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[inaudible conversations] resol and the first important thing, you need to defeat that, because that says that limits the authority of the president to -- ways which -- just what every president since president truman in violation. so -- that's the first thing that needs to be addressed. any authorization resolution requires significant time, i think, to put it together, but also, you know, much more time on the floor. and it would deserve a significant debate. >> talking about -- >> resolution referred to this committee and to foreign relations. >> i think he assessed the senate.

>> amendment. >> to refer back, which i hey think may be on a list of matters to be resolved before this small -- i'm not sure th that -- it's so fluid over there it's hard to know whether or not senator paul's motion to refer back and then immediately refer to the senate, i think it's to foreign relation, but, anyway, to immediately vote on, that the president had no authority to do what he did, and that's -- that has to be addressed before any resolution authorizing or resolution supporting. i mean, senator -- mccain, senator lieberman, i agree that support this mission. i mean, we're all in support of the mission. so if there is an effort at an authorization resolution, hopefully we can come together on that if there is such an

authorization. there's a lot of language which would have to be viewed, and need to be set aside in a significant amount of time in the senate for that, and it may be to some extent overtaken by the event of the handoff to nato and the reduction of our presence. so that it may take way less of the >> we are going live now to the longworth building on capitol hill and the house ways and sub committee on health is what is holding a joint hearing on aarp's tax-exempt status. structure and financial growth over the next -- over the last decade. according to a new republican ways and means republican report, aarp can make as much as $1 billion from the new health care law that it supported. aarp is the largest organization representing seniors. there's a story related to this in "roll call" from a day or so ago. republicans have launched an

assault on aarp which joins a growing list of groups supportive of democrats agenda that are being targeted by conservatives. and this hearing is now getting under way. >> the subcommittee will come to order. when doctor percy found that aarp in 1958, medicare did not exist. he understood that seniors needed access to health insurance and found a solution. what began as an organization to fill a need not yet met by society, has grown and evolved over the last 50 years into aarp inc., and is affiliated entities. with the establishment of medicare in 1965, health insurance became widely accessible to seniors. however, aarp kept on with this

reported mission to promote independence, dignity and purpose for older persons to enhance the quality of life for older persons, to encourage older people to serve, not to be served. these are in questionable you laudable goals. however, as we were discussed today, mr. reichert, former congresswoman ginnie brown a, and i, took a closer look into aarp over the last 18 months, revealing nearly every publicly available document and the facts suggest that aarp has strayed from its core mission. the facts show that aarp no longer operates like a seniors advocacy organization. instead, it is more closely resembles a pro--- a for-profit

insurance company. in 2009 aarp raised 46% of its revenue from royalty payments, versus just 17% from membership dues. while questions had indeed been raised in the past about aarp's reliance on royalties, the amount of these payments has nearly tripled just over the past decade. aarp asserts their policy position are made by its all volunteer board of directors, which is separate from its business interests. the facts show otherwise. in 2010, the entire board of aarp insurance plan was collected and processed $6.8 billion in insurance premiums in 2009, also served on

the board of directors of aarp which makes policy decisions. the aarp in insurance plan funneled millions of dollars to aarp inc. in 2009. the facts show that aarp is dependent on the hundreds of millions of dollars it receives primarily from insurance companies, and could not continue to operate in its current fashion without this revenue. aarp revenue from membership dues totaled $246 million in 2009, just barely enough to cover its employee compensation and legal and accounting fees. aarp's decision to endorse more than one half trillion dollars in medicare cuts to pay for a

new entitlement program seems to directly contradict its missions. this became more disconcerting when medicare officials warned that medicare cuts were so severe that seniors access to care could be jeopardized your medicare officials also revealed that the health care law will result in a migration from medicare advantage to medigap plans that could force as many as 7 million seniors to give up a plan they know and like. what does this have to do with aarp? it turns out that upon a close examination of aarp's medicare insurance business, the facts show that aarp had a unique financial incentive that was not

transparent to seniors, the public, or members of congress during the health care reform debate. as a result of these unique contractual relationship between aarp and unitedhealth group, aarp stands to earn $1 billion over the next 10 years as a result of the democrats health care overhaul on top of hundreds of millions of dollars in insurance royalties that they currently collect. this is just one of a number of shocking details contained in a report issued earlier this week by mr. reichert and many, many of which will be discussed today. i would now like to recognize mr. reichert who's been a driving force in this investigation to make a brief opening statement.

>> thank you, mr. chairman, for allowing me some time to say a few words. first i want to take a moment just to thank all of the volunteers, that volunteer with aarp, the wonderful work you all do. i know there are some here in the hearing room today, and some that may be listening across the nation. thank you for volunteering, being engaged in helping our seniors across this country. and i know that others representing aarp, i know your hearts are in the right place, but sometimes we can sort of find ourselves misguided in going down the wrong path. so we are here today just to make sure as representatives of the people in our district and across this country that aarp is still on the right path, that really our mission statement is to make sure that you help

seniors. and that's really what we want to do, too. we want to help seniors. want to make sure they get the best health care coverage they get. best insurance coverage they can get so they can have the best retirement that we know they all deserve, as they worked so hard during their lives your but i sort of became very concerned. it was back in 2007 when the first cut was mentioned to medicare advantage come and it was a 200 million-dollar cut associate with an schip vote. and i was very puzzled, to be honest with you, sir, very, very puzzled as to why medicare or aarp would support a $200 million cut to medicare advantage. eventually what happened was the senate didn't support that cut

and schip found other ways to support their financial needs. and then along came the health care bill. and $523 billion cut to medicare was announced as one of the mechanisms to pay for the health care bill. close to $200 billion in cuts again to medicare advantage were mentioned as the part of the solution to finding finances, to fund the health care bill. so again, i was puzzled, i am myself, mr. herger, ginnie brown waite begin to generate letters and ask questions. again, to begin odds with one in the people watching today, we did not get forthright answers. we were just looking for some very simple answers, very simple questions as to where money is going and why it's going and why aarp supported that huge of a cat, half a trillion dollars to

medicare. we just want to know him half of the scene is what the truth was. and we couldn't get it. so now we find ourselves today, after 18 months of interviews and exchanging letters, and here we are today at this hearing. i wish we could have been more forthright. you could have been more with your answers. hopefully today you will be. and will be able to get to the bottom of this and make sure together that our seniors are cared for properly and that they enjoyed the retirement that they deserve. so i appreciate your presence here today and look forward to asking you some questions and getting some straight answers. thank you. >> i thank mr. reichert and i thank you for your dedication for being involved in this

process. before recognizing our ranking member for the purposes of an opening statement, i ask unanimous consent that all members written statements be included in the record. without objection, so ordered. i now recognize ranking member start for his opening statement. >> chairman herger, i want to thank you both for holding this hearing. and there are questions to ask about aarp. of course, we could ask the same questions of the chamber of commerce, which outranks aarp as the top spend on lobbying over the last 12 years, spending about three quarters of a trillion dollars lobbying over that period. we could ask the questions of american crossroads, which was founded by karl rove and spends

millions with its sister organization trying to defeat democratic candidates in the last election. but republicans don't seem to want to ask those questions today. it seek to understand why. those groups oppose affordable care act and aarp supported it. so this amounts to nothing more than a political witchhunt. to punish an organization that spoke out in favor of health reform. any organization that can stand in the way of a cold to privatize social security, medicare, turn senior citizens over to the mercy of private health insurance companies would be suspect. now, i would have to admit in the past, maybe even today i've raise questions about aarp. it is true in addition to the work they do advocating for us elderly, they make a tremendous amount of money off of bases

that they market to us. and it's no surprise to american seniors that their products make them probably the biggest player i think in medicare, medicare advantage part d drug plans, and it's obvious to us when you are shopping the market that their plans are well placed and have good features. so it's not exactly that they're hiding under a veil, as the republicans would suggest. but many aarp members look forward to joining for the discounts, other deals that they get. so before us we've investigated the aarp for a year. in that time, all that the republicans have found is publicly available information, which -- here it is.

this is all publicly available. they don't have to research anything. it's all printed in the. i must admit i haven't been through it, but it's large and heavy. it's a complex organization, all which is illegal. in fact, these -- the information in here indicates -- i must admit, the president of the american action forum, he wouldn't answer any of our questions. he said he didn't have to and he wasn't about to, and he wouldn't explain who was funding his organization. so while he refused to disclose his information, aarp at least has been up front. it's transparent. it seems to meet everyone sitting here today that rather than american action network or

60 plus for american crossroads or the chamber of commerce, we are here to discredit aarp among the seniors. now, they know that my colleagues across the aisle know that as seniors trussed aarp, and that's why the republicans lauded aarp's endorsement of the republican medicare prescription drug bill in 2003, which i thought was wrong. i thought it was a bad thing for aarp to do but the republicans loved it. now eight years later they are trying to break the trust that american seniors have in aarp. and before they announced their budget that will devastate medicare, social security, medicaid, the republican plans to privatize social security, they would like to kind of silence aarp and that's why we're here today.

we should see this for what it is, a waste of government time, and abuse of government resources to settle a political score and silence a voice that represents seniors. i yield back my time, look forward to hearing the testimony of our witnesses. thank you, mr. chairman,. >> i thank the ranking member from california, mr. stark. i now recognize the chairman of the subcommittee on oversight for an opening statement. >> thank you, chairman herger. as chairman herger said in his opening statement, aarp was created with a praiseworthy and noble goal of promoting independence, dignity and enhancing the quality of life for americans. and as a physician before came to congress, and now as a member of congress i have interacted with many volunteers in my home state of louisiana who have done excellent work. found with this goal does incorporate under section five o. one c. four of the internal revenue code this meant that in return for promoting social

welfare in the common good it would enjoyed exemption from federal income taxes. today, more than 50 years after its founding as a small nonprofit helping the retired aarp has changed into what appears to be insurance and advertising powerhouse. according to most recent data we have, aarp incorporated in its for-profit organizations annually process billions of dollars in insurance premiums and are nearly $700 million in insurance revenues and over $100 million in advertising revenues. only a fifth of its revenue comes from membership dues and contributions. since 2002 aarp's revenue from membership dues has only increased on us to get over that same period however by parting with other countries to suck insurance aarp has experience gained in his royalty income

that any private sector business within the. its revenues have nearly tripled grown from $240 million, to $600 million in 2009. yet as aarp incorporated has grown by leaps and bounds, it's funny for charitable work has nearly flat line. contributions to the aarp foundation between 2002-2009 grew by only 11%. or about $3.1 billion. funding of the legal counsel for the elderly decrease by about 9%. the parts of aarp that fulfilled its original purpose seem not to be sharing in the bounty that has come to aarp from its insurance related business activities. another concern regarding aarp is whether they provide excessive compensation to executives which might suggest the organization exists more for the enrichment of its officers and employees and less for the public good. in the case of aarp executive compensation and benefits often far exceed what one might think

appropriate for tax-exempt organization. the website charity navigator compares the compensation of ceos and charities and nonprofits with expenditures exceeding $500 million. in looking at these members we see that compensation for aarp's top executive is a consistent outlier reaching as high as $1.6 million in 2009. in addition to aarp has making travel policy that exceed what are considered best practice recommendations developed by an independent oversight group which aarp's then ceo was involved in. the differences in revenue generated and money spent promoting social welfare and common good suggest that aarp may have strayed from its original mission. it brings into question whether it's appropriate for it to continue to operate as a five o. one c. for tax-exempt organization. this is primarily a question of the internal revenue service. we'll be asking them to conduct a review.

