Nonprofit Health Clinic for Sex Workers Switches to For-Profit Status

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February 14, 2011; Source: Los Angeles News | No, NPQ hasn't lowered its standards to provide coverage of pornography. Rather, the issues behind the conversion of Adult Industry Medical Healthcare Foundation to AIM Medical Associates, P.C., an obvious quick transformation from nonprofit to for-profit, merit attention for this reason: should the tax status of a health care provider be the determinant of its compliance with or exemption from health care standards?

AIM has both its nonprofit and for-profit missions on its webpage. As a nonprofit, AIM existed "to care for the physical and emotional needs of sex workers and the people who work in the Adult Entertainment Industry . . . (t)hrough our HIV and STD testing and treatment, our counseling, and support-group programs . . . to take a leadership position in promoting safe and responsible sexual behavior, not only for the adult entertainment industry, but for everyone."

But its for-profit statement provides an interesting clue about the motivations for the tax status change: "Relieved from pointless harassment that came with oversight from the County Health Department, the new AIM more appropriately is responsible to the California Medical Association."

What was the "pointless harassment?" The AIDS Healthcare Foundation asked California Attorney General Kamala Harris to investigate why AIM switched from nonprofit to for-profit, which AIM admits was to avoid Los Angeles County regulation of nonprofit clinics. AHF wants the San Fernando Valley-based porn industry to use condoms on-set, as required but not enforced by the state of California. The pornography industry says condoms will ruin the biz and prefers the AIM clinic's regular testing for performers, which it says makes adult industry movie sets safer for sex than sex in the general public.

AHF is simply questioning how AIM, which apparently was in violation of California's unenforced condom law, could reinvent itself as a for-profit so quickly and what government oversight it might be trying to escape. It is not unknown for for-profits to seek nonprofit status to access subsidies and resources available to nonprofits (for example, property tax exemptions or government grants). When nonprofits convert to for-profits, particularly in the health sector, the AG usually plays a role investigating and overseeing the protection and transfer of nonprofit assets.

In this case, if the Los Angeles County rules for health clinics are good enough for nonprofits, why shouldn't they apply to for-profit clinics too? If the status conversion is largely to evade government oversight, shouldn't the AG ask what's up?—Rick Cohen