UPDATED
NY AG Accuses NRA Of "Massive Fraud", Seeks To "Dismantle" Guns-Rights Organization
Update (1140ET): James is starting off the hearing by detailing a state lawsuit against the NRA and seeking the dissolution of the pro-second amendment organization, one of several subjects she was expected to address today.
James alleges the the organization violated non-profit laws by diverting "millions of dollars away from the charitable mission of the organization for personal use by senior leadership," who awarded contracts that benefited friends and family. That would be a slam-dunk if she were going after politicians. But at a non-profit, things are more blurry.
BBG published an update on the lawsuit almost immediately, suggesting that the financial news organization - owned by a former mayor of NYC - had the story under embargo ahead of time. Here's a snippet from their reporting, which accuses NRA of "massive fraud".
New York is seeking to dissolve the National Rifle Associationas the state attorney general accused the gun rights group and four senior officials of engaging in a massive fraud against donors.A sprawling lawsuit filed Thursday in state court in Manhattan alleges the NRA diverted charitable donations for years to enrich the organization’s top executives in violation of laws governing nonprofits, New York Attorney General Letitia James said in a statement. The state is also demanding millions of dollars in restitution and penalties.The case may pose one of the biggest legal threats the NRA has faced since its founding in New York in 1871. The turmoil began with a power struggle last year between former NRA president Oliver North and longtime leader Wayne LaPierre, which led to allegations of self dealing. A subsequent state probe found wrongdoing blamed for more than $64 million in losses in the last three years alone, James said.“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, a Democrat, said in the statement. “The NRA is fraught with fraud and abuse.”
For those who aren't familiar, this is the culmination of what Trump once called "an illegal investigation" by Cuomo and the AG, which stems from a power struggle that rocked the NRA last year.
The news sent shares of gun makers lower.
The NRA must "get its act together quickly, stop the internal fighting, & get back to GREATNESS - FAST!" Trump tweeted at the time.
We imagine he'll be chiming in on Twitter about this new lawsuit any minute now.
N.Y. attorney general sues to dissolve NRA over 'unchecked power'
By Clyde Hughes
A sign promoting the National Rifle Association and CEO Wayne LaPierre is seen at the annual convention in Dallas, Texas, on May 5, 2018. File Photo by Sergio Flores/UPI | License Photo
Aug. 6 (UPI) -- New York Attorney General Letitia James filed a lawsuit Thursday seeking to dissolve the National Rifle Association, accusing it of illegally diverting millions from charity to benefit senior leadership, families and associates.
The lawsuit names NRA Executive Vice President Wayne LaPierre, former Chief Financial Officer Wilson "Woody" Phillips, former chief of staff Joshua Powell and General Counsel John Frazier, as well as the gun-rights organization as a whole.
James said the NRA has operated as a New York non-profit since 1871, even though its headquarters is in Fairfax, Va.
"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, a longtime Democrat and former New York City councilor, said in a statement. "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."
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LaPierre, who is one of the major focal points of the suit, is accused of using charitable funds for personal gain -- including a post-employment contract valued at more than $17 million that was never approved by the NRA's board of directors.
James's office said the NRA fostered a culture of "self-dealing, mismanagement and negligent oversight" that was illegal, oppressive and fraudulent.
"They overrode and evaded internal controls to allow themselves, their families, favored board members, employees, and vendors to benefit through reimbursed expenses, related party transactions, excess compensation, side deals, and waste of charitable assets without regard to the NRA's best interests."
RELATED NRA sues San Francisco over 'domestic terrorist' designation
The organization, which has endorsed President Donald Trump for re-election, did not immediately respond publicly to the suit. Texas Attorney General Ken Paxton, however, responded with an invitation for the NRA to move its operations to his state.
"The NRA has been instrumental in defending our Second Amendment rights and we would welcome them with open arms to relocate to Texas," Paxton tweeted.
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The organization, which has endorsed President Donald Trump for re-election, did not immediately respond publicly to the suit. Texas Attorney General Ken Paxton, however, responded with an invitation for the NRA to move its operations to his state.
"The NRA has been instrumental in defending our Second Amendment rights and we would welcome them with open arms to relocate to Texas," Paxton tweeted.
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Daniel Trotta, David Shepardson
(Reuters) - New York state’s attorney general sued to dissolve the National Rifle Association on Thursday, alleging senior leaders of the non-profit group diverted millions of dollars for personal use and to buy the silence and loyalty of former employees.
New York State Attorney General, Letitia James, speaks during a news conference, to announce a suit to dissolve the National Rifle Association, In New York, U.S., August 6, 2020. REUTERS/Brendan McDermid
The lawsuit announced by Attorney General Letitia James alleges NRA leaders paid for family trips to the Bahamas, private jets and expensive meals that contributed to a $64 million (48.6 million pounds) reduction in the NRA’s balance sheet in three years, turning a surplus into a deficit.
James alleged in a statement that NRA leaders “used millions upon millions from NRA reserves for personal use,” failing to comply with the NRA’s own internal policies in addition to state and federal law.
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Trump says Texas would be great place for NRA to relocate
In announcing the lawsuit, James told reporters the NRA “has operated as a breeding ground for greed, abuse and brazen illegality.” She added “no one is above the law” - including the NRA.
At the same time, the attorney general for Washington, D.C., filed suit against the NRA and its foundation, alleging the misuse of charitable funds and wasteful spending.
The confrontation pits James, a Democrat, against the largest and most powerful gun organization in the United States, one that is closely aligned with President Donald Trump’s Republican Party.
Briefing reporters, James denied the suit was motivated by the NRA’s support for Trump
The action is certain to further polarize a country where the NRA is revered by conservatives as a champion of the U.S. Constitutional right to keep and bear arms and vilified by liberals as an enabler of rampant gun violence.
“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. “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.”
The NRA, which teaches gun safety in addition to advocating laws making it easier for Americans to own guns and ammunition, is subject to New York law because it is registered as a non-profit organization in New York, where it conducts most of its financial transactions.
The NRA, which has its national headquarters in Fairfax, Virginia, about 20 miles (30 km) west of Washington, D.C., did not immediately respond to a request for comment.
New York state and the NRA have tangled before. The state has taken legal action against NRA-branded insurance policies sold to gun owners, and the NRA is suing the state for closing gun stores under an executive order to halt the spread of COVID-19.
The latest lawsuit names the NRA as a whole and four senior executives of the group including Wayne LaPierre, the executive vice-president who has been atop the leadership for decades.
It also names former Treasurer and Chief Financial Officer Wilson Phillips, former Chief of Staff and Executive Director of General Operations Joshua Powell, and Corporate Secretary and General Counsel John Frazer.
Slideshow (2 Images)
The suit charges the NRA with “awarding contracts to the financial gain of close associates and family, and appearing to dole out lucrative no-show contracts to former employees in order to buy their silence and continued loyalty,” James’s office said in a statement.
“The failure of the NRA to comply with multiple fiduciary responsibilities and state and federal laws resulted in the NRA seeing substantial losses on its balance sheet: going 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 statement said.
In addition to attempting to close down a group that has existed since 1871, James seeks to recover millions of dollars in lost assets and to stop the four executives from serving on he board of any other not-for-profit group in the state.
Reporting by Daniel Trotta and David Shepardson; Editing by Howard Goller
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