let me end by saying as chairman, i take this committee's responsibilities, its responsibilities in oversight very, very thursday. and i intend to take a close look at the irs is administration of tax-exempt sector and whether the irs is adequate overseeing the practices of tax-exempt organizations. thank you, mr. chairman. i yield back. >> thank you, mr. boss and i would now like to record highs john lewis, ranking member of the subcommittee on oversight for the purposes of making an opening statement. >> thank you, mr. chairman. we are holding a hearing on tax exempt organization. however, i do not think we should single out just one organization. while i agree the organization that enjoyed a special tax status should justify the reason for their exemption. i know that there are about 140,000 other organizations that

share the same tax status. mr. chairman, it is our duty to provide oversight for the nonprofit sector. i am saddened that you have chosen your duty today. you and i both know that this hearing is politically motivated and driven by aarp's support of the affordable care act. your report a men's that all of the information contained in it came from a document filed in accordance with the law. there's nothing new here today. nothing that is not already public. nothing that says aarp a part. no unveiling that i can see. i mindful that the majority wants to cut social security, they want to cut medicare, they want to cut programs that help

the poor. i can only surmise the true intent of this hearing is to harm the reputation of aarp. but to silence their voice as we move closer to this debate. it is a plan to provide real oversight today, are happy force other organizations who share the same tax status as aarp, we would have more organizations like tea party, american crossroad, and american action network. they all share the same tax status as aarp. and play a major role in the election. if that was the real plan to take we would have a 2.2 billion dollars a year racetrack and casino operating in iowa under

the same tax-exempt status as aarp. i find this unreal. it is unbelievable. if oversight was the true goal, we would look at the compensation paid by other tax implications including those, like the chamber of commerce. if they all pay more than aarp. based on all of this, i believe that this is no plan for oversight today. we have a single witness, a biased report, and to use committee resources to settle a score. this is nothing other than a political witchhunt. the ways and means committee is better than this. i ask my colleagues, who is

next? who else is on your list? my college? your church? this is a dangerous game to play. in closing, i am pleased to have before us today a nationally recognized expert in the role of tax-exempt organizations, professor francis hill. she wrote one of the leading treaties in this area and i look forward to her testament. thank you, mr. chairman, and i yield back my time. >> thank you, mr. louis. i would now like to turn to the subcommittee's first panel. today we're joined by barry rand, chief executive officer of aarp, who is accompanied by lee hammond, president aarp board of directors. mr. rand, thank you for agreeing to testify today. he will have five minutes to present your testimony. your entire written statement will be made part of the record.

you are now recognized for five minutes. >> thank you, mr. chairman. good morning. i am barry rand, ceo of aarp. and joining me this morning is lee hammond, president of aarp and a member of the aarp board of directors. lee, like all 22 members of our board, is an unpaid volunteer. aarp is proud of our record. proud of our more than 50 years of service we worked tirelessly to promote nonpartisan policy solutions, to improve marketplace, to enhance the public good, especially for those 50 and older and we will continue to do so in the future. we are strictly nonpartisan organization. we do our work in a very public way. since its founding, aarp has made information about its finances, mission, and governance available to the

public. we post on our website our annual reports, financial statements, irs form 990 tax returns, and detailed breakdowns of our revenues and expenditures. this is why we are surprised and disappointed, both by the time and substance of the report, a few members released this week. behind the veil, the aarp america doesn't know. there is no bail. quite frankly we disagree with each other conclusion strong in this one-sided report. first, we reject the allegations that our public policy positions are influenced by our revenues. our policy positions are set by our all volunteer board of directors based on the needs of the 50 plus population. they are determined totally independent from revenue considerations. we have long maintained that we

would forgo revenue in exchange for a lifetime health and financial security for all older americans. the revenues we earn from royalties on allow us to keep membership dues low. currently, $16 a year are providing outstanding benefits to members and to all americans aged 50 and older. we also reject the conclusion that we are not good stewards of our nonprofit status. the revenue that aarp receives from lending its name to products and services goes directly to fulfilling our mission, inserting people 50 plus. our mission includes three major areas. we work to make sure that people have access to affordable, quality health care. we work to make sure that people have the opportunity to achieve lifelong financial security. and we hope and empower people

50 plus to live their best lives. these are the principles of aarp was founded upon. doctor ethel percey andrus, a retired educator from california, was appalled when she discovered a retired teacher living in an old chicken coop. so she began a campaign to get affordable group medical insurance for retired teachers, creating the first group health insurance plan for people 65 and older in the country. a decade before medicare. in 195 1958 she created aarp for seniors across the country who needed health insurance for themselves. through 1010, she also envisioned a better life for seniors that included health and economic security and opportunities to remain active and productive members of society. when we look at what dr. andrus

did, it is the remarkable she came up with a creative marketplace solution, to what was then considered to be an unsolvable problem. providing access to health care for seniors. she changed the market by bringing seniors together who shared those needs. we have followed dr. andrus' lead ever since. lee, our other volunteer leaders and our dedicated staff are "the guardian's" of that legacy today. we are leading efforts to improve life for all generations by working to provide access to quality, affordable health care, including lower prescription drug costs, improve and protect financial security including social security, and fighting age discrimination. and we advocate for consumers. for example, aarp has supported bipartisan legislation including the lifetime income disclosure act which will provide consumers with better information about their 401(k) plans.

we're also proud to endorse strengthening medicare and fraud act. this bill is sponsored by the chair and ranking member of the health subcommittee, and powers the government to reduce medicare fraud. aarp also provides direct assistance to americans. for example, as we sit here today more than 30,000 aarp tax volunteers are helping to play 6 million taxpayers prepare their taxes. in 2010, 193,000 people with low income received a total of 233 million in earned income tax credits. last year, aarp volunteers helped more than 526,000 people stay safe on the roads there are driver safety program. also in 2010 our advocacy efforts help consumers save more

than $3 billion in lower utility costs. last year, more than half a million people visited our great, good website. connect with more than 260,000 volunteer opportunities in their communities. today, aarp and the aarp foundation in partnership with nascar's jeff gordon and hendrick motorsports are leading the drive to end hunger. and effort to help 6 million american seniors, another 6 million their families who face the horror of going hungry every day. that's aarp. working to make sure that the american dream lives on for all generations. thank you. >> mr. rand, i thank you for your testimony. i'd like to call your attention to the monitor is, and to a

chart detailing aarp's sources of revenues. according to aarp's consolidated financial statement, aarp's royalty revenue which comes primarily from insurance companies was $240 million in 2002, and grew to $657 million in 2009, an increase of nearly 200%. during this same period, aarp's revenue from membership dues, advertising and federal and other grants, have remained relatively flat. it is safe to say that aarp could not operate or function as it does today without the money it makes from its insurance business, which certainly raises

the suspicion about where aarp's modus why. -- motives lie. if aarp did not have the nearly one quarter of a billion dollars in royalty payments coming in, most of which are from insurance companies, what sort of changes would aarp need to make. >> quite frankly aarp is very proud of the fact that its membership dues are kept low. we work at keeping them low. in fact, the director from the board is that we want to keep membership dues low. we don't expect to extract incremental dollars from our membership. we invest in it. so we are proud of that particular fact. now, royalties, royalties from health insurance companies, royalties from financial

products, royalties from other products, lifestyle products. we believe that part of the solution is to meet the unmet needs of the 50 plus population -- >> mr. rand, if you could answer my question. if you did not have these huge profits from the insurance company, what would you do? what would that do to you? >> it would decrease our ability to serve 100,000, 50 plus, 37 million members. all of our revenue, all of our revenue goes towards our missi mission. >> so in other words, this is very important, the revenues that you're bringing in from the profits that are made, the royalties that are made from your insurance companies, is that not correct? >> it's very important to our members and it's very important to the 100,000, 50 plus.

let me give you some idea -- >> so, therefore, you have a great interest in those revenues, those royalties being high as we've seen the huge increases that have taken place in a relatively short period of time? >> as you know royalties are tax exempt let me tell you what we do with the money. >> but just answer my question. you have a great interest in that those royalties be high because -- i mean, your dues would be higher if they were not, is that correct? >> would you like me to tell you where our interest lies? >> just yes or no, is that correct? >> obviously it would affect our -- >> answer the question please. >> the answer is we have an interest in meeting the unmet wants and needs of our population. that's what our interest is.

this is not something that we devised. all of these insurance products come from our members, and the 100 of the 50 plus population say we have these needs. they give us those needs and wants, if it's in the insurance area we convey those to potential providers of insurance. that's what we do. >> i understand it. begin, i appreciate it if you'd keep answering my question, if you would. and i thank you for that. you stated in your testimony that, quote, under the democrat health care overhaul the aarp's branded insurance plan for 50-64-year-olds will become obsolete, and aarp will no longer receive revenues from those plans, closed quote. can we take from that statement that aarp will not endorse or

sell insurance in the government run exchanges and that aarp will not accept any royalty or commission payments or licensing fees from any insurance plan operating in the exchange? and will you make that commitment today to? >> we don't sell insurance, mr. chairman. >> you do receive royalties which would rank as the sixth largest health insurance company in the united states, is that not correct? >> the answer is we are not an insurance company. we don't sell insurance. we don't underwrite insurance. >> excuse me, could you repeat that? >> do you not -- aarp, does not aarp in royalties received the highest, the sixth highest profit of any insurance, health

insurance company in the united states? is that not correct? >> it's not correct. we don't receive profits, sir. >> royalties. >> and i don't know what -- >> you receive royalties that would rank you, again, this is public information species absolute. >> that would rank you the sixth largest for-profit, were you for profit, which the irs does not rank and that's one of the purposes of this hearing, would rank it as if you were an insurance company -- anyway, your public information would indicate that. finally, i'd like to highlight the recent comment from an aarp spokesman, that aarp is committed to transparency and the hearing will provide us yet another opportunity to answer any question, closed quote. i found this quote somewhat

refreshing, given aarp's repeated refusal for 18 months to provide members of this committee with financial documents relating to the aarp insurance plan. aarp services and details about aarp's medicare insurance contracts. given your new commitment to transparency, i have a few questions i'd like you to answer, or to commit to answering on the record. in 2007, aarp retained 4% of every medigap insurance premium it received. in 2009, aarp retained for .95% of premiums paid for every aarp medigap policy. could you tell us how you

decided on 4.95% and what went into that conclusion? what percentage of aarp's medigap premiums will aarp keep in each year from 2011 until the current contract expires in 2017? >> may i address your premise? >> i'd like you to address my question. >> that's what i think i'm trying to -- >> premise in question are two different things. if you could address my question. what went into your decision for aarp to increase its royalties from 4%, to 4.95%? first of all. and, what percentage do you anticipate that aarp will keep each year from 2011-2017?

so if you could address my question, please. >> number one, the royalties have nothing to do with the premiums of the beneficiaries. nothing to do with the premiums. the premiums -- >> that's not my question. i asked you what went into your decision that it would be 4%, and what went into your decision to increase it from four, 24.95. that's my first question. >> that was simply a renegotiation between united and aarp. >> okay. and what -- could you tell us what percentage aarp, medigap premiums, what you will keep in each of the years, the year we are in, 2011, through 2017 which is what your contract runs for. will they go up again? weather remained at 4.95?

