WASHINGTON – The nation's largest senior lobby — AARP (search) — has launched a $5 million ad campaign to stop President Bush's efforts to partially privatize Social Security. AARP is considered a formidable voice on Capitol Hill, but the organization is even more successful at making money.
The nonprofit group has an operating budget of nearly $800 million, without parallel in Washington. AARP also makes millions from royalties, investments and sales of insurance policies and prescription drugs.
"We are not like a corporation. We bring in money in a kind of social enterprise and that money goes into the good work that we do," AARP CEO Bill Novelli (search) told FOX News.
AARP also publishes the largest circulation magazine in the country, from which it earns $77 million in advertising. It also earns $300 million each year in royalties from the use of its name on dozens of consumer products and insurance policies.
"The money that we can make off of the products and services that we can provide to our membership we're able to plug that money right back into AARP, and it enables us, for example, to keep our membership dues low," said David Certner, AARP's federal affairs director.
Membership dues only cost $12.50 per family. AARP collects more than $200 million in dues every year from its 35 million members.
As for AARP's newest crusade to keep private accounts out of Social Security (search), members of Congress are already seeing that message around Capitol Hill. The ad campaign by the organization, which spends tens of millions of dollars on lobbying, calls for a stop to the president's push for allowing young workers to invest a portion of the taxes they pay for the retirement account into the stock market. AARP is likely to spend even more on the campaign than the original $5 million investment.
Some conservatives call it hypocrisy on the AARP's part. The organization manages an investment portfolio of $912 million. In 2003, it invested $737 million of its portfolio in stocks and mutual funds, earning returns of $60 million.
"AARP seems to believe that capitalism is a fine thing as long as they're the only ones practicing it," said Pete Sepp, vice president of communications for the National Taxpayers Union (search).
AARP also collects premiums from members who buy AARP-approved insurance. Before turning the money over to the insurance companies, however, AARP invests it in short-term securities. In 2003, this maneuver raked in $24 million.
"AARP is the emperor with no clothes. How can an organization so heavily invested in the stock market tell others they can't do it?" Sepp said.
AARP says it doesn't oppose seniors investing in the stock market. It just wants to keep accounts out of Social Security.
"What we've said, and I think what our ads try to point out, is that there is a place in your retirement portfolio for risk and a place where there is, such as Social Security, where risk is not appropriate," Certner said.
For years, AARP was thought of as a lobbying powerhouse, but not so much anymore. Republicans say its endorsement of the president's Medicare (search) prescription drug bill didn't move any votes at all. More and more lawmakers say that was because AARP now appears more interested in making money than in moving votes.
Click in the box near the top of the story to watch a report by FOX News' Major Garrett.