-released finance statement for the 2001 AIDS Vaccine Rides "stomach turning."

"It's not fair to the riders, who worked so hard to raise all that money," Suarez said. "You have less than 25 cents to the dollar going to the charities."

A spokesperson for Pallotta Teamworks did not return a call by press time. Steve Bennett, president of Pallotta Teamworks, told the Blade in an interview the day before the firm released its 2001 finance statement that the for-profit company carefully studies the results of all of its events to determine whether they should be continued or dropped.

"We're breaking new ground in doing this," Bennett said. He said the company makes every effort to insure that the greatest return to charitable organizations is realized in all of its events.

The Pallotta firm's finance statement for 2001 does not break down the figures for the three individual AIDS Vaccine Rides held that year. The three included the Montana AIDS Vaccine Ride, held July 30-Aug. 5, 2001 from Missoula to Billings; the Alaska AIDS Vaccine Ride, held Aug.30-Sept. 5, 200l, from Fairbanks to Anchorage; and the Canada to U.S. AIDS Vaccine Ride, held Sept. 5-9, from Montréal to Portland, Maine.

The 2001 finance statement posted on the Pallotta Teamworks Web site says the company's events that year netted more than $69 million for AIDS and breast cancer charities. Among the events of 2001 was the Washington, D.C. AIDS Ride, which benefited the Whitman-Walker Clinic and the D.C. AIDS service group Food & Friends.

George Bednar, Food & Friends director of finance, said the 2001 D.C. AIDS ride netted $3,542,382, which was split evenly between Food & Friends and Whitman-Walker. Bednar said an audited finance report prepared by a local accounting firm showed that the D.C. ride yielded a return of 50.5 cents on the dollar.

"We're very pleased with these results," said Craig Shniderman, Food & Friends executive director. Shniderman said the net proceeds were significantly higher than the previous year. However, Shniderman noted that the number of riders who have signed up for the 2002 D.C. AIDS Ride, which will travel from Norfolk, Va., to D.C., is lower than the number who signed up at this time last year.

"We expect to make up the shortfall within the next few weeks," he said. The ride is scheduled to take place June 13-16.

Pallotta Teamworks began its fundraising bike rides in 1994, when it began the California AIDS Ride. Since then it has expanded the AIDS rides to several others cities, including D.C., New York, Boston, Minneapolis, and Chicago. Several rides were dropped, including one held in Philadelphia, after returns drops as low as 30 percent.

In a 22-page document posted on its Web site, which includes the finance statement for all of its 2001 events, Pallotta Teamworks says it netted more than $69 million for AIDS and breast cancer charities in 2001. The finance statement shows that the breast cancer events yielded by far the largest return for their designated charities. The statement shows that nine events netted $51.5 million, and garnered a return of 60.34 cents on the dollar.

The Pallotta Teamworks 2001 finance statement shows the combined net proceeds for AIDS rides in 2001 came to $13.5 million and yielded a return of 46.71 cents for every dollar raised. The finance statement shows the 2001 returns represented a decline from a combined return of 52.72 cents on the dollar for the 2000 AIDS Rides.

Promotional literature released by the company shows that it plans several new AIDS Vaccine Rides in 2002. One is set to take place in Europe, where riders are expected to travel 400-500 miles from Amsterdam to Paris. A 70-75 mile vaccine "Africa AIDTrek," or walk, is scheduled to take place in a wilderness park in South Africa, the literature says. A three-day AIDS Vaccine Walk will travel from West Point, New York, to New York City, the literature says. Similar to last year, the Canada-U.S. AIDS Vaccine Ride is scheduled to travel between Montreal and Portland, Maine, according to the Pallotta literature. But the literature makes no mention of an Alaska ride, indicating the firm has dropped the Alaska event.

Copyright © 2002 The Washington Blade Inc.

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Berkeley man sues AIDS Ride organizer

Update April 2002: Article in Associate Press

(04-25) SAN FRANCISCO (AP)

A Berkeley bicyclist has sued the organizer of the AIDS Vaccine Rides for allegedly misrepresenting how much money raised by the events ends up going to medical research.

Mark Cloutier, who also is a lawyer, on Wednesday sued Los Angeles-based Pallotta Teamworks in San Francisco Superior Court. He alleged the company has misrepresented and mismanaged the amount of money distributed to nonprofit agencies for AIDS research.

Pallotta organizes several bicycle rides across the country to raise money for AIDS research, breast cancer research and other causes.

Cloutier said Pallotta delivered less than one third of the $28 million it received from the Vaccine Rides to charities that conduct AIDS vaccine research.

"The promise of the AIDS Vaccine Ride was that it would help raise much-needed funds for research and development of a vaccine for HIV/AIDS," Cloutier said. "I was greatly disappointed and so were many other well-intentioned riders who were misled."