>> i can't answer the future. we've not talked about that. >> okay. how much money did aarp earn on investing seniors in insurance premiums money before taking a portion of the premiums back to united in 2008, 2009, and 2010? >> the premiums from the beneficiaries since 1958 have gone into a trust, a legal trust. it has been the collecting portion of these checks and beneficiary -- >> that's again, if you could answer my question. that's public information which you are stating. we all know that. what we don't know and what you would not answer is when we requested from you, and what my

question is, is what portion of the premiums did you give back to united, money before kicking in a portion? >> all of the money that we took in -- >> how much did you earn before giving it back? that's my question, which is not public record. >> first, do you mind if i enter it into parts of? >> if you answer it, yeah. >> first part, any interest that we has goes back to our mission which means it goes back to the -- >> that's not answering my question. we know that. you stated that already. could you be precise in answering my question, which you're avoiding in which he would not answer for 18 months? >> mr. chairman? mr. chairman, i -- i'm not certain what's going on here, but to some degree the witness is entitled to an opportunity to

try to respond or if the chairman or any member does not agree that's responsive, certainly were entitled to its members to try to extract as best of answers as again. but at this stage i think you are preventing the witness -- >> okay. the gentleman has not been recognized. let me just say i will take that to be that you refuse to answer my question. >> no, i'm not not. i'm happy -- >> so either answer my question or move onto the next one. because you are not answering the question i am asking you. >> all of the money that we have that comes out of the trust in interest goes to our mission. none of the money is taken out of any of the premium -- >> mr. rand, let me say for the third or fourth time that is not the question i asked. i asked what is that about. i will take that to be that you are refusing to answer my question. and i will move on --

>> now that i understand the specificity of your question. over the years in interest earned from the trust which is aarp's trust, would very anywhere from 69, 1,090,000,000 depending on the years. >> thank you. if you could, i'd like you to answer that, maybe in writing if you don't have that. to our committee. how much that aarp received annually for the use of aarp's brand for aarp medicare, advantage insurance plan and aarp medicare prescription drug insurance plan, each year over the course of the current contract? >> i can give you an i.t. would've answer is that will suffice because i don't have it by the individual insurance products. it is roughly 440, 430 million that we get royalties from,

unitedhealthcare from their ability to use our brand on their products. >> okay. i believe that's already publicly known. could i request you to respond in writing to the? >> we can, we can respond in writing, just. >> with the answer of? >> yes. >> i thank you. i thank you, mr. rand. i now recognize the ranking member, mr. stark, for five minutes. >> the report from my colleagues across the aisle raises some objections to aarp sponsoring nascar driver jeff gordon. this raises questions according to the report about whether

scarce taxpayer dollars are being used to sponsor a nascar team. you to sponsor a nascar team? >> we sponsor what we call -- the answer is yes. and that is the drive to end hunger car. >> well, i guess if it's bad for aarp to do that with taxpayers dollars, it's okay for the pentagon to do it. i'd like to insert in the record the "roll call" vote february 18 of this year and an amendment offered by ms. mccollum of minnesota that we eliminate $7 million in funding use of the department of defense to sponsor a nascar vehicle.

and i'd also note that my colleagues, mr. herger, mr. boustany, and most other republicans on this committee voted against that amendment. so, you did but with those, in eliminating these funding, mr. tiberi, mr. riker, mr. jenkins. thank you, but it seems to me there's a difference here that it's okay to spend taxpayer funds on nascar by the department of defense, maybe it helps them learn how to fly those airplanes or whatever they are doing. but then to insinuate that you all, aarp by doing something sinister, that just doesn't seem quite right to me. and i wonder if, mr. rand, can you explain why aarp makes this investment in nascar and why you

think it's valuable? >> number one is we don't make the investment in nascar. we're making the investment in a coalition of both awareness and partners to end what is an insidious issue in america, which is 51 million people who suffer from hunger, go to bed every night struggling to figure out how they will get their meal. >> so you make some money -- >> we don't make any money on this. >> i neither is revenue that comes out of this, of the nascar thing? >> no. we take our revenue and we invest in this issue. >> which is to help -- >> in hunger, bring attention to hunger, have partnered to help with us with a particular out how we can have a national network that helps with the infrastructure, access to food, delivery of food, awareness of the issue. we believe that we have over 6 million seniors who suffer,

and another six minus that include their family, that's 12 million that -- >> now, can you explain what the department of defense does with the money they make on their nascar involvement? >> i can't, serve. >> any ideas what they might do with the? >> no, sir. >> i don't either. i mean, it seems to me if it's all right for our people in uniform, then it out to be all right for our old folks who haven't worn the uniform for four years. does that make sense for you? >> it make sense to me. >> all right. thank you. thank you, mr. chairman. >> we have a new chairman. >> for the time being. thank you, mr. stark.

mr. rand, i want to put a chart up on the screen. i know you can't see the tv screens but i believe you have, i think our committee has provided this chart number seven, and if we could put up on the screen for the viewing audience, i would appreciate that. i would like to call your attention to this chart, because to maintain taxicab status, and no decision must be operating exclusively in the promotion of social welfare and primarily promoting the common good. this chart is derived from your consolidated financial statements. the red line shows royalty revenue. i'm going to get back to the definition of royalty in a moment, but it shows royalty revenue including payments from insurance companies with remarkable growth, 200% increase for the year 2002-2009. last figure in '09 was 657 million. and down at the bottom, those

lines that are not as easily seen our dollars transferred from aarp, incorporate aarp's legal counsel, which was actually shows a decrease of $300,000 over that time period. and dollars in the blue -- i'm sorry, in the gold would be dollars -- i'm sorry, blue, transferred from aarp corporate to aarp foundation. which was $3.1 million. so, in looking at this, you know, the entities that brought in these royalty revenues and your charitable mission, the growth has not kept pace. so this calls into question in my mind where you really meeting that obligation as a 501(c)(4) which is charitable contribution, how does that comport with aarp's tax-exempt status of?

>> all of our mission, all of our money does go to our mission. there may be a particular program that has not kept pace with investment. but i will tell you with -- >> when you say nation, are you referring to -- >> our social good mission. our -- >> that leaves $414 million on the table. if you just do some simple math, that -- i'm just wanting an explanation of the discrepancy here. it seems to me, well, that those bottom lines would not be flat or showing a decrease over that time period. >> mr. chairman, may i add some information hear? >> yes, sir. >> i think part of the problem in looking at the difference between a c-4 and a c-3 -- >> i understand that but -- >> i know you understand but i

think the definition and requirements for c-4 are constantly different than c-3. >> i'm going to get that in just a moment. thank you. let's move onto something else. i want to follow up on some of the angry that mr. herger was working on. in looking at the medigap policies, i understand you have licensing agreements with insurance companies, is that correct, sir? >> we have a, an arrangement where we have our brand that is lent to them, assuming that -- >> but this is the licensing agreement? >> you can call it a license agreement. we called it a royalty. >> i'm going to get to the definition of royalty in a moment. and under the medigap arrangement, only dues paying members, aarp dues paying members are allowed to participate in the medigap policies, is that correct?

>> again, if i could -- >> transfix runs the organization, can you answer that question? is it only dues-paying members that are allowed to participate in the aarp medigap arrangement with the insurance companies? >> i believe we have some products that you don't have to be -- >> i'm talking specifically about medigap. >> when you start out then the answer is yes. some way the program and they stay with the insurance, and we're happy that they stay with the insurance. >> fair enough. and he received in this arrangement at least based on the information we have gathered from public records and so forth, and your consolidated statement, you receive the premiums that are collected from these beneficiaries in the medigap policies, is that

correct, sir? you collect the premiums of? >> they are collected in the trust fund. >> the grantor trust, which is part of aarp? >> that's correct, since 1958. >> that's right. and you retain 4.95% of those premiums as royalty? >> no, sir, that's incorrect. we do not retain any of the premiums. those premium dollars are written to the specific ensure. -- incher. ..

or genworth? that is worth of the administration that the trust haas. >> this is administrative fee, you're saying that, because i have, i have a document here from rhode island, state of rhode island that shows member, total mem fwer contributions, lives covered, it breaks it all down. it serves royalty to aarp, percent of member contribution, 4.95%. >> that is royalty, sir.

>> that's what i asked you in the first place. >> i know but royalty has nothing to do, royalty has nothing to do with the trust fund. has nothing, the trust fund takes beneficiary's payment to the united or gern worth or any other -- genworth or any insurance dollars and transfers to the appropriate insurers. that's all it does. >> 4.95% is not going -- >> the royalty fee associated with our contract or a contract that talks about we're going to lend you our aarp logo if you do certain things associated with improving insurance products to our members and people 50 or over. >> 4.95% go to the grantor trust? does it go to aarp, inc., what? >> it goes to us in revenue? >> i know what entity. >> aarp.

>> but, okay. let's leave that at the moment. royalty income, which is excluded from unrelated business income under section 512-b of the tax code often raised a number of questions. there's been litigation. while royalty income that's excluded under the code, is an issue that's difficult. a lot of times it relates to intangible property. it's my understand understanding putting aside the 4.95% issue which you classified as royalty earlier, you also retain these premiums for, it is unspecified period of time. i'm not certain what that period of time is. can you tell us how long aarp or an entity of aarp holds on to those collected premiums in medigap? >> there are two processes. the first process is the

collection process. there may be two to 2 1/2 million, either electronic, 60% of it is electronic. the rest is mail. those are sorted through for the various accounts, united, i.e., genworth. that is is an administrative process. that administrative process can take anywhere from a week to three weeks, depending on how these checks come in. for that period of time as we are amalgamating the checks for payment, that trust, financial prudence is also in an interest-bearing account. >> are there other investments besides, just simple interest-bearing account? >> as the money comes in it is in an interest-bearing account. there is no other money in there. interest-bearing account. >> okay. >> for that week or two days or three weeks we are in a

earn small interest as any interest-bearing account as your own checking account you may have interest bearing. >> i understand. >> that's one issue. i think that's the one you're trying to get to. that interest has nothing to do with insurance companies. it does not affect any of the payments associated with beneficiary. >> you pay tax on that interest? >> i believe we do but i don't know. >> okay. >> i'll find out for you. >> if you can get us the answer. >> we'll get you that information. >> if you get us some idea of how much you earn with that. what is, what kind of interest earnings do you get on that and tax paid on it. that would be helpful. >> we'll give you all that information. >> thank you, sir. now you mentioned there was another aspect to this and, well let me back up a moment. this is all set by contractual arrangement? >> the trust was set by contractual arrangement in

1958. >> no, i understand that but the, you have a separate contract with united for instance or genworth for the handling of these premium dollars? which specifies how long you might hold onto it? >> no. >> there are no contracts? >> well we have a contract to do the administration for them. >> can you provide us with those contracts? provide the committee? >> yes, we can. >> thank you, sir. you said earlier the interest goes back to the mission. that was kind of a broad statement. the i'm just following up on a quote you gave in questioning to mr. herger. and that the royalties have nothing to do with the premiums. can you elaborate more on that? >> premiums are what the

insurance companies charge the beneficiaries. >> right. >> separate issue. we have nothing to do with that. royalties come from the agreement when we go through a process that says, who can meet the wants and needs of our membership and 50 plus populations. we understand clearly what the unmet needs are. we take those unmet needs and during the process we invite, in this case insurance companies in, and say who can do the best job in changing the marketplace to meet the unmet needs of our seniors. who can have the quality that our seniors expect? >> no, i understand that. >> we then -- >> okay, go ahead. >> we then select, when we

select we then give them permission to use our brand, the aarp brand. for that permission to use our brand we have royalties and payment for that. >> okay. now does aarp services have any role whatsoever in setting the premiums, the premium rates? >> the answer is no. >> ok. thank you. that's all i have. >> i thank the gentleman. the ranking member of the oversight committee, mr. lewis, is recognized for five minutes. >> mr. rand, mr. hammond, thank you for being here. i want to thank you for your great service to the nation. and for all of your great and good work. now the republican report states that aarp charitable contribution only increased by 11% from 2004 to 2008.

