Andy Rooney, CBS 60 Minutes, and Leonard Davis

For shareholders to understand Cyanotech, they must know about Michael Arlen Davis (MAD). To know about MAD is to know that he learned his life lessons from his father,
the controversial AARP co-founder Leonard Davis. CBS 60 Minutes journalist Andy Rooney paints a scathing picture of Leonard Davis in his excellent memoir,  Sincerely, Andy Rooney,   Andy Rooney was one of the most trusted and respected journalists of the post-Watergate era. It is a great read. (Click on the image to the right for info.)

Mr Rooney’s commentary on Leonard Davis in Sincerely, Andy Rooney follows below. The excerpt is an example of Mr Rooney at his best:


"In 1978 I was in Washington doing a short television report on the great number of organizations that have their headquarters there. The American Association of Retired Persons had its name carved in stone across the top of its building and the cameraman was photographing that when someone emerged from the building and ordered us to stop. I thought that was strange and decided to look further into an organization I knew nothing about, the AARP. They did everything they could to keep us from the facts.

A member of one of the country’s most prominent law firms, representing the AARP, wrote a letter to the president of CBS News, Richard Salant, hoping to discourage the broadcast. Salant forwarded the letter to me to answer. Here is what I said:

Journalist Andy Rooney
Mr. Stuart Robinowitz
Paul, Weiss, Rifkind, Wharton & Garrison
New York, New York

Dear Mr. Robinowitz,

On several occasions recently I have heard statements that apparently originated from AARP Headquarters or those of Colonial Penn Insurance Company, suggesting that the report I am doing on the relationship between the retired people associations and the insurance group has not been done according to the highest journalistic standards.

These suggestions are personally disturbing and professionally damaging to me. Your letter to the president of CBS News, in advance of the broadcast of the report, indicating that it may be inaccurate because of “the manner in which this program was produced,” is a serious charge. 

To state that I set out to make this report with any intention except to ascertain the facts of the matter is wrong. I make my living as a writer and a reporter. I am in no doubt about the ethical standards of my profession and am not ambivalent about my determination to stand by them. To say that I have only gone to sources who have a negative attitude toward the relationship between the AARP and Colonial Penn ignores the fact that I made repeated attempts to film interviews with the principals, Leonard Davis, the originator of the plan to use the AARP as a sales tool for Colonial Penn, Cyril Brickfield, president of the AARP and John MacWilliams, president of the insurance company.

My report on the AARP was broadcast and it forced major changes in the organization, they dropped Colonial Penn as their insurance company and signed on with Prudential. In 1996, I read that the AARP was ending that association and taking on a new insurance company and couldn’t resist reviewing the experience I’d had doing the 60 Minutes report in a column.

The headline most newspapers used was: THERE’S GOLD IN THE OLD

The text follows:

There’s big money in old folks if you get enough of them to buy your product. No organization knows this better than the AARP, the American Association of Retired Persons, with thirty-five million members. 

I’m plenty old enough to belong to the AARP—they’ve reduced the age requirement to fifty—but I’ve never joined. I’m prejudiced against the AARP because of the bad start it got. People tell me all that is in its dark past and I know it’s unfair but my negative feeling about the gigantic association won’t go away.

The AARP was started in 1958 by an insurance salesman named Leonard Davis after he met an elderly woman named Ethel Percy Andrus who had been working to help teachers with medical insurance through an organization called The National Association of Retired Teachers.

Davis recognized a good thing when he saw it and realized the market for insurance sales to old people wasn’t limited to teachers. He wanted to expand it to include “persons” so he put up $50,000 to establish the AARP.

This was not an eleemosynary institution (e.g. not charitable; not relating to or dependent on charity)  Andrus’s interest was old people; Davis’s interest was money. He put together the Colonial Penn Insurance Company which he made certain, through several legal maneuvers, was in firm control of the AARP. He then started using it, through its magazine Modern Maturity, as a sales tool for insurance policies.

Leonard Davis made hundreds of millions of dollars from the sale of insurance policies to AARP members. For several years, Colonial Penn was the single most profitable company in the United States even though the policies it sold to AARP and NRTA members were rated “poor.”

Andy Rooney was revered for his trustworthiness
Davis’s plan was a deviously ingenious sales scheme. The AARP was not much more than a front for his insurance company. At local AARP meetings around the country, volunteers set up desks to sell insurance. They didn’t even have to pay salespeople. They conned members into thinking they were doing charitable work. The AARP office in Washington did not even have a list of its own members. That membership was kept under lock and key in the offices of the Colonial Penn Insurance Company.

After a 60 Minutes report exposing all this was broadcast in 1978, the AARP got rid of Colonial Penn and signed up with the Prudential Insurance Company.

Just last week the AARP ended its eighteen-year association with Prudential and has given its $4 billion contract to the United Healthcare Corporation. I know nothing about the arrangement except you can bet that the AARP will be taking a 3 percent kickback from every single premium its members pay. Nothing illegal there. It’s just that I still have a bad taste in my mouth.

People have told me of the good things the AARP does and I believe them. Cyril Brickfield, a lawyer and an important part of the Leonard Davis machine that so efficiently ran the AARP for its own profit, finally left a few years ago with an exit fee so large the AARP won’t say what it was.

The AARP’s current executive director is a former Catholic priest and longtime AARP employee named Horace Deets. He was hired twenty years ago by Harriet Miller, then the director, who was fired when she openly disapproved of what Leonard Davis was doing.

She won a $445,000 lawsuit against the AARP and is now, of all things mayor of Santa Barbara, California. Leonard Davis lives in Florida. I don’t think they exchange greeting cards.

People speak highly of Deets but I am not at ease with anyone who accepted the heavy hand of Leonard Davis for so long.

The most prickly thorn in the AARP’s side now is Sen. Alan Simpson. The AARP enjoys tax exemption and nonprofit mailing privileges that amount to millions of dollars a year and Simpson has tried to have them taken away. He claims that AARP publications and mailings are ads for their many business enterprises and should be taxed and that their mailings should bear stamps like any other for-profit company’s mail.

The AARP does have a lot of income-producing sidelines. As a small example, AARP members get a reduced rate if they rent a car from Hertz or Avis and the AARP, in turn, collects 5 percent of what members pay the rental company. It’s still a good deal for members.

Simpson’s opponents claim his is a political vendetta being waged against the AARP because he feels the organization has generally supported Democratic causes. In view of this criticism which they don’t want to spread and ruin their lobbying efforts in Congress, the AARP has been neutral to the point of paranoia during the current Presidential race.

Maybe I’ll join the AARP when they lower the age limit to forty-five.

You can understand why the current AARP management wasn’t pleased and I got an angry letter from a representative which I answered.

Andy Rooney was "The Man"
James R. Holland
American Association of Retired Persons
Washington, D.C.

Dear Mr. Holland,

While I understand why you disliked my column looking into the American Association of Retired Persons’ not-so-distant past, I thought the occasion of a change in its insurance connection was good reason to remind people of what it had been so that they might be wary of it in the future. Wary is all I suggest.

My experience reporting on the AARP in 1978 was one of the most memorable of my life—that’s a life that included three years reporting WW II. What the AARP was I think current members should be unaware of it.

The AARP’s behavior in those years was despicable, dishonest and unforgivable. It seems likely that things have changed but I would want to start all over and have a close look at all aspects of the operation before I could endorse it.

Your suggestion that the AARP has turned itself into an eleemosynary institution is persuasive. I hope you are right and I am anxious to believe you. There certainly is a need for what the AARP purports to be. 

You are missed Andy Rooney