today three weeks after3 today three weeks after the 9.0 earthquake that struck japan the prime minister addressed his country to dhaka recovery efforts. he announced the shift from rescue operations to reconstruction. the japanese government has said 166,000 people have been displaced and an estimated 16,000 still missing this is 45 minutes.

you are seeing the japanese prime minister naoto kan. he's just about to speak to the public come he's getting his photograph taken -- now we bring you the simultaneous translation. >> translator: today is the third week after a great earthquake and during the press cabinet meeting that it ago and the great earthquake i'd like to offer my heartfelt condolences to the people who fills victims' as well as their powers. and also for those people that

help the affected people, the self-defense forces, firefighters, policemen are literally risking their lives to help the people affected, and i would like to dedicate my gratitude and also i am very proud to have the official government has the head of the government. furthermore there are a lot of assistance offered from all over the world and i would like to state my heartfelt gratitude to all of you. this is the first of april and the beginning of the new fiscal year. and new fiscal budget who apart his been already established with related bills. having said so, however, after the proposal of this budget, this great east japan earthquake hit us and in order to deal with

this the top priority to support restricting people and also to the recovery that we have to give top priority to the policy of this and so the budget is established however that we are going to sustain part of it, and in order to shift this portion for this part of the disaster stricken area i would like to get into the appropriation supplementary budget. the supplementary budget is for the recovery and the rehabilitation and we would like to provide stages of the budget. one is dealing with the race for stotland temporary housing building and also as the employment and in preparation of the industrial rehabilitation included in the first stage of

deferring the supplemental budget by the end of this month we would like to have the content of the first supplementary budget to be established and the proposed and then the next stage is the preparation for the recovery not only to get to the former state but to create wonderful japan and with this addition were a dream in mind we would like to compile the restoration plan. and in order in this time that the municipal government or the mayor's and the city's and we ask their opinions of the disaster stricken area the mayors and the leaders for example excavated part of the mountains and accept that the administrative institution to

the coastal area for the fishery businesses that was an idea in using the biomass that the committee central heating of the community should be established as a part of as another mayor suggested to me and as the social welfare city would be encouraged so we can be the model of the entire world. and i believe we have to work hard for such kind of division. and the creation of employment is important in the restoration. there are many parts from suppliers in this area as well as especially the fishery has been a very important industry and so we would like to encourage the primary industry in this particular area.

for such recovery we would like to develop the blueprint and ask the opinions and also the state quarters and would like to have that recovery vision conference by the end of the 11th of this april that is the first month anniversary of the disaster. and in this meeting there will be many proposals and suggestions that will come about the government will ready itself to execute those recommendations and again, we will be ready for the execution of those proposals by the end of april. for the recovery effort i would like to -- i and understand that the opposition parties have offered their help so we will be

taking a very bipartisan approach to help in the recovery effort that is my strongest desire. now on the nuclear power plant, we have been working on three basic principles in the past and we will continue to focus on these three basic principles. the first principle is the health and safety of the residence and japanese public is the top priority. the second principle we will have strong risk management measures in place in some cases even if they are considered too extreme. third, we will put together every possible scenario to

counter against various possibilities so that we have measures in place for any possible scenario. we are currently working on addressing the situation based on these three basic principles in order to bring the fukishima nuclear power plant back to a stable state we are consolidating the measure to become major forces in order to address the situation. one is centered around the government and its affiliated company as well as the nuclear and industrial safety agency as well as any others in the nuclear community. we are bringing together the various forces of these communities to address the situation. the other area is support from the international community. we had already been given strong

assistance from the united states since the accident in a recent conference call with president obama. he again promised me strong support and assistance yesterday french president nicolas sarkozy was in japan. france is an advanced nuclear power in addition to his own country's assistance he offered his assistance for his position as the leader of the g8. the iaea has already dispatched experts and provided various kinds of assistance. with regards to the nuclear power plant issue, we are prepared to deal with this in the long run, and we will -- we are committed to resolving the

situation. i recognize the inconvenience and the worry to the japanese public but i also promise you we will overcome this issue. that is my commitment to you. three weeks have passed since the earthquake. the earthquake has been a terrible catastrophe. i have seen many heartbreaking scenes and because of that i think that there is now a great movement rising within japan and also throughout the world to collaborate on, to help each

other. it's been said that personal ties are waning in japan, but now i believe the local government companies and every individual citizen has made a personal and conscious effort to assist in the recovery effort. people have been taking actions i believe that these among us are becoming stronger and strengthened and this gives me great hope for a bright and promising future for japan to i believe japan has a bright future ahead of it. >> [speaking japanese] >> translator: what made the

japanese are that education against the disaster which has been instilled in the mind of the people from the agent according to his essay, and this time that is a great east japan earthquake in the process of tiding over the hardship i believe that the japanese will gain that human ties and also will be able to rebuild japan again. and through the process i myself and also the cabinet members will be the leaders, assumed the leadership and to our level best to work very, very hard with this conviction, this commitment of. this will conclude my speech. thank you. >> he's going to entertain questions. please identify yourself and pose a question to the prime

minister. >> the nuclear crisis in three weeks has passed and the residence and the national people are very fearful about or the nuclear plant accident and the prime minister that you've mentioned that this is a very unpredictable situation and how are you going to bring this ending to this accident and also what are the options and what time do you think the nuclear plant will be in the stables that this? by this nuclear accident, first of all many people are facing hardship and challenges including the the evacuation i would like to offer my apologies in many forms that their

livelihood are sometimes jeopardized including contaminated vegetables. the current nuclear plant and you mentioned about the status quo that have mentioned that we are consolidating the expertise in order to bring the plant back into this stifel status but this particular stage this plant is not yet achieved the status yet. however as i have mentioned under any kind of situation we are prepared for any possible conceivable situation and therefore i think i'm convinced somehow and sometimes we can bring to that this plan to enter stable status however i cannot say when we will do our very

best and that is a situation. next question. >> [speaking japanese] >> translator: prime minister can you give more specific ideas about the reconstruction effort he said he would be establishing the reconstruction coordinating committee with experts and local governments. will you set up a meeting with the cabinet minister leader, argue already thinking of making an assignment? and for the ministry charge, you asked who the leader to join your cabinet. i know that he refused to do you plan on asking him again? there will need to be a very long-term recovery plan. when do you plan on developing that plan? as for the recovery but and

funding which will need to be massive, are you thinking of a hike in consumption of income tax? >> as i was saying earlier, we need to clear away the debris for one so in order to assist the livelihood of the victims, we need to establish a supplementary budget which is preparation for a more sustained recovery work. on april 11th which will mark one month from the earthquake i will launch a reconstruction the concept development meeting we will work closely with

government leaders and local experts. as we develop proposals, we will also during this time ways to execute those recommendations. >> examples will probably be useful. we may learn lessons from the great earthquake in which the task force was set up. i have personally heard of many examples we can learn for, and i would like for us to be a very capable and addressing the situation so we will be looking at ways on with the most appropriate response structure will be. we may or may not have a ministry or agency responsible for reconstruction.

that is one of the things we will be thinking about during this time. as for the necessary funding as i said earlier as for this fiscal year we will be freezing the outlays for some items in fy 11 budget it is already clear however that money alone will not be enough. so in the reconstruction concept meeting or perhaps in meetings with the opposition party we will identify ideas we can agree upon. next question, please. >> [speaking japanese] >> translator: on the 19th, primm minister, you asked join the cabinet and he declined. are you willing to offer again

and also considering the difficult await for the grand alliance would be a challenge but what are you going to do? what possible alliance? >> yes it is indeed offering the discussion face-to-face and as for the telephone call i have no intention of revealing to you about the content of the telephone call from me but in any case as i have mentioned earlier of the earthquake that ldp and the position of the tough party members all gave the commitment to a certain level of the contribution and together with them we would like to make

the reconstruction plan in writing this kind of platform is something i'm expecting for and aspire for a. >> from nhk i would like to ask about funding for the reconstruction efforts. prime minister, you just said that readjusting the budget will not be enough. are you thinking of an increase in taxes or issuing more national debt bonds? >> as i was explaining we already have a budget in place for fiscal 2011 we've already decided to defer spending on several of these outlays. however that alone will not be enough to fund the reconstruction effort.

what kind of funding will lead people to realize in our reconstruction team development meeting we will be thinking about. there obviously needs to be an agreement between the ruling and opposition parties in order for that kind of budget to be passed so i would like to have a discussion within that framework at this point in time i am still working on starting and launching this reconstruction conference, and i have yet to begin in debt discussions with the opposition parties so i have no personal ideas yet whether it's this point in time i want to listen to the ideas. >> representing the foreign

press. >> i believe that there has been in a huge cost necessary to deal with this accident. are they going to be that the insurance or guaranteed national government to support? >> because of the accident there will be a lot of compensation they have to pay. this is easy to predict. at the same time ultimately i think that we have to -- well worth the costs are beyond the means which is the primary responsible for the compensation of the government should take part also. and as a private entity industry during this time they're having the private company and therefore based upon what i've

mentioned that we have to support them. however basically as a private institute that i think they have to do their best. >> next question. >> my question is not the nuclear power plant. the forces and fire departments have been called in, so it seems as if you are trying to address the issue from just within japan earlier in your speech however, decided that the international community is working on ever since the issue. does that mean that the situation has become so serious that you need assistance from the international community? second i would like to ask about a specific option at fukishima freshwater needs to be injected and cooling needs to be sustained. but read a good water also needs

to be removed so things have been going up and down for awhile. are those the only options available at this point in time? or are there other areas that can be brought into play? >> first, about the international community being involved, the united states has been involved from a very early stage given many ideas. for anything necessary we have been ready to have been involved. we are working with the joint staff, will fall so our nuclear safety commission as well as nuclear and industrial safety agency we have daily

communications with the u.s. side to discuss issues to proceed with preparations. from the outset, the united states in particular has offered us a great deal of support. in addition to that, france, the iowa ea and many other countries have offered help and assistance on this nuclear power plant crisis. we've been asking also for much assistance. as for your question and of the toxins are available to us, we have experts discussing the situation putting together schedules for daily effort.

