ALEXANDRIA, Va.Clearly something must be up with AARP.

Why else would the nation's largest lobbying organization, sworn to protect the interests of senior citizens, watch silently as Congress plans to cut Medicare spending by $400 billion to pay for its health reform legislation? Could it be that the interests of seniors and AARP are not exactly aligned?

Let's follow the money. AARP takes in more than half of its $1.1 billion budget in royalty fees from health insurers and other vendors that market services with the organization's name. Medicare supplementary policies, called "Medigap" plans, make up the biggest share of this royalty revenue.

AARP has an interest in selling more, not fewer, Medigap plans, of course. But there is a competitor on the block. A growing number of seniors are enrolling in a new form of Medicare coverage Medicare Advantage where they don't need Medigap.

"There's an inherent conflict of interest," former AARP executive Marilyn Moon says of AARP's royalty arrangements. "They're ending up becoming very dependent on sources of income."

Tens of thousands of seniors have resigned from AARP, many of them cutting up their membership cards to protest the organization's promotion of health reform.

The new chief executive officer of AARP, Barry Rand, who was a strong supporter of President Obama during last year's presidential campaign, says AARP is not protesting the Medicare cuts because reducing waste and fraud in Medicare will make the program stronger over the long term.

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