KEYA VAKIL
AUGUST 6, 2020
National Rifle Association Executive Vice President and CEO Wayne LaPierre speaks at Conservative Political Action Conference. (AP Photo/Jose Luis Magana)
New York AG moves to dissolve the organization, citing Trump Foundation case as precedent.
New York State Attorney General Letitia James on Thursday filed a lawsuit against the National Rifle Association, seeking to dissolve the anti-gun safety lobbying group over a years-long pattern of fraud, financial crimes, and corruption.
The lawsuit alleges that top NRA executives, including chief executive Wayne LaPierre, engaged in 18 criminal offenses, including fraudulently using charitable funds for their own personal gain and providing millions of dollars in contracts to friends, family members, ex-employees, and ex-board members.
“It’s clear that the NRA has been failing to carry out its stated mission for many, many years and instead has operated as a breeding ground for greed, abuse, and brazen illegality,” James said in a press conference on Thursday. “No one is above the law, not even the NRA, one of the most powerful organizations in this country.”
The investigation is just the latest example of groups allied with President Donald Trump running afoul of the law. The New York Attorney General’s office specifically named their investigation into President Trump’s charitable foundation as precedent to dissolve the NRA. That case forced his organization to shut down in 2018 amid allegations that Trump used the foundation for his own personal and political gain, including to help his 2016 presidential campaign by funding giveaways at Iowa rallies.
James mentioned that case in explaining why she was filing a suit to dissolve the NRA. “The corruption was so broad and because they have basically destroyed all the assets of the NRA,” she said. “We needed to dissolve this organization just as we did the Trump foundation.”
And on Wednesday, the New York Times reported that the president’s longtime lender, Deutsche Bank, turned over Trump’s financial records after the Manhattan District Attorney’s office issued a subpoena last year as part of their investigation into Trump’s business practices. The request signaled that their investigation into Trump has expanded into potential business and insurance fraud.
James said the NRA investigation, which began in February 2019, found the group’s financial misconduct led to a loss of more than $64 million over a three-year period for the non-profit organization. The lawsuit asks the court to order that LaPierre and other executives make “full restitution” for the funds they misused, pay financial penalties, and be barred from ever again serving on a charitable board in the state of New York.
BREAKING: @NewYorkStateAG has filed a lawsuit to dissolve the @NRA, claiming its leaders exploited the company for personal gain. pic.twitter.com/Oza5bDakF1— COURIER (@CourierNewsroom) August 6, 2020
The lawsuit could have enormous political consequences, given the NRA’s history of political influence and financial support of right-wing candidates. The organization spent more than $50 million boosting now-President Donald Trump and Senate Republicans during the 2016 election, according to an audit obtained by the Center for Responsive Politics.
James has jurisdiction over the NRA because it is chartered as a nonprofit in New York, and her lawsuit sets up what is sure to be a contentious legal dispute that could take years to be decided. In a statement released shortly after James’ press conference, the NRA blasted the lawsuit as a “baseless, premeditated attack” and vowed to fight the lawsuit.
According to James, LaPierre was the ringleader of the scheme, engaging in rampant misuse of funds. “Mr. LaPierre exploited the organization for his and his family’s financial benefits and the benefit for a close circle of NRA staff, board members, and vendors,” she said.
LaPierre, who has led the NRA for 39 years, is accused of spending more than $500,000 in the NRA’s funds to pay for at least eight family trips to the Bahamas over a three-year period. LaPierre also billed a vendor for “multiple luxury hunting safaris in Africa” and spent more than $3.6 million on travel agent services in just the past two years, according to the lawsuit.
The filing also names NRA general counsel John Frazier, former chief financial officer Woody Phillips, and former chief of staff Joshua Powell, for allegedly misusing “millions upon millions of dollars from the NRA for personal use, including for lavish trips for themselves and their families, private jets, expensive meals, and other private travel.”
The lawsuit represents a potentially fatal blow for the powerful gun rights group, which has more than 5 million members, but has already experienced financial struggles and inner turmoil in recent years. A secret recording of an NRA board meeting obtained by NPR in April showed LaPierre saying that the NRA’s previous legal troubles—which include congressional inquiries, state investigations, internal whistleblower complaint, and a contentious dispute with its former public relations firm—had cost the organization $100 million.
“The cost that we bore was probably about a hundred-million-dollar hit in lost revenue and real cost to this association in 2018 and 2019,” LaPierre said, according to a tape recorded by someone in the room. “I mean, that’s huge.”
