Lance Clem can talk for hours about what's wrong with the way millions of dollars designed to help people infected with the AIDS virus are being spent in the Denver area. But talk like that, he says, cost him his job as the executive director of the Governor's AIDS Council.

In July, Dr. Patricia Nolan, director of the Colorado Department of Health, dismissed Clem from his post. The move, which came on the heels of the sudden transfer of the council from the governor's office to the health department, surprised not only Clem but also councilmembers and AIDS activists.

And Nolan dumped Clem despite bylaws the council had implemented following a similar purge that claimed his predecessor in 1990.

"She called me out of the blue and said, `With you being an enemy of the health department, there is no place for you...Consider this your thirty-day notice,'" says Clem. Clem is generally credited with securing federal AIDS funding for Colorado after the health department botched the first attempt in the spring of 1990. But his opponents, and even some of his friends, say Clem didn't know when to keep his mouth shut. Nolan, who is also a member of the AIDS council, says that because Clem wasn't yet working for her department, she technically didn't fire him. But she refuses to describe the role she did play in his removal from the position. "It's not appropriate for me to discuss Lance Clem's appointment or his issues," she says.

Nolan's reluctance to talk stems from a lawsuit that Clem, who was moved into the governor's office but told there would be no money to pay him after December, filed in January. In it he alleges that Nolan's action violated his constitutional rights of due process and free speech. Nolan and "unknown individual co-conspirators" on the council also have "commenced a scheme" to "ruin Mr. Clem's professional career," the suit claims. Clem is seeking unspecified monetary damages. He also wants to prevent Nolan from filling his old position.

Nolan didn't have the authority to fire him, Clem argues. And even if she had, he says, she dismissed him because he dared to question some expenditures of metro-area agencies that receive the lion's share of federal AIDS money available to the state.

In particular, Clem says, he riled councilmembers with ties to the Denver Department of Health and Hospitals by arguing that money intended for the care of people with the AIDS virus should not be used to support "exorbitant" salaries of DHH physician/administrators. He also questioned the propriety of councilmembers voting on funding requests for their own agencies.

C.L. Harmer, DHH's chief spokeswoman as well as a councilmember, says Clem's contentions aren't valid. Nor, she adds, were they the sole reason she supported his ouster.

"Lance has many strengths," she says. "But consensus-building was not one of them, and consensus-building was important to his job. It became an issue of diplomacy and tact, not free speech."
Faced with what was becoming an ugly public squabble, in January Governor Roy Romer gave Clem a temporary job with his Community Partnership Office. Romer's staff is still casting about for a satisfactory permanent position. In exchange, Clem agreed last month to postpone further legal action for thirty days. But that agreement hasn't stopped him from talking, and Clem still may get the last word.

At the request of Colorado Senator Hank Brown, the General Accounting Office will be sending its auditors to Denver this spring to investigate how the city and state spend their federal AIDS funds. Brown's request comes shortly before Congress takes up the reauthorization of the emergency-services funding program known as the Ryan White CARE Act.

The GAO action has Denver worried enough that Donna Good, a member of both the governor's and the mayor's AIDS councils, as well as Wellington Webb's liaison with DHH, flew to Washington, D.C., last week to see if she could "neutralize" Brown's possible opposition to reauthorization.

Neutralizing Clem is another matter entirely.

The Governor's AIDS Council is the offspring of the Governor's Task Force on AIDS, a large, unwieldy group of activists, medical experts and bureaucrats that began meeting in 1987; the task force eventually recommended that a smaller, more permanent agency be formed. Romer created the council in 1989 to advise his office on issues such as AIDS testing and health-care services. The council quickly grew to its present contingent of 28 members, appointed by the governor from the ranks of community activists and AIDS-agency representatives across the state.

Under its first executive director, Mary Lou Johnson, the council successfully lobbied for legislation that created sites for anonymous AIDS testing. This was the first--but certainly not the last--time the council would butt heads with the health department, then led by Tom Vernon. Anonymous testing was in direct conflict with Vernon's policy of identifying those people who had been infected with the virus as well as their partners--the traditional method of dealing with sexually transmitted diseases, but one that, given the stigma of AIDS, generated a great deal of controversy.

