Trust Betrayed: Inside the AARP. - book reviews

Washington Monthly, May, 1998 by Philip J. Longman

by Dale Van Atta Regnery Publishing, $24.95

Suddently, the juice seems to have gone out of the so-called third rail of American politics. Messing with Social Security used to be considered political suicide in Washington; "touch it, and you die" went the conventional wisdom. But now politicians across the political spectrum are openly calling for fundamental reform of what was once America's most popular social program. This spring, for example, President Clinton used a town hall meeting in Kansas City to launch what he hopes will become a "national debate" on Social Security; the Senate passed a resolution calling for privatization of at least part of the program, and even Daniel Patrick Moynihan, one of the program's staunchest supporters, introduced legislation calling for partial replacement of Social Security payments with private accounts.

What's behind the new politics of Social Security? There are many obvious factors, including the aging of the baby boom generation, the increasingly wide-spread and profitable participation by middle-class Americans in mutual fund investing, and the evermore dire reports by Social Security's own trustees about the program's dismal future. But there is another factor that has received far less attention: The political decline of the American Association of Retired Persons.

For nearly a generation, the AARP has been among the most feared lobbies in Washington. With over 30 million members, the AARP is the second largest organization in the United States, after the Catholic Church. Its flagship magazine, Modern Maturity, has a larger circulation than Time, Newsweek, and U.S. News & World Report combined. If AARP were a for-profit company, its total revenues would rank it in the top half of the Fortune 500. Not surprisingly, a 1997 Fortune article called AARP's executive director, Horace Deets, "Washington's Second Most Powerful Man"

But inside AARP's lavish headquarters, staff members are trying hard to keep the lid on a secret many Washington insiders already suspect: The AARP is losing membership fast, and as a result, is losing its ability to take strong political positions.

This is by far the most important revelation in Dale Van Atta's new expose of the AARP. An investigative reporter who earned his stripes working for the Jack Undersign column, Van Atta spent years probing the AARP, in the process developing a network of disgruntled former employees who provided him with a treasure chest of sensitive internal documents. Much of the information Van Atta developed concerns AARP's often-shady business dealings in peddling insurance, pills, and other services to its members. As damaging as this reporting is, however, much of it merely corroborates accounts that have appeared elsewhere. Van Atta's real scoop, which he unfortunately buries in the last chapter of his book, is that AARP's membership is, in the words of one AARP official, "dropping like stone."

At the beginning of 1994, AARP claimed a membership of 33,176,654. By the end of that year, they had lost a million members. Despite the tidal wave of baby boomers turning 50 and thereby becoming eligible for AARP membership, the losses have continued. According to Van Atta's sources, the AARP has done its best to disguise this erosion by cooking its books. For example, in 1995, the board quietly decided to increase the assumed number of AARP members with living spouses, thereby allowing it to claim 2.11 million additional members, even though actual membership was declining. Over the last three years, Van Atta estimates, AARP has seen its real rolls drop by 3 million. As a result, he estimates, AARP and its various business partners have lost more than $1.5 billion in gross revenues.

What's gone wrong? Virtually everything. The vast majority of AARP members, internal documents show, join for the membership discounts, but those discounts don't turn out to be worth the bother for increasing numbers of retirees. Van Atta quotes one former member as saying, "when we pay our annual membership dues to AARP, we're really just putting our name on a junk mail list. " A 1995 internal study shows that 12 percent of members who quit give as their reason: "There are too many mailings."

AARP also has big political problems with its members, who are far more likely than retirees as a whole to be affluent, white, and Republican. The ardent support wielded by AARP's Washington staff for the Clinton health care plan caused deep resentment among such members, as has its support for a litany of liberal causes, including opposition to Clarence Thomas' nomination. At the same time, many left-leaning members resent the AARP's opposition to a single-payer health care system, which AARP headquarters finds objectionable presumably because of the threat it would pose to its mail-order pharmaceutical business. The lesson the AARP's business side has taken from these circumstances is that the AARP loses business every time it takes a strong political position, and so the group's chief lobbyist, John Rother, is under increasing pressure to pull his punches and keep a low profile.