A cynic, they say, is a disappointed idealist. After nearly 40 years in Washington, D.C., I’ve had enough disappointments to justify my cynicism. The most recent is “Behind the Veil: The AARP America Doesn’t Know,” a highly promoted report about the lobby group for older Americans produced earlier this year by two Republican members of the House of Representatives.
I have nothing to say about the policy positions the authors take in the report. But I am disappointed to witness, once again, the willingness of smart, sophisticated, educated and professional people (including lawyers) to ignore a fact, base a policy position on it and then publicize their ignorance of it.
Playing fast and loose with the facts is not new in policy debates, but when it occurs in your area of interest you pay closer attention. Also paying attention was well-regarded non-profit lawyer Bob Boisture, who published a critique of the report in The Exempt Organization Tax Journal. He called the report a “new salvo” fired at the AARP by House Republicans and said its analysis was “fundamentally flawed.” I prefer the simpler characterization “wrong,” and here’s why.
The report repeatedly referred to AARP as an insurance company. Indeed, the title of Part 1 of the report is “AARP the Insurance Company.” It is not. The authors may want to make the point that AARP is engaged in activities beyond do-gooder services to older Americans, but they should be able to do that without using outright falsehoods. The AARP is a tax-exempt social welfare organization with charitable and for-profit subsidiaries, and it licenses its name to some insurance companies. It derives a lot of money in royalties from those licenses, but it does not take on any risks. It is not an insurance company.
I know why the authors may want you to think AARP is an insurance company, but I can’t get my still somewhat idealistic mind around the idea that a member of the Ways and Means Committee or his professional staffer would willingly state in print something he knows to be untrue. I say “willingly” because my mind also cannot conceive that either a Ways and Means Committee member or his staff would not know such a basic fact. The error might appear in the first draft of a report, but it could never survive a second draft, much less the fact checking prior to publication.
The report then uses this one falsehood (that AARP is an insurance company) to bolster another argument that AARP may not deserve its tax-exempt status. As even a newly minted non-profit lawyer knows, licensing in exchange for royalty payments (from an insurance company, for example) has always been deemed a lawful noncommercial activity for exempt organizations. Entire books have been written on the subject. Given that fact, any suggestion that AARP’s receipt of royalties would support a credible inquiry into its tax exemption is irresponsible, especially coming from a member of the tax-writing Ways and Means Committee. Again, I can guess why the authors want to challenge AARP’s exemption, but they undermine their credibility by misstating the law. Their anti-AARP case would be stronger if they simply called for a change in the law regarding royalty income rather than mislead the public into thinking that AARP is flouting it.
Boisture’s critique of the report cites other errors of fact and omission, and most of them disappointed me in the same way. I may be cynical, but I am still holding out hope that people like me—professionals, lawyers, policy wonks—will engage the world with facts. Most people agree with that law school phrase, “Words have their usual and customary meaning.” We rely on people to mean what they say. If even the lawyers and public officials can’t do that, we’ll never get out of the fix we’re in.
Bruce D. Collins is corporate vice president and general counsel of C-SPAN, based in Washington, D.C. E-mail him at email@example.com.