>> understanding as the cooling effort is extremely important and it must be sustained. >> in conjunction with that, several other things have occurred including the contamination of standing water we would need to address that situation as well in terms of the cooling effort, one day in the future we hope to have the cooling systems back in place that is definitely one of the goals that we have.

a cynic about the reconstruction of the likelihood of that affected people in my question many people lost everything all the assets but the limitation of the recovery assistance while we for the limited amount of the compensation i think this is far from the position. do you think would be revised to give help, and what is your idea of that employment creation foundation of the affected area including [inaudible] devastated by this earthquake and tsunami. many of the committees are destroyed and i know that many people are suffering from the

heavy damage and i like to offer my apology or encouragement to the best i can. now getting back to their feet in terms of the livelihood. for each and every people who are devastated by this calamity i believe the question is what to do and what they can do for the support to get back on their feet and for this i would like to do my best to provide the best kind of assistance and support for them, and as to the creation of the employment there are many of the work in the communities moving the debris for the example of the communities offered the debris moving as a part of the works out a kind of that employment and we can recover back to the

old employment and former employment and plus that of the new employment please elaborate. >> my question has to do with the fukishima power plant and evacuation zone. it's still considered problematic. the local residents and all of japan is very suspicious in your meeting with president sarkozy i believe there was a proposal to talk about nuclear safety at the g8 forum, and global safety standards for nuclear power plant accidents. do you think there will be something that might be decided that will help reassure the japanese public and avoid

misinformation? >> yesterday i had various exchanges with president sarkozy. during those exchanges, we talked about international safety standards pertaining to the nuclear power plants. there is no such global standard today, and in our discussions, we talked about having an international forum to discuss such safety standards as for the evacuation zone whether or not those international safety standards would be inclusive of and the evacuation zone we didn't touch upon. we felt that would be necessary more for the nuclear power reactors. in japan, as you are aware, the nuclear and industrial safety agency offers expert advice to

the government. their advice is based on various monitored data and also operational expertise for the nuclear power plant so it is collective wisdom from experts that is the basis for their recommendations to less and we accept the recommendations in deciding on the evacuation zone from the japanese government perspective we would like to say to the public that as long as these evacuation zones are not held there should be no health hazards. >> earlier you said -- he referred to the freezing of the part of the current fiscal budget are you going to have a

plan on abolishing part of that fiscal budget for example the child rearing allowance for example not only freezing but abolishing, retreating. as you know they're having discussions the to the ruling and opposition party national assembly and there's been a lot of questions of the child-rearing allowance and this time 13,000 of to it will be increased to 20,000 for a to the three-year old that was the plan originally almost committed as the government plan to get that from the deliberation of the assembly in putting this into the future and putting the charge alarm. we have to consider in what form

including in the process of the breach budget, we have to have a very thorough discussion of the opposition party >> nuclear power plant strategy. i would like to ask a question, president sarkozy yesterday apparently talked about some strict international safety standards to be developed in france. the nuclear power plant or the nuclear power strategy will continue to be advanced. mr. prime minister, i know that you have said that he will think about this and putting the re-evaluation of the accident in

a previous statement, however, you mentioned that japan's nuclear power strategy would basically go back to scratch. would you continue to advance japan's nuclear strategy? even on a global scale will of course, they're has been a more serious accident before but this is basically one of the most serious on a global scale. the first and foremost priority is to ensure that we can stabilize the situation and then do a complete and thorough

examination of the accident and i sure that everybody will agree to that. so from that sense, as soon as the issue stabilizes, we will begin a very thorough examination and as a part of that assessment, we will identify what safety measures need to be a guaranteed in order to offer reassurance to the japanese public that post accidental examination will offer that kind of information i'm not going to set of course before we have had a chance to do the examination. the examination will point us in the direction. as for the re-evaluation of our

energy strategy, we do already have a nuclear power plant that nuclear power plan and scheme in light of this accident is the plan adequately safe that is one of the reasons why i said we need to reevaluate the plan. i certainly didn't mean to say that we had scrapped the whole plan. >> my question is the recommendation to take shelter in doherty iaea or epa of the united states and you and according to the manual of the emergency of the nuclear accident in the structure that they cannot believe the gate the

impact of the nuclear sub and also the 48 hours limitation of the inside of that the buildings, and after that, that the evacuation is ordered. but three weeks has passed and there are 20 or more than 20 people are trying to take shelter and while they are within that the evacuation area, they have the supplies. however, they cannot expect the mediation impact is unexpected and still why are they instructed to take shelter inside of the building. through the evacuation or taking shelter indoors in order to judge the fight that first we have to listen to the device of

the safety commission and many other experts as well. and basically the expert's opinion and decide what will the evacuation zone is 20 kilometers in radius and which to be safe however when 20 to 30 years the residents are encouraged to stay indoors as long as they stay indoors they are safe. that is the base of the instruction of the guideline but as i have mentioned, this is a little different from the safety but the likelihood, how comfortably, for example, between the range of the 20 kilometers and 30 kilometers that they are having access to the day to day supply, and we understand this and sometimes that these are the case is of the people between 30 kilometers and for this many of the local

committees are trying to deal with such kind of the hardships and what are the additional measures that we have to encourage together with the nuclear safety commission's we would like to discuss and also the social benefits. i would like to exchange frequent opinions between us and the national governments and that is a condition. >> i would like to ask about reconstruction in the affected areas. prime minister, you said that you won the region to become a new model for the reconstruction in the next reconstruction plan meeting for the heavily devastated areas, especially the coastal areas. will the central government be bodying that real estate in some

of those areas? for the areas surrounding fukishima nuclear power plant, you said that you will overcome this challenge in the long run but if you say that it's in the long run i'd expecting that you foresee this as being the long-term issue. so, for perhaps several decades are you planning on designating this area as off limits. >> this is certainly a major natural disaster for transforming the major urban areas as a very well-known concept. not all the ideas were implemented, and i personally read about the history, i've

heard about in the coast lines in the past they also have suffered from major tsunamis in this recent earthquake though there were very high tsunami is in even the st coast lines so the best way to address this i'm sure that many local government leaders have different opinions which is why the reconstruction plan meeting is necessary. we would like to invite real estate developers and give us specific ideas we must reach an

agreement with the local community and local stakeholders i believe this is a major task me to look at. >> and repeating myself, but the situation is still how shall i say fluid and therefore it is too early for us at this particular moment today to refer to any, anything in the future. this is going to be the last question. >> my question is about the nuclear power plant. >> be so horrible examples of the risk of radiation and nuclear power plant safety is no longer in tact.

prime minister, you said that the accident needs to be thoroughly examined. do you have any plans to reduce the number of nuclear power plants? >> going back to my earlier response, at this point in time, we are in the midst of a major nuclear power plant accident when the situation is somewhat more stabilized we will need to examine the accident early. going a little bit beyond that, in terms of energy usage, we will look at biomass and wind power generation sources of power that do not generate co2.

nuclear power has enjoyed a resurgence in part because it doesn't limit co2. based on all those factors year in japan. obviously there has been a lot of thought going into this before and we will need to continue to think of this moving forward. the fertile examination and analysis is where it starts.

republicans on the house ways and means committee today questioned the tax-exempt status of the group aarp. they cited a new republican authors report alleging a conflict of interest between the aarp's advocacy for seniors and their health insurance business. member's question to the ceo of aarp barry rand to read this part of the hearing is two hours and 45 minutes. [inaudible conversations]