Despite the anonymous-testing victory, Johnson's council lacked any real authority. It had no budget and was housed in space donated by Kaiser Permanente. And it depended on the health maintenance organization and the governor's office to pick up its bills.

The real clout on the AIDS front--in other words, the money--lay in the hands of metro-area agencies, including the nonprofit Colorado AIDS Project (CAP) and the Denver Department of Health and Hospitals, which includes the public Denver General Hospital. These agencies received funding from the federal Health Resources and Services Administration for "demonstration projects," which qualified for the funds by providing unique examples of ways to care for people infected by the human immunodeficiency virus, the cause of AIDS. Administration of these HRSA grants fell to DHH, which used a large chunk of its share to support the salaries of clinic directors and other staff members involved in AIDS services.

"Basically, Denver health and hospitals was the only agency big enough to handle the administration," says Julian Rush, the founder and executive director of CAP, one of the original HRSA grant recipients.

The result was that DHH cut the checks for itself and other qualified agencies. Groups that didn't qualify--often agencies outside the metro area--were left begging.

"It was like AIDS didn't exist outside of Denver," says Shelley Nielsen, director of the Grand Junction-based Western Colorado AIDS Project. "Which made it tough, because there is a lot of denial on this side of the mountains, too. The lack of attention from Denver made it easier for people here to ignore what was going on."
By 1990 the Governor's AIDS Council had reached a crossroads. Groups such as ACT-UP accused the council of playing politics and dragging its feet on important issues. Gay activists picketed the April meeting, painting anticouncil slogans on the sidewalks outside the Kaiser building.

ÊThat's when a small group of councilmembers decided to get rid of Johnson, according to Rush. She was gone by June--and before the full council knew what was happening. (Now an employee with the AIDS Education and Training Center at the University of Colorado Health Sciences Center, Johnson did not return telephone calls requesting comment for this story.)

Councilmembers were upset by the secretive way three or four people had managed to remove Johnson, Rush remembers. As a result, the council drafted new bylaws stating that a majority of the councilmembers present at a meeting constituted a quorum "except with respect to...the installation or termination of the Director, which shall require a majority of the total number of members of the Council." The council started a search for a new executive director. Among those who applied was Lance Clem, a University of Denver graduate who had worked as a Colorado Department of Transportation public-information officer for twelve years. Clem, who is gay, had been volunteering at various AIDS agencies since the early 1980s, when he joined the fledgling CAP. "I had a lot of friends with AIDS," he says, "and volunteer work was sort of a family tradition--an example set by my mother and grandmother." Still, he soon discovered that his most useful talent was one he had picked up working for the state government: writing grant applications.

Among those supporting Clem's appointment to the director's job were Rush and Harmer, who had joined the council following the death of her husband from AIDS. "I started working for Denver health and hospitals after I was on the council," Harmer says. "But I didn't represent DHH at the meetings. I was there because of my husband."

Clem got the job in September 1990, unaware of how drastically the position was about to change. Earlier that year Congress had passed the Ryan White CARE Act, named for the hemophiliac boy infected with HIV who gained national attention when he battled to stay in his Indiana school. The money attached to the act came in two primary forms, Title I and Title II; the first category went to qualified metropolitan areas, the second to states. Unlike much of the HRSA funding, Ryan White money was earmarked for emergency-care services for people infected with the AIDS virus, including medical, transportation and housing expenses.

At the time, the Denver area didn't have the 2,000 AIDS cases required for Title I funding. But Title II money didn't have the same restriction, and the state health department quickly applied. But federal authorities rejected the department's application, and Colorado become one of only six states refused Ryan White funding. In March 1991, Clem says, he was shown the feds' letter rejecting Colorado's application. "Basically, they were saying that the application didn't indicate how the money would be spent, which was clearly required by the grant description," he remembers. "I looked at the application and thought that it was an embarrassment--a halfhearted attempt that told me that the health department really didn't want to take care of people with AIDS. Ryan White money was to take care of people who already had it."