now aarp is a social welfare organization. american crossroads, gptf is a social welfare welfare corporation. the tea party patriots is a social welfare corporation. both want to repeal health care reform. i'm not aware of any charitable activity or contribution by either of these organizations. mr. hammond, are you aware of any requirement of social welfare. engage in charitable activities. can you please describe for the committee a few of the charitable efforts of aarp? >> thank you, for the opportunity mr. lewis. the that's one of the things i was trying to talk with chairman boustany about. a c-4 social impact

organization is simply that. we've established a charitable arm, the c-3, to deal with vulnerable populations who are in need of assistance in the very essence of their lives, and to try to stay together. the c-4 is working on a broader basis. on a social commission. we're looking to help people in need. and certainly we do. but we help them in different ways. we help 53,000 job-seekers through our 2010 job fairs. we're helping with the drive to end hunger, which we are financing. folks say, well, you know, why don't you just throw that money at hunger? why don't you just feed people with that money? well, that would be fine and it would feed a lot of people, but the focus isn't that. the focus is on defeating

hunger in this country and putting a spotlight on hunger, and making people understand just exactly what a big problem it is. we've been raising money for relief in haiti. we're raising money for relief in japan. as mr. rand stated earlier, through our advocacy efforts saved you till the -- utility customers in 2010 by opposing unjustified rate increases. we represented tens of thousands of people at no fee in cases where age discrimination is involved. we've supported efforts through our advocacy which another perfectly legal part of the c-4 to do the kinds of things that our people say they need having done. we're looking at 100 million americans who are age 50 plus. about 37 million, plus or minus are members. but we're not doing it just

for our members. we're doing it for everyone. >> thank you, mr. hammond. mr. rand, you want to respond? >> i would add some clarity. this is what i was trying to explain when we were asking the questions about where does our, where do our dollars go in terms of a social good organization. roughly 25% of our revenue, 25% of, excuse me of our expenditures, go to community benefits such as tax aid, driver safety, other programs of that ilk. 25% of our expenditures. member services, 240 million. about 24%. advocacy and research, 10%. communications operations, 8%. that is really focus on education with our great

magazines. those are some examples on a higher percentage basis well beyond the two programs that there seems to be a chart that says they went down but this tells you in a broad sense that the vast, vast majority, all of our money really goes to our social welfare mission. >> thank you. mr. rand and mr. hammond, i find it sort of strange and out of the ordinary that our republican colleagues of mine are attacking aarp today as retribution for your organizations support of health reform. they were more than happy as mr. stark suggested to stand with you when they created the medicare drug benefit. i want to ask unanimous consent to insert into the record a list of quotes from my republican colleagues when mma was passed.

mr. rand, i don't believe you were at aarp at that time but mr. hammond -- >> without objection, that would do, gentleman's time has expired. >> mr. chairman, i think you took much more than five minutes. i know you have leeway. answering questions. when i went over to vote, when i came back you were still asking questions. you took at least 15 minutes. >> the gentleman's time has expired. the gentleman from texas, mr. johnson is recognized for five minutes. >> thank you, mr. chairman. thank y'all for being here. the health care bill cuts medicare advantage by $206 billion. those cuts are going to result in millions of seniors no longer selecting medicare advantage coverage. either because those plans will no longer be available to some seniors or they will become too expensive and offer fewer benefits. i want to know if you were aware of these cuts when

aarp endorsed that legislation? >> mr. johnson, if i might answer? >> sure. >> yes, we were certainly aware of those cuts. that's been aarp's position since medicare advantage was first instituted. we do not believe that excess payments should go to programs that are paid for by the other 75% of the taxpayers who are involved in regular medicare. that's been our position and our public policy for at least 10 years. >> so you don't believe that people ought to be able to choose their own health care program. >> we absolutely believe they ought to be able to choose their own health programs. we don't think they ought to be subsidized into programs. >> okay, the for-profit aarp's insurance plan collects medigap premiums, invests seniors premium money, earns interest on it and keeps

almost five mers of the people mum amount and interest earned off the float. the rest of the premium is sent to unitedhealth group. aarp, inc., the 501(c)(4) receives royalty payments directly from unitedhealth group for aarp's medicare advantage and medicare prescription drug plans. why does aarp handle insurance profits differently depending whether it is medicare advantage or medigap? you want to answer that too? >> i will give it a shot and mr. rand can fill in with anything he has to say. number one, medicare advantage is a program that is sponsored under medicare, not through private insurance. >> that's right. >> and it follows all the government regulations. therefore the way that that royalty payment is done is under federal regulation.

>> okay. so you didn't really tell me about medigap though. >> and medigap i think, first of you will all like to make a slight correction what you indicated. all the premiums for those issues go into the insurance trust, the grantor trust that chairman boustany was talking about. that is a legal entity that was set up in 1958 to receive those and to hold the general, the group policy and to receive the premiums, hold the premiums, invest that and yes, we do receive interest income for that float which is perfectly legal. we do take royalty payments from that money that comes in and then as requested by the insurance companies to cover their products, we

return the balance of that money to them. >> does aarp receive more in royalty payments for aarp branded medigap than medicare advantage plans? >> i'm sorry, sir, would you repeat that? >> do you get more from medigap than you do medicare advantage plans that you all have started? >> i'm assuming you're talking about royalties, sir? >> yes. >> yes we do. >> you do? >> yes. >> qording to medicare's chief actuary and united states, united health care executives and medicare advantage cuts will increase enrollment in medigap plans as seniors look to have supplemental coverage. more people that enroll in aarp medigap, the more money aarp receives according to what i'm given. as a result, aarp could easily see a windfall in excess of one billion

dollars as a result of the health care law. how do you explain that to the seniors you're supposedly advocating for and, you know, looks like you're raking in the cash while they're losing benefits and paying more for coverage? >> may i make one comment, sir, before i mr. rand answers that question. >> sure. >> one of the priorities that we set was that traditional benefits under medicare would be lost. in fact medicare would be strengthened. so i just want to make that clear in terms of benefit cuts. >> the gentleman's time has expired. >> my time has expired. thank you, mr. chairman. >> the gentleman from washington, mr. mcdetermine not, dr. mcdetermine not is recognized for -- mcdermott is recognized for five minutes. >> i think you gentleman what you are made part of today.

it is reenactment after play by arthur miller called "the crucible". it was a play about witches in salem and the evidence had to be found that these women were all controlled by the devil. your sin, as you may no, is that you backed the affordable care act. now, i'm sure that the chairman has a long list of other groups that are going to be brought in here. i'm sure that the pharmaceutical industry will be brought in here because they got a deal that we can't negotiate pharmaceutical prices or prohibited, mrs. sebelius is prohibited, secretary sebelius is prohibited from negotiating better prices for seniors. pharmaceutical industry, i think they must have caught pretty good deal on that.

that was put in, you remember, back when they put in the drug benefit a few years ago and they said you couldn't negotiate better prices for seniors. you could do it for veterans. saved a quite a bit for them. maybe, 40, 50, 60% but you couldn't do it for seniors. so the pharmaceutical industry caught quite a benefit in there. and they supported it. i'm sure we're going to have them in here to go over their finances and how their money is spent and where they get it and how they use it for lobbying up here and how they get tax deductions. and then we'll probably have the medical device people up here. i keep getting those things from the scooter store saying, you having any trouble moving around? well, just come on in we'll get you a scooter and you will be paid for by medicare. by goodness, they got a little ol' deal in this bill that went out of here, the accountable care act.

and down the list we're going to go. now the question really is, are we going to go after every organization that is 501(c)(3) and a 501(c)(4)? if we're going to start that then we'll have churches in here. there ought to be churches we look carefully at. this an oversight committee and we really ought to be going after them. and the question that comes to my mind in listening to all this is, how did you make the decision to back the affordable care act? i don't think you just got up one morning and said, let's back this thing? tell us about the process that you went through? because i want to understand why you committed this sin. i think if you would confess your sin, maybe we could end this hearing and you could go home but if you won't confess, as to how you came to this terrible decision, i'd like to hear you talk

about it. >> thank you very much, for the opportunity to talk about it. first of all as many of you all know, this is a vital part of our mission to have affordable, accessible health care for all americans. it is health security. this has been our mission for over 50 years, over 50 years. when we talk to our members they asked us what it was they needed the most. we took down a list of what they said they needed. one was, no preexisting conditions because they couldn't get insurance yet they were still getting sick and it was their leading cause of bankruptcy and loss of homes. so we advocated for no preexisting conditions. and in fact there were many

portions of the insurance industry who were pushing against it. age-rating. as they were getting older, and we're paying 10, sometimes more depending on the state than a young person. as we have less out-of-pocket to pay. we don't want age discrimination to continue. and so we advocated for taking the 10-x they were paying and the bill has maximum of 3-x. baby boomers said we don't have enough money to send our kids to college and at the same time, try to figure out how to pay for their separate insurance. so we would love to be able to have them on our insurance policy so we can do both, so we can help give them the american dream. closing the doughnut hole. >> the gentleman's time has expired. if you could close up

quickly, please. >> the doughnut hole was because of 30% of the out-of-pocket cost foreseen, i don't. we closed the doughnut holcomb completely. home an community care options for those that want don't want to go to nursing homes. >> the gentleman's time has expired. >> thank you. >> i recognize the gentleman from washington, mr. reichert, for five minutes. >> excuse me, mr. chairman. again, thank you, mr. hammond and mr. rapped for being here this morning. first of all, all those conditions that you have just listed i think most members in this panel, democrats and republicans would agree with. i do. so i think we're on the same page with a lot of these things. and i do take issue with some of the comments made as far as this being a political witch-hunt. we can demonize this but you know, it really what it boiled down to and representative in florida who represents a lot of

seniors who had some questions. ginny brown-waite. chairman of a health committee, who had some questions and it is his responsibility to have those questions answered. and then as far as my part in this, i'm just an old cop and so i hope you can understand, do you really know and why you're here today? i mean, we're just wanting to find the answers. and so i just want to go through a couple of things. first of all, look, we exchanged some letters and the responses we got back were minimal in response to the questions that we asked. and the fact this transparency issue was referred to earlier by the chairman where one of the comments made is no public or confidential proprietary information. some information is nonpublic or confidential and proprietary to only aarp and its member benefit providers. there is a transparency issue. after the letters were sent

and the responses were really not adequate, we then had a face-to-face meeting with your cfo and then cfo tom nelson. tom nelson and others could not answer the questions that i posed to them. they couldn't anticipates the question of what happens to the one out of four seniors who will lose medicare advantage? what happens to those? you have acutarial scientists working in your organization i assume, is that correct? just yes or no because my time is limited? >> yes. >> yes. i would assume -- >> excuse me. i don't believe we have actuarial because we're not in the insurance business. >> you must have actuaries who can map out your future for you right? you're a large organization you have to have actuaries. i think your actuaries -- >> if we do i will give you -- >> thank you. the actuaries have to look out forward and say, we can predict what is going to happen to these, one out of every four seniors, how much insurance they may lose.

what it is going to cost. what its benefits are for aarp or not. what united way, you know, what the impact and effect will be. but we finally had to end up calling in help from the irs. so this report, as people referred to it as a republican report, is a report that was formed with the help of an irs personnel who assisted our staff in going through this information. this isn't made up information. this is accurate, statistical information, gathered through a very serious analysis of the monies that you are, making in revenue, versus the monies that you are distributing in your 501(c)(3). now look, one of the answers tom nelson gave me, this whole thing is to protect the greater good. which kind of goes to your, one of your mission statements to enhance the public good but what about

protecting the american seniors? you know when you talk about medicare advantage, and we don't want others shouldering the burden of paying these additional premiums, to allow others to have insurance, the whole health care bill is built on that. am i not correct? yes or no, please? the whole health care bill is built on others helping to provide for others, isn't that not true? so why would you be -- >> answer is yes. [inaudible] >> thank you. why would you be against another program that really is helping seniors and others are shouldering the burden? that doesn't make any sense to me. the fact that you support these cuts, is just, it is amazing to me. >> can i -- >> protecting aarp's dues members, aren't you concerned about that? aarp, you're not suggesting i hope that the half

trillion dollars in medicare cuts that will jeopardize seniors access to health care is good for seniors? are you? >> no. and i'm, at your ready when you like for me to respond. >> do you, you keep records, i mean, meticulous records, right? i would just like to say, sir, if you could provide me with the list of times that you visited the white house, i would interested in that. thank you, mr. chairman. >> gentleman's time has expired. the gentleman from california, mr. thompson, is recognized for five minutes. >> thank you, mr. chairman. i just want to state for the record i believe it is totally appropriate that we look attacks status. i think it is a very, very important thing to do. and this committee certainly has the jurisdiction, responsibility, to review this, this issue. i think our taking it on is very appropriate. also, however, i want to

state that review i believe must be fair and impartial and should not be done to carry out some sort of political vendetta. after, after aarp supported the medicare part-d measure, that was support that i might add was touted by then president bush, speaker hastert, chairman thomas of this committee. chairman tauzin of the other committee with jurisdiction, aarp's financial interests, i think was probably more clear then than it is after their support of the health care measure. and there was no question whether or not their tax status should be looked at. there was no oversight of aarp at that particular time. and i just find it curious that we're looking at it at this particular time. . .

