The Daily Beast•August 6, 2020
Peter Foley/Bloomberg via Getty Images
New York Attorney General Letitia James may be able to do what no politician before her has been able to accomplish – take down the National Rifle Association.
Her lawsuit alleging self-dealing and misconduct could, if successful, dissolve the entire organization. While the suit is civil in nature, it reads like an old-fashioned corruption indictment.
It alleges that the not-for profit organization violated New York state laws governing charities by diverting tens of millions of dollars away from the organization’s mission for the personal benefit of its leaders, with Wayne LaPierre, the NRA’s Executive Vice President for the past 29 years, and three other officers named as defendants along with the organization itself. According to the complaint, LaPierre used NRA funds for eight private plane flights to the Bahamas, where they enjoyed life on the 107-foot yacht of an NRA vendor, as well as for safaris in Africa and elsewhere. The complaint also claims that LaPierre allotted millions of dollars for private security for himself without sufficient oversight (and cited “security” concerns to explain why he didn’t disclose those trips to the NRA’s board), that he spent $1.2 million of the group’s funds on gifts from Neiman Marcus and Bergdorf Goodman for favored friends and vendors, and that he negotiated a post-employment contract for himself valued at $17 million without board approval.
‘Fraught With Fraud and Abuse’: NY Attorney General Sues to Dissolve the National Rifle Association
New York, like most states, requires non-profit organizations to file annual financial reports as a condition of its non-profit status, which confers tax benefits for the organization and its donors. The law requires funds to be used to serve the organization’s members and advance its charitable mission. The complaint alleges that the NRA’s leaders “blatantly ignored” those rules by failing to ensure proper internal controls, ignoring whistleblowers and concealing problems from auditors.
Like other cases of corruption, this easily could have been framed as a criminal case. Filing false registration and disclosure documents as part of a scheme to defraud can serve as the basis for federal mail or wire fraud, and often does in public corruption cases. When I served as a federal prosecutor, my former office brought public corruption cases on such theories in similar cases in which officials misused funds for personal benefit. Why then, is it left to James, whose office’s oversight over charities is civil in nature, to bring this action? The silence of the U.S. Department of Justice here is deafening.
But the effect of the state attorney general’s civil case might be even more devastating than a criminal case because one of the remedies of her action is dissolution of the NRA itself. She used the same tactics to dissolve the Trump Foundation in November. There, she reached a settlement with President Donald Trump and family members to pay $2 million to resolve allegations of misuse of charitable funds to influence the 2016 presidential primary election and to further his own personal interests. Among the improper use of funds was doling out $500,000 to potential voters at a 2016 campaign rally in Iowa. As part of that settlement, James required Trump to personally admit to misusing the Foundation’s funds. Sometimes, parties to settlements are permitted to publicly state that a resolution is not an admission of wrongdoing. James would not let them off so easily. Her success in the Trump Foundation case puts teeth into her legal quest to dissolve the NRA as well.
Trump to NRA Bigwigs: Get Better Lawyers
Since 1871, the NRA has been the nation’s largest gun advocacy group. Founded to improve marksmanship following the Civil War, the organization has lately become a powerful lobbying organization and campaign funder that can make or break candidates for political office depending on their stance on firearms regulations. As its website boasts, the NRA is “widely recognized today as a major political force.” Following mass shootings in America, Democratic candidates for office have blamed the NRA for the inability to pass gun reform legislation, and have demanded campaign finance reform to expose and limit the organization’s influence on elections.
No doubt, there will be Second Amendment advocates who claim that the New York lawsuit is politically motivated effort to strike a blow against gun ownership. Indeed, if the allegations are true that the NRA engaged in cartoonishly corrupt self-dealing and misconduct, then the dissolution of the NRA would end its 139-year run as the nation’s strongest advocate for gun rights.
The law may be the only weapon that can take down the NRA. And if James can prove her case, then the demise of the NRA will be a self-inflicted wound.
