Amid Data Privacy Concerns, AARP Sweetheart Deals with Federal Government Face Renewed Scrutiny

Sensors help smartphones keep eye on solo seniors
AFP/ERIC CABANIS

President Donald Trump’s administration has provided the nonprofit foundation arm of the American Association of Retired Persons (AARP) with more than $111 million in a variety of taxpayer-funded grants and contracts. But the gravy train may be coming to a stop soon amid concerns over not just AARP’s work against Trump’s agenda on major big-picture policy items such as healthcare and taxes but also over data privacy concerns for seniors who have trusted the organization to help them file their tax returns for years. The organization’s continued profiting to the tune of billions of dollars off of denying seniors pre-existing condition healthcare coverage as part of a major Obamacare loophole also factors into the mess.

The AARP foundation has, since the beginning of the Trump administration, received more than $111,000,000 in taxpayer funding from a variety of sources. They come from departments and agencies as wide-ranging as the Department of Health and Human Services (HHS), the Department of Justice (DOJ), the Department of Labor (DOL), the IRS, and the Corporation for National and Community Service (CNCS), per sources that have calculated the various grants and contracts. From HHS, the AARP foundation has received during the Trump administration a $235,290 grant and a $9,995 contract purchase order. From DOJ, the group has received during the Trump administration a $2 million grant. From the DOL during the Trump administration, the organization has received two grants totaling $90,388,686 and during the Trump administration the IRS has given the group one grant for $9,496,545 while CNCS under Trump has given AARP’s foundation five grants totaling $9,309,241. In total, that means the Trump administration has given the AARP’s foundation a whopping $111,439,757 in taxpayer money.

An AARP spokesman defended the government grants and contracts in a statement to Breitbart News. “Like many charities, the AARP Foundation, not AARP, has been awarded some government grants to help its work on behalf of low-income seniors,” an AARP spokesman said.

But Republicans, one administration official told Breitbart News on condition of anonymity, see potential corruption swirling around AARP –the Medigap pre-existing condition coverage denial Obamacare loophole that allows the group’s partners to profit significantly off of denying seniors with pre-existing condition coverage as well as all the taxpayer cash flowing into the foundation–as a potential opening salvo for the looming healthcare battle between the GOP and Democrats. Democrats have seized the high ground politically on healthcare for some time, but Trump sees a way back for the GOP–and the way back includes showing that the Democrats’ claims that Obamacare has made coverage better for Americans just aren’t true–which starts with the big picture exposing the sweetheart deal the AARP got.

Meanwhile, questions about how AARP’s foundation gathers and uses seniors’ private tax data–and how the organization uses the tax dollars it gets, and what policy positions its for-profit arm lobbies for–further cloud the picture around the organization. Specifically, the foundation has received in just the past couple years more than $110 million in taxpayer funding–only to have its for-profit side turn around and advocate against two of the president’s biggest agenda items on behalf of the Democrat Party’s far-left: AARP worked against the Tax Cuts and Jobs Act, a major tax cut that Trump and congressional Republicans secured for Americans last year, and against repealing and replacing Obamacare–the Obama-era healthcare takeover that AARP worked in favor of passing into law. All of this comes as the AARP foundation, according to multiple news sources, may have severely mishandled seniors’ personal tax data collected while helping them complete their tax returns as part of one of the many taxpayer-funded AARP foundation programs that started years ago and has continued under Trump.

“There’s always room for improvement when it comes to compliance, and the tax-exempt sector is no exception,” Sen. Chuck Grassley (R-IA), the chairman of the powerful Senate Finance Committee, told Breitbart News when asked about the continued flow of tax money into AARP foundation coffers while these data privacy concerns continue and while the organization’s for-profit arm continues to lobby for big government healthcare policy such as protecting Obamacare. “Oversight, especially in the tax-exempt sector, continues to be a top priority for me to identify and discourage improper behavior, but also to highlight best practices in this important sector.”

It’s not just the Senate potentially taking a renewed look into the AARP, either.

“Taxpayer money should not go to any organization engaged in partisan political activities or any organization that mishandles Americans’ personal data,” Matt Sparks, a spokesman for House Minority Leader Kevin McCarthy, told Breitbart News.

What’s more, senior Trump administration officials tell Breitbart News they are looking at these grants and contracts with intense focus, especially because President Trump is very upset the organization–perhaps not in the best interest of its members, but more so focused on its bottom line–advocated against repealing Obamacare, one of the biggest early Trump administration setbacks. Trump has recently railed against the late Sen. John McCain (R-AZ), who infamously as one of his last acts in life broke his promise to repeal Obamacare with a thumbs-down on the repeal bill on the floor of the Senate. While the establishment media and politicians on both sides whine about Trump lamenting McCain’s healthcare betrayal, administration aides have been working diligently to find actual actions Trump can take to keep chipping away at the serious flaws of Obamacare and take the moral high ground on healthcare and tax policy away from the Democrats.