>> who show multi-billion dollars of profit and then we read in the papers they don't pay one single dime of corporate taxes. i think it's a very slippery slope where we are going today, and i just want to make sure that, that everybody recognizes that and i'd like to see this

committee get back on its regular order, course of business. i wanted to give mr. rand an opportunity to finish his comments. mr. mcdermott had asked a question and i don't think he had a chance to finish. will he be coming back or is he -- >> you will be back. if you would like to phrase the question if it's a partner with the chairman i'll be glad to try to give you an answer. >> why did you go ahead and finish up where he had left off? mr. mcdermott, do you want to rephrase? >> yes. my question really was, the process by which you arrived at the decision to back the affordable care act, and he was describing things that the members had talked about and wanted, but never got on how that decision was made. that decision was made by the board. after what seemed like torturous

hours, discussion, and i think as mr. rand stated, the decision was made based on the principle that we wanted to see included in any health care reform act. these are the principles of the things that our members told us they wanted to see in the act. and as his reichert indicated, there are things that almost all manners of the committee agree with. we would love to have seen that done on a bipartisan basis because that's the way we try and operate. but we felt that we had to support that act because of those principles and the benefits that would give to seniors. >> mr. lewis, you were kind of abruptly cut off a your question. would you like to take, the remainder of my time to ask your questions because i appreciate that but i think you made a point i plan to make.

>> thank you. i yield back i yield back. >> the gentleman yield back. i request unanimous consent that the investigative report behind veil the aarp america doesn't know be entered into the record. without objection -- >> object. reserving the right to object. >> the right to object has been recognized. >> reserving the right to object. i haven't objected because there's just some question as to whether this is an official document, who prepared it? is a political document? is at a ways and means document? is a congressional document? i see your name on it, and, of course, my colleagues. but i am waiting to see where this came from. so if you put in the record how would you identify it as to what we would look forward to in reading it lacks if you can help me i certainly am anxious if

they withdraw any objection at all. who paid for it? where did it come from? is it a campaign document? did it come from the republican congressional campaign committee? is it a ways and means document without sco? god no, i know what seals mean. >> the gentleman, i might mention, the whole purpose, object of this hearing is on this report. the committees on a regular basis submit and are accepted by unanimous consent documents that are not involved in this hearing. if the gentleman doesn't remove his objection, we will call for a vote. >> no, i'm not going -- this one question, who paid for this report? where did it come from? why is there no identification? is it a federal report? that's on asking. i don't want to go for a vote. i'm ready to roll over and

accept it, but i just want to know why is only two members names on it and why is the source of this information not put on the cover? so when i do read it, i would know who paid to have this done. if the government paid for it, i would think -- >> again, the gentleman, it has on the report who asked for it. it's my name and congressman reichert's name are on it. so it is indicated here. and again, would the gentleman like a vote? >> i want to withdraw my objection. all i'm asking for is who paid for the report and where does it come from? i don't want to make a big issue out of this. did you and your colleague pay for the? >> i appreciate. if the gentleman looks at the report i think it's obvious where -- >> it's not obvious and you can

direct my attention to where i am missing. >> with the chairman yield? >> i will yield. >> it's my recollection mr. stark issued a similar report in the context -- >> wrong in doing that. stark, i know him -- [laughter] >> i would never use -- >> since you are admitting that there's no place to hide. >> to my friend from new york, the report was prepared by two members of the committee. >> you to did it. that's all i want to know. i remove my objection. >> the right to object has been restored. >> mr. chairman, i'm not interested in rolling over. i'd like to know, are we saying that this is report those produced by just two particular members of this committee? and it was produced by just two particular members, i'm interested in understanding, was it a committee generate report? if so, at what point wasn't

shared with the other members of the committee? >> again, it's on the report, as was mentioned to the gentleman from new york. there's actually three members, former congresswoman ginny brown-waite was also involved. again, i think it's very clear. >> so we're committee resources used to generate this report or was it through members own member account money or some private account money? >> this has been done through the same account through our members account as would be done as if you had an ounce, the german from california have asked for report or anyone else. >> of the committee or of my staff? i'm trying to determine whether this is -- >> would the gentleman like a vote or will the gentleman remove -- >> i am reserving the right to object. i'm hoping to get responses because the report doesn't identify other than an investigative report prepared by

wally herger and dave reichert. does that mean this was prepared, mr. chairman, by you as a member and mr. reichert as a member, or as you as chairman using the resources of the maids and we've committee -- >> we need to move on. is the gentleman objecting are not objecting? >> i do object. >> would the gentleman like a vote? >> reserve the right. >> okay. >> am i recognized? >> the gentleman is recognized. >> thank you, thank you. there's no date on this report either. if we're supposed to consumers so we could respond and ask questions today we certainly were not given much time. are you telling us, mr. chairman, a very simple question, this is like any other report that this committee asks for and the people who worked on repay their usual salaries, nothing more, nothing less, there was no external force used

to put this -- >> the gentleman -- we need to move on with this hearing. >> we don't like to move on unless we get -- >> why do we have a vote? >> we are not moving on italy get an answer. >> mr. chairman, what the heck is so complicated? >> i remove my unanimous consent. >> mr. chairman, reserving the right to object. mr. chairman? i have removed by unanimous consent request and we will move on. >> mr. chairman, can i ask a simple question? we don't want to make a big deal out of it. >> the gentleman is not recognized. >> if your staff prepared the report just a so-so we have and understand. we are not clear who prepared the report and that's all we're asking. >> the gentleman from illinois is recognized for five minutes. >> mr. rand, back to you in the booth. a couple of questions but earlier in your testimony come in your written testimony on the first page down at the bottom,

you said an interesting thing. let me just read two sentences of your testimony and let me make a couple of inquiries. in light of some of your responses to mr. mcdermott and mr. lewis. you said we've long maintained that we forgo revenue in exchange for lifetime health and financial security for all older americans. as an example of this, it's very likely that under the affordable care act the aarp branded insurance plan for 50-64-year-olds will become obsolete and will no longer receive revenue from those plans. is it your intention to forgo future revenues or royalties or sources of income as the affordable care act roles in? and are you committing today that you're not going to be earning any of those revenues or royalties or sources of income from areas that are in the

exchange? >> we really haven't had a conversation. we really haven't had a conversation about the exchange, and a strategy about the exchange. >> but that's what you're implying in these two senses, aren't you? >> no, i'm not. >> but when you say, when you say we would forgo revenue if this happens, and an example of that we are forgoing revenues, that is a reasonable application of those two sentences together, isn't? >> if it's reasonable for you i would not say no. it is not the intent, putting two sentences together and perhaps it was my lack of clarity. >> no, you put two sentences together and i've read them together in context. >> would you like to clarify them? >> let me put them in this context. you gave us earlier a description of some of the elements of the affordable care act that you found attractive,

and i understand those. i made a note, no preexisting condition. you reference the age rating changing from 10 x. to three x. the baby boomers keeping children on their coverage, closing the donut hole, home to nearly care options and there were other things that you got cut off based on time that were attractive to you. >> yes. >> what are the weaknesses of the affordable care act that compel you to keep an option open that would suggest that if the affordable care act isn't successful, that you may have to continue in the revenue royalty or income element of this in order to preserve your mission? what are the weaknesses of the affordable care act that compel you to keep the option open? >> let me explain the intent of my statement. we have long been accused by some elements of being in this

for money, for revenue. >> hold that thought. i want to come back to a. i just want to highlight some of the folks that have accused of that because it is interesting. our panel members really don't disappoint, do we? the gentleman from california, mr. stark, said that aarp members know that they are being sold out by an organization, i.e., you. the gentleman from new york, mr. rangel, said that aarp has forgotten where they come from because once you get into the business of making money with the devil, you forget your mission. and the former speaker, ms. pelosi said she complained that you in the pocket of republicans at that time and suggested that there was a financial conflict of interest. so your point is you received a lot of criticism from a lot of circles. go ahead. >> that was not my point.

[laughter] >> that was your point. the issue i state here is that our mission started in the '50s. i was 14 years old when the mission was stated. and that nation is every american should have access to affordable health care and, therefore, health care security for life. the question becomes one of many. one is affordable. right now we're having conversations about medicare as if medicare is the problem. medicare is a recipient of the expenses of many industries -- >> look, i understand that. so the question is, spirit affordability is the answer spirit and the affordable care act doesn't satisfy you that it will maintain affordability, and, therefore, you need to keep the option open to sell and be involved in these products in the future, is that really get?

>> may i help with that? >> the gentleman's time has expired. the gentleman from new jersey, mr. post grow is recognized for five minutes. >> thank you, mr. chairman. >> mr. rand, you are a tax-exempt private corporation, private association, yes, sir. >> mr. chairman, i have a couple of questions for you, mr. chairman. i'd like to know whether or not we think, or you think that there are specific laws that have been broken here with regard to this tax-exempt organization, is that one of the reasons, or the reason why we are having to think? >> that's an improper parliamentary inquiry. >> oh, it is? my second question to you is this, what loss do you think have been broken since we look

at policy and we're not looking at corporate policy here. we are looking at national policy. that's our responsibility. >> i thank the gentleman, again, that was outlined in the report that we have. that's why the we are requesting the irs to look into this and let them decided whether or not they properly should be paying taxes on the large amounts of money that they seem to be benefiting from, legislation that was passed. >> mr. chairman, if you would indulge me. mr. chairman, there are legitimate questions that call into question whether there's a violation of for profit or nonprofit status. and i think there are legitimate questions about what's taxable income versus non-taxable income. these are --

>> can i have my time back, please? >> yes. >> thank you. looked, -- look, we're here to make national policy and we're shortly not here, none of us are saying this, i hope, to make aarp policy. if the majority actually look at the broader question here that we are supposedly discussing today, on taxes, section 501(c)(4) has a very specific part of the code, as you know. i think they would find it interesting that the sixth largest social welfare organization passionate wealthier organization that has a 501(c)(4) classification is a tax exempt racetrack and casino which operates in iowa. and it pulls in $2.2 billion a

year. can you blame us for asking questions about why now? it's hard for me, it's really hard for me, and i'm sure you will help me understand why a racetrack and a casino is more deserving of this classificati classification, because that's what you're getting at dick you are questioning the classification of aarp. you didn't do ages ago but you did it now. this classification of the aarp, very clear here the majority believes the aarp is worth investigating more so than this racetrack. i find that hard to accept. i know for fact that the aarp does great work. i have disagreed with some of your philosophies, so what? mr. rand, can you share with us how aarp directly helps americans and all the districts of the country?