>> the subcommittee will come to order. when percy founded in 1988 medicare did not exist. he understood seniors need access to health insurance and found a solution. what began as an organization that field the need not yet met by society has grown and evolved over the last 50 years into aarp eink and the affiliated entities. with the astana showman of medicare in 1965, health insurance became widely accessible

however as we would discuss today the former congresswoman ginny brown-waite and i took a closer look into aarp over the last 18 months, reviewing every publicly document and the facts suggest that aarp has strayed from the core mission. the facts show that aarp no longer operates a seniors advocacy organization. instead, it is more closely resembles a for-profit insurance company. in 2009, aarp raised 46% of its

revenue from royalty payments versus just 17% from the membership dues. while the questions have indeed been raised in the past about aarp's reliance on royalties the amount of these payments has tripled over the past decade. aarp asserts that the policy positions are making all the 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 insurance plan funneled millions of dollars to aarp's incorporated in 2009. the facts show aarp is dependent on the hundreds of millions of dollars that it receives primarily from insurance companies and could not continue to operate in its current fashion without this revenue. aarp's 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 of medicare cuts to pay for the new entitlement program seemed to directly contradict its

mission. this became more disconcerting when medicare officials warned that the medicare cuts were so severe that seniors access to care could be jeopardized. 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. it turns out on a close examination of aarp's medicare insurance business the facts show that aarp had a unique financial incentive that was a transparent for seniors with congress during the health care

reform debate. as a result of the unique contractual relationship between aarp and the united health corporation, aarp stands to earn $1 billion over the next ten years as a result of the democrats' health care overhaul on top of hundreds of millions of dollars of insurance royalties that they currently collect. this is just one of a number of shocking details contained in a report earlier this year by mr. reichert and me 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 allowing me the time to say a few words. first i want to take a moment just to thank all of the volunteers that a volunteer with aarp and the wonderful work that you will do. i know there's some here in the hearing room today and some that may be listening across the nation. thank you for volunteering to be engaged in helping our seniors across this country and i know that mr. rand and hammond and others are representing aarp. your heart is in the right place but sometimes we can sort of find yourself misguided and going down the wrong path is to make sure as representatives of the people and across this country. and that aarp is on the right path. the mission statement is to make sure we help seniors and that's really what we want to do, too. we want to help seniors and make sure they get the best health

care coverage they can get, this insurance coverage so they can have the best retirement that we know they all deserve as they worked so hard during their lives. but i sort of became very concerned and is back in 2007 when it first cut was mentioned to medicare advantage and was a 200 billion-dollar cut associated with an schip vote and i was very puzzled to be honest with you, very, very puzzled as to why medicare or aarp would support the 200 million-dollar cut in medicare advantage. >> eventually that happened is they didn't support the cut and schip found other ways to support their financial needs. and then along came the health

care bill and 523 billion-dollar cuts of medicare was announced as one of the mechanisms to pay for the health care bill. close to hundred billion dollars of cuts again to medicare advantage for mentioned as the part of the solution to finding finances to find the healthcare bill. so again, to myself and mr. herger and ginny brown-waite began to ask questions and i began to be honest with everyone in the room and people watching today we don't get forthright answers. we are just looking for some very simple answers simple questions as to where money is going and why aarp supported and have a trillion dollars to medicare which we just wanted to know on behalf of the seniors

with 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 and you could have been more forthright with your answers. hopefully today he will be and we will be able to get to the bottom of this and make sure to get there that our seniors are cared for properly and that they enjoy their retirement at the desert 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 for your dedication for being involved in this process. before recognizing the ranking members start for the purposes of an opening statement, i ask

unanimous consent all members written statements be included in the record without objection so order. i now recognize ranking member stark for his opening statements. >> chairman, 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 spender of lobbying the last 12 years spending three-quarters of a trillion dollars lobbying over that period. we are going to ask the questions of american crossroads, which was founded by carvel growth and spent 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 and it's easy to understand why. those groups oppose the affordable care act and aarp supported it. so this amounts to nothing more than a political witch hunt to the organization that spoken in favor of health reform. any organization that could stand in the way of a goal to privatize social security and medicare turned senior citizens over to the mercy of private health insurance would be suspect. i have to admit in the past i've raised questions about aarp. it's true that in addition to the work they do at the keating for us elderly they make a tremendous amount of money off the businesses the market to us. and it's no surprise to america's seniors that their products make them probably the

biggest player lighting can i get from medicare the advantage, part de drug plans, and it's obvious to us when you are shopping the market the plans are well priced and have good features. so it's not exactly they are hiding under the veil as the republicans would suggest. but many aarp members have looked forward to joining for the discounts and other deals the gets. they've investigated the aarp for a year and now it's time that all the republicans have found is publicly available information which here it is. this is all publicly available.

i must admit its large and heavy. it's a complex organization all of which is legal. ..

>> my colleagues across the aisle know that us seniors trust aarp, and that's why the republicans applauded the endorsement the medicare prescription drug bill in 2003, which i thought was wrong and a bad thing for aarp to do, but the republicans loved it. now, eight years later, they are trying to break the trust the american seniors have in aarp, and before they announce their budget that will devastate medicare, social security, medicaid, the republican plans to privatetize social security and kind of silence aarp, and that's why we're hear today. we should see this for what it is, a waste of government time, an abuse of government resources that have been an indicative

attempt to settle a political score and silence a voice that represents the use. i give back my time, and i look forward to hearing the others. >> i thank you the chair, mr. stark, and now i welcome chairman of the committee on oversight. >> thank you as chairman herger said that aarp was created with a noble goal promoting independence, dignity, and enhancing the quality of life for older americans, and as a physician before i came to congress, and now as a member of congress, i interacted with many volunteers in my home state of louisiana who have done excellent work. under 501c4 this means promoting social welfare in the common good enjoys exemption from federal income taxes.

today, 50 years after its founding as a small nonprofit, aarp has changed into what appears to be an insurance in advertising power house. according to the most recent data we have, aarp incorporated in for-profit organizations annually processed billions of dollars in insurance premiums and earned nearly $700 million in insurance revenues and advertising revenues. only a fifth of the revenue comes from membership dues and contributions. since 2002, aarp's revenue for membership dues increased modestly, and over that same period by partnering with others to sell insurance, aarp has gains in its royalty income that any private sector business would envy. revenues tripled growing from

$650 million in 2009. yet as its grown, the funding for charitable work flat lined. contributions to the aarp foundation between 2002 and 2009 grew by only 11% or $3.1 million. funding for the elderly decreased by about 9%. the parts of aarp that fulfill its original purpose seem not to be sharing in the bownty that's come to aarp from its insurance-related activities. another concern regarding aarp is whether they provide accessive exe compensation for the executives. in the case of aarp, it far exceeds what one thinks appropriate for a tax exempt organization. they compare the compensation of

charities and nonprofits with expenditures exceeding $500 million. in looking at the numbers, compensation it a consistent outlier reaching as high as $1.6 million in 2009. in addition, aarp has maintained travel policies that exceed what are considered best practice recommendations developed by an oversight group when aarp's then ceo was involved in. the differences in revenue vennuated and money spent promoting social welfare and the common good suggest that aarp may have strayed from its original mission and brings into question whether it's appropriate for it to continue to operate as a 501c4 tax exempt organization. this is primarily a question for the internal revenue service, and we'll be asking them to conduct a review. let me end by saying as chairman of the ways and means committee on oversights, i take this committee's responsibilities -- its responsibilities in

oversight very, very seriously, and i intend to take a closer look at the irs's administration of the tax exempt sector and whether the irs oversaw the practices of tax exempt organizations. thank you, mr. chairman. i yield back. >> thank you. i now like to recognize representative john louis, ranking member of the subcommittee on oversighted for the purposes of making an opening statement. >> thank you, mr. chairman. for holding a hearing on tax exempt organizations. however, i do not think we should single out just one organization. while i agree that organization that enjoy a special type 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, for it is our duty to provide oversight of the non-profit sector.

i'm saddened that you have chosen to forfeit your duty in the manner displayed 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 admits that all the implementations in it came from the document filed in accordance with the law. there's nothing new here today, nothing that is not already published, nothing except aarp apart, nothing unvailing that i can see. i'm mindful that the majority want to cut social security, but cut medicare. they want to cut programs that help the poor. i can only so mize that the true intent of the hearing is to harm the reputation of aarp, to

stifle the voice as we move closer to this debate. if there was a plan to provide real oversight today, we would have a force of an organization who shattered fame type status as aarp, like 60-plus. we would have more organizations, american cross roads gps. they all share the same tax status as aarp. they play a major role in the election. if there was a real plan today, we would have before us, we would have a $2.2 billion a year raise and a casino operating in iowa under the same type of status as the aarp. i find this unreal. it is unbelievable.

if oversight was a true goal, we would look at the compensation paid by other tax exempt organizations including those that oppose health care reform like the chamber of commerce and nfib, all paid and more than aarp. based on all of this, i believe that this is no plan for oversight today. we have a single witness, a bias report and to use the committee resources to sell a score. there's nothing other than -- this is nothing other than a political witch hunt. the ways and means committee is vowed in this. i ask my colleague who is next? who next is on your list? my college? your church? this is a dangerous game to

play. in closing, i'm pleased to have before us today a nationally recognized expert in the law of tax exempt organizations, professor hill who wrote one the leading treaties in this era, and i look forward to her testimony. thank you, mr. chairman. and i yield back my time. thank you, mr. chairman lewis. i want to turn to the subcommittee's first panel. we are joined by jerry rand accompanieded by larry hammond. mr. rand, thank you for agreeing to testify tread. you will have five minutes to present your testimony, your entire written statement will be made part of the record. you're now recognized for five minutes. >> thank you, mr. chairman. good morning.