Pallotta spokeswoman Janna Sidley dismissed the suit as "wholly and entirely non-meritorious."

Cloutier is seeking class-action status for his suit to represent all riders who have participated in the fundraising rides during 2000 and 2001.

Pallotta Teamworks has been embroiled in another legal battle with the organizers of the AIDS/LifeCycle ride, which scheduled a competing event weeks before Pallotta's ride June 2-8.

The San Francisco AIDS Foundation and the Los Angeles Gay and Lesbian Center accused Pallotta of mismanaging the event and said they're better off running it themselves.

Update 2001/2 - SFAF and LA Center Dump Pallotta

Organizations End Relationship with Pallotta TeamWorks

San Francisco, CA, Oct. 11, 2001 -- The L.A. Gay & Lesbian Center and San Francisco AIDS Foundation have jointly announced they will co-produce a new cycling event in 2002 to raise needed funds for HIV/AIDS services. AIDS/LifeCycle is an all-new LA-SF cycling event expected to attract thousands of riders in the late spring of 2002. A new AIDS/LifeCycle Web site, www.aidslifecycle.org, and a toll-free information number, 866-BIKE4AIDS, will be operational in the coming week. The L.A. Gay & Lesbian Center and the San Francisco AIDS Foundation will no longer be part of the California AIDS Ride for which they have served as beneficiaries for more than eight years. Both organizations have not renewed their contractual relationships with the event producer, Pallotta TeamWorks (PTW), after several months of negotiations.

The parties failed to reach agreement on several important issues, including reasonable financial controls for PTW production expenses, PTW cross promotion and marketing strategies, and a reasonable expense budget for the proposed 2002 event given significant unapproved budget overruns by PTW during the 2001 event. "

Our goal in creating AIDS/LifeCycle is to refocus attention and energy on our common cause -- the fight against HIV/AIDS -- while getting the maximum return from each dollar raised to support HIV/AIDS services," said Gwenn Baldwin, executive director of the L.A. Gay & Lesbian Center. "We have worked with the San Francisco AIDS Foundation for almost a decade to help people living with HIV/AIDS. Supported by our communities and donors, and committed to our clients, we are eager to create a meaningful and successful fund-raising experience."

"We are thrilled about AIDS/LifeCycle, which will make possible many critically needed HIV and AIDS services," said Pat Christen, executive director of the San Francisco AIDS Foundation. "In partnering with the L.A. Gay & Lesbian Center, we join an organization that shares our commitment to those affected by HIV. This event will bring together a caring and daring community that is supremely dedicated to the fight against AIDS. We are confident that it will be hugely successful." With the development of new treatments, more people are living with HIV than ever before, and the need for support services continues to grow. The documented increase in new HIV infections underlines the need for new initiatives in education, outreach and prevention programs.

By co-producing their own cycling event beginning in 2002, the two nonprofit organizations believe firmly they will improve cost controls, resulting in a greater share of net proceeds to support their respective client services.

California AIDS Ride loses top beneficiaries

The Los Angeles Gay and Lesbian Center and the San Francisco AIDS Foundation, the two beneficiaries of the California AIDS Ride, announced Thursday that they will no longer be a part of the Pallotta TeamWorks-produced event. In a joint statement, the organizations said that after two months of negotiations they failed to come to any agreement with the company regarding several important issues, "including reasonable financial controls for [Pallotta TeamWorks] production expenses" and "a reasonable expense budget for the proposed 2002 event given significant unapproved budget overruns by [Pallotta TeamWorks] during the 2001 event."

For almost a decade, the AIDS Ride events have been the largest fund-raisers for HIV/AIDS-related causes in the United States. Pallotta TeamWorks, however, has been frequently criticized for spending too much on the events' production and, therefore, decreasing the amount of donations that end up with the AIDS organizations. The L.A. Center and the San Francisco AIDS Foundation announced that they will instead produce their own cycling event for next year, the AIDS/LifeCycle. No representatives of Pallotta TeamWorks were available for comment at press time.

(So, over two years after I wrote the most extensive expose of Pallotta do these organizations get a clue. Call me Cassandra. -JP)

SF Weekly Editorial, May 3, 2001 on Cycling Deaths and the AIDS Rides

Take for instance, the Tanqueray California AIDS Ride, which leaves from San Francisco June 3. Everybody in San Francisco knows an AIDS Rider, San Francisco's seasonal equivalent of airport Hare Krishnas. They endlessly panhandle friends and acquaintances. They cajole co-workers into joining their AIDS Ride teams. That would all be fine and good if the organization promoting the rides, the for-profit corporation Pallotta Team Works Inc., didn't inspire such a high degree of doubt.