>> yes, i will. let me just give you some snippets. and job category we have helped 53 million jobs seekers through 2010 with career, 53,000. again, we talked about a drive-in under, we felt 2.6 billion hunger. we supported schools, provided more than 20,000 in supplies in 43 states. the walgreens bus, we have a tour that we completed, 2 million free health screenings, 359,000 people participated. aarp litigation represents tens of thousands of people at no fee, and over 160 cases in 2010 alone. again, we save utility in over 18 cost and over 18 states, saved $3 billion for the

consumers in the states. defended and expanded services for home and community-based care. >> you could go on and on. and i'm sure our great chairman would agree with all of those activities in the field. he would not want to in any of those activities. >> the gentleman's time has expired. >> the citizens which he represents in which i represent. naked mr. chairman for your cooperation. >> i think you. and at this point i request unanimous consent to enroll into the record a letter from aarp, from the chief operating officer, tom nelson, which states that less than $31 million out of the $650 million in aarp insurance revenue went to aarp foundation in 2008. >> mr. chairman, preserving the right to object. has that document been provided to the members of this committee?

>> this is a letter that is posted on aarp website. >> i understand that, and i certainly have no reason to disbelieve the chairman in what he is saying that the letter depicts. none of us have seen this and you're asking it to be part of the official record of this hearing. and typically what happens is the chairman will make available to every member in a document that is going to be part of the record. i'd like to share this report was never provided. i would just want to make sure that members are provided with the information that will be part of this record. >> i mentioned that, the minority has entered already two letters for unanimous consent that have been entered that have not been distributed. >> that's fine, mr. chairman, and we appreciate in the indulgence of the members who did not object. this hearing is proceeding in a regular fashion what comes to this particular report. so i am just interested in making sure i know what he's been put in the record as part of this hearing. i'm responsible to my

constituents and anyone in america for what this committee does and i do want anyone to believe i was engaging in any form of witchhunt so i'm interested in knowing what's going to be part of the record of this particular hearing. i reserve the right to object. >> is the gentleman continue to object? >> until i see the doctor the chairman is going to submit i will continue to reserve the right to object. >> the gentleman continues. >> i have now been handed what i think is -- if i could just take a moment and take a look of the letter, mr. chairman, i will probably remove my reservation. >> the gentleman removes his reservation? >> if i could take a moment to review the document. i will remove the reservation. >> the gentleman's objections has been removed so without objection, the letter will be submitted for the record. now, the gentleman from georgia,

mr. price, dr. price, will be recognized for five minutes. >> thank you, mr. chairman, and i want to commend the office of this report because i think it brings into question what mr. pascrell talk about which is a legitimate question as to whether or not the tax-exempt status of aarp is wanted it and i think that's a legitimate question. i want to open by simply saying that there are a lot of folks in my district are members of aarp and a lot of folks who volunteer a lot of time. and put their heart and soul into it efforts to try to help seniors in our community, and i want to thank them for the work they do. i think that they are interested in making certain that the organization that they give so much volunteer time to is functioning in an appropriate and illegal manner. i do want to follow up very briefly on the issue of the support for the health care act, because i think that's part and

parcel of the objection of the other side. and it was such a huge disconnect between seniors in my district about their lack of support for the health care act in medicare's -- or aarp's support for it. and i think that's what caused folks to say, scratch their head and say, well, what's going on here? is aarp really, do they really have my seniors best interest at heart? or do they have other reasons to act the way they do? and you mentioned, mr. rand, a number of things that you felt were appropriate in the health care bill and that's what you supported it because 880 preexisting preexisting allegedly and the like. there's some things we believe happened in that health care bill that seniors adamantly oppose. so if you don't believe that seniors support the rationing of care, do you? >> we don't support it and i'm sure seniors don't. >> and really that's in the bill

so there is that inconsistency. you don't believe that seniors want more difficult for them to find a physician to care for them, do you? >> they have been support of the toxic. we're been supportive of the toxics. >> i guess he is all the time in my seniors that i can't find a medicare doctor. i can find a medical doctor because of the rules that have been put in place to any believe that's good increase but i know you don't support the. you don't support a decrease in innovation and health care system, do you ask seniors don't, do they? >> i don't think anyone supports black, and lack of innovation. i believe that there some aspects of the legislation that is there to help innovation. >> absolutely. and there's a difference of opinion. so there's a difference of opinion among seniors like is a difference of opinion among the regulation -- the regulation --

the regular population. that's why so many of us scratch our head and said what i do? there's a huge difference of opinion. the majority of seniors believe the bill will, in fact, a decrease their ability to get the kind of care that they desire. so that's kind of why we say what was going on. but i want to shift to this issue of tax-exempt status because i think it's incredibly important. it is an appropriate question for this committee to ask, is it not, whether or not an entity as large as aarp out there is following the appropriate rules to maintain their tax-exempt status, is that an appropriate function of this committee? >> i believe the committee has wide powers, and if you want to do that, then -- >> great. i have here a number of questions that i understand that members of the staff, the folks that put together this report were unable to get from aarp

inspite of the suggestion by aarp that they're open entrance there and they want to share all information. i wonder if i might build ask if you'd be able to supply these things for the committee's availability. how many millions of dollars does aarp receive from its medigap insurance business? that are to be something relatively simple, shouldn't it? >> we will provide anything that we have sole control over. there are some confidential contracts at which we can't make decisions about by herself. >> things like -- i appreciate that and i look forward to seeing the. things like the added benefits that aarp members receive after the aarp insurance revenues increasing difficulty, that members didn't receive in prior years. those kinds of things we ought to be able to get that information on, should we not? >> we would need clarification on that whenever you put that in

writing so we can clearly understand that particular request. >> what we will do is submit these questions to you, and in an effort trying to be transparent and open and provide the public with the greatest amount of information, look forward to those responses are why they cannot answer. >> the gentleman's time has expired the gentleman from new york, mr. rangel is recognized for five minutes. >> thank you, mr. chairman. i ask unanimous consent that this document called behind the veil, the aarp america doesn't know, be placed into the record. the privileges that we have -- >> reserve the right to object. >> the right to object has been recognized. >> mr. chairman, the report that my colleague and friend, mr. rangel, is asking to be put in the record, has this been

peer-reviewed by anyone? any organizations? >> this is mr. rangel's request. >> i understand that it's your report. has this been peer-reviewed? or is this -- >> this report has been dashed that we requested it. it's been prepared and it's been submitted. >> but has been peer-reviewed? >> well, it's before all of you right now. not any more than other reports are. spirit mr. chairman, might i add that the report has 246 footnotes documenting thoroughly everything in the report. >> mr. chairman, is there good reason why you two don't want us to know who prepared it and who paid for it and why it's not official rex i just want to protect the privileges of members of congress not to be

challenged when they want to put things into the record. i truly believe that we have a responsibility to protect of that record, and you know what we are by unanimous consent putting into the record. and so, i'm asking unanimous consent, notwithstanding the many unanswered questions, that it be placed into the record and then we can proceed to make certain that my motion is not abused by other people who just want to stop people from expressing themselves. so i ask about it be placed in the record by unanimous consent. >> mr. chairman, i withdraw my right to reserve upon mr. rangel's motion to place this and peer-reviewed report into the record. >> mr. chairman, preserving the right to object. >> this is not taken out of my five minutes i hope. [laughter] >> your five minutes has been taken away, yes.

this is a procedural matter. it has nothing to do with the time -- >> reserving the right to object, mr. chairman,. >> the gentleman reserves the right to object. >> thank you again, i will raise the concern that i have that this report, this document indicates it is a report prepared by individual representatives, and -- >> okay, the gentleman -- this report, this gentleman, this will not be -- we are not subjecting it to the record now. there is objection. we want to move on with this hearing. >> mr. chairman, i may list my reservation. i am reserving the right to object but i believe i have an opportunity to explain my reservation and see if i can get the question i've answer to see if i will remove my reservation. >> the gentleman from louisiana.

>> mr. chairman, i believe i have the floor. i made a reservation to the unanimous consent request [talking over each other] >> i had a reservation on the unanimous consent request. >> it is mr. rangel's time. >> no, it's not it's my time. >> if the gentleman will yield i will answer. >> i will yield. >> this report was prepared by two members listed on the cover. >> does that mean, mr. chairman, does that mean that the members use their staff? no ways and means committee staff? >> no staff was used. >> isn't ways and means committee staff that were used to repair the staff? >> and chairman levin approved a. chairman levin was in the loop and he approved. >> does the gentleman withdraw? >> if the chairman is representing that the ways and means committee staff helped

prepare this report, and that the use of the committee staff was approved by then chairman levin -- yes. >> okay i am being told that is not accurate. my understanding is that chairman levin, mr. levin was chairman, approved the detail he from the irs. >> the gentleman's time has expired. the gentlelady from candace -- >> kansas. >> the gentlelady from kansas -- >> parliamentary inquiry, mr. chairman. >> parliamentary inquiry. >> now, under what provision is the chair denying me an opportunity to question the witness? now, i made a motion here that had nothing to do with asking

the witnesses any questions. and if you are telling me now that because i made a procedural motion that i as a member of the committee -- >> the gentle -- will start over again with five minutes. >> thank you so much for your consideration. now, mr. rand, so unchecked since i don't know what this report came from can you tell you what you think it came from? >> mr. chairman, parliamentary procedure. mr. chairman? >> the gentleman is recognized -- >> i hope this doesn't come out of my five minutes. >> the clock will be stopped. >> mr. chairman, there was a unanimous consent request that was proffered by the chairman from new york. as far as i know, that request has not been disposed of. >> that's correct. >> i don't see how we can proceed forward with regular order until we dispose of this

procedural request for unanimous consent. and, therefore, granted i would ask a regular order to be restored and absurd and let us dispose of this unanimous consent request. >> would the gentleman like a vote on that? is there objection? >> my question had not been answered. the chairman try to answer the question but the information i am receiving on this side of the aisle is that chairman levin, when he was chairman of this committee, did not approve of committee staff being used to prepare this report, that he approved the use of a detail he from the irs. and so i'm just trying to find out, mr. chairman, a very simple, i get an answer very simple question was committee staff used to prepare this report? >> the answer is yes. our committee staff did work to repair this report.

>> and give and that this report was never provided to mirrors of this committee we're committee staff helped prepare and -- >> it's not a committee report. >> the committee staff were used. mr. chairman, you may call it a member report but when committee resources are used, it is members of this committee who have an opportunity and a right to review these reports before they are submitted for broadcast and publication and used by the media. i would hope, otherwise how are we to be prepared to question witnesses on a report that we are hearing rumor and speculation on from all over the place? so if the case is that this is a report that is being requested to be included in the record, and it was prepared by committee staff unbeknownst to members of this committee, for it to be considered into the record as any kind of official document i would object to that. if the chairman wishes to portray this report as report by

to individual members who i believe may have misused committee resources -- >> that is what it is. >> okay. so two members of this committee misused committee resources to prepare the support. on that basis i will remove my -- >> ginny brown-waite. >> those individual members used without authorization committee staff resources, with the approval of some of the ranking republican at the time, resources of this committee to prepare a report which members of this committee do not have an opportunity to review. without understanding i will remove my reservation and allow this report which is not an official report and repaired under the normal course that this committee is accustomed to preparing reports to be allowed into the record. >> okay. with the objection been removed we again recognize the gentleman from new york. >> would shoot vindicate my -- >> i have four minutes and 45 seconds. >> i was saying that you never did say that permission is granted to put in the record.

