August 06, 2020
We’ve known for some time that Letitia James, the attorney general (AG) of the State of New York, has been investigating the National Rifle Association (NRA). The plot thickened on August 6, 2020, when AG James filed a lawsuit against the NRA, as well as four current and former staff members in the state’s the Supreme Court. The 164-page complaint contains detailed examples alleging financial abuses characterized as “greed, abuse and blatant illegality” by NRA’s top leadership. Assuming the claims in the complaint can be verified as facts, there may be serious problems for the gun-rights and shooting-sports-advocacy organization.
AG James is no friend to gun owners, and there are undoubtedly political motivations to this lawsuit. Nonetheless, the assertions contained in the complaint are staggering in their scale and scope. This lawsuit names the NRA as a defendant as well as Executive Vice President (EVP) Wayne LaPierre; John Frazer, NRA’s general counsel; Josh Powell, NRA’s former chief-of-staff and Wilson “Woody” Philips, the association’s former treasurer. The lawsuit seeks the judicial dissolution of NRA along with millions of dollars in restitution on the part of the named defendants.
NRA is and always has been a New York-chartered corporation, since 1871, which gives the state’s AG jurisdiction to investigate any breaches of state law or regulation. Using these broad powers, the AG launched an investigation into NRA’s financial and governance, requesting documents and deposing various high-level NRA officials. The results of this 18-month investigation are nothing short of damning. It appears as though NRA’s leadership, under the direction of EVP LaPierre, diverted millions of dollars to individuals for personal gain, to the detriment of the members who sent-in their hard-earned dollars hoping to preserve the Second Amendment and related activities.
The allegations are almost too many to name, but they include blatant abuses of member assets such as secretive “consulting agreements” with former employees and current board members; millions of dollars spent on personal travel for LaPierre and his extended family; lavish expense accounts charged back to the company using outside consultants; and exorbitant salaries for senior staff, many of which appear grossly unqualified for their jobs. Among those consulting firms was Ackerman-McQueen, which billed NRA for $70 million during the 2017 to 2018 period alone. These expenditures resulted in a dwindling of NRA’s assets from “a surplus of $27,802,714 in 2015 to a net deficit of $36,276,779 in 2018 — contributing to a total loss of more than $64 million in just three years.”
The complaint also alleges retaliation by NRA against Lt. Col. Oliver North (ret.), who served as the organization’s president for a single term ending abruptly in 2019. North allegedly tried to call attention to the financial impropriety and lack of oversight and was subsequently ousted by LaPierre’s loyalists on the organizations’ Board of Directors. Many of these individual board members, some of whom were vocal critics of Col. North at the time, turned out to have undisclosed consulting agreements worth hundreds of thousands of dollars. All in all, Col. North emerges as the heroic figure in this tragic story.
A civil complaint is just that — a complaint. The defendants will have their chance to respond. The complaint is quite specific, however, and even if it has been exaggerated for political purposes, it is still beyond the pale. At the reported $2 million per month that NRA is paying its lawyers, the response won’t come cheap. The losers in this story will be American gun owners who thought they were making contributions to a noble cause. Those contributions were allegedly wasted with little regard for even the appearance of propriety. It is gun owners who will suffer from the NRA’s downfall. Even if the association survives, it will do so with severe damage to its reputation, financial position, and ability to influence public policy.
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