The group has also been involved in a dispute with its long-time public relations firm, Ackerman McQueen, which James’ suit claims was intimately involved in the NRA’s fraud. The filing claims that the groups secretly agreed that LaPierre and his allies would pass through lavish personal expenses and other questionable spending to the Oklahoma-based firm, which would then bill the NRA for those costs, calling them “out-of-pocket expenses,” indicating they were related to the company’s work for the gun rights group.
The goal of the scheme, James alleges, was to prevent the Board of the NRA or other members from knowing that the organization was paying for LaPierre’s personal spending. In 2017 and 2018 alone, Ackerman McQueen billed the NRA $70 million, with a large chunk of these expenses coming from LaPierre’s personal trips and expenses. The relationship between the companies has splintered over the past two years, with the NRA suing Ackerman McQueen over hiding details of its billing records.
Collectively, these issues have pushed the NRA out of the limelight in 2020 and tarnished the group’s reputation among some.
President Trump, however, defended the group on Thursday, calling the lawsuit a “terrible thing” and urging the NRA to move to Texas to avoid investigation.
Trump laments the lawsuit by NY AG Letitia James to dissolve the NRA as a "terrible thing." Trump urges the NRA to move to Texas or another state to avoid the legal scrutiny from law enforcement.
The NRA spent millions in 2016 to promote Trump's presidential campaign. pic.twitter.com/X2Iyj1aSre— The American Independent (@AmerIndependent) August 6, 2020
Trump, of course, is no stranger to lawsuits.
Manhattan DA Cyrus Vance’s investigation initially appeared to be focused on Trump’s 2016 hush money payments made to women who claim they had affairs with him. But The Times’ report indicated that the investigation might be broader. In a court filing this week, prosecutors with the DA’s office cited “public reports of possibly extensive and protracted criminal conduct at the Trump Organization” and indicated they were also investigating possible crimes involving bank and insurance fraud.
That investigation remains ongoing, and like the NRA case, could take years to play out.
NY Sues to Dissolve the NRA, Accusing Top Execs of Fraud
National Rifle Association members listen to speakers during the a 2013 meeting at the George R. Brown Convention Center in Houston. (Johnny Hanson/Houston Chronicle via AP, File)
MANHATTAN (CN) — Employing the same move that helped shutter the Trump Foundation, New York Attorney General Letitia James filed a lawsuit Thursday to dissolve the National Rifle Association.
“The NRA’s influence has been so powerful that the organization went unchecked for decades while top executives funneled millions into their own pockets,” James said in a statement this morning. “The NRA is fraught with fraud and abuse, which is why, today, we seek to dissolve the NRA, because no organization is above the law.”
Spanning a novel-length 163 pages, the lawsuit accuses four NRA executives of looting the nonprofit that has operated in New York since 1871.
“The central figure behind this scheme was none other than Wayne LaPierre,” James told reporters at a press conference this morning, referring the NRA’s chief executive. “Mr. LaPierre exploited the organization for his and his family’s financial benefit.”
Itemizing private jet trips to the tropics and African safaris — all allegedly on the donors’ dime — James said LaPierre used the NRA as his “personal piggy bank.”
“In the last five years, LaPierre and his family have visited the Bahamas by private air charter on at least eight occasions, at a cost of more than $500,000 to the NRA,” the complaint states. “On many of those trips, LaPierre and his family were gifted the use of a 107-foot yacht owned by an NRA vendor.
“LaPierre received hundreds of thousands of dollars in gifts from another NRA vendor in the form of complimentary safaris in Africa and other world-wide locations for himself and his spouse,” it continues.
MANHATTAN (CN) — Employing the same move that helped shutter the Trump Foundation, New York Attorney General Letitia James filed a lawsuit Thursday to dissolve the National Rifle Association.
“The NRA’s influence has been so powerful that the organization went unchecked for decades while top executives funneled millions into their own pockets,” James said in a statement this morning. “The NRA is fraught with fraud and abuse, which is why, today, we seek to dissolve the NRA, because no organization is above the law.”
Spanning a novel-length 163 pages, the lawsuit accuses four NRA executives of looting the nonprofit that has operated in New York since 1871.
“The central figure behind this scheme was none other than Wayne LaPierre,” James told reporters at a press conference this morning, referring the NRA’s chief executive. “Mr. LaPierre exploited the organization for his and his family’s financial benefit.”
