NY attorney general sues NRA
AGs for New York, DC sue gun group, charity foundation
Lawsuit highlights misspending and self-dealing allegations that have roiled the NRA in recent years.
NEW YORK — New York’s attorney general sued the National Rifle Association on Thursday, seeking to put the powerful gun advocacy organization out of business over claims that top executives illegally diverted tens of millions of dollars for lavish personal trips, no-show contracts for associates and other questionable expenditures.
Attorney General Letitia James’ lawsuit, filed in Manhattan state court, highlighted misspending and self-dealing claims that have roiled the NRA and its longtime leader, Wayne LaPierre, in recent years — from hair and makeup for his wife to a $17 million post-employment contract for himself.
“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,” she said at a news conference. “Enough was enough. We needed to step in and dissolve this corporation.”
Simultaneously, Washington, D.C., Attorney General
Karl Racine — like James, a Democrat — sued the NRA Foundation, a charitable arm of the organization 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.
In a statement, NRA President Carolyn Meadows labeled James a “political opportunist” who was pursuing a “rank vendetta” with an attack on its members’ Second Amendment rights.
“You could have set your watch by it: the investigation was going to reach its crescendo as we move into the 2020 election cycle,” said Meadows, who announced a countersuit by the NRA in federal court in
Albany, New York, that could set the stage for a legal battle lasting well past November’s election.
The New York lawsuit made only civil claims, but James said the investigation was ongoing and any criminal activity discovered would be referred to prosecutors and the Internal Revenue Service.
The NRA’s financial troubles, James said, were long cloaked by loyal lieutenants but became public as deficits piled up. The organization went from a nearly $28 million surplus in 2015 to a $36 million deficit in 2018.
James argued the organization’s prominence and cozy political relationships enabled a culture where nonprofit rules were routinely flouted and state and federal laws were violated. Even the NRA’s own bylaws and employee handbook were ignored, she said.
Though headquartered in Virginia, the NRA was chartered as a nonprofit in New York in 1871 and continues to be incorporated in the state.
The Washington, D.C., attorney general’s office has been investigating the NRA Foundation for more than a year. It said its investigation
determined that low membership and exorbitant spending left the NRA with financial problems and so it exploited the foundation to remain afloat.
“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 news release.
His lawsuit sought not to have the NRA destroyed, but to have a court-appointed monitor supervise financial transactions and a trust created to recover money diverted from the foundation.
The New York lawsuit also named LaPierre and three 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, 70, who has been in charge of the NRA’s day-to-day operations since 1991, is accused of spending millions 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 $17 million contract with the NRA, if he were to exit the organization, without board approval.
Some of the NRA’s excess spending was kept secret, the lawsuit said, under an arrangement with the organization’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 organization for “out-of-pocket expenses,” the lawsuit said.
James’ lawsuit portrayed the NRA as the victim of its leaders, and she was asked during a news conference why she would seek to shut the organization down entirely, rather than take less drastic actions like removing or fining the officers responsible for misconduct.
James said the “breadth and the depth of the corruption and the illegality” justified seeking a the organization’s closure.