AARP draws political fire

The senior-citizens group, founded in 1959, has become a sprawling billion-dollar financial and political powerhouse that does far more than simply publish a couple of newsletters and find discounts for seniors. And increasingly, its political and financial relationships have put the group’s leadership at odds with its members, critics charge.

Jim Martin, president of the conservative seniors group 60 Plus, accused AARP of “putting the wishes of Washington’s liberal politicians before the interests of their own members” by backing Obama’s health care efforts. “They are big-government liberal activists eager to ensure that the grants and subsidies keep flowing, and eager to keep their Democrat pals in Washington happy,” Martin said.

AARP’s support for Obama’s plan is significant because the organization is a lobbying powerhouse. In 2008, AARP spent $27.9 million lobbying the federal government. Only the U.S. Chamber of Commerce and Exxon Mobil spent more.

AARP endorsed the health care bill that passed the House last month and has expressed support for the Senate proposals that are still taking shape. Critics note that these measures do not contain a priority for senior citizens — allowing the re-importation of cheaper prescription drugs from Canada. And they do contain significant cuts to Medicare spending.

Opponents of Obama’s plan have assailed AARP for supporting such measures, but AARP responds that the Medicare cuts would simply reduce waste.

AARP Chief Executive Officer Barry Rand wrote in the current AARP Bulletin that Democratic bills strengthened Medicare and began to “improve long-term care services and support.”

Though legally non-partisan under IRS rules, AARP has a visible leftward tilt. In the 2008 and 2010 elections, campaign contributors who listed AARP as their employer gave 90 percent of their money to Democratic candidates, according to data from the Center for Responsive Politics. Rand gave the maximum contribution to Obama. The company’s top lobbyist, Nancy LeaMond, was a political appointee in the Clinton administration.

AARP is also allied with a staunch Democratic booster — teachers unions. AARP began as the National Retired Teachers Association and has lobbied against school vouchers, which teachers unions strongly oppose.

These political leanings and AARP’s lobbying record (including opposition to tax cuts) have spawned conservative rivals, such as 60 Plus and the American Seniors Association.

AARP’s business dealings also complicate its role in the health care debate. AARP brought in $1.14 billion in 2008, according to tax filings. Less than one-fourth of that was from membership dues — barely enough to cover the group’s printing and mailing costs. Most of AARP’s 2008 revenues — $653 million — were from royalties. AARP spokeswoman Elly Spinweber told The Examiner that AARP had made $425 million in royalties from licensing its name to businesses — including insurance and medical companies — hoping to sell to AARP members. AARP, a tax-exempt nonprofit organization, earned an additional $205 million from selling financial products and services.

A health care overhaul could bring more business to AARP’s insurance division — for instance, driving more customers to AARP’s “Medigap” program by reducing the federal subsidy for Medicare Advantage, a competing product sold by private insurers. Also, the weakened “public option” to which Senate Democrats have reportedly agreed would boost enrollment in nonprofit insurance plans — a field in which AARP already plays a multimillion-dollar role.

Government partnerships are not new to AARP. The AARP Foundation has received $390 million in taxpayer money from the federal government since 2003, mostly for the Senior Community Service Employment Program, which helps place seniors in jobs. A health care overhaul could provide more opportunities for such partnerships.