>> that permission is granted. >> okay, good. now, mr. rand, did you have an opportunity to see this report the aarp and america doesn't no? >> i saw the report. that the reason why -- >> okay, did anyone ask you questions in connection with the preparation of this report? >> from the committee? >> no, from the office of -- i have no idea why the committee would be asking you questions. do you know who prepared this other than what you have heard this morning? do you know who prepared a? >> that was my understanding as you're going through the conversation and reiterated that there were to -- >> did anyone represent the office of this committee to any increase of you? >> no. the answer is no.

>> so, as far as you know, this could have been prepared by a private outside organization that would want to discredit your organization as relates to your position on the affordable care act. is there anything i'm saying that is consistent with that? >> we really are not in a position to speculate on -- >> let me try this. is there anything in this report that would indicate that the united states congress was involved in investigating this, or did anyone hold themselves out to be staff of the united states congress in making this report? >> no. it simply went through the things that you have identified. >> and so you saw two members names, but they were not identified as members of this committee. as a matter of fact, with the exception of the words wraps,

they were not identified as minutes of the united states congress. >> the answer is no, not in the report. so we -- >> not in the report, not in the cover of the report. do you have council that is hired normally when accusations are being made against your organization to -- how can you possibly defend it if you don't even know who made them? >> we do have council in that normal procedure. >> i hope you make some inquiries as to why would anyone put out a report and not identify who they are as to where they come from. because representative wally berger and representative could be wrapped from the states that have reps. but there's nothing on this report that indicate that the congress is involved in the inquiry that certainly is not complementary to the work that

your organization has been doing for half a century. is that correct? >> it certainly isn't complementary. >> well, i hope your accountable share with me since it's impossible for me to get any information or it will be in the record, i hope they will find out exactly what was the motivation behind the report. because if the motivation is just to refer you to the irs, anyone can do that without the report. and i would hope that they would ask the questions that i can get answers for as to what was the resources that were used in order to prepare the report, why there's no identification with the united states government, the united states congress, the ways and means committee, the subcommittee of oversight, and the subcommittee on health. and the reason i want it in the record is so that it doesn't disappear. i want this in the record. i want you to be able to use this in the record, and i want to make certain that the ability

that we have to put what ever we think is helpful to inquiry, helpful to hearing, that no member be denied for partisan reasons the opportunity to put it in. so, mr. chairman, let me thank you for this opportunity. i yield the balance of my time and i thank you for your answers. and i look forward to working with you to see that america continues to receive the best possible health care that we can provide. >> thank you, sir. >> the gentleman yield to back. again, this is the report, it says right on the report, investigative report prepared by representative wally herger, of california, and dave reichert, of washington.

inside it mentions recognition of former representative ginny brown-waite who represents the fifth district of florida. and throughout it indicates congressional inquiries. so i think it's very clear. i think it's important that we not have this as diverting our attention for what the purpose of the very real purpose of this -- >> where are you reading, mr. chairman? i got the document that's been distributed -- >> with that, the gentlelady, from kansas, ms. jenkins, is recognized for five minutes. >> thank you mr. guerre, and thank you for being here to answer our questions. as representative ross can noted earlier, representative nancy pelosi, the democrat minority leader is on record as having complained that aarp is in the pocket of republicans, and she

suggested that because you sell insurance to your members that there is a conflict of interest. i am just curious if you believe leader pelosi is wrong. and in the interest of time with a bell ringing, just a simple yes or no. mr. rand? >> yes. we don't believe anybody who says where in the pockets of anybody. >> so leader pelosi is wrong? okay. representative pete stark, a democrat from california as good as an aarp members know they are being sold out by an organization that is happily using member dues and medigap premiums to promote a medicare bill that does more harm than good. do you agree with representative stark? >> we do not. >> representative rankle from new york is quoted as saying aarp has forgotten where they come from, because once you get

into business of making money with the devil, you forget your mission. is representative rankle wrong? >> we have not forgotten our mission. >> representative john larson a democrat from connecticut as good as a wide as the national aarp leadership support bills that needs almost none of their clearly stated needs and conditions. as representative larsen right to question this logic? >> we have said in testimony that there were a number of items -- >> just yes or no. >> the answer is -- >> is he right in questioning this? >> i don't believe he is right in questioning this. >> rahm emanuel was quoted as saying aarp's latest step forward into the insurance realm gives him some posit when there are principled about medicare drug prices and run into the business practices, which goes,

business practices or principles? i would just like you to answer his question, which goes, business practices or principled? >> first with principals and policy. >> and finally, 85 democrat minutes of congress led by representative lynn woolsey from california signed a letter to aarp, ceo resign their membership or stating that they would not be joined the groups in the future. the letter stated the aarp's compasses ago, aarp's misguided decision to embrace this legislation and sacrifice the future of medicare must go unchallenged. i'm curious if you know of any of those 85 members were true to the word and have continued to boycott aarp? >> i do not know. we have always -- >> will you find out for us?

i think .doc. >> thank you. to point out like to make is i think we have run across something that democrats and republicans in washington can agree on. and perhaps that is that the aarp leadership doesn't necessarily protect the interests of the american senior citizens that they pledged to represent. so i simply begged you as representing the leadership of aarp, please don't mislead our seniors who sent all of us, democrats and republicans alike, to this body to represent them. please do not use them to line your pockets on their backs. without i yield back. >> can i comment? >> the gentlelady -- >> can i comment? >> the gentlelady has yielded back. i think it's very important, very important that we not allow

the purpose of this hearing to be taken in a different direction. the seniors of this nation deserve the right to know how money is being spent and whether it is being spent in the best interest. with that i yield five minutes to the gentleman from oregon, mr. blumenauer. >> thank you, mr. chairman. and i actually agree with that notion about the senior citizens. i would first of all like to thank aarp because i have not always agreed on some issues, but i respect the work that is done, the folks back home provide lots of energy and activity. i for 1 a.m. sorry that you are subjected to something of this nature. because i truly think reading to a 25 and a half page pamphlet with 243 footnotes to try to

dress it up to try to make a look official and a authoritative and scholarly misses the mark. i find it fascinating on page 17, you are taken to task because somehow you are undermining your long-term business interests, because you have underwriting standards that are more flexible and speak to the needs of people who are 50-64, that cost potentially some money. and you are taken to task for that. well, you supported the affordable care act which now requires every american to have these protections, which you undertook at perhaps some financial disadvantage to your model because you thought it was the right thing. i remember that when some members of congress who used to support helping seniors with

end-of-life care when the big lie about death panels, and they retreated, aarp was part of 400 individuals and groups that came forward to tell the truth. now, just because somebody like my friend from georgia thinks something is in the bill doesn't put it in the bill. and i appreciate your zeroing in. this report takes you to task it has aarp had the audacity, the audacity to support the children's health program expansion. assuming you did that only for some sort of convoluted financial benefit, it the fact that your members have children and grandchildren and great-grandchildren, and we all

want intergenerational cooperation. mr. chairman, i've read it. i think it's a little bit goofy. with all due respect. the notion somehow that they focus on medicare advantage that is rocky and a draconian cut. medicare advantage means that 75% of your members to our senior citizens in fee-for-service paying $90 a year more. so maybe trying to reform medicare advantage speaks to the 75% of your members, and 75% of american seniors who are paying more because a system got out of hand. >> you have expressed our rationale. >> i just think that i am glad it's in the record. i hope people look at it. witch hunt is such a nasty term.

i look forward to bringing before us people who have really crossed the line, people have co-mingled funds and push the limits or crossed over them in terms of irs regulations. but i think any fair reading is that your work on preexisting conditions, children's health, end-of-life, medicare reform, speaks to what we need to be doing as a country and as a congress your sadly, this morning's exercise moves us no further along towards the implementation, but the things that you came out for back in the day used to be bipartisan support. and someday they will again. i appreciate your efforts. again, i apologize for being a

part of this, but i do hope people analyze this and understand that it's no indictment of aarp. it does say something about this committee's operation. thank you and i yield back. >> the gentleman yield back. i think it's important to note that aarp in a written, and it's written and oral testimony did not refute any specific conclusions or findings in this report. neither ranking member refuted any specific conclusions or findings in this report, in their opening statements. so all of this talk about which congressional staffer was involved with report, or who the committee will investigate next is simply a stunt to draw attention away from the findings of the report, specifically that

aarp stands to gain an additional $1 billion over the next 10 years as a result of the democrats health care law. without i yield back minutes, without i yield back minutes to the lady -- i yield five minutes to the lady from tennessee, ms. black. >> thank you, mr. chairman. i want to begin by saying how does one item that this has been turned into what people say is a witch hunt. it is the role and responsibility of this subcommittee when there are things that seem to be outside of what should be happening that we should investigate. it is the role and responsibility, and i would hope that the members on the other side of the aisle that have concerns about other organizations that may not be operating or may have questions, that they bring that before this committee. and so, my question, i want to

turn to you, just comes from my personal experience prior to coming here to congress. and i was an executive director of a 501(c)(3) health care foundation. we were very careful because we were providing funds for the hospitals for which we were the foundation, about co-mingling our members of our boards. and one of the things that concern me as i read this report was the fact that your aarp income of the 501(c)(4) tax-exempt social welfare organization is run by 22 board members. but you also have seven board members from your for-profit, and all seven of those board members also serve on your other board. and so i and concerned about the co-main going of board members from your for-profit, from a not-for-profit but if you could speak a little bit about that i would appreciate it. >> i would be glad you, ms. black, if i could. i'm not sure what for-profit you're talking about, the

seven-member strict are you talking about the insurance trust? >> now, you have -- explain to me how many different boards you have. >> thank you. i appreciate that question because it needs to be clarified. there are basically three different boards that are involved in the aarp organization. one is the parent board which is the aarp board. >> is that the 22 members? >> twenty-two during this period. there is another board which is the board for asi, our taxpaying affiliate, which has on it to aarp board members. >> okay. >> there is a third board which is the aarp foundation board, which has for board members on it. there are seven total. there are four boardmember, aarp board mayors on the foundation board.

the purpose of having the aarp board members on those interlocking boards is to make sure that the mission of aarp is the first priority of each of the boards, and that everything that goes through those boards is in concert with the aarp policy and our mission. >> so which of those boards sets your rates, the premium rate? >> the premium rates are set by the state insurance. >> you have a contract with united. who oversees those contractors? which ones of those board oversees the contract? >> the contracts are not overseen by the board repair overseen by asi. which is a for-profit. ..

>> there's a president of the foundation, there's a president of asi. >> but as far as your managers go, your administrative staff, so they're all three separate -- >> they have separate, if in a few occasions where they may be comingled, their time is set. but there are only a few occasions. most of the work is done by the staffs of those individual entities. >> and, mr. rand, are you the ceo of all three of these entitiesesome. >> no. they report to their separate boards. i'm the ceo of aarp.

