SENATE COMMITTEE BEGINS ITS HEARINGS INTO AARP DEALINGS

One of the biggest and best-financed lobbying organizations, the one that represents some 33 million Americans age 50 or older, is being asked to explain some of its operations to the Senate Finance Committee in hearings scheduled to start today. Among the areas of questioning will be the American Association of Retired Persons' multimillion-dollar business enterprises and its not-for-profit tax status.

The AARP was started in 1958 to represent concerns of the elderly in the labyrinth of the federal government. That was before Medicare, and the AARP sought to meet the needs of older Americans who couldn't purchase health insurance anywhere else.

Since then, the AARP has become a major provider of insurance and related services. Those commercial enterprises produced some $173 million of the organizations total revenue of $382 million in 1994. Other major revenue sources were dues ($146 million), advertising ($47 million) and its mail-order pharmacy ($4 million).

Senators led by Alan K. Simpson, chairman of the Finance Committee, are interested in knowing if the AARP's lucrative businesses jeopardize its tax-exempt status, on which the organization has spent millions of dollars to protect. For example, last year the AARP paid the IRS $135 million in lieu of taxes on revenue from its insurance operations. It also paid the Postal Service $2.8 million to settle claims that it improperly used its not-for-profit mailing privileges in 1991 and 1992.

At the heart of the congressional interest in the AARP, however, is its welfare-state mentality. Even though the organization says its activities and policy positions are based on frequent membership polls and public forums, there was considerable backlash when it endorsed the Clinton administrations doomed health-reform plan.

Because of its size and the political involvement of its members (older Americans are among the most frequent voters of any age category), the AARP has considerable clout. Many leaders of the Republican-controlled Congress believe the AARP's top brass is out of touch with the mainstream of older Americans, who tend to be conservative, both in financial matters and political philosophy.

The AARP eventually may be forced to separate its activities in order to satisfy federal regulators and policymakers. Some of its commercial operations are clearly money-making enterprises, which may need to be cut loose from its lobbying and influence-peddling activities as a major influence-peddling group.

Meanwhile, many older Americans, who once joined the AARP almost automatically in order to take advantage of discounts and special member-only specials, are electing not to join the organization. Some feel the group no longer represents Americans who are retired or are winding down their careers and, instead, is pursuing a political and profit-oriented path that is opposite the original concept of an organization that was intended to represent them faithfully and honestly.