i am bair rand, ceo of aarp, and joining me is the president of aarp, a member of the aarp board of director the. we, like all 22 members of the board, is an unpaid volunteer. aarp is proud of our record. throughout our more than 50 years of service, we have worked tirelessly to promote nonpartisan solutions to improve the market place, 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. sense its founding, aarp has made information about its finances, mission, and government available to the public. we post on our website our annual reports, financial statements, irs form 990 tax

returns and details break downs of our rev revenues and expenditures, and this is why we're surprised and disappointed both by the title and substance of the report a few members released this week. behind the veil, the aarp america doesn't know. there is no veil. quite frankly, we disagree with each of the conclusions drawn on this one-sided report. first, we reject the obligation that our public policy positions are influenced by our revenues. our policy positions are set by our own 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 forego revenue in exchange for a lifetime health and financial security for all older americans. the revenues we earn from

royalties allow us to keep membership dues low. currently, $16 a year while providing outstanding benefits to members and all americans age 50 and older. we also reject the conclusion that we are not good stewards of our non-profit status. the revenue that aarp receives from lending its name to products and services goes directly to fulfilling our mission and serving people 50-plus. our mission includes three major areas. we work to make sure people have access to affordable quality health care. we work to make sure people have the opportunity to achieve lifelong financial security, and we help and empower people 50-plus to live their best lives. these are the prince. s aarp was founded upon.

dr. ethel, percy andrews was appalled to discover a retired teacher living in an old chicken coop. she got a group going to create the first group health insurance plan for people 65 and older in the country, a decade before medicare. in 1958, she created aarp for seniors across the country who needed health insurance for themselves. through aarp, she envisioned a better life for seniors that includes health, economic security, and opportunities to remain active and productive members of society. when we look at what she did, it is truly 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 are going to follow her lead every sense. lee, our other volunteer leaders and staff are the guardians 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 advocate for consumers. for example, aarp has supported bipartisan regulation including the lifetime income disclosure act providing consumers with better information about their 401k plans. we are also proud to endorse medicare antifraud act. this bill sponsored by the chair

and ranking member of the health subcommittee empowers 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 aid volunteers are helping 2.6 million taxpayers prepare their taxes. in 2010, 193,000 people with low incomes received the total of $233 million in earned income tax credits. last year, aarp volunteered to help more than 526,000 people stay safe on the roads through our driver safety program. also in 2010, our advocacy efforts helped consumers save more than $3 billion in lower utility costs. last year, more than half a million people visited our great

for good website and connected with more than 260,000 volunteer opportunities in their communities. today, aarp and the aarp foundation in partnership with nascar's jeff gordon and hendricks motor sport are leading the drive to end you thinker and help more than 6 million seniors and another 6 million in 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. rapid, i thank you -- mr. rand, i thank you for your testimony. i'd like to call to your attention, the monitors in 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 2%%. -- 200%. during that same period, aarp's revenues 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 suspicion about where aarp's 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 at 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're 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 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 your -- >> it would decrease our ability to serve 100,00050-plus, and 173,000 members. all of our revenue, all of our revenue goes towards our 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 an idea -- >> 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, but let me tell you what we do with the money. >> but just answer my question. >> well -- >> you have a great interest in that those royalties be high because they basically -- i mean, your dues would be higher if they weren't, so is that correct? >> would you like me to tell you where our interests lie? >> just yes or no; is that correct? >> obviously it would -- >> answer the question, please. >> well, 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 devise. all of these insurance products come from our members and the

100 of the 50-plus population who say we have these needs. they give us those needs and wants, and if they're in the insurance area, we convey those to providers of insurance. that's what we do. >> i understand. i appreciate if you keep to answering my question if you would. i thank you for that. you stated in your testimony that quote -- "under the democratic health care overhaul, the aarp's branded insurance plans for 50-64-year-olds will become obsolete and aarp will no longer receive revenues from those plans." can we take from that statement that aarp will not endorse or sell insurance in government-run agencies and aarp will not

accept commission payments or licensing fees from any insurance plan operating in the exchange, and will you make that commitment today? >> we don't sell insurance, mr. chairman. >> you do receive real royalties which ranks you as the 6th largest health insurance company in the united states; is that not correct? >> the answer is we're not an insurance company. we do not sell or underwrite insurance. >> don't you receive royalties from insurance companies. >> excuse me, could you just repeat it? >> do you not -- aarp, does not aarp in royalties receive the 6th highest profits of any insurance, health insurance company in the united states, is that not correct statement? >> it's not correct. we don't receive profits, sir. >> royalties. >> i don't know what the --

>> you receive royalties that would rank you, again, this is public information. >> absolutely. >> that would rank you as a 6th largest for-profit, were you a for-profit, which the irs does not rank you as, and that's one of the purposes of this hearing, would rate you as you were an insurance. anyway, your public information -- >> yes. >> would, would indicate that. finally, i'd like to highlight the recent comment from an aarp's spokesman that aarp is committed to transparency and the hearing will provide us yet another opportunity to answer any questions. i found this quote somewhat refleshing given aarp's repeated refusal for 18 months to provide members of this committee with

financial documents relating to the aarp insurance plan. aarp's services and details about aarp's medicare and 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 4.95% 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. >> well, that's what i think i'm trying to do. >> well, premise and question are two different things. if you could address my question, what went into your decision for aarp to increase this royalties from 4% to 4.95% first of all, and what percentage do you an anticipate those aarp will keep from each year from 2011 to 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 4 to 4.95. that's the first question. >> that's a renegotiation between united and aarp. >> okay. what could you tell us, what percentage aarp medigap premiums, what you will keep in each of the years, the year we're in, 2011, through 2017 which is what you're contract runs for. will it go up again? will it remain at 4.95? >> i can't answer the future. we have not talked about that. >> okay.

how much money did aarp earn on investing seniors insurance premiums money before kicking 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 beneficiaries. >> now, again, if you could answer my question. that's public information what you're stating. >> yeah. >> we all know that. what we don't know, and what you would not answer us 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 in investment before giving it back? that's my question which is not public record. >> first -- do you mind if i answer in two parts. >> if you answer it, yeah. >> okay. first part, any interest we have goes back to the mission which is means it goes back to the 50-plus. >> that's not answering my question. you stated that already. >> okay. >> can you be precise in answering my question which you're avoiding and which you would not answer for 18 months. >> mr. chairman? mr. chairman? >> i'm not certain what's going on here, but to some degree, the witness' entitled to an opportunity to respond. if the chairman or witness does not agree that's responsive, then we are entitle to as members to extract a best

answer, but at this stage, you're preventing the witness to answer or responding. >> the yesman has not been recognized. i will take that to be that you refuse to answer my question. >> no, i'm not. >> okay, then either answer the question or move on to the next one. you are not answering the questions i'm asking you. >> all the money that we have that comes from the trust goes to the mission. none of the money is taken out of the premiums. >> mr. rand, let me say for the third or fourth time, that is not the question i asked. i asked what is that amount? i will take that to be you're refusing to answer my question, and i'll move on. >> now that i understand the specifity of your question, over the years interest earned from

the trust which is aarp's trust is -- would vary anywhere from 60 million to 90 million depending on the years. >> okay. thank you. if you could, i'd like you to answer that in writing if you don't have that to our committee. how much does aarp receive annually for the use of aarp's brand for aarp medicare advantage insurance plans in aarp medicare prescription drug insurance plans each year over the course of the current contract? >> i can give you accumulative answer if that suffices because i don't have it by the individual insurance products. it is roughly 420-430 million from royalties from united health care for 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 that? >> we can -- we can respond in writing, yes. >> with the answer? >> yes. >> all right. 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 the aarp sponsoring of nascar driving jeff gordon. this race is question -- this raises questions according to their report about whether scarce taxpayer dollars are being used to sponsor a nascar

team. you do sponsor a nascar team? >> we sponsor what we call the -- the answer is yes, and as 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 role call vote, february 18th of this year, an amendment offered up by ms. mccollum from minnesota that we eliminate $700 million in funding used by the department of defense to sponsor a nascar vehicle, and i'd also know that my colleagues and most of the republicans on

this committee voted against that amendment. and if you did vote with us in eliminating these fundings, thank you, but it seems to me that 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 insinew ate that you all, aarp, are 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 is valuable? >> well, number one, we don't make the investment in nays -- nascar. we make 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 who go to bed every night struggling to figure out how they are getting their meal. >> you make money. >> we don't make money on this. >> i mean, there's revenue coming out of the nascar thing? >> no. we take our revenue, and we invest in this issue. >> which is to help? >> >> end hunger, help us with hunger, to figure out how we can have a national network -- >> okay. >> that helps with the infrastructure, access to food, delivery of food, awareness of the issue. we believe that we have six, over 6 million seniors who suffer, yet another 6 million including their family, that's 12 million that are focused on -- >> sounds like a great --