“Why is the Trump administration funding President Trump’s political enemies to the tune of over $100 million?” a former Trump White House official asked Breitbart News. “It boggles the mind why anyone in the administration would think it’s a good idea to line the pockets of the very people who publicly oppose and lobby against the president’s America First agenda. The administration should put an end to the AARP gravy train immediately.”

President Trump has made it clear that despite the failure of Republicans in Congress at the beginning of his administration to address healthcare, he’s not giving up. “We’re not finished with [health care],” Trump told Breitbart News in an exclusive Oval Office interview last month, for instance. He has also repeatedly pledged that the GOP will become the party of healthcare, and will take another stab at repealing Obamacare and replacing it with a better healthcare system in 2020 after the next presidential and congressional elections.

AARP, for its part, insists it is nonpartisan and works with the Trump administration on some things such as lowering prescription drug costs. A spokesman for AARP said the organization’s official position is to mandate that people with pre-existing conditions have access to Medigap coverage, even though its organization partners have made billions off of the Obamacare loophole.

“For over six decades, AARP has been a nonpartisan, nonprofit advocate for quality affordable health insurance for older Americans, which is one reason why AARP strongly supported the requirement to provide access to comprehensive coverage to anyone irrespective of health status,” an AARP spokesman told Breitbart News. “It is also why AARP has previously endorsed legislation to ensure that people with preexisting conditions also have access to Medigap coverage, which continues to be AARP’s policy today. In a bipartisan fashion, AARP works with the Trump Administration, Congress and others to lower prescription drug prices, find treatments for dementia, combat fraud against our nation’s vets, fight age discrimination, support family caregivers, and more.”

An October 2018 piece from the Federalist’s Christopher Jacobs, however, is headlined, “How AARP Made Billions Denying Care to People with Pre-Existing Conditions.” In the piece, Jacobs lays out how AARP made billions from the Obamacare loophole that allows Medigap providers to discriminate against people with pre-existing conditions:

Even though an article on AARP’s own website states that, as of 2014, “insurance companies [are] required to sell policies to anyone, regardless of their pre-existing medical conditions,” that claim isn’t quite accurate. Obamacare exempted Medigap supplemental insurance plans from all of its “reforms,” including the prohibition on “discriminating” against individuals with pre-existing conditions.

As a 2011 Washington Post article noted, individuals can apply for Medigap plans when they first turn 65 and become eligible for Medicare. “However, when Congress created this protection in 1992…it exempted disabled Medicare beneficiaries under age 65, a group that now totals 8 million people.”

In other words, the most vulnerable Medicare beneficiaries—those enrolled because they receive Social Security disability benefits—often cannot obtain Medigap coverage due to pre-existing conditions. And because traditional Medicare does not provide a catastrophic cap on patient cost-sharing (Medigap plans often provide that coverage instead), disabled beneficiaries who want to remain in traditional Medicare (as opposed to Medicare Advantage plans offered by private insurers) may face unlimited out-of-pocket spending.

Jacobs’ piece continues later by noting that AARP has made billions off of this loophole in Obamacare that denies people with pre-existing conditions Medigap healthcare coverage:

In July 2009, the Congressional Budget Office (CBO) analyzed a House Democrat bill that, among other things, would have made Medigap coverage available to all individuals, regardless of pre-existing conditions. CBO stated that the Medigap provisions in Section 1234 of the bill would have raised federal spending by $4.1 billion over ten years—a sizable sum, but comparatively small in the context of Obamacare itself.

Contrary to the anonymous staffer’s claims to the Washington Post, if House Democrats truly wanted to end pre-existing condition “discrimination” against individuals with disabilities enrolling in Medicare, they had an easy source of revenue: AARP. As Democrats were drafting Obamacare, in November 2009, the organization wrote in a letter to Rep. Dave Reichert (R-WA) that AARP “would gladly forego every dime of revenue to fix the health care system.”

Since that time, AARP has made quite a few dimes—about 45,090,743,700, in fact—from keeping the health care system just the way it was.

In response to these issues regarding AARP and the Obamacare loophole, the AARP spokesman told Breitbart News that “AARP is not a health insurer and does not sell, provide or administer health insurance.”

But its partner, UnitedHealthGroup, does, and as the financial statements reviewed by the Federalist’s Jacobs show, AARP has benefited greatly from this system flaw.

Aside from the healthcare concerns with AARP, a bigger issue emerging is the potential mishandling of data by the AARP foundation. A November 2018 report by Rebekah Sanders of the Arizona Republic found that AARP may have been seriously mishandling seniors’ personal data when it comes to the information they collect as part of the tax volunteer program–which is taxpayer funded as part of those IRS grants listed above–sharing it eventually with corporate sponsors.