Lawsuit: The NRA’s ‘School Safety Initiative’ Was a Front to Increase Fundraising
‘FUNNY MONEY’
The gun group launched the School Shield program after Sandy Hook. But it doled out a measly number of grants before new leadership demanded it get real.
Julia Arciga Reporter Updated Dec. 05, 2019
Photo Illustration by Sarah Rogers/The Daily Beast/Photos Getty
In the wake of the shooting at Sandy Hook elementary school in December 2012, the National Rifle Association launched a grant program that it said would be instrumental in protecting students from gun violence.
The School Shield Emergency Response Program was touted as a way to help provide schools with everything from “armed security to building design and access control to information technology to student and teacher training.” And in the subsequent years, the gun lobby continued to push the idea as school shootings became more frequent.
“When People Cried, ‘Someone Do Something!’ We Did,” The NRA declared on its website. School Shield, it added, was “A Program Whose Time Has Come.”
But as the gun group promoted School Shield, questions mounted about how far-reaching the program actually was. And now, one of the NRA’s longtime vendors is claiming that the gun-rights group artificially boosted their fundraising numbers by raising money for its School Shield program while paying out only a small number of actual grants.
In an amended counterclaim filed in Texas federal court in November, the NRA’s former ad agency—Ackerman McQueen—says that the gun lobby used School Shield as a “shell” program that it did not intend to meaningfully execute.
The longtime NRA leader Wayne LaPierre, the counterclaim alleges, “boosted NRA revenue through the creation of shell programs” like School Shield, “that the NRA never had any intention or meaningful ability to execute (or execute competently).”
All told, Ackerman McQueen claimed the NRA only gave a “paltry” five grants to schools between 2012 and 2014. That revelation matches reporting from Mother Jones, which revealed that the NRA’s tax returns from 2013 to 2016 showed only three grants given to schools on behalf of the School Shield program—totaling up to $200,000.
The lack of grants were, apparently, a subject of concern internally. When Oliver North became the NRA’s president in May 2018, the counterclaim alleged he “demanded” that the NRA “make [the program] real.” The gun group announced later that year that it had given 54 grants totaling over $600,000 to public and private schools in 23 states. The program is still active, recently giving a $21,000 grant to a Missouri school.
School Shield isn’t the only program that Ackerman McQueen says was used as a shell for the NRA to raise more money. According to its counterclaim, the NRA also used its Carry Guard insurance program as a vehicle to bring in more cash without providing much benefit for its members. The program was unveiled in 2017, and offered members insurance-backed criminal and civil liability protection. It also offered three levels of concealed carry gun training before shutting down earlier this year.
The counterclaim alleged that Josh Powell, the senior NRA official responsible for Carry Guard’s development, “seemed generally dismissive of the training component of the program and kept referring to Carry Guard as nothing but an ‘insurance scheme.’” The ad firm said it resisted promoting the program until the NRA could deliver on their promises to members, and expressed that it wanted nothing to do with the so-called “scheme.”
“By appealing to members’ hearts or promising benefits that were never delivered, the NRA raised millions of dollars of ‘funny money’—LaPierre’s affectionate term for brand sponsorship funds,” the counterclaim reads.
LaPierre Promised Job Security, Then Ousted an NRA Top Gun
BEWILDERING
Betsy Swan
The counterclaim makes additional claims about Youth for Tomorrow (YFT)—a Christian organization where LaPierre’s wife, Susan, was president. The gun group has been scrutinized for its lack of transparency in donations to YFT before, with a report from The New Yorker and The Trace revealing that over $180,000 in NRA contributions to YFT went unreported in their tax filings. According to Ackerman McQueen, the NRA also hid donations to YFT by using another entity, stating that it used a “third-party charity”, which would then give the NRA’s money to YFT. The counterclaim did not name the alleged “third-party charity” used by the NRA.
