Republican Congressmen Launch Attack on AARP,
Challenge Non-Profit Status
House Ways & Means members release investigative
report, send letter to IRS
April 11, 2011 - Three Republican members of the
House Ways and Means Committee have launched an attack on AARP,
including the release of a report focusing on the massive amount of
money the organization earns from insurance companies, and sending a
letter last Friday to the Internal Revenue Service asking for an
investigation of AARP’s non-profit tax status.
The investigative report, "Behind
the Veil: The AARP America Doesn’t Know,” was prepared by
Ways and Means Health Subcommittee Chairman Wally Herger (R-CA) and Rep.
Dave Reichert (R-WA) a member of Ways and Means. Joining them in signing
the letter to IRS Commissioner Douglas H. Shulman was Ways and Means
Oversight Subcommittee Chairman Charles Boustany (R-LA).
“As the facts set forth in this report reveal, AARP
is not simply a non-profit entity claiming to advocate on behalf of
America’s seniors,” the report says. “AARP is in fact a large, complex
and sophisticated organization with over $2.2 billion in total assets
and had revenues in excess of $1.4 billion in 2009 alone.
“When measured by the products it endorses and
profits it derives from those deals, AARP is one of the nation’s largest
insurance companies and by far the largest provider of Medicare plans to
seniors. AARP is also one of the most powerful and active lobbying
groups (in terms of dollars spent) in the country.”
In a news release issued by the three Congressmen
on Friday they described their report as, “exposing the conflict between
AARP’s drive for profits at the expense of the best interests of its
members and the organization’s activities that call into question its
tax-exempt status. The facts in the report conclude that AARP stands to
make upwards of one billion dollars over the next ten years as a result
of the new health care law through the sale of AARP endorsed-Medicare
The Hill says AARP is softening on imported drugs,
favoring Medicare drug plans like they help sell
By Tucker Sutherland, editor
Jan. 5, 2006 – Has AARP softened its support for
imported drugs, because they find drugs are cheaper from the Medicare
drug program than from Canada? The Hill, a newspaper "for and about the
U.S. Congress," says they have, but AARP has fired back saying The Hill
story is a "blatant mischaracterization of AARP's position."
It's hard, however, not to question AARP's position when they are one of
the major brokers of Medicare insurance programs.
Let's strengthen the system we have now, before
considering private accounts
By Tucker Sutherland, editor, SeniorJournal.com
Feb. 21, 2005 – The battle over how to reform
Social Security is about to get ugly. The Bush team hopes to squash the
AARP by using some of the same tactics they used to dispatch John Kerry
in the presidential race. The people responsible for the infamous “Swift
Boat Veterans” campaign are now gearing up to sink AARP because of their
opposition to the Bush plan to take money out of the Social Security
program and put it in private investment accounts.
22, 2005 - The political hatchet men who brought us the Swift Boat ads
in the last presidential election, have launched their avowed
assassination attempt of the AARP with an ad showing an X over a soldier
and a check mark over two kissing men which is labeled "The Real AARP
Agenda." USA Next, a right-wing political group, is angry because AARP
opposes the privatization of Social Security proposed by President Bush.
In the letter to the IRS, they said about the
report, “This information gave rise to a number of serious concerns
regarding AARP’s organizational structure and activities, and it raised
questions about whether AARP, Inc. continues to qualify as a tax-exempt
organization under Internal Revenue Code section 501(c)(4). Therefore,
we ask that the Internal Revenue Service review the report and the
issues raised therein.
They note, too, “the attached report raises
concerns regarding various issues including the organization’s
substantial revenues, limited charity work, and generous executive
compensation. For instance, AARP, Inc., has experienced tremendous
revenue growth in recent years from its contracts with business
partners. Its revenue from for-profit businesses, derived primarily from
insurance companies selling products with the ‘AARP’ name, nearly
tripled between 2002 and 2009, reaching $657 million.”
They add that the AARP Foundation “enjoyed
increased taxpayer funding, including at least $18 million in “stimulus”
funding and a total of $314 million in federal grants from taxpayers
between 2009 and 2010.”
The letter requested that the IRS examine:
● Whether the operational activities of AARP,
Inc. and its affiliates are primarily motivated by political or profit
interests, instead of by service to the community;
● The separateness of federal grant cash and
lobbying activities between AARP’s Internal Revenue Code (IRC) 501(c)(3)
charitable organizations and its IRC 501(c)(4) advocacy organization;
● Whether it is appropriate to continue
characterizing AARP Inc.’s revenue generated from insurance products as
royalty income that is exempt from Unrelated Business Income Tax (UBIT);
● Due to evidence suggesting AARP, Inc. asserts
control over its affiliates, whether the activities of its affiliates
should be attributed to the tax-exempt parent, AARP, Inc.
The Congressman point out in their executive
summary of the report, “AARP, formerly known as the American Association
of Retired Persons, is a tax-exempt non-profit membership organization
for those aged 50 years and older. As such, AARP has long been regarded
as a protector and advocate of the nation’s senior community.
“What is less known is the extent to which AARP
operates as a massive for-profit enterprise and how that conflicts with
its legal requirements to “primarily operate to promote the common good
and social welfare of a community of people.”
“This report highlights AARP’s increasing reliance
on the ‘for-profit’ sale of insurance, particularly health insurance,
and the underlying implication for this storied ‘non-profit’
>> Click for pdf copy of letter to IRS,
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