For anyone who hasn't read the history of
AARP, here is a short version from Andy Rooney of 60-minutes.
THERE'S GOLD IN THE OLD
There's big money in old folks if you get enough of them to buy your product. No organization knows this better than the
AARP, the American Association of Retired Persons, with thirty-five million members.
I'm plenty old enough to belong to the
AARP—they've reduced the age requirement to fifty—but I've never joined. I'm prejudiced against the
AARP because of the bad start it got. People tell me all that is in its dark past and I know it's unfair but my negative feeling about the gigantic association won't go away.
The
AARP was started in 1958 by an insurance salesman named Leonard Davis after he met an elderly woman named Ethel Percy Andrus, who had been working to help teachers with medical insurance through an organization called The National Association of Retired Teachers.
Davis recognized a good thing when he saw it and realized the market for insurance sales to old people wasn't limited to teachers. He wanted to expand it to include "persons" so he put up $50,000 to establish the
AARP.
This was not an eleemosynary institution. Andrus's interest was old people; Davis's interest was money. He put together the Colonial Penn Insurance Company which he made certain, through several legal maneuvers, was in firm control of the
AARP. He then started using it, through its magazine Modern Maturity, as a sales tool for insurance policies.
Leonard Davis made hundreds of millions of dollars from the sale of insurance policies to
AARP members. For several years, Colonial Penn was the single most profitable company in the United States, even though the policies it sold to
AARP and NRTA members were rated "poor."
Davis's plan was a deviously ingenious sales scheme. The
AARP was not much more than a front for his insurance company. At local
AARP meetings around the country, volunteers set up desks to sell insurance. They didn't even have to pay salespeople. They conned members into thinking they were doing charitable work. The
AARP office in Washington did not even have a list of its own members. That membership was kept under lock and key in the offices of the Colonial Penn Insurance Company.
After a
60 Minutes report exposing all this was broadcast in 1978, the
AARP got rid of Colonial Penn and signed up with the Prudential Insurance Company.
Just last week the
AARP ended its eighteen-year association with Prudential and has given its 64 billion contract to the United Health Care Corporation. I know nothing about the arrangement except you can bet that the
AARP will be taking a 3 percent kickback from every single premium its members pay. Nothing illegal there. It's just that I still have a bad taste in my mouth.
People have told me of the good things the
AARP does and I believe them. Cyril Brickfield, a lawyer and an important part of the Leonard Davis machine that so efficiently ran the
AARP for its own profit, finally left a few years ago with an exit fee so large the
AARP won't say what it was.
The
AARP's current executive director is a former Catholic priest and longtime
AARP employee named Horace Deets. He was hired twenty years ago by Harriet Miller, then the director, who was fired when she openly disapproved of what Leonard Davis was doing.
She won a $445,000 lawsuit against the
AARP and is now, of all things, mayor of Santa Barbara, California. Leonard Davis lives in Florida. I don't think they exchange greeting cards.
People speak highly of Deets but I am not at ease with anyone who accepted the heavy hand of Leonard Davis for so long.
The most prickly thorn in the AARPs side now is Sen. Alan Simpson. The
AARP enjoys tax exemption and nonprofit mailing privileges that amount to millions of dollars a year and Simpson has tried to have them taken away. He claims that
AARP publications and mailings are ads for their many business enterprises and should be taxed and that their mailings should bear stamps like any other for-profit company's mail.
The
AARP does have a lot of income-producing sidelines. As a small example,
AARP members get a reduced rate if they rent a car from Hertz or Avis and the
AARP, in turn, collects 5 percent of what members pay the rental company. It's still a good deal for members.
Simpson's opponents claim his is a political vendetta being waged against the
AARP because he feels the organization has generally supported Democratic causes. In view of this criticism, which they don't to want to spread and ruin their lobbying efforts in Congress, the
AARP has been neutral to the point of paranoia during the current Presidential race.
Maybe I'll join the
AARP when they lower the age limit to forty-five.
What is AARP?
Amazon.com: Trust Betrayed: Inside the Aarp: Dale... 
Linear Mode