This is the same organization that was investigated by the Pennsylvania state attorney general for allegedly misleading donors into thinking charities would receive the lion's share of their contributions. Instead, in that case, 28 percent of revenues went to charity, according to news reports.

Dan Pallotta, the aphorism-spouting entrepreneur behind the AIDS Rides, paid the state $110,000 without admitting wrongdoing. An AIDS Ride in Texas netted only 8 percent for AIDS service organizations. The San Francisco-Los Angeles AIDS Ride last year provided around 60 percent of revenues for charity, according to Pallotta data. Ordinary nonprofits consider an overhead of more than 30 percent excessive.

That's all old hat, of course. Pallotta has earned legions of detractors in the gay community, who believe he has exploited a tragic epidemic for his own gain. Jim Provenzano two years ago wrote a wonderful expose of the Pallotta operation for the gay newspaper the Bay Area Reporter, detailing how it "has been sued, fined, and maligned, yet defends its high fees and continues to secure contracts with charities around the country." Pallotta has also been criticized for the Avon 3-Day, a 55-mile, Pallotta-promoted walk to raise money for breast cancer research.

Through all this Pallotta has refused -- in interviews with the New York Times, the Los Angeles Times, and other publications -- to reveal how much money he earns from his AIDS Ride/cancer walk empire. He includes a section on his organization's Web site titled "Full Financial Disclosure," which is anything but.

Instead, it is filled with bromides such as these: "Do you feel it's valuable for people to reconnect with their dreaming skills? Do you feel it's important, in this world that suffocates people's dreams, for people to reawaken the dreamer within them, for their own good and the good of all the world? We do, and we design events that do that."

Comforting. But not comfort enough to mute the galling fact that about half of AIDS Rides donations go to a profit-making company that does not provide services for people with AIDS.

With the Ides of May only two weeks away, it's certainly time for spring cleaning -- of our consciences and otherwise. For some that might mean taking civic action, forging a new consciousness that says becoming a true transit-first, ped-first, and cyclist-first city is exactly the same thing as becoming a life-first city.

For others this might mean joining the fight against AIDS. For those wary of Dan Pallotta's for-profit style of fund-raising, that could involve volunteering and/or writing a generous check for one of the dozens of reputable charities addressing the AIDS epidemic, then setting down your pen and taking a bike ride.

Read the full editorial:
http://www.sfweekly.com/issues/2001-05-02/smith.html

Letters to SF Weekly following Matt's column:

Follow the money: While 60 percent was indeed the percent I saw that went to the designated charities after last year's California AIDS Ride, it is a misrepresentation to suggest that 40 percent went to Pallotta Team Works. I know a significant percent goes to rider support -- tents, securing road permits, food, showers, Porta Pottis, etc. -- and a significant percent goes to promotion and staff. Agree with that expenditure or not, it is not going into Dan Pallotta's pocket. Agree or not with a for-profit company putting on charity events, in the case of [the AIDS Ride], 60 percent of $11.6 million is still $6.96 million. That is a lot of money that would never be seen by those charities. How do I know? I can use myself as an example -- most of the money I raise comes from out-of-town donors. These are people that would never be writing checks to the S.F. AIDS Foundation. While I think there may be legitimate criticisms of these events, I also think there was much left out of your story that skewed the picture.

Regarding S.F. drivers and the general attitude of disregard to cyclists -- I totally agree with your comments. Thanks for writing a provocative article. Safe riding!

Cathy Johnson
Mission District

Criticizing is easy, but to be honest, we have few other skills: After seeing the numerous letters that seem to appear each week citing a problem with Matt Smith's weekly babblings, I turned to his column this week only to find myself joining the letter writers. As a second-time walker in the Breast Cancer 3-Day, I have found Pallotta Team Works, as well as the Avon Breast Cancer Crusade, to be highly reputable and extremely competent in running their events. The walk was one of the most incredible, moving, and empowering experiences of my life, and I would recommend the Pallotta events to anyone. However, as Smith illustrates, it is a lot easier to criticize than it is to get out there and make a positive difference for a serious cause.

Megan Keane
Oakland

Thank you so much for your column about the AIDS Ride ("Rides and Wrongs," Matt Smith, May 2) -- pardon me, the Tanqueray AIDS Ride (the sponsoring booze now merits top billing over the putative reason for the ride). I was the editor of the Bay Area Reporter when Jim [Provenzano] did his wonderful series, after which I faced lawsuits and a barrage of calls from AIDS Riders who were angry with me for pointing out that [Dan] Pallotta could have chartered an ocean liner for those eight days, treated the gang to endless food and Broadway-style entertainment, not to mention real bathrooms, and it would have cost less than what he charged in overhead. This is just to let you know some of us appreciate what you said.

Mike Salinas
New York City