RELATED IN POLITICS
NY Attorney General Sues to Dissolve the NRA Over ‘Fraud’
Wayne LaPierre Looks Like the Corrupt Elites He Attacks
The ad firm said this arrangement was part of “‘back-scratching’ relationships” LaPierre structured to “siphon money to pet projects that the NRA would otherwise be prohibited from contributing to.”
Ackerman McQueen’s counterclaim comes as the ad agency and the NRA are currently locked in a bitter legal battle. The gun group first sued Ackerman McQueen, claiming it was unable to provide adequate documentation for its bills to the group. The ad firm sued back, and said it complied with the gun group’s records requests. The firm also claimed that the NRA was attempting to terminate the contract between them. Both entities are seeking tens of millions from each other.
“It’s disappointing, but not surprising, that Ackerman’s response to the agency’s legal issues is to attack a service program supported by many members of law enforcement and school officials across the country,” Andrew Arulanandam, the managing director of NRA Public Affairs, said in a statement. “We take great pride in NRA School Shield—and thank our many loyal members who join us in the effort to keep our children safe.”
The gun group's lawyers also said the counterclaim represented “another desperate chapter in the agency’s smear campaign” against them.
A representative for North declined to comment, and Ackerman McQueen’s lawyers did not respond to a request for comment.
NRA Officials Found NRATV ‘Distasteful and Racist’: Suit
YA THINK?
Andrew Kirell
Ackerman McQueen’s counterclaim was filed after the NRA launched a lawsuit against the ad firm in U.S. District Court in Texas. The two parties are also involved in a lawsuit in Virginia. The filing—which accuses the NRA of libel and LaPierre of libel and fraud—also includes previously reported claims of LaPierre hiding his personal expenses within the ad firm. In the NRA’s initial complaint, the gun group accused Ackerman McQueen of fraud, conspiracy, breaches of fiduciary duties, and others.
TO SEE PDF OF LAW SUIT GO TO
https://www.thedailybeast.com/nras-school-safety-initiative-was-a-farce-meant-to-juice-fundraising-lawsuit?via=rss&source=articles_fancylink
New York Attorney General Letitia James may be able to do what no politician before her has been able to accomplish – take down the National Rifle Association.
Her lawsuit alleging self-dealing and misconduct could, if successful, dissolve the entire organization. While the suit is civil in nature, it reads like an old-fashioned corruption indictment.
It alleges that the not-for profit organization violated New York state laws governing charities by diverting tens of millions of dollars away from the organization’s mission for the personal benefit of its leaders, with Wayne LaPierre, the NRA’s Executive Vice President for the past 29 years, and three other officers named as defendants along with the organization itself. According to the complaint, LaPierre used NRA funds for eight private plane flights to the Bahamas, where they enjoyed life on the 107-foot yacht of an NRA vendor, as well as for safaris in Africa and elsewhere. The complaint also claims that LaPierre allotted millions of dollars for private security for himself without sufficient oversight (and cited “security” concerns to explain why he didn’t disclose those trips to the NRA’s board), that he spent $1.2 million of the group’s funds on gifts from Neiman Marcus and Bergdorf Goodman for favored friends and vendors, and that he negotiated a post-employment contract for himself valued at $17 million without board approval.
‘Fraught With Fraud and Abuse’: NY Attorney General Sues to Dissolve the National Rifle Association
New York, like most states, requires non-profit organizations to file annual financial reports as a condition of its non-profit status, which confers tax benefits for the organization and its donors. The law requires funds to be used to serve the organization’s members and advance its charitable mission. The complaint alleges that the NRA’s leaders “blatantly ignored” those rules by failing to ensure proper internal controls, ignoring whistleblowers and concealing problems from auditors.
Like other cases of corruption, this easily could have been framed as a criminal case. Filing false registration and disclosure documents as part of a scheme to defraud can serve as the basis for federal mail or wire fraud, and often does in public corruption cases. When I served as a federal prosecutor, my former office brought public corruption cases on such theories in similar cases in which officials misused funds for personal benefit. Why then, is it left to James, whose office’s oversight over charities is civil in nature, to bring this action? The silence of the U.S. Department of Justice here is deafening.