now, can you explain what the department of defense does with the money they make on their nascar involvement? >> i can't, sir. >> i suppose they bomb yemen or any ideas what they might do with it? >> no, sir. >> okay. i don't either. i mean, it seems to me if it's all right for our people in uniform then it's all right for us old folks who wore uniforms for years. does that make sense to you? >> it makes sense to me. >> all right, good. thank you, thank you, mr. chairman? there's a new chairman, thank you. >> that's me. >> i yield back. >> 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

it. i think our committee provided it. it's chart number seven, and if you could put the chart on the screen for the viewing audience, i would appreciate that. i want to call attention to this chart. it must be operated exclusively on social welfare and promote common good. this chart's derived from the consolidated financial statements. the red line shows royalty revenue, and i'll get back to the definition of royalty in a moment, but royalty revenue including payments from insurance companies with a 2 00% increase from 2002 to 2009, last figure in 2009 was $657 million. dun at the bottom, those lines that are not as easily seen are dollars transferred from aarp incorporated to aarp's legal

counsel which was actually showing a decrease of $300,000 over that time period, and dollars in the blue, i'm sorry, in the gold is dollars -- i'm sorry, blue, dollars transferred from aarp to the aarp foundation which was $3.1 million, so in looking at this, you know, the for-private entities that brought in these royalty revenues and your charitable mission, the growth has not kept pace, and so this calls into question in my mind, are we really meeting that obligation as a 501c4 which are charitable contributions. how does that comport with aarp's exempt status, sir? >> all of our money does go to the mission. there may be a particular

program that has not kept pace with investment, but i will tell you that with the -- >> when you say mission, are you referring to your -- >> our social good mission. >> that leaves $414 million on the table here if you just do some simple math that -- i'm just wanting an explanation of the discrepancy here. it seems to me that those bottom lines would not be flat or showing a decrease over that time period. >> mr. chairman, may i add information here? >> yes, sir. >> i think part of the problem comes in looking at the difference between a c4 and a c3. >> no, i understand that. >> i know you understand it, sir, but the requirements and definitions are considerably different. >> okay. i'll get to that in a moment, but thank you. >> okay. >> let's move on to something

else. i want to follow-up on some of the inquiry that mr. herger was working on. in looking at the medigap policies, i understand that you have licensing agreements with insurance companies; is that correct, sir? >> we have a arrangement where we have our brand that is lent to them assuming that -- >> this is the licensing agreement. >> you can call it a license agreement. we call it a royalty. >> royalty. okay. i'll get to the definition of royalty in a moment, and under the medigap arrangement, only due-paying members, aarp members are allowed to participate in the medicare policies, is that correct, sir? >> sir, again, if i could? >> well, mr. rand runs the organization. mr. rand, can you answer that

question? >> you -- >> is it only due-paying members 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, the answer is yes. some leave the program and stay with the insurance, and we are happy that they stay with the insurance. >> okay, okay, fair enough, and you receive in this arrangement at least based on the information we 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? >> there -- they are collected

in the trust fund. >> part of aarp. >> that's right, since 1958. >> that's right, and you retain 4.95% of those premiums as royalty? >> no, sir, that's incorrect. we don't retain any of the premiums. those premium dollars are written to the specific insurer. >> i understand they are written to the insurer, but there's an arrangement by which you retain a royalty -- >> no, sir. >> what is this 4.95%? >> it does not come out of the premiums. the premiums go into the trust fund, sir. >> okay. >> they are then matched -- >> so is this a separate royalty payment by the insurance company? >> no, sir. >> where does the money come from? >> if i could just complete one statement. >> go ahead, sir. >> perhaps i could be clearer.

>> go ahead, sir. >> the trust fund is a collection in which the beneficiaries send their check. there are 2-2.5 million checks and wires that come in. they get collected, and they are given to the appropriate insurer and that's part of the administration that the trust has. >> okay. so this is an administrative fee you're saying? i have a document here from rhode island, state of rhode island that shows total member contributions, lives covered, breaks it all down, and it says royalty to aarp, percent of member contribution, 4.95%. >> that's the 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. it has -- the trust fund just takes the beneficiary's payment to united or jenworth, or any other insurance provider, collecting the dollars and transfers it to the appropriate insurer. that's all it does. >> so the 4.95% is not -- >> it's 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-plus. >> so there's a 4.95% go to the grant or trust or aarp? >> it goes to us in revenue. >> i know, but what entity? >> aarp. >> but, okay. well, let's leave that there for a moment. royalty income, which is

excluded from unrelated business income under section 512b of the tax code, often raises a number of questions, and there's been litigation, and while royalty income that's excluded under the code is an issue that is difficult, you know, a lot of times it relates to intangible property. it's my understanding that putting aside the 4.95% issue which you classified as royalty earlier, you also retain these premiums. it's an unspecified period of time. i'm not certain what that period of time is. can you tell us how long they hold on to the collected premiums in medigap? >> there's two processes. the first process is the collection process. there may be 2-2.5 million either in electronics, the rest

is mail. those are sorted through for the various accounts, ie united, so that's an administrative process. that administrative process can take anywhere from a week to two weeks or three weeks depending on how these checks come in. during that period of time, that trust, financial prudence is also in an interest bearing account. >> is there someone beside an interest bearing account? >> as the money comes in, it's in an interest bearing account. there's no other money in there. interest bearing the. >> okay. >> so that week or two days or three weeks, we earn a small interest as any interest bearing account, as your own checking account that you may have. >> i understand. >> that's one issue, and 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 the beneficiary. >> you pay tax on that interest? >> i believe we do, but i don't know. >> okay. >> i mean, i'll find out for you. weal get you -- we'll get you that information. >> and get us some idea of how much you earn with that, i mean, what kind of interest earnings do you get on that and the tax paid on it would be helpful. >> we'll get you all that information. >> thank you, sir. you mentioned there's another aspect to this, and -- well, let me back up a moment. this is all set by con contract arrangement? >> since 1958. >> 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 on to 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. the -- you said earlier the interest goes back to the mission. that was kind of a broad statement. 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 an 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 company then, 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? >> well, i understand that. >> we then -- >> okay, go ahead. >> we then sect. when we select, we then give them permission to use our brand, the aarp brand.

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

organization. american cross road, gps aarp medigap social welfare organization, the tea party is a social welfare organization. both want to repeal health care reform. i'm not aware of any charitable activity or contribution by either of the these organizations. mr. hammond, are you aware of any social welfare organizations engaged 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. that's one of the things i was trying to talk to others about. a c4 social impact organization is simply that. we established a charitable arm to c3 to deal with vulnerable

populations who are in need of assistance in the very essence of their lives to try and state together. the c4 is working on a broader basis on our social mission. 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 suspect that. the foe sus is on -- focus is on defeating hunger in this country and putting a

stoplight on hunger and make people understand what a big problem it is. we raised money for relief in haiti, raising money for relief in japan. as mr. rand stated earlier, we've through advocacy efforts saved members money on utility costs. we represented tens of thousands of people at no fee in cases where age discrimination is involved. we've supported efforts through our add volunteers advocacy which is oughts perfectly legal part of the c4 to do the kinds of things our people say they need having done. we're looking at 100 million americans who are age 50-plus, about 37 plus or minus are members, but we're not doing it just for our members, but we're doing it for everyone. >> thank you, mr. hammond.

mr. rand, do you want to respond? >> i want to add 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 our expenditures, excuse me, go to benefits such as tax aid, driver safety, other programs, 25% of our expenditures. member services, 240 million, about 24%. advocacy and research, 10%. communications operations, 8%, and that's really focused on education where there are 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 ewe -- you in a broad sense that the vast, vast majority that all of our money really goes to our social welfare mission. >> thank you. mr. rand and mr. hammond, i find it so strange and out of the ordinary that if our republican colleagues of mine are attacks aarp today as retribution for health reform, it will be more than happy as mr. stark suggested to stand with you when they created the medicare drug benefit. i want unanimous consent to insert in 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, the gentleman's time -- >> mr. mr. chairman, you took more than 50 minutes. i went to vote, and when i came back, you still were asking questions. you took at least 15 minutes. >> the gentleman's time expired. mr. johnson is recognized for five minutes. >> thank you, mr. chairman. >> thank you 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 the plans are no longer available to seniors or because they are 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 access 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 should choose their on programs. we don't think they should be subsidized into programs. >> okay. the for-profit aarp's insurance plan collects medigap premiums, invests money, earns interest on it, and then keeps 5% of the premium amount and the interest earned off the cloak. the rest of the premium is sent

to united health group. the 501c4 receives royalty payments directly from united health group for aarp's medicare advantage and medicare prescription drug plans. why does aarp handle insurance profits differently depending on whether it's medicaid advantage or medigap? you want to answer that too in >> yeah, i'll 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. >> 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. >> medigap, i think first of all, i'd like to make a slight correction in what you indicated. all of the premiums for those issues go into the insurance trust, the grant or trust that the chairman was talking about. that is a legal entity set up in 1958 to receive those and to hold 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, repeat that. >> do you get more from medigap than you do medicare advantage, plans that y'all have started. >> talking about royalties, sir? >> yes. >> yes, we do. >> you do? >> yes. ..

