New York: New York’s Attorney-General is suing the National Rifle Association, seeking to put the gun advocacy organisation out of business over allegations that executives engaged in a decades-long pattern of fraud.
Attorney-General Letitia James’ lawsuit, filed in state court in Manhattan on Thursday after an 18-month investigation, highlights allegations that have roiled the NRA and its longtime leader, Wayne LaPierre.
Allegations of financial misuse range from hair and makeup for LaPierre’s wife to a $17 million ($23.6 million) post-employment contract for himself.
Simultaneously, the Washington, DC, Attorney-General sued the NRA Foundation, a charitable arm of the organisation designed to provide programs for firearm safety, marksmanship and hunting safety, accusing it of diverting funds to the NRA to help pay for lavish spending by its top executives.
The troubles, which James said were long cloaked by loyal lieutenants and a pass-through payment arrangement with a vendor, started to come to light as the NRA’s deficit piled up and it struggled to find its footing after a spate of mass shootings eroded support for its pro-gun agenda. The organisation went from a nearly $US28 million surplus in 2015 to a $US36 million deficit in 2018.
James, a Democrat, argued that the organisation’s prominence and cozy political relationships had lulled it into a sense of invincibility and enabled a culture where non-profit rules were routinely flouted and laws violated. Even the NRA’s own bylaws and employee handbook were ignored, she said.
“The NRA’s influence has been so powerful that the organisation went unchecked for decades while top executives funnelled millions into their own pockets,” James said.
“The NRA is fraught with fraud and abuse, which is why, today, we seek to dissolve the NRA, because no organisation is above the law.”
A spokesman for the NRA’s legal team had no immediate comment.
Though it has its headquarters in Virginia, the NRA was chartered as a non-profit in New York in 1871 and continues to be incorporated in the state.
The Washington, DC Attorney-General has been investigating the NRA Foundation for more than a year. It said its investigation determined that low membership and lavish spending left the NRA with financial problems and so it exploited the foundation to remain afloat.
“Charitable organisations function as public trusts – and District law requires them to use their funds to benefit the public, not to support political campaigns, lobbying, or private interests,” Washington Attorney-General Karl Racine said.
“With this lawsuit, we aim to recover donated funds that the NRA Foundation wasted.”
The New York lawsuit named LaPierre and three other current and former executives as defendants: corporate secretary and general-counsel John Frazer, retired treasurer and chief financial officer Wilson Phillips, and LaPierre’s former chief of staff Joshua Powell.
While the lawsuit accuses all four men of wrongdoing and seeks fines and remuneration, none of them have been charged with a crime.
LaPierre, who has been in charge of the NRA’s day-to-day operations since 1991, is accused of spending millions of dollars on private travel and personal security, accepting expensive gifts such as African safaris and use of a 107-foot yacht from vendors and setting himself up with a $US17 million contract with the NRA, if he were to exit the organisation, without board approval.
The lawsuit said LaPierre spent millions of the NRA’s dollars on travel consultants, luxury car services and private jet flights for himself and his family, including more than $US500,000 on eight trips to the Bahamas over a three-year span.
Some of the NRA’s excess spending was kept secret, the lawsuit said, under an arrangement with the organisation’s former advertising agency, Ackerman McQueen.
The advertising firm would pick up the tab for various expenses for LaPierre and other NRA executives and then send a lump sum bill to the organisation for “out-of-pocket expenses,” the lawsuit said.
Frazer, the corporate secretary and general counsel, is accused of aiding the alleged misconduct by certifying false or misleading annual regulatory filings, failing to comply with governance procedures, failing to enforce a conflict of interest policy, and failing to ensure that board members were reviewing transactions or that the the organisation was following the law.
Phillips is accused of overseeing the pass-through arrangement. The lawsuit said he ignored or downplayed whistleblower complaints and made a deal to enrich himself in retirement – a bogus $US1.8 million contract to consult for the incoming treasurer and a deal worth $US1 million for his girlfriend.
Powell, the former LaPierre chief of staff, is accused of getting his father a $US90,000 photography gig through an NRA vendor, arranging a $US5 million contract for a consulting firm where his wife worked and pocketing $US100,000 more in housing and relocation reimbursements than the organisation’s rules allowed. He was fired after 3½ years for allegedly misappropriating NRA funds.
A critical time for the NRA
The lawsuit comes at a time when the NRA is trying to remain relevant and a force in the 2020 presidential election as it seeks to help US President Donald Trump secure a second term.
Trump on Thursday encouraged the NRA to relocate to Texas, hinting that the state would be less hostile than New York or Washington.
There has been an ongoing factional war within organisation, pitting some of its most ardent gun-rights supporters and loyalists against one another. The NRA has traded lawsuits with Ackerman McQueen, which crafted some of its most prominent messages for decades, eventually severing ties with it last year and scrapping its controversial NRA-TV, which aired many of its most controversial messages.
The internal battles reached a fevered pitch at its 2019 annual meeting where its then-president Oliver North was denied a traditional second term amid a tussle with LaPierre as he sought to independently review the NRA’s expenses and operations. He accused LaPierre of exerting “dictatorial” control.
Chris Cox, the NRA’s longtime lobbyist and widely viewed as a likely successor to LaPierre, left after being accused of working behind the scenes with North to undermine LaPierre.
AP, Washington Post, Reuters