Itemizing private jet trips to the tropics and African safaris — all allegedly on the donors’ dime — James said LaPierre used the NRA as his “personal piggy bank.”
“In the last five years, LaPierre and his family have visited the Bahamas by private air charter on at least eight occasions, at a cost of more than $500,000 to the NRA,” the complaint states. “On many of those trips, LaPierre and his family were gifted the use of a 107-foot yacht owned by an NRA vendor.
“LaPierre received hundreds of thousands of dollars in gifts from another NRA vendor in the form of complimentary safaris in Africa and other world-wide locations for himself and his spouse,” it continues.
National Rifle Association Executive Vice President and CEO Wayne LaPierre speaks at the 2020 Conservative Political Action Conference at the National Harbor, in Oxon Hill, Md., on Feb. 29. (AP Photo/Jose Luis Magana, File)
James even notes how the TV hunting show “Under Wild Skies” documented several of these free trips before its producers sued the NRA last September.
“LaPierre and his wife regularly appeared in episodes of Under Wild Skies, traveling to and participating in big game hunts in the United States, Botswana, Tanzania, South Africa, Zimbabwe, Mozambique, Argentina, and Uruguay,” New York’s complaint states. “The expenses associated with these trips — including professional hunter costs, camps, chartered in-continent travel, food and beverages, hunting licenses, trophy fees, and taxidermy — were incurred by UWS.”
In the New York case, the NRA and LaPierre are joined as defendants by the NRA’s former treasurer and chief financial officer Wilson “Woody” Phillips, chief of staff and the executive vice president of operations Joshua Powell, and general counsel Joshua Frazer.
The complaint says Phillips tripled his salary in less than three years, despite allegations of abusive and illegal conduct, and Frazier failed during his brief 18-month tenure to enforce whistleblower protections and conflict-of-interest policies.
“Efforts to question or challenge LaPierre’s leadership were quashed or ignored,” the complaint states. “LaPierre retaliated against the NRA president after personally lobbying him to take on the position. LaPierre withdrew his critical support after the president began to independently assess the governance of the NRA upon learning of complaints by whistleblowers, senior staff and donors.”
This appears to be a reference to Oliver North, whom the NRA accused last year of planning a “failed coup attempt” with their longtime public relations firm Ackerman McQueen, an entity labeled by the attorney general as a pass-through for hiding improper expenditure and self-dealing.
“Payment of these expenses also violated IRS rules governing reporting of income for each of the recipients on their W-2 forms, exposing the NRA to penalties for false filings and for under-withholding of taxes due,” the new complaint alleges.
Describing her investigation as ongoing, James did not reveal whether she referred criminal charges for the alleged federal tax violations.
Beset by internal turmoil, in-fighting and a Mueller-era prosecution shining a light on Russian government infiltration of their organization, the NRA saw its record of alleged financial mismanagement documented by multiple lawsuits at the same time James announced her investigation publicly.
James referred to the group as a “terrorist organization” during her run for attorney general, but her lawsuit describes the gun group’s donors as the victims of these practices.
“The effect has been to divert millions of dollars away from the charitable mission, imposing substantial reductions in its expenditures for core program services, including gun safety, education, training, member services and public affairs,” her complaint states.
NRA President Carolyn Meadows quickly denounced the lawsuit as an election-year stunt.
“This was a baseless, premeditated attack on our organization and the Second Amendment freedoms it fights to defend,” Meadows said in a statement. “You could have set your watch by it: The investigation was going to reach its crescendo as we move into the 2020 election cycle. It’s a transparent attempt to score political points and attack the leading voice in opposition to the leftist agenda.”
Wasting little time on a counterattack, the NRA sued James in Albany this afternoon, claiming the new lawsuit against it in Manhattan violates the First Amendment rights of its more than 5 million members.
“This has been a power grab by a political opportunist — a desperate move that is part of a rank political vendetta,” Meadows said. “Our members won’t be intimidated or bullied in their defense of political and constitutional freedom.”
James is hardly alone in alleging a culture of fraud in the gun group as former NRA insiders and associates rush forward with supporting allegations.
In a separate Thursday suit, Karl Racine, the attorney general in Washington, D.C., seeks to have the NRA’s diverted assets governed by a constructive trust.
“Charitable organizations 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,” Racine said in a statement. “With this lawsuit, we aim to recover donated funds that the NRA Foundation wasted. District nonprofits should be on notice that the Office of the Attorney General will file suit if we find evidence of illegal behavior.”