advocating for and it looks like your braking in the cash while they are losing benefits and pay more for coverage. >> may i make one comment, sir, one of the priorities we set is that no 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 -- >> my time is expired, thank you mr. chairman. >> the gentleman dr. mcdermott is recognized for five minutes. >> i think you gentlemen understand what you're being made part of today. it's the re-enactment of a play by arthur miller called the

crucible. is a play about witches in salem and the evidence had to be found that these women were controlled by the devil. your sin as you know is that you back to the affordable care act. now, i'm sure the chairman has a long list of other groups that are going to be brought in here, and ensure that the pharmaceutical industry will be brought in here because they got a deal they don't negotiate pharmaceutical prices that credited secretary sebelius has prevented from negotiating better prices for seniors. pharmaceutical industry i think they must have gotten a pretty good deal on that. that was put in back when they

put in the drug benefit of two years ago, and they said you couldn't negotiate better prices for seniors. you could do it for veterans, quite a bit for them before the, 50, 60%, but you couldn't do it for seniors, so the pharmaceutical industry cost quite a bit in there and they support it. i am sure we are 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 and get tax deductions and then we will probably have the medical device people appear and i keep things from the scooters were saying you have trouble moving around? just come on in and we'll get you a scooter and will be paid for bye medicare and goodness they got a little deal that went out in the care act, and down the list we are going to go. the question really is are we

going to go after every organization that is a 501c3 and a 501c4. and if we are going to start that, then we are going to have churches in here. there ought to be some churches we look carefully at. this is an oversight committee and we ought to be going after them. 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 got just one morning and said let's back this thing, tell us about the process you went through because i want to understand why you committed this sin. if you confess your sin to end this hearing and go home if you won't confess as to how you can 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 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 ask us what it was the needed the most. we took down a list of what they said they needed. one was no pre-existing conditions because they couldn't get insurance yet they were still getting sick and was their leading cost of bankruptcy in homes and so we advocated for no pre-existing conditions. and in fact, there were many portions of the insurance industry pushing against the age

reading because they were getting older and we are paying ten 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 so we advocated for taking the ten x they were paying and the bill has the maximum 3x. we don't get 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, helped give them a the american dream, closing the doughnut hole. >> the time is expired. if you could close up quickly, please. >> because a was 40% of the out

of pocket cost we closed the door mudhole completely following the community care options for those people who don't want to go to nursing homes -- >> the gentleman's time is expired. i recognize the gentleman from washington, mr. reichert for five minutes. >> thank you, mr. chairman for being here this morning. first of all, the conditions listed i think most members of the panel, democrats and republicans would agree with, i do. we take issue with some of the comments as far of the witch hunt. we can demonize this about really what it boils down to is representative in florida who represents a lot of seniors who have some questions.

it's his responsibility to have those questions answered. and then as far as my part in this, just an old cop. and so i hope you can understand you know and understand why you're here today. we just want to find the answers, and so i just want to go through a couple things. first of all, look, we exchanged some letters coming and the responses we got back were we met them all in response to the questions that we asked, and in fact this transparency issue is referred to earlier by the chairman where one of the comments made is no public or confidential propriety or information, some information is not public or confidential and proprietary to only the aarp and its member benefit providers. there is a transparency issue after the letters were sent and the responses were really not

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

united way, with the impacting affect will be, but we finally had to end up calling in health and from the irs. this report as people refer to it as the republican report is a report formed with the health debate to help with the irs personnel who assisted the staff in going through this information. this is sent me the information. this is accurate, statistical information gathered through a very serious analysis of the money that you are making in revenue birse the covers is the money that you're disturbing in your 501c3. one of the answers, nelson gave me is that this whole thing is for protecting the greater good, which kind of goes to your, one of your mission statements and enhance the public good but what about protecting the american seniors we don't want others

shouldering the burden of paying these traditional 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 for helping to provide for others isn't that true? so -- >> yes -- >> thank you. so why would you be against another program that is helping seniors and others shouldering the burden? that doesn't make sense to me. the fact that you support these cuts is just amazing to me. protecting aarp's members -- aren't you concerned about that? aarp come your not suggesting i hope that the half trillion dollars of medicare cuts the would jeopardize the seniors

access to health care is good for seniors. are you? >> no, and i'm ready when you would like me to respond. >> do you -- you keep records, meticulous records, right? i would just like to say if you can provide me with a list of times you visited the white house i would be interested in that. thank you. >> the gentleman's time has expired. mr. thompson is recognized for five minutes. >> i just want to state for the record i believe that it's totally appropriate that we look at the tax status. i think it's a very important thing to do, and this kennedy certainly has the jurisdiction responsibility to review 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 it

shouldn't be done to carry out some sort of political vendetta. after aarp support of the medicare part de measure this support i might add was counted by then-president bush and a speaker hastert, chairman thomas, of this committee and the chairman of the other committee with jurisdiction. aarp's financial interest i think was probably more clear than in than it is after the support of the health care measure, and there was no question as to 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 are looking at this particular time, and i think we have to ask the question is this political

payback or will this committee be receiving the tax status of other nonprofit organizations that didn't involved in the political process such as 60 plus, the republican leaning group that claims that it is the alternative, the conservative alternative to the aarp. i'm a little mystified as to why they aren't here, or american crossroads or the tea party for that matter or churches or even corporations, multibillion-dollar corporations who show multi-billion a was of profits and then we read in the papers they don't pay one single dime of corporate taxes. i think it is a very slippery slope where we are going today, and i just want to make sure 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 and

opportunity to finish his comments. to finish. will he be coming back or -- >> he will be coming back if you would like to freeze the question if it's appropriate with the chairman i would be glad to try to give you an answer. >> why don't you go ahead and finish up where he had left off. 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 the things the members had talked about and wanted but never got to how that decision was made. >> the decision was made by the board after it would seem like torturous hours of discussion and as stated the decision was

made based on the principles we wanted to see included in any health care reform act. these are the principles of the things our members told us they wanted to see in the act and as mr. reichert indicated, there are things almost all members of the committee agreed with. we would love to have seen that done on a bipartisan basis because that is what we would try to 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 cut off during your questioning. would you like to take the remainder of my time to finish asking your question? >> i appreciate i think it made the point that i planned to meet. >> thank you. i yield back. >> the gentleman yields back.

i request unanimous consent that the investigative report behind the veil of the aarp america doesn't know to be entered into the record without objection. >> reserving the right to object. >> the right to object has been recognized. >> reserving the right to object i haven't objected because there is a question as to whether this is an official document who prepared it as a political document and the ways and means document, this is a congressional document. i see your name on it and my fellow colleagues, but i have been waiting to see where this came from and so if you put it in the record how would you identify it as to what we would look forward to in reading it? if you would help me i'm certainly anxious to withdraw any objection at all, who paid for it, where did it come from,

is a campaign document, did it come from the republican congressional campaign committee, or is it a ways and means document without a seal, dak knows i know what the seals mean. >> the gentleman i might mention that the whole purpose object of this hearing is on this report. the committee on a regular basis submits and are accepted by unanimous consent documents that are not involved in this hearing. if the gentleman who doesn't remove his objection we will call for a vote. >> i don't have to remove my -- the one question who pays for this report, where did it come from, why is there no identification, is it a federal report? that's all i'm asking for. i don't want a roll call vote, i'm ready to roll over and accept it, but i just want to know why it is only to members names on it and why is the

source of this information not put on the compass so when i do read it i would no who paid to have this done. if the government paid for it, i would think -- >> again, the gentleman has on the report who has asked for it, so it's my name and congressman reichert's name on it, so it is indicated here again if the gentleman -- would the gentleman like a vote? >> i want to withdraw my objection. all i'm asking is who paid for the report and where does it come from? i don't want to make a sheet out of this to you and your colleagues before this? >> the gentleman looked at the report but it's obvious -- >> it's not obvious and you could direct my attention to what i'm missing. >> with the chairman yield? >> it's my recollection

mr. stark issued a similar report in the context -- >> he may have been wrong in doing that. [laughter] -- since you're admitting that -- >> as to what the committee should be doing. >> my friend from new york. it was prepared by two members of the committee. >> you did it, you paid for it so that answers my question. i reserve my objection. estimate the right to object has been reserved. >> mr. chairman, i'm not interested in rolling over. i'd like to know are we saying that this is a report that was produced by just two particular members of this committee? and if it was produced by just to protect other members i'm interested in understanding what does the committee generated report, and if so, at what point was it 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 and again i think it's very clear -- >> so committee resources used to generate this report or was it done through members account monies or through some private account money squawks >> this has been done through the same account through committees, through the member's account as would be done if you had asked for the gentleman from california had asked from a report from anyone else. >> of the committee or of my staff? i'm trying to determine whether this is a -- >> with the gentleman like a vote or what he removed his -- >> i'm reserving the right to object and i'm hoping to get responses to the question because the report doesn't identify other than investigative report prepared by dave reichert. does that mean this was prepared

mr. chairman by you as a member and mr. reichert as a member or by you as the chairman using the resources of the ways and means committee. speed is the gentleman objecting or not objecting? >> reserve the right to object. >> the gentleman is recognized. >> there is no debate on this report and if we were supposed to consume at so we could respond today we certainly were not given much time. are you telling us, mr. chairman in the very simple question this is like any other report this committee asks for and the people who worked on it would pay their usual salaries, nothing more, nothing less, there was no external force used -- >> the gentleman -- we need to move on with this hearing.

