In yesterday’s editorial about how AARP is in the mutual fund business in partnership with Deutsche Bank while opposing President Bush’s plan to allow Americans to invest their Social Security money in personal accounts, we noted in passing that at least one important congressman is starting to ask of the AARP’s leadership, “who elected them?”

In that context, we were intrigued by an item from June of 2001 on the AARP Web site: “To better meet the needs of AARP and the interests of current members, the board has adopted new bylaws. Key changes include the following: There will no longer be a biennial convention (delegate assembly). The board now has authority to amend AARP’s by laws. This will enable the board to take action promptly rather than waiting for ratification of amendments by delegates. Nominees for the board and president-elect will be elected by the current board members.”

In other words, the board elects itself. It’s a self-perpetuating group. The AARP Web site helpfully explains that the old-fashioned system of having the organization’s membership elect its leadership just wasn’t working out. “I’ve been a delegate and I can tell you this is really the direction we need to go,” the site quotes “Chuck Leven, chair of the board Bylaws Committee and former state president of New York,” as saying. “The number of members voting for delegates has dropped considerably over the last decade. Clearly, it’s not perceived as an important benefit among AARP members today.”

The most recently available tax return of the AARP Foundation, a non-profit charitable organization formed under section 501(c)3 of the tax code, reports that the AARP’s executive director, William Novelli, earned $449,698 in compensation in 2003, along with $191,386 in benefits. No doubt he’s worth every cent of it. But not all Americans have such benefits packages from their employers, which is one reason they could use the personal accounts that Mr. Bush is proposing.

The AARP – as opposed to the AARP Foundation – is exempt from taxation as a social welfare membership organization under section 501(c)4 of the tax code. As a 1992 article by Christopher Georges in the then-neo-liberal magazine the Washington Monthly observed, “AARP seems a lot more of a business than a charity or a grassroots lobby. In fact, the organization has in many respects evolved into a giant merchandising company that taxpayers subsidize to the tune of millions of dollars.”

The AARP is spending its members’ money on opposing personal Social Security accounts, even though the accounts wouldn’t affect most of the AARP’s current members, who are too old to be affected by the policy changes. Most of the organization’s members joined the AARP for discounts at hotels and on insurance, not to fund a lobbying campaign against President Bush’s domestic agenda of putting their children’s and grandchildren’s retirement on a sounder financial footing. In an era with a renewed focus on boards’ responsiveness to shareholders, it can’t be long before some enterprising regulator, lawyer, or member-activist takes a careful look at what the AARP’s self-perpetuating board has been up to in the name of the 35 million members that the group claims to represent.