“Tax advisers flee AARP program over data use, privacy concerns,” was the headline on Sanders’ Arizona Republic piece, which cited internal AARP emails finding that dozens of volunteers in the Arizona area quit over concerns that the organization using information collected from doing people’s taxes may be used for nefarious purposes.

“The AARP Foundation plans to shut down five Tax-Aide sites in Scottsdale, Fountain Hills and Cave Creek because dozens of volunteers like Abel have quit over data privacy concerns, according to internal emails obtained by The Arizona Republic,” Sanders wrote. “The volunteers claim AARP is implementing new policies that will force 2.5 million taxpayers nationwide to hand over all of their private taxpayer data to the foundation without protections.”

Later in her piece, Sanders quotes one such volunteer as worried AARP will use the information for corporate partners:

“The bottom line comes down to: We didn’t sign up to be pollsters for AARP,” said Tax-Aide volunteer Bob Schmidt, 75. “We’re in the business to help the taxpayer. That’s why we signed up for it.”

Schmidt also worries the AARP Foundation could sell taxpayers’ data to corporate partners or advertisers.

AARP officials denied this to the Arizona Republic, though:

In response, Tax-Aide’s national director, Lee-Villanueva, said, “IRS policy prohibits us from using any taxpayer information or data for commercial purposes.”

The AARP spokesman also told Breitbart News the law prohibits commercial use of data collected from that program. “By law, the data that the Tax Aide program collects when it helps low-income seniors with their taxes cannot be – and is not – used for marketing,” AARP’s spokesman told Breitbart News.

But given the fact that AARP is part of a group of nonprofits fighting alongside Big Tech companies against a data privacy law in California, those claims by the AARP that it will not mishandle people’s data rings hollow.

A recent report in AdWeek quoted Stephanie McCracken, the CEO of the Nonprofit Alliance–a group of nonprofits that includes the AARP, American Heart Association, and Nature Conservancy among others–as saying that nonprofits need to use data collected in order to fundraise.

“Nonprofits use data to reach beneficiaries, to figure out how to most benefit programs, to figure out where the need is greatest, and to measure our impact in the world,” McCracken said in arguing against the California Consumer Protection Act.

The Nonprofit Alliance is fighting alongside Big Tech companies’ Silicon Valley lobbyists to water down the law before it is implemented in 2020. According to the Washington Post, Facebook, Google, and other Big Tech lobbyists are working hard against the soon-to-be-enacted law in California.

AARP’s efforts against that California law are not the only thing that suggests they do not collect people’s data just for fun. LinkedIn profiles of a number of senior AARP officials describe their roles as literally capturing and manipulating data.

For instance, Michael Cranford–a senior adviser of “advanced analytics and marketing services” for AARP since 2012, describes his role at the company as follows: “Work as a liaison between the for-profit and non-profit data analytics departments to communicate membership demographic data and membership engagement data through intensive data cleansing, manipulation, processing and analytical reporting.”

Shomari McCrimons, who has been at AARP Services for 13 years, including three years as Data Analytics Director for the company, describes on his LinkedIn page his role as: “Work as a liaison between the for-profit and non-profit data analytics departments to communicate membership demographic data and membership engagement data through intensive data cleansing, manipulation, processing and analytical reporting.”

KaQuan Little, a social media coordinator at AARP who previously served as a “Data/Communications Analyst,” described his responsibilities in that previous role as in part having “[t]ransformed large amounts of raw private membership data from an external source into private databases for company access on timely basis.”

Brian Williamson, who left AARP in early 2019 after several years there as a “Principle Strategy Consultant,” says on his LinkedIn page that part of his job at AARP was: “I help my clients better engage with the 50+ population with an emphasis on unlocking the tremendous value of AARP‘s primary research & data assets to serve as the empirical foundation of our communication strategies.”

Then there is Kevin Hawkins, who served as Vice President for Research and Development at OptumInsight from July 2012 to June 2017. OptumInsight is a subsidiary of UnitedHealthGroup–which is AARP-affiliated–and has, per his LinkedIn, a 21-employee division called the “AARP Research and Reporting Team.” On Hawkins’ LinkedIn page, he says he turned it into a revenue-generating machine for AARP.

Hawkins says he was “[b]rought in at the inception of the contract to lead the AARP Research and Reporting team in 2007, today there are 21 employees generating $8.0 million in annual revenue.”

It remains to be seen what happens next on this front, but one former Trump White House official told Breitbart News that focusing on this could be a way for the GOP to take the side of consumers and seniors on healthcare, data privacy, and responsible tax dollar stewardship. It could also, that former Trump White House official said, offer a pathway for the GOP to take on the Democrats on these issues responsibly and effectively. “They’d be stupid not to hold hearings on this on Capitol Hill,” the former Trump White House official said, regarding Senate Republicans.

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