Founded in New York, the NRA has much less to lose from the lawsuit filed in the nation’s capital, and Racine has not faced the same kind of personal attack as James, who brushed aside claims of political motivations.
“We follow the facts and the law,” James said at her press conference. “We come to conclusions of law.”
She filed the case in Manhattan Supreme Court, where a similar lawsuit filed by her predecessor led to a $2 million settlement with a now-defunct Trump Foundation.
James even notes how the TV hunting show “Under Wild Skies” documented several of these free trips before its producers sued the NRA last September.
“LaPierre and his wife regularly appeared in episodes of Under Wild Skies, traveling to and participating in big game hunts in the United States, Botswana, Tanzania, South Africa, Zimbabwe, Mozambique, Argentina, and Uruguay,” New York’s complaint states. “The expenses associated with these trips — including professional hunter costs, camps, chartered in-continent travel, food and beverages, hunting licenses, trophy fees, and taxidermy — were incurred by UWS.”
In the New York case, the NRA and LaPierre are joined as defendants by the NRA’s former treasurer and chief financial officer Wilson “Woody” Phillips, chief of staff and the executive vice president of operations Joshua Powell, and general counsel Joshua Frazer.
The complaint says Phillips tripled his salary in less than three years, despite allegations of abusive and illegal conduct, and Frazier failed during his brief 18-month tenure to enforce whistleblower protections and conflict-of-interest policies.
“Efforts to question or challenge LaPierre’s leadership were quashed or ignored,” the complaint states. “LaPierre retaliated against the NRA president after personally lobbying him to take on the position. LaPierre withdrew his critical support after the president began to independently assess the governance of the NRA upon learning of complaints by whistleblowers, senior staff and donors.”
This appears to be a reference to Oliver North, whom the NRA accused last year of planning a “failed coup attempt” with their longtime public relations firm Ackerman McQueen, an entity labeled by the attorney general as a pass-through for hiding improper expenditure and self-dealing.
“Payment of these expenses also violated IRS rules governing reporting of income for each of the recipients on their W-2 forms, exposing the NRA to penalties for false filings and for under-withholding of taxes due,” the new complaint alleges.
Describing her investigation as ongoing, James did not reveal whether she referred criminal charges for the alleged federal tax violations.
Beset by internal turmoil, in-fighting and a Mueller-era prosecution shining a light on Russian government infiltration of their organization, the NRA saw its record of alleged financial mismanagement documented by multiple lawsuits at the same time James announced her investigation publicly.
James referred to the group as a “terrorist organization” during her run for attorney general, but her lawsuit describes the gun group’s donors as the victims of these practices.
“The effect has been to divert millions of dollars away from the charitable mission, imposing substantial reductions in its expenditures for core program services, including gun safety, education, training, member services and public affairs,” her complaint states.
NRA President Carolyn Meadows quickly denounced the lawsuit as an election-year stunt.
“This was a baseless, premeditated attack on our organization and the Second Amendment freedoms it fights to defend,” Meadows said in a statement. “You could have set your watch by it: The investigation was going to reach its crescendo as we move into the 2020 election cycle. It’s a transparent attempt to score political points and attack the leading voice in opposition to the leftist agenda.”
Wasting little time on a counterattack, the NRA sued James in Albany this afternoon, claiming the new lawsuit against it in Manhattan violates the First Amendment rights of its more than 5 million members.
“This has been a power grab by a political opportunist — a desperate move that is part of a rank political vendetta,” Meadows said. “Our members won’t be intimidated or bullied in their defense of political and constitutional freedom.”
James is hardly alone in alleging a culture of fraud in the gun group as former NRA insiders and associates rush forward with supporting allegations.
In a separate Thursday suit, Karl Racine, the attorney general in Washington, D.C., seeks to have the NRA’s diverted assets governed by a constructive trust.
“Charitable organizations 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,” Racine said in a statement. “With this lawsuit, we aim to recover donated funds that the NRA Foundation wasted. District nonprofits should be on notice that the Office of the Attorney General will file suit if we find evidence of illegal behavior.”
Founded in New York, the NRA has much less to lose from the lawsuit filed in the nation’s capital, and Racine has not faced the same kind of personal attack as James, who brushed aside claims of political motivations.
“We follow the facts and the law,” James said at her press conference. “We come to conclusions of law.”
She filed the case in Manhattan Supreme Court, where a similar lawsuit filed by her predecessor led to a $2 million settlement with a now-defunct Trump Foundation.