>> of the nonprofit c4. >> yes, that's correct. >> do you sit as an ex officio on any of these boards? >> i sit on the board of asi as a nonvoting member. >> okay m -- okay. i am concerned about the intermingling of these board members and veto power and the decisions that are being made by each one of these groups and these members being comingled. i am concerned about that, and i will be interested to see once irs looks at the way in which you manage your organization by the comingling of these what they have to say. because i know how sensitive of a situation that was as i served as the executive directer of a nonprofit and the for-profit. >> the gentle lady's time has expired. with that we have a series of votes, so we will recess until -- and reconvene immediately after the votes, and we'll continue with this panel.

i apologize, that'll probably be about an hour, but i appreciate your indulgence. with that, we're recessed. [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] >> so, as you heard, there's a break now in this hearing on the aarp. members are taking a break because the house is doing a series of votes on amendments to the extension of faa programs and procedures. so it'll last about an hour, as you heard, and can we do plan to come back and bring you the rest of this hearing if it is at all possible. president obama, by the way, this afternoon will be touring a

facility in landover, maryland. that is planned for 12:20 eastern. we will bring that to you depending on what's happening in the house, whether they are voting, whether they are finished voting and this aarp hearing comes back into session. >> c-span2, one of c-span's public affairs offerings. weekdays, live coverage of the u.s. senate and weekends, booktv. 48 hours of the latest nonfiction authors and books. connect with us on twitter, facebook and youtube, and sign up for schedule alert e-mails at c-span.org. >> the u.s. supreme court heard oral argument this week in the walmart sex discrimination case. over a million women are suing the national retailer. it's the nation's largest class action lawsuit if allowed to proceed. you can hear the oral argument this afternoon at 4 eastern on c-span radio. and the congressional radio

television correspondents' association hosted its 67th annual dinner this week. among those speaking, kentucky senator rand paul, new york congressman anthony weiner. you can see the event tomorrow at 8 p.m. eastern on c-span3. this weekend on booktv on c-span2, new york times op-ed columnist david brooks on how our unconscious mind shapes our character, intelligence and biases. from the social animal. on after words, ken walsh on the long history of african-americans serving in the white house residence. and live on "in depth," your calls and tweets for ishmael reed. look for the complete schedule at booktv.org and get our schedules e-mailed directly to you. sign up for our booktv alert. >> witnesses say thousands in syria have been marching in the southern city that's become the

focus of the country's protest movement, n. urging mass demonstrations to honor more than 70 people who have been killed in more than two weeks of bo tests -- protests. up next, the president's first speech since the resignation of his cabinet. his address to the syrian parliament is about 50 minutes. [cheers and applause] [cheers and applause]

[applause] [speaking in native tongue] >> translator: it is very hard for me to correspond to such great feelings i receive from you. [applause] >> translator: our souls, our blood we sacrifice for you.

[applause] >> translator: you are the greatest son of syria, bashar assad. tell the criminals to keep trying. they can never overcome the nation of syria. [applause] [speaking in native tongue] >> translator: mr. speaker of the assembly, dear legislators, i am very happy to meet with you again under the dome of your assembly and to address you about the circumstances that the region and syria are going through. and, through you, to talk to the sons and daughters of syria, the

beloved syria, the one that beats with one heart with love and dignity. syria, the strong fortress, the great with its history, syria with its nation with the prominence of its people in every province in each city and each town. i talk to you in these particular times circumstances of which look like a test of unity to us. it is a test that circumstances make happen again for all, circumstances that are taking place in our nation. the will of god and our will we will succeed over and over again to come out of these unscathed and stronger than before. [applause] [speaking in native tongue]

>> translator: mr. president, you are always the pride of this nation. you, the generous, the forgiver with your strength and your kindness. [speaking in native tongue] >> translator: the free and dignified people of syria are with you. the people are with you and god is with us. [applause] [speaking in native tongue] >> translator: whoever belongs to the syrian people always holds their head high. [applause] [speaking in native tongue] >> translator: i am talking to you from the heart. with mixed feelings of pride to belong to this nation, with

recognition and drat tuesday to the -- gratitude to the love that you give me and the sorrow and sadness to the victims that perished among our sons, the sons of syria. my responsibility is to keep the security and the stability of this nation. this remains my utmost goal at this time. i know full well that the syrian people have expected this speech since last week, and i took my time to talk to you until i got the full picture in this my mind or at least some of the basic points of the picture. so that this speech doesn't come sentimental rhetoric, but might make people feel better but doesn't change and doesn't have any effect at the time where our enemies are working methodically to, to bring down, to destroy,

to destabilize our country. of course, we recognize how smart they are in the methods of their approaches, but they were stupid in choosing the wrong country and the wrong nation. [applause] [speaking in native tongue] [applause] [speaking in native tongue] >> translator: and we tell them that they have no choice except to keep learning from their failures. of but the syrian people have another choice which is to keep learning from their successes. [applause] [speaking in native tongue] >> translator: it is no secret, dear brothers, of the big changes that are taking place in the region for the past few months. there are major changes that

will have repercussions on the region without exception, arab countries and non-arab countries, and this also means syria among these countries. but if we want to look to what concerns us and to what has happened so far, we can say that what happened comforts the syrian point of view from an important angle. what happened is an expression of a popular consensus. when there is such a consensus, we are happy whether we agree or do not with all the points. what this means is that this popular, the popular will of the arab countries have been marginalized for three, four decades, maybe more now are back to be at the heart of the events in our region. this situation in the arab country, they have tried to domesticate it, but they did not succeed. these will have effects. you remember me in many previous

speeches, i always talked about the arab street, how the arab street was the real lead or. many in the press and the media and commentators laughed about it. foreigners, when they meet with us, they smile when i say these things and when they were bringing to us approaches that were contrary to our interests, and there was conspiracies against our fellow arabs or the resistance and even if i personally accepted. but the people will not. the people will reject me. and, of course, that was a political suicide. they used to laugh saying that this was not true. now, i am saying the same things, and now they agree. and this is very important. [speaking in native tongue] >> translator: the other side of this is since the arab people have not been domesticateed, now

the chances for us are even bigger. if these changes continue to move and to evolve in the directions that the peoples want them. another side is the orientations of the arab street toward the major causes of the arab people, particularly the palestinian cause. i believe that these changes will lead to a change this political, in the palestinian problem, major change from the past two decades or from a path of sacrifice and giving in to pressure to a different kind. syria is not an isolated country from what's happening in the arab country. we are a part of this region, we interact, we affect and we are affected. but at the same time we're not laughing at other nations. but here in syria we have some

specificities. we are different domestically and internationally. domestically our politics, our policies have been opened on direct contact between myself and the people. regardless of what the negative points and the positive things and regardless of what has been achieved and what has not been achieved. but as general principles, these are the principles of our domestic policy. the foreign policy was built standing for the rights, national rights, sovereignty and support of resistance when there is an occupation. the link between these two policies is the same point. our compass is the people. when we defuate from the people -- deviate from the people, we deviate from the our

goals. in any case, this, these two policies are -- these two principles created a national unity in syria that is unprecedented. and this national city of syria was the region, the real strength of the nation of syria, and this is what allowed us to dismantle many minds that were planted in the path of the syrian policies and politics, and we were able to keep the pivotal position of syria. this, of course, the enemies are unhappy with this. i want to talk about the conspiracy and then will talk about the, in the tvs now i are saying that the syrian president considers everything that happens in syria to be a conspiracy. we have to take the points one

after the other, and then we draw the links. the role, of course, the role of syria is unacceptable for the enemies, and i always warned that our successes lead us to be complacent. you know, i say that in the battle you need to know your enemy, but after the battle you don't know what they're preparing and what they're plotting. so i said that after each success we have to keep that success and protect ourselves against plots from the outside. it's no secret that syria is under a big conspiracy. countries that are far away, others that are close by and even inside. they are basing their action on what's happening in other countries. they're saying revolution in syria, we don't call it revolution, of course, what's happening, but for them when something is happening, they're

saying revolution happening somewhere. it's also happening in syria. reform here, reform there. liberties, slogans means all the same. therefore, if there are people who call for reform -- and we all are reformists -- we will walk with them without knowing what's happening really. so they created this amalaga mission -- amalgamation between three points. i know most people are listening to us now, and you represent them. you know the details. but i want to take the details to unify the concepts with their information available up to now. maybe there's more information that will come later. they created this mixture between division, reform and popular need and daily needs of the people. you're all reformists. most syrian people have needs that have not been fulfilled, and we are all criticizing

ourselves for not having fulfilled all the needs. but the division or the fragmentation entered, and they started hiding underneath the other two points. so now i think that many people came out of the street were not, were well intentioned. not everybody that came out to the street was ill-intentioned. [applause] [speaking in native tongue] >> translator: the conspirators are always a minority. this is always the truth. even us as a government, we didn't know, we were not understanding what was happening until the sabotage started and the attack against the institution. what is the relationship between reform and the killing and the reform and destruction to a point where some of the satellite channels, they always

accuse us of being, using conspiracy theories. they were, there were announcements of attacks against institutions a full hour before they happened. how did they know? when these things started, it was difficult for us to deal with it pause people were going to -- because people were going to misunderstand the way we were going to deal with these things. when the syrian people uncovered what was happening and the reaction came as you noticed through the people themselves -- not through the government, the government stepped back a little bit, and we left, allowed the people to deal with it and to protect their open country and the national unity came back to syria. so what we say now is something that we don't know. is it the first step, is it an

advanced step? but what we care about is the last step. the last one is that syria become fragmented, that syria fall down and that the last obstruction, the last obstacle toward israeli plan is removed. they will keep repeating, they will keep trying, and every time they fail they will start, they will come again in another way. so we have to expect more attempts. many people have advised me not to talk about the details, but as you know me, it is my habit, my custom to talk about details. [applause] [speaking in native tongue] >> translator: they started with incitement. many weeks before they started with incitement on the internet

and satellite tv. they did not achieve anything. then they moved toward division, and they fabricated forged images, they forged information, then they started with the sectarian line. also incitement. they were sending sms messages telling one sect, be careful, the other sect is going to attack them -- to attack you. and then they sent people, masked people knocking on doors and saying, make sure to go occupy the street because the other sects are occupying the street. they did this, but we were able to afford this. they started shooting people indiscriminately to create more anger. so we did not dismantle the whole structure, but it is an

organized structure. there are people across the provinces, there are people who are here, there are people who are the actors and people who are eyewitnesses who are also part of the plot. they started with the province that some say is a border region, and i tell them that if it is a border region, it is in the heart of every syrian. [applause] [speaking in native tongue] >> translator: but if it is not in the heartland of syria, it is in the heart of all syria and all syrians. [applause] >> translator: this is its history and this is its present.

it is a first-line province. the first line protects the other lines. they protect. of course, they cannot at the same time conspire against the nation. this is, of course, not true. [applause] [speaking in native tongue] >> translator: therefore, the people are not at all responsible for what happened, but they have the responsibility to in thwart the conspiracy. [speaking in native tongue] >> translator: we are with you, sir. [applause] >> translator: and we are always with, all syrian people with are with the people of the province. [speaking in native tongue]

>> translator: there are in all its martyrs and its men and women and children all with you, and they all tell you, we are with you, we support you. go ahead, lead us. [applause] [speaking in native tongue] [applause] >> translator: the people of the province are the people of true patriotism and true arabism. they are the people of dignity and honor, and they will contain the minority of the one or two who bring in conflict and fragmentation to our national unity. [applause]

[speaking in native tongue] >> translator: in any case, they transferred the plan to other provinces and other towns, the same mechanism, incitement and killing and destruction, and there were clear destructions of security forces -- clear instructions of security forces not to hurt any citizen. but, of course, when things go to the streets, chaos happens, and the reaction becomes, become the prevailing thing, and this is what happened, the accidents happened in the streets. there were victims. the blood that was shed was syrian blood. we're all worried about this point. the victims are our brothers and their families are our families. and we have to look for the reasons and those behind it and

investigate and bring to justice. if we had this injury, we have to invest it to work reinforcing the unity, to thwart the fragmentation and to keep love a prevailing feeling between all the sons of syria. what happened today is very close to what happened in 2005 which is a virtual war. they want us to give them a statement of submission. what happened then, it looked like we had to give them the submission check. the same principle now, there is a virtual defeat planned for