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Sunday, October 14, 2012

AAA Carolinas: what is it, really?

When we had small children and I was frequently out of town on business, we joined AAA so that someone would be available in case of a dead battery, flat tire, etc. On several such occasions, AAA came in handy. The kids have since moved out, but we are still AAA members -- in part because Gail is on the road 120 miles every workday, in part because I'm often out of the country on business.

During this period AAA Carolinas has morphed into something that I don't understand. Several years ago, members received a solicitation from management to revise the bylaws of AAA. Under the proposal, members would no longer be "members" as defined by North Carolina General Statutes 55A, the North Carolina Nonprofit Corporation Act as amended. I didn't think much about it at the time, and I voted for it. So did a majority of members.

What has emerged: an ambitious non-profit that owns and operates garages, started its own organic towing company, purchased an insurance company, and engages in Lord knows what else. NC law does not require non-profit corporations to file a detailed annual report with the NC Secretary of State. Because members of AAA Carolinas are no longer "members" under NCGS 55A, we are no longer entitled to receive an annual report from management and we no longer vote to elect the board of directors, which is self-perpetuating. Because AAA Carolinas -- the actual corporate name of which is Carolina Motor Club, Inc. -- is not a charity, it need not file an annual Form 990 with the IRS. About all one can find on the Internet is the current Articles of Incorporation.

Consequently there is no way for the 1.8 million members of AAA Carolinas to know what the businesses of AAA Carolinas actually are, nor is there any way to see if compensation of officers at AAA Carolinas is consistent with compensation at other non-profits, nor to determine what other persons or entities may be benefiting from this rapid expansion, nor to see whether AAA Carolinas unfairly competes against for-profit businesses, nor to ascertain how much cross-subsidization is taking place between AAA Carolinas' diverse lines of business. I have nothing against expansion, and I do not know of anything amiss at AAA Carolinas. But given the new opacity of the corporation, I wonder. All that money has to be going somewhere.

By the way, my experience with AAA Carolinas garages is that while they do good work, they are relentless upsellers. (I have the same complaint about Wells Fargo.) When I get a simple oil change, I don't want to hear 101 things that I allegedly should do to my car of 100,000+ miles.