At the urging of the governor's staff, Clem resubmitted the application, this time proposing that the Governor's AIDS Council be made the fund's administrator. The application was approved immediately, making Colorado the only state in which Ryan White Title II monies were controlled by a citizens' council rather than a state health department or social services agency.

The money arrived in May 1991. It totaled more than $770,000, of which a maximum of 10 percent was allowed for administrative costs. Clem was overjoyed. The council now had a significant budget, and the state had a major source of funds for dealing with the human effects of the epidemic.

But not everyone was as thrilled with the new funding arrangement. The state health department, which regularly locked horns with Clem over such issues as AIDS testing, had lost clout. And the agencies that had previously received HRSA demonstration grants now had to ask Lance Clem and the governor's council for their money.

When Congress passed the Ryan White act, one of its caveats required that agencies that had received HRSA funds be given priority for the new program. But to get Ryan White funding, those agencies had to form a consortium that would make requests of the grant administrator.

Former HRSA grant recipients in the Denver area formed a consortium that left DHH in charge of distributing the money received through the governor's council. But the Denver consortium's bylaws created a catch for other agencies that wanted to join the group (and get a share of the Ryan White money): In order to join the group, an agency had to already be funded. For small agencies that relied on public donations or were just starting up, this stipulation proved an insurmountable hurdle.

Although several Denver agencies were cut off from the Ryan White funds, Clem saw to it that other parts of the state received a share. He contacted agencies across Colorado that had received small amounts through CAP's annual fundraiser and convinced them to form three more regional consortiums.

"If it hadn't been for Lance, we probably wouldn't have received any Ryan White funding," says Nielsen, of the Western Colorado AIDS project, whose territory covers every community west of the Continental Divide except those in the San Luis Valley.

"There was nothing here," she continues. "Families were having to deal with this horrible disease without any help or support. Lance had hearings up here to explain how to apply for Ryan White funding and brought the council so that we could tell them about our problems. It felt like someone in Denver finally cared."
But several members of the Denver consortium didn't care for Clem's positions. For instance, he told the consortium that he was troubled when small metro agencies weren't allowed to join up. Under federal rules, he pointed out, although agencies weren't eligible for Ryan White Title II funding unless they belonged to a consortium, there was nothing in those rules that required they already have a funding source.

Clem moved into deeper waters when he began challenging councilmembers for voting on funding applications that affected their own agencies. In particular, he singled out councilmembers who were either employed by DHH, like Harmer, or those with direct ties to the department, such as Donna Good, Webb's special assistant for health and family issues.

Their voting especially galled him, Clem says, when he saw the DHH application for Ryan White funding in the summer of 1991 and "the range of exorbitant salaries paid to doctors and other employees at DHH for providing care services to persons with HIV." Clem's ire focused on Dr. Adam Myers, Denver General Hospital's director of oncology, one-third of whose $250,000 salary was covered by Ryan White funds that year.

"Yet he spends only about 1 percent of his time with AIDS patients," Clem says. "And for what? These are city employees. If there was no federal funding, they would still have to provide the services. My own private doctor sees fifty to sixty patients with HIV and makes half as much as Myers."
But Myers, who is also the consortium's lead administrator and runs its meetings, contends that he spends between 35 and 50 percent of his time on AIDS work, doing research and treating patients. Using Ryan White funds to support his salary has allowed DHH to hire staff to handle some of his other duties, Myers says, so he can devote more of his time to AIDS, including running two clinics devoted to AIDS-related blood and cancer disorders.