But the effect of the state attorney general’s civil case might be even more devastating than a criminal case because one of the remedies of her action is dissolution of the NRA itself. She used the same tactics to dissolve the Trump Foundation in November. There, she reached a settlement with President Donald Trump and family members to pay $2 million to resolve allegations of misuse of charitable funds to influence the 2016 presidential primary election and to further his own personal interests. Among the improper use of funds was doling out $500,000 to potential voters at a 2016 campaign rally in Iowa. As part of that settlement, James required Trump to personally admit to misusing the Foundation’s funds. Sometimes, parties to settlements are permitted to publicly state that a resolution is not an admission of wrongdoing. James would not let them off so easily. Her success in the Trump Foundation case puts teeth into her legal quest to dissolve the NRA as well.
Trump to NRA Bigwigs: Get Better Lawyers
Since 1871, the NRA has been the nation’s largest gun advocacy group. Founded to improve marksmanship following the Civil War, the organization has lately become a powerful lobbying organization and campaign funder that can make or break candidates for political office depending on their stance on firearms regulations. As its website boasts, the NRA is “widely recognized today as a major political force.” Following mass shootings in America, Democratic candidates for office have blamed the NRA for the inability to pass gun reform legislation, and have demanded campaign finance reform to expose and limit the organization’s influence on elections.
No doubt, there will be Second Amendment advocates who claim that the New York lawsuit is politically motivated effort to strike a blow against gun ownership. Indeed, if the allegations are true that the NRA engaged in cartoonishly corrupt self-dealing and misconduct, then the dissolution of the NRA would end its 139-year run as the nation’s strongest advocate for gun rights.
The law may be the only weapon that can take down the NRA. And if James can prove her case, then the demise of the NRA will be a self-inflicted wound.
Lawsuit: The NRA’s ‘School Safety Initiative’ Was a Front to Increase Fundraising
‘FUNNY MONEY’
The gun group launched the School Shield program after Sandy Hook. But it doled out a measly number of grants before new leadership demanded it get real.
Julia Arciga Reporter Updated Dec. 05, 2019
Photo Illustration by Sarah Rogers/The Daily Beast/Photos Getty
In the wake of the shooting at Sandy Hook elementary school in December 2012, the National Rifle Association launched a grant program that it said would be instrumental in protecting students from gun violence.
The School Shield Emergency Response Program was touted as a way to help provide schools with everything from “armed security to building design and access control to information technology to student and teacher training.” And in the subsequent years, the gun lobby continued to push the idea as school shootings became more frequent.
“When People Cried, ‘Someone Do Something!’ We Did,” The NRA declared on its website. School Shield, it added, was “A Program Whose Time Has Come.”
But as the gun group promoted School Shield, questions mounted about how far-reaching the program actually was. And now, one of the NRA’s longtime vendors is claiming that the gun-rights group artificially boosted their fundraising numbers by raising money for its School Shield program while paying out only a small number of actual grants.
In an amended counterclaim filed in Texas federal court in November, the NRA’s former ad agency—Ackerman McQueen—says that the gun lobby used School Shield as a “shell” program that it did not intend to meaningfully execute.
The longtime NRA leader Wayne LaPierre, the counterclaim alleges, “boosted NRA revenue through the creation of shell programs” like School Shield, “that the NRA never had any intention or meaningful ability to execute (or execute competently).”
All told, Ackerman McQueen claimed the NRA only gave a “paltry” five grants to schools between 2012 and 2014. That revelation matches reporting from Mother Jones, which revealed that the NRA’s tax returns from 2013 to 2016 showed only three grants given to schools on behalf of the School Shield program—totaling up to $200,000.
