Class-Action Lawsuit Filed Against Pallotta TeamWorks Over Return on AIDS Vaccine Rides
Participants in the 2000 and 2001 Pallotta TeamWorks' AIDS Vaccine Rides, who claim that the company "took too much money off the top of donations," on Tuesday filed a class-action lawsuit in San Francisco Superior Court against the company, a for-profit operation that stages charity events across North America, Europe and Africa, the San Jose Mercury News reports. According to the suit, only $8 million of the $28 million raised from four bike rides over the two-year period has been turned over to vaccine researchers. That return rate stands well below the "benchmark of 60%" set by most charitable fundraisers, attorney Victor Schachter, who represents the participants and their donors, said, adding that Pallotta had "promised" a 50% to 60% return. According to Pallotta's Web site, most of the money went to cover expenses, administrative costs and marketing, and the company also collected a $1.3 million fee. Pallotta, which provides a "traveling tent city" with hot meals and hot showers to attract participants, contends that it must "spend money to make it." The company has been criticized for its poor return on many of its events -- which include rides and walks for causes ranging from HIV/AIDS to suicide prevention -- but the lawsuit only addresses the AIDS Vaccine Rides, as they are the only events over which the company has complete financial control. The suit also asks the court to order the company to make a complete accounting of its expenditures and to provide vaccine researchers with any funds the court finds were "misspent." Pallotta spokesperson Janna Sidley said that the lawsuit was "wholly and entirely non-meritous," adding, "Pallotta TeamWorks has always been totally forthright in its printed and written materials" (Koury, San Jose Mercury News, 4/25). Pallotta has been involved in another legal battle with the San Francisco AIDS Foundation and the Los Angeles Gay and Lesbian Center, two former beneficiaries of the California AIDSRide, over their creation of a competing cycling event (Kaiser Daily HIV/AIDS Report, 12/20/01).This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.