"I have always been a bit puzzled by Mr. Clem's preoccupation with my salary," Myers says. "I don't set my salary, the city does. My colleagues in private practice make twice what I do. Those of us in the institutions aren't here because of the salary; we're here because we're dedicated to what we're doing. And we in Denver enjoy an excellent reputation nationally for the work we are doing here."
In his suit, Clem claims that not only did council voting present a conflict of interest, but that using Ryan White funds to supplement salaries is illegal. He'd repeatedly brought these same issues before the Governor's AIDS Council, he says, but other councilmembers weren't nearly as alarmed. "I think part of the problem with what happened to Lance was that he thought this was such a major issue and the council didn't," says Rush.

But Skip Tjach, chairman of a citizen's committee appointed by the council to oversee fund distribution, was outraged when he learned that most of DHH's money went to administration. "They listed other duties that I thought were bogus," says Tjach. "The committee officially recommended to the council that [DHH] funding be cut back."

His committee members thought the matter was important enough that they raised the issue on several occasions, Tjach adds. But the council still approved DHH's funding.

In the spring of 1992, a Romer aide called a meeting between Clem, his supervisor, Dr. Myers and members of Wellington Webb's staff.

"The purpose of the meeting ostensibly was to `iron out' the conflict between Dr. Myers and Mr. Clem," according to Clem's suit. "The implicit message given to Mr. Clem was that he was to bury the issues of improprieties" or "there would be another `meeting' if Mr. Clem raised the issues again."
And Clem did. He asked Myers why the Denver consortium had no quality-assurance mechanism in place, as required by the federal government. He suggested that a survey of consortium clients be taken or that the consortium form an advisory group of people infected by HIV.

Myers assured him such a survey would be conducted, Clem says, but it took repeated requests before a Denver General nurse was assigned to the task.

"Even then, it was not a survey of how clients felt about the treatment they received and whether they were happy with services provided by DHH," Clem says. "It just gathered basic demographic information--such as the number of clients served, their age, sex...that sort of thing."
Myers says he believes the survey met federal requirements and that Clem's complaints are just another attempt to harass him.

But Clem didn't reserve all his criticism for DHH. He questioned other consortium members about such expenditures as hiring outreach workers and paying for education campaigns. "Ryan White money is supposed to be used for direct care, not education," he says. He took Donna Good and the Mayor's HIV Resource Council to task for using $300,000 from the federal Housing Opportunities for People With AIDS program to purchase and renovate apartment units on Jersey Street.

"Maybe six people will be able to live there," Clem says. "They would have gotten more bang for their buck by using the money as rent vouchers to keep people in their homes."
Her program includes rent vouchers, Good says, but the apartments "fill a need for people with AIDS who want the support of others nearby, who are going through the same thing."

In June Romer announced that the AIDS council's fiscal affairs were being transferred to the state health department, and that the rest of the council would soon follow.

"I thought the move was appropriate," says Clem. "That's why I was so surprised when Nolan called."
Despite annual job evaluations that rated Clem's performance as excellent or outstanding, Nolan told him he wouldn't be making the move to her department. Clem wasn't the only one caught off-guard by Nolan's announcement. Even though it was evident that Clem's actions had angered some members of the council, as well as DHH and health department officials, "I was surprised when it happened, and how it happened," Rush says. "I was on the executive committee, and everyone thought we had something to do with it. But it was a done deal before I even heard about it from Lance.

"We had previously been led to believe [by the governor's staff] that our bylaws were credible. After the fact, we were told...they weren't legal. The council has asked for a clarification, but we haven't received an answer."
According to Meg Porfidio, Romer's deputy chief of staff, when the decision was made to move the council to the health department, the director's role changed. "The position went from being an employee of the governor's office to a civil service job," she says. "The bylaws no longer applied, and it was up to the health department how to staff that position."

Clem may have criticized that department one time too many before the transfer, Rush says. "The bottom line was that under the new arrangement, a large portion of Lance's salary would have been paid by the health department. I think Pat Nolan decided that, given the past relationship, Lance would not make the change with the rest of the council."

Councilmember Elizabeth Nickles, who works with the Department of Corrections' AIDS programs in Canon City, had no idea Clem was in trouble. "I never had any difficulties with him," she says. "In fact, I found him to be very nice and extremely dedicated."