>> we don't need to move on unless -- >> we aren't moving until we get an answer. >> what is so complicated? spec i remove my unanimous consent. >> reserving the right to object. i removed my unanimous consent request and. >> your staff prepared the to prepare the report and you have an understanding that we are not clear who prepared the report and that's all we're asking today. >> the gentleman from illinois is recognized for five minutes. >> back to you in the booth. a couple of questions earlier in your testimony and written testimony on the first page down at the bottom use it and interesting thing to 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. we've long maintained the we for revenue in exchange for a lifetime health and financial security for all older americans. as an example of this, it's very likely under the affordable care at the aarp branded insurance plan for 50 to 64-year-olds will become obsolete and will no longer receive revenue from those plans. is it your intention to forego future revenues or royalties or sources of income as the affordable care act rules and 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 about the exchange and the strategy about the exchange. >> but that's what you're in pulling in the sentences, aren't you? >> notte. >> okay but when you say that we would forego revenues if this had and come and as an example of that we are for doing revenues that is a reasonable implication of the sentences together isn't it? >> if it's reasonable for you i wouldn't say no. you are putting the two sentences together and perhaps it was my lack of clarity. and so therefore -- >> and i read them together in context. >> would you like me to clarify them, let me put it in context. >> yes, sir. >> you gave us a description of some of the elements of the affordable care act that he found attractive and i understand those. i need a note. no pre-existing conditions. you reference to the age

changing from 10x3x, the baby boomers keeping children on their coverage, closing the doughnut hole, the community care options and there were other things you got cut off based on time that were attractive to me. what are the weaknesses of the affordable care act that compel you to keep an option open that would suggest 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 that we come back to it. let me highlight some of the

folks that have accused you of that, because it's interesting. our panel members really don't disappoint, do we. the gentleman from california, mr. stark, said that aarp members know that they're being sold out by an organization, you, from past conduct, not your action in the affordable care act. the gentleman from new york mr. rangel said that aarp has forgotten where they come from because once you get in the business of making money with the devil you forget your mission and the former speaker mrs. pelosi said she complained that you were in the pocket of republicans at that time and suggested that you had a financial conflict of interest so you're point is you receive a lot of criticism from a lot of circles, but go ahead. >> that was not my point, that was you're point. [laughter] >> the issue at stake here is

that our mission started in the 50's. i was 14-years-old when the mission was stated and that is that 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 are having conversations about medicare that medicare is the problem. medicare is a recipient of the expenses of many industries. >> understand that. so, the question is -- >> affordability is the answer. >> and the affordability care act doesn't satisfy you. it's going to 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 it? on of remic the gentleman's time is expired. the gentleman from new jersey

mr. pascrell was recognized for five minutes. >> mr. rand, you are a tax-exempt corporation from a private association commodus sir. >> 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 xm organization. is that one of the reasons or the reason why we are having this hearing? >> that's an and proper parliamentary inquiry. >> oh it is? >> my question is what laws do you think have been broken since we look at policy and we are not looking at corporate policy here, we are looking at national

policy. that is the responsibility. >> i thank the gentleman. again that was outlined in the report, that's why we are requesting of the irs to look into this and let them decide whether or not they properly should be paying taxes on the large amounts of money that they seem to be benefiting from legislation the was passed. >> i think there are legitimate questions that followed the question whether there's a violation of the for-profit nonprofit status and legitimate questions about what is taxable income versus non-taxable income. >> can i have my ty please?

>> none of us are saying this i hope to make aarp policy, if the majority actually looked at the broader question here that we are supposedly discussing on taxes and section 501c for, that is a very specific code as you know that the sixth largest social welfare organization that has a 501c4 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 classification than -- because that's when you're getting at, your question in the classification of aarp. you didn't do it eight years ago but you did it now. this classification is that aarp, very clear here the majority will lead the aarp is working investigative team more so than this racetrack. i find that hard to accept. i know for a fact that aarp does great work. i've disagreed with some of your philosophies, so what. can you share with us how aarp directly helps americans and are in all of the districts of the country? >> yes, i will. let me just give you some snippets in the job category

that helped 53 million job-seekers through 2010, 53,000 again we talked about ponder and about 2.6 million finalists pre-tax returns support of schools, provide more than 20,000 supplies and 43 states. the wolverines a 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 for 160 cases and in 2010 alone again we saved utility in over 18 costs and over 18 states state $3 billion from the consumers in the state's expanding the services for home and community-based care.

>> thank you, mr. rand. you could go on and on. i'm sure our great chairman would agree with all of those activities in the field. he wouldn't want to end any of those activities because he knows to the citizens which he represents and i represent. thank you mr. chairman from your operation. >> i ask unanimous consent to valente the record a letter 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 the aarp foundation in 2008. >> reserving the right to object has that document been provided to the members of this committee? >> this is a letter that was posted on the aarp web site.

>> and understand that, and i have no reason to disbelieve the chairman and what he's saying that the letter detect that none of us have seen this and you're asking to be part of the official record of the hearing and typically what happens is the chairman will make available to every member any document that's going to be part of the record and i like this report was never provided to members to be for the media by would want to make sure members are provided with the information the will be part of this -- i might mention the minority and heard all ready to letters unanimous consent that have wracked the company entered but not distributed. >> that's fine. we appreciate the indulgence of the members the didn't object but this is proceeding in an irregular fashion when it comes to this report and so i would be interested in making sure i know what is being put into the record as part of this hearing. i am responsible to my constituents and anyone in america for what this does and that i was engaging in any form

of witchhunt and so interested in knowing which way to be part of this hearing. >> as the gentleman continuing to object? >> unless i can see the document that the chairman saying he wishes to submit to the record i will continue to reserve the right to object. >> i've been handed what is --. >> i would remove my reservation >> does the gentleman review his resignation? >> ticket to demint to review the document. >> the gentleman's objection has been removed so without objection it 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 i want to commend the author of the report because if it brings into question what mr. pascrell talked about as a legitimate question as to whether or not the tax-exempt status of the aarp is warranted and that is a legitimate question and i want to open by simply saying there are a lot of folks in my district who are members of aarp and a lot of folks who volunteer a lot of time and put their heart and soul into efforts to try to help seniors in our community and i want to thank them for the work they do and they are giving such volunteer time to is functioning in an appropriate and legal manner. >> i do want to follow-up on very briefly on the issue of the support for the health care act. that is part and parcel of the of rejection of the other side. and there was such a huge disconnect between the seniors

in my district about their lack of support for the health care act and medicare's aarp's support for it and i think that's what caused the folks to say scratch their heads and say what's going on here, is aarp really -- do they have my senior's best interest or do they have other reasons to act the way the do? and dimension and number of things you felt were appropriate in the health care bill and that's why you supported it because it ended a pre-existing allegedly in the like. it builds the seniors adamantly opposed and so you don't believe the seniors support the rationing of care, do you? >> we don't support it and i'm sure seniors of -- >> exactly so there is that in the inconsistency you don't believe seniors want it more difficult for them to find a

position to care for them, do you? >> we have been supportive of the dhaka six. >> but i get seniors all the time in my district to say i can't find a medical doctor, i can't find a medical doctor because the rules put in place and that's right increase and i know you don't support that. you don't support a decrease in innovation and the health care system, do you? seniors don't come today? >> i don't think anyone supports -- >> exactly. >> the lack of innovation. i believe there's some aspects of the legislation but is there to help innovation, and there's a difference of opinion, isn't there? so there's a difference of opinion among seniors just like a difference of opinion among the regular population out there which again is why so many of us scratch our head and said well what is aarp doing? there's a huge difference of opinion. the majority of seniors right

now believe the bill will in fact a decrease their ability to get the kind of care to desire and that is why we say what was going on a want to shift to this issue of the tax-exempt status because 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 the aarp out there is following the appropriate tools to maintain the 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 than -- >> i have here a number of questions that i understand that members of the staff of the folks they put together this report were unable to get from the aarp in spite of the suggestion by aarp that they are open and transparent and want to

share the information so i wonder if i might be will to ask to be able to supply these things for the committee's availability. how many millions of dollars still aarp received from its medicare insurance business? that ought to be something relatively simple, shouldn't it? >> we will provide any of your ads that we have sold control over. there are confidential contracts which we can make decisions about bye ourselves. >> i look forward to seeing those, the benefit the in the aarp members received after the aarp revenues increased the members didn't receive in prior years, those things we ought to be a will to get the information on should we not? >> steny to get that in writing is appealing understand that request degette >> i appreciate that. will we will do is submit these questions to you in an effort to

be transparent and open and provide them the public with the greatest amount of information look forward to those responses or why they can't be answered. >> the time has expired. >> the gentleman from new york restaurant was recognized for five minutes. >> thank you mr. chairman. i ask unanimous consent of that this document called behind the veil, the aarp doesn't know, the place into the record i cherish the privileges that we have on congressional -- >> reserve the right to object? >> the right to object as been recognized. >> the report that my colleague and friend mr. rent was asking be put into the record has this been pure review by anyone? >> come any organizations?

