WASHINGTON -- Sen. Alan Simpson plans to conduct hearings on the finances of the American Association of Retired Persons, with which he often disagrees.
The Wyoming Republican said the probe by his Finance subcommittee on Social Security and Family Matters will focus on the income the 33-million-member seniors' group receives from two sources: federal grants, and the royalties and fees paid by businesses that use the AARP to sell products and services ranging from Medigap policies and mobile-home insurance to credit cards, mutual funds and prescription drugs.
Federal grants accounted for up to 19 percent and the fees and royalties for about 32 percent of the AARP's $454 million in revenue in 1993, according to its most recent audited annual statement, which was widely distributed among members of the AARP and Congress.
"People ought to know where their money comes from and what it's used for," Mr. Simpson said last week. He said his subcommittee's hearings will come after Congress completes work on immigration reform.
"He's been looking for ways to raise questions about our organization for some time," John Rother, legislative director of the AARP, said yesterday. "I guess I am surprised he would NTC suggest doing it in hearings before he completes the effort to talk to us directly."
Mr. Simpson and AARP Executive Director Horace B. Deets have squared off in dueling letters and newspaper columns this year over Medicare funding. Last year, they scrapped over health care reform and the growing costs of Social Security, Medicare, Medicaid and other entitlements.
AARP officials "go to the media and say, 'My God, they [senators] have cut Medicare in half,' which means we took it from an 11 percent increase down to 5, which they will describe as a 50-percent cut, and actually it's a 5-point increase," Mr. Simpson complained.
In a letter printed last week in the Washington Times, Mr. Simpson wrote that radio humorist Garrison Keillor has described the AARP as the "American Association of Rip-off Artists" and "the nation's largest and most despicable lobbying organization." Mr. Simpson added, "I'll buy most of that."
The AARP's three biggest federal grants in 1993 paid for $86 million in programs to help the elderly.
"All of that money is used in running the program," Mr. Rother said. "None of it is used for any other purpose."