Western CAP's Nielsen was shocked by Clem's removal. "He's a wonderful human being," she says. "But there are an awful lot of politics in the whole AIDS funding issue."

Which is why several other councilmembers and agency heads say they're unwilling to be quoted about their own surprise at Clem's dismissal. They claim they fear the possibility of retribution by the health department, which now controls the Ryan White Title II money, and DHH, which cuts the checks for members of the Denver consortium.

Even Clem's opponents don't question his dedication to helping people living with the AIDS virus. "But the job entails coordinating the state's response to this epidemic," Harmer says. "And how can you coordinate if you're constantly criticizing everyone and everything? People like Dr. Myers, whose hard work was responsible for those first grants coming to the area, should be praised, not criticized."

This year Denver became eligible for its own Ryan White money when it crossed the 2,000-person threshold required for Title I funding. Those funds will be handled by Good and the mayor's council, which also administers the federal Housing Opportunities grant. All told, Good's group will control more then $4 million of the $6 million in federal AIDS funding coming to Colorado this year. "Early on, Clem had the biggest AIDS funding agency in the state," Good says. "Now I do. I don't think he liked that. But really, I had no hard feelings."

While Good says she wasn't surprised that Clem wasn't moved to the health department, she adds, "I didn't know that it wasn't his choice until later." According to Tjach, though, DHH put a lot of political pressure on the state health department to get rid of Clem. "I left at the end of 1993 because the council had become dysfunctional under the health department," he says. "It was no longer independent, and DHH has a lot more pull with the health department than it did with Lance."

Today Clem is still waiting for Romer to find him another job. "We're working on it real hard," says Cindy Parmenter, the governor's press secretary. "It's ongoing."

Even if he were asked, Clem says, he wouldn't return to the AIDS council. But apparently his complaints have produced some results. Project Angel Heart was one of the small agencies prohibited from joining the Denver consortium in the first few years, according to executive director Charles Robbins. But recently the rules changed. "We were allowed to join two months ago--the first nonfunded agency allowed," says Robbins, whose group delivers hot meals to housebound people with the AIDS virus. "And we just received our first Ryan White funding. I think Lance woke everybody up." That includes the health department. Nolan says her department plans to review the council's funding policies, including any potential conflicts of interest. Such a review is necessary in part because Denver is getting so much more funding through Title I, she says, and "we will need to rebalance the distribution of Title II money." Nolan says she knows of no impending GAO review.

And for all his talking, even Clem admits that he was surprised by Senator Brown's request. He only learned of the congressional investigation two weeks ago, when Good mentioned it at a planning committee meeting of the mayor's council.

According to Ric Games, a committee member who supports Clem, Good seemed agitated. "She said that she would be flying to Washington to present a brief to Senator Brown," Games says. "She said, `We may not be able to get him off our backs, but maybe we can neutralize him.'"

Good claims Games misinterpreted her. "For one thing," she says. "I never said anything about the senator being on `our backs.' I don't think the senator is an advocate of AIDS services, but what I said was that perhaps we could neutralize him as an opponent when Ryan White reauthorization comes up in 1995. I plan to ask him nicely not to oppose reauthorization."

Senator Brown's office did not return repeated telephone calls. But Roy Hogberg, who will be part of the GAO team coming to Denver, says, "We have been asked to look at the formula used to disburse Ryan White funding to see if it is equitable and according to the guidelines."

There's been a push in Congress to consider the reauthorization of the $500 million annual program this summer rather than wait until 1995, Hogberg adds. And although the GAO review of the Ryan White program may expand to a national level, "right now we're going to look at Denver and Colorado, because that's where the request came from.

"I'm sure that part of Senator Brown's request also has to do with whether Colorado is getting its fair share," Hogberg continues. The review "will be broader than any specific allegations, but it will be important for us to look at those, too."
And if they do, Clem plans to do more talking.
"If what's going on in Denver is going on in the rest of the country," Clem says, "Congress shouldn't reauthorize it. It needs to be rethought.


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