>> this is mr. trinkle's request. >> i understand but it's your report. has this been peer reviewed or -- >> this report has been -- we requested it has been prepared and has been submitted. >> but has it been peer reviewed. >> it's before all of you right now, not any more than other reports are. >> might i add the report has 246 footnotes documenting everything thoroughly in the report. >> a reason why you don't want us to know who prepared it and who paid for it and why it's not official. i just want to protect the privileges of the members of congress not to be challenged when they want to put things into the record i truly believe we have a responsibility to protect that record and to know

what we are by unanimous consent putting into the record so i'm asking unanimous consent notwithstanding the many unanswered questions that it be placed into the record and that we can foresee to make certain that my motion is not abused by other people who just want to stop people from expressing themselves. so i ask that it be placed in the record by unanimous consent. >> mr. chairman, i withdraw my right to reserve on mr. rangel's motion to place this on reviewed report into the record. >> reserving the right to object. >> this isn't taking out of my five minutes i hope. [laughter] >> you're five minutes is taking away, yes. >> this is a procedural matter. it has nothing to do with the time -- >> reserving the right to object

mr. chairman. >> by will, again, raised the concern i have that this report -- this document indicates that it's a report prepared by individual representatives. -- >> this gentleman, this will not be -- we are subjecting it to the record now there is objection. we want to move on to this hearing. i'm reserving the right to object but i believe i have an opportunity to explain my reservation for the question i have answered to see if i will remove my reservation. >> the gentleman from louisiana. >> i believe i have the floor and i made a reservation to the unanimous consent request.

>> to remove or withdraw and i have a reservation on that unanimous consent request. >> it's mr. trinkle's time -- >> no it's not, time. >> will the gentleman yield? >> this report was prepared by the two members on the cover. >> mr. chairman does that mean they use their staff, no ways and means committee staff? >> onerous consultant. >> is it the stuff used pittard report? >> and chairman levin approved it, he was in the loop and approved. >> the use of committee staff? >> yes, and the irs detailed it. >> does the gentleman withdraw? >> the chairman is representing the ways and means committee staff helped prepare this report and the use of the committee staff was approved by then

chairman levin -- >> yes. >> i'm being told that is not accurate. islamic my understanding is chairman levin, when he was chairman, approved the detail the from the irs. >> the time is expired from new york. >> the gentle lady from kansas -- spec there is unanimous consent request on the floor -- >> i want to thank -- >> the gentle lady from kansas -- >> i said parliamentary inquiry, mr. chairman. >> parliamentary inquiry. now under what provision is the chair denying me an opportunity to question the witness? i made a motion that had nothing to do with asking the witness any questions, and if you were telling me now that because i

made a procedural motion that i as a member of the committee -- >> we will start over again with five minutes. >> thank you so much for your consideration. [laughter] now mr. rand, since i don't know where this report came from, can you tell me where you think it came from? >> mr. chairman, parliamentary -- >> the gentleman is recognized for parliamentary. >> i hope this doesn't come out of my five minutes. >> the ploch will be stopped. >> mr. chairman, there was a unanimous consent request that was offered by the chairman from new york as far as i know, that request hasn't been disclosed. i don't see how we can proceed forward with regular order until we dispose of this procedural request for unanimous consent and i would ask for regular

order to be restored and observed and let us dispose of this unanimous consent request. >> with the gentleman like a vote on that? is their objection? >> my question hadn't been answered. chairman tristani tried to answer but the information i am receiving on this side of the list that chairman when when he was the chairman of the committee didn't approve of committee staff been used to prepare this report that he approved the use of a detail the from the irs sign chongging to find out mr. term and a very simple, in answer to a simple question, was the committee staff used to prepare this report? >> they did work to prepare this report. >> and given that this report was never provided to the members of the committee or the report or the committee staff

how to prepare it. >> it's not a committee report. >> the resources are used. >> mr. chairman, you may call it a member report but when the 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 a broadcast 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 from all of the place. so if the case is that this is a report that is being requested to be included in the record, and was prepared by the committee staff unbeknownst to the members of this committee for it to be considered into the record as any kind of official documents i would object to that if the chairman which is to portray this report as a report by two individual members who i believe they have misused the committee resources -- >> that is what it is. >> members of the committee to

be misused resources to prepare the report on that basis -- >> ginny brown-waite. >> so those individual members used without authorization committee staff resources with the approval s tomb of the ranking republican at the time resources of this committee to prepare a report which members of this committee didn't have an opportunity to review with that understanding i will remove my reservation and allow this report which is it an official report and prepared under the normal course that this committee is accustomed to preparing reports to be allowed into the record. cynically again recognize the gentleman from new york. >> would you indicate that my -- >> i have four minutes and 45 seconds. >> i was saying that he never said permission is granted to put in the record. >> the permission is granted.

>> did you have an opportunity to see this report from the aarp america, does it know? >> i saw the report, the staff went through and that's the reason why. >> did anyone ask you questions in connections with the preparation of this report? from the committee? >> from the office -- i have no idea why the committee would be asking you questions. do you know who prepared this other than what you've heard this morning? do you know who prepared it? >> that was my understanding as you were going through the conversation and reiterated that there were -- >> did anyone representing office of this committee, any increase? >> no, the answer is no.

an outside organization of a plot to discredit your organization as it relates to your position on of the affordable care act. is their anything i'm saying that is inconsistent with that? >> we are in the position to speculate -- >> is their anything in this report would indicate that the united states congress was involved in the investigating this or did anyone hold themselves out to be staffed of the united states congress and making this report? >> it simply went through the names that you've identified. >> and so useful to members names but they were not identified as members of this committee. >> as a matter of fact. >> they were not in cannot identify as members of the united states congress.

were they? >> not in the report, not in the cover of the report. do you have counsel but tigard normally when accusations are being raised against your organization to be? how could you possibly defend if you don't even know who made them. >> we do the council in the normal procedure. >> i hope he makes an increase as to why would anyone put out a report and not identify who they are as to where they come from because wally and representative david reichert could be ripped from the various states that have what reps? but there's nothing on this report that indicates that the converse 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 cracks.

>> i hope your counselor share verney so it is impossible for me to get any information it will be in the record. i would hope that they would find out exactly what was the motivation behind the report because the motivation is just to refer you to the irs anyone can do that without a report, and i would hope that they would ask a question or get answers for as to what was the resources that were used in order to prepare the report, the 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 wanted it in the record is so that it doesn't disappear. i want is in the record to be able to use this in the record and i want to make certain that the ability that we have to put whatever we think is helpful to an inquiry, helpful to a hearing

that no member be denied for partisan reasons the opportunity to put it in so let me thank you for this opportunity. i yield the balance of my time and i think you for your answers and i look forward to working with you to see that america continues to receive the best possible health care we can provide. the gentleman yields back. and again, this is the report, it says right on the report investigative report to prepared by representative wally herger of california and david reichert of washington inside with recognition of former representative ginny brown-waite who represents that district of

florida throughout it indicates congressional inquiries. so i think it's very clear i think it's important that we not have this as an diverting our attention from the purpose, the very real purpose -- >> what are you reading, mr. chairman of? >> with that, the gentle lady from kansas, ms. jenkins is recognized for five minutes. >> thank you, mr. chair, and thank you for being here to answer the question as representative ross noted earlier representative nancy pelosi the democratic 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, there

is a conflict of interest i'm just curious if you believe leader pelosi is wrong and in the interest of time with the bells ringing just a simple yes or no, mr. rand. >> we don't believe anybody who says we are in the pockets of anybody. >> representative pete stark, democrat from california is quoted as saying aarp members know they are being sold out by an organization that is happily using members' dues and premiums to promote a medicare bill that does more harm than good. do you agree with representatives dark cracks >> we do not. >> representative rangel from new york is quoted as saying aarp has forgotten where they've come from because once you get into the business of making money with a devil you forget your mission is representative

rangel wrong? >> we've not forgotten our mission. >> representative john larson, a democrat from connecticut is quoted as saying why does the national aarp leadership support the bill that meets almost none of their clearly stated needs and conditions as representative larsen writes to question this lot check? >> we have said in the testimony there's a number of items -- >> yes or no. >> is he right in questioning this? >> i don't believe he's right in questioning it. >> former representative rahm emanuel, a democrat from illinois is quoted as saying aarp's latest step forward into the insurance realm gives him some pause. when there are principles about the medicare drug prices and the importation run into their business practices, which goes? business practices or