Why is the lavishly-funded, tax-exempt, Obamacare-promoting AARP receiving over $1 billion in taxpayer funds?
AARP, perhaps the single greatest political obstacle to reforming the entitlement programs that will someday leave our children bankrupt and destitute, is the Scrooge McDuck of tax-exempt organizations, which is swimming in cash.
Consider this: the major players in the Washington non-profit world typically come in at around $100 million in annual revenue.
For example, in 2016, the Brookings Institution was at $97 million, the Heritage Foundation at $79 million, and the ACLU, apparently riding an anti-Trump wave, shot up to over double its 2015 revenues to $155 million.
That same year, AARP spent $100 million on a single PR agency, Mediacom Worldwide, one of several firms it had on retainer, including RR Donnelley ($58 million), GMMB ($36 million) and LCI Communications ($20 million), as well as buying $22 million on Google ads.
AARP's total 2016 revenues topped $1.6 billion, the equivalent of 20 Heritage Foundations.
But typical non-profits are funded by donations. AARP, by contrast, is an extremely lucrative and well-manicured brand targeting America's elderly.
The group's largest source of revenue, by far, is not its member dues, advertising fees (in AARP magazine and online), or the tiny amount in traditional donations it receives. It's a category dubbed "royalties" in its IRS 990 tax forms.
Essentially, AARP rents its name and moniker to for-profit companies (mostly insurance), who pay dearly for the privilege.
Charles R. Morris, examining the history of AARP in his book "AARP: America’s Most Powerful Lobby and the Clash of Generations," revealed that for much of its existence AARP was under the control of insurance executive Leonard Davis thus "operating as a sales network to hawk very high-priced insurance and a host of other Davis-created products to old people."
While marketing to seniors appears to be an excellent business plan, AARP's tax-exempt status makes a mockery of the spirit of the non-profit carve-out, and its pernicious status as a relentlessly liberal senior scaremonger leaves an even bitterer taste in conservatives' mouths.
There's also the matter of AARP's rich hypocrisy on pre-existing conditions.
In Obamacare, Democrats left a conspicuous hole in guarantees on pre-existing conditions with Medigap, a "supplemental" plan offered by the government for Medicare enrollees.
As detailed by Christopher Jacobs in The Federalist, Medigap (via a contract with leading Obamacare cheerleader United Health), just happens to be the single largest line-item in the interest group's royalty revenues.
AARP has in the past received nearly five percent of seniors’ premiums for every Medigap policy sold under its brand, which is, in effect, a hefty hidden tax on the senior population, seemingly incentivizing it to sell the most expensive insurance plans possible. How convenient that the organization with the power to weaponize its 38 million members on the issue suddenly fell quiet on when the left failed to rectify this issue!
Which brings us, again, to the question of why this lavishly-funded, tax-exempt, Obamacare-promoting organization is on the taxpayer dole?
Since 2007, the AARP's lobbying arm (the "AARP Foundation"), has received $839 million from the Department of Labor to teach seniors how to find a job!
Since 2008, the Treasury Department paid AARP $72 million to provide tax counseling to the elderly!
And there are additional pots of money from the Justice Department ($2 million), the Corporation for National and Community Service ($20 million) and Health and Human Services Department ($879,000).
The total bill to taxpayers is over $1 billion, but that's only the amount of money the government paid to AARP; it doesn't even touch the much larger amount the group avoided paying in taxes by pretending a Fortune 500-sized marketing company is a charity.
In the past, AARP has been hammered for accusations of its rampant government and taxpayer abuse. After the Internal Revenue Service began investigating its non-profit status, it agreed to pay $135 million “in lieu of taxes” on its business dealings from 1985-1993.
AARP also forked up an additional $15 million in 1994, all while shelling out $2.8 million to the United States Postal Service that same year to settle accusations that it improperly used its non-profit mailing privileges. It’s anyone’s guess how the organization has abused their tax abuse status in the years since.
The time is now for someone to turn over the AARP rock again to find the corruption, excess, and liberalism squirming underneath. Congress needs to get tough with AARP, and step one is stopping the spigot of federal tax dollars to an organization that should instead be under intense scrutiny over whether it's tax-exempt status is justified.
In Washington's health care debates, AARP is and always has been a bully. Usually, the only response to a bully is to punch him in the nose, but the more effective response is stopping the billion-dollar largesse the federal government is sending to AARP.
James L. Martin is chairman of the 60 Plus Association
© 2021 Newsmax Finance. All rights reserved.