The lack of grants were, apparently, a subject of concern internally. When Oliver North became the NRA’s president in May 2018, the counterclaim alleged he “demanded” that the NRA “make [the program] real.” The gun group announced later that year that it had given 54 grants totaling over $600,000 to public and private schools in 23 states. The program is still active, recently giving a $21,000 grant to a Missouri school.
School Shield isn’t the only program that Ackerman McQueen says was used as a shell for the NRA to raise more money. According to its counterclaim, the NRA also used its Carry Guard insurance program as a vehicle to bring in more cash without providing much benefit for its members. The program was unveiled in 2017, and offered members insurance-backed criminal and civil liability protection. It also offered three levels of concealed carry gun training before shutting down earlier this year.
The counterclaim alleged that Josh Powell, the senior NRA official responsible for Carry Guard’s development, “seemed generally dismissive of the training component of the program and kept referring to Carry Guard as nothing but an ‘insurance scheme.’” The ad firm said it resisted promoting the program until the NRA could deliver on their promises to members, and expressed that it wanted nothing to do with the so-called “scheme.”
“By appealing to members’ hearts or promising benefits that were never delivered, the NRA raised millions of dollars of ‘funny money’—LaPierre’s affectionate term for brand sponsorship funds,” the counterclaim reads.
LaPierre Promised Job Security, Then Ousted an NRA Top Gun
BEWILDERING
Betsy Swan
The counterclaim makes additional claims about Youth for Tomorrow (YFT)—a Christian organization where LaPierre’s wife, Susan, was president. The gun group has been scrutinized for its lack of transparency in donations to YFT before, with a report from The New Yorker and The Trace revealing that over $180,000 in NRA contributions to YFT went unreported in their tax filings. According to Ackerman McQueen, the NRA also hid donations to YFT by using another entity, stating that it used a “third-party charity”, which would then give the NRA’s money to YFT. The counterclaim did not name the alleged “third-party charity” used by the NRA.
RELATED IN POLITICS
NY Attorney General Sues to Dissolve the NRA Over ‘Fraud’
Wayne LaPierre Looks Like the Corrupt Elites He Attacks
The ad firm said this arrangement was part of “‘back-scratching’ relationships” LaPierre structured to “siphon money to pet projects that the NRA would otherwise be prohibited from contributing to.”
Ackerman McQueen’s counterclaim comes as the ad agency and the NRA are currently locked in a bitter legal battle. The gun group first sued Ackerman McQueen, claiming it was unable to provide adequate documentation for its bills to the group. The ad firm sued back, and said it complied with the gun group’s records requests. The firm also claimed that the NRA was attempting to terminate the contract between them. Both entities are seeking tens of millions from each other.
“It’s disappointing, but not surprising, that Ackerman’s response to the agency’s legal issues is to attack a service program supported by many members of law enforcement and school officials across the country,” Andrew Arulanandam, the managing director of NRA Public Affairs, said in a statement. “We take great pride in NRA School Shield—and thank our many loyal members who join us in the effort to keep our children safe.”
The gun group's lawyers also said the counterclaim represented “another desperate chapter in the agency’s smear campaign” against them.
A representative for North declined to comment, and Ackerman McQueen’s lawyers did not respond to a request for comment.
NRA Officials Found NRATV ‘Distasteful and Racist’: Suit
YA THINK?
Andrew Kirell
Ackerman McQueen’s counterclaim was filed after the NRA launched a lawsuit against the ad firm in U.S. District Court in Texas. The two parties are also involved in a lawsuit in Virginia. The filing—which accuses the NRA of libel and LaPierre of libel and fraud—also includes previously reported claims of LaPierre hiding his personal expenses within the ad firm. In the NRA’s initial complaint, the gun group accused Ackerman McQueen of fraud, conspiracy, breaches of fiduciary duties, and others.
TO SEE PDF OF LAW SUIT GO TO
https://www.thedailybeast.com/nras-school-safety-initiative-was-a-farce-meant-to-juice-fundraising-lawsuit?via=rss&source=articles_fancylink
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