The Washington Post

NRA funds flowed to some board mem­bers

- BY BETH REIN­HARD, KATIE ZEZIMA, TOM HAMBURGER AND CAROL D. LEONNIG Belarus · New Mexico · Mexico · Washington · Belgium · Philadelphia · Austria · Virginia · Ginny Brown-Waite · Beverly Hills · New York · Donald Trump · Republican Party (United States) · Georgia · Karl Malone · Federal Emergency Management Agency · George W. Bush · George H. W. Bush · U.S. government · organization · U.S. Internal Revenue Service · Iceland · United States Marine Corps · Italy · Budapest · Bahamas · Florida · National Rifle Association · Wayne LaPierre · Oliver North · Bob Barr · Indianapolis · Allen B West · David Keene

A former pro foot­ball player who serves on the Na­tional Ri­fle As­so­ci­a­tion board was paid $400,000 by the group in re­cent years for pub­lic outreach and firearms train­ing. An­other board mem­ber, a writer in New Mex­ico, col­lected more than $28,000 for ar­ti­cles in NRA pub­li­ca­tions. Yet an­other board mem­ber sold am­mu­ni­tion from his pri­vate com­pany to the NRA for an undis­closed sum.

The NRA, which has been rocked by al­le­ga­tions of ex­or­bi­tant spend­ing by top ex­ec­u­tives, also di­rected money in re­cent years that went to board mem­bers — the very peo­ple tasked with over­see­ing the or­ga­ni­za­tion’s fi­nances.

In all, 18 mem­bers of the NRA’s 76-mem­ber board, who are not paid as direc­tors, col­lected money from the group dur­ing the past three years, ac­cord­ing to tax fil­ings, state char­i­ta­ble re­ports and NRA cor­re­spon­dence re­viewed by The Wash­ing­ton Post.

The pay­ments re­ceived by about one-quar­ter of board mem­bers, the ex­tent of which has not

pre­vi­ously been re­ported, deepen ques­tions about the rigor of the board’s over­sight as it steered the coun­try’s largest and most pow­er­ful gun rights group, ac­cord­ing to tax ex­perts and some long­time mem­bers.

The NRA, founded in 1871 to pro­mote gun safety and train­ing, re­lies heav­ily on its 5 mil­lion mem­bers for dues. Some sup­port­ers are re­belling publicly and ques­tion­ing its lead­er­ship.

“I will be the first per­son to get in your face about de­fend­ing the Se­cond Amend­ment, but I will not de­fend cor­rup­tion and crony­ism and fear­mon­ger­ing,” said Vanessa Ross, a Philadel­phia-area bak­ery owner and life­time NRA mem­ber who pre­vi­ously worked at the Vir­ginia head­quar­ters manag­ing a pro­gram for dis­abled shoot­ers.

Among the rev­e­la­tions that have burst into pub­lic view: CEO Wayne LaPierre racked up hun­dreds of thou­sands of dol­lars in charges at a Bev­erly Hills cloth­ing bou­tique and on for­eign travel, in­voices show. Oliver North, forced out as pres­i­dent af­ter try­ing to oust LaPierre, was set to col­lect mil­lions of dol­lars in a deal with the NRA’s now-es­tranged pub­lic re­la­tions agency, Ackerman McQueen, ac­cord­ing to LaPierre. And the NRA’s out­side at­tor­ney reaped “ex­tra­or­di­nary” le­gal fees that to­taled mil­lions of dol­lars in the past year, ac­cord­ing to North.

The du­el­ing al­le­ga­tions, cou­pled with mul­ti­mil­lion-dol­lar short­falls in re­cent years and an on­go­ing in­ves­ti­ga­tion by the New York at­tor­ney gen­eral, threaten the po­tency of the NRA, long a po­lit­i­cal jug­ger­naut and a close ally of Pres­i­dent Trump.

The NRA said its fi­nances are healthy and that the al­le­ga­tions of mis­spending are un­founded. In a state­ment last month, a dozen board mem­bers said they have “full con­fi­dence in the NRA’s ac­count­ing prac­tices and com­mit­ment to good gov­er­nance.” LaPierre de­clined to com­ment.

The gun rights or­ga­ni­za­tion’s board in­cludes firearms in­dus­try ex­ec­u­tives, con­ser­va­tive lead­ers, gun en­thu­si­asts, and a hand­ful of sports and en­ter­tain­ment celebri­ties. Among its mem­bers, whose names are not listed on the NRA web­site, are former Repub­li­can con­gress­man Bob Barr of Ge­or­gia, bas­ket­ball star Karl Malone and Joe All­baugh, who served as the di­rec­tor of the Fed­eral Emer­gency Man­age­ment Agency in the Ge­orge W. Bush ad­min­is­tra­tion. (The three are not among the direc­tors the NRA re­ported pay­ing.)

Af­ter learn­ing about the money his fel­low board mem­bers re­ceived, Malone said he was con­cerned. “If th­ese al­le­ga­tions are cor­rect and 18 board mem­bers re­ceived pay, you’re damn right I am,” he said. “If it’s cor­rect, the mem­bers who pay their dues should be damn con­cerned, too.”

The NRA does not re­quire board mem­bers to do­nate or raise funds for the group, as many non­profit or­ga­ni­za­tions do. They do not have term lim­its.

State and fed­eral laws al­low mem­bers of non­profit boards to do busi­ness with their or­ga­ni­za­tions un­der cer­tain guide­lines. The In­ter­nal Rev­enue Ser­vice can im­pose penal­ties if top of­fi­cials and their fam­i­lies re­ceive eco­nomic ben­e­fits that ex­ceed fair mar­ket value.

Tax ex­perts said the nu­mer­ous pay­ments to cer­tain NRA direc­tors cre­ate po­ten­tial con­flicts of in­ter­est that could cloud the board’s in­de­pen­dent mon­i­tor­ing of the or­ga­ni­za­tion’s fi­nances.

“In 25 years of work­ing in this field, I have never seen a pat­tern like this,” said Dou­glas Var­ley, a Wash­ing­ton at­tor­ney at Caplin & Drys­dale who spe­cial­izes in tax­ex­empt or­ga­ni­za­tions and re­viewed the NRA’s fed­eral and state fil­ings from 2016 through 2018 for The Wash­ing­ton Post. “The vol­ume of trans­ac­tions with in­sid­ers and af­fil­i­ates of in­sid­ers is re­ally as­ton­ish­ing.”

Var­ley said he did not see any ap­par­ent vi­o­la­tions of the law, and noted that the NRA, for the most part, ap­peared to have prop­erly dis­closed the pay­ments.

“But the pat­tern raises a thresh­old ques­tion of who the or­ga­ni­za­tion is serv­ing,” he said. “Is it be­ing run for the ben­e­fit of the gun own­ers in the coun­try and the pub­lic? Or is it be­ing run as a busi­ness gen­er­at­ing en­ter­prise for of­fi­cers and em­ploy­ees of the or­ga­ni­za­tion?”

NRA spokesman An­drew Aru­lanan­dam said that the num­ber of fi­nan­cial re­la­tion­ships be­tween direc­tors and the NRA is “small,” con­sid­er­ing the size of the board and the or­ga­ni­za­tion.

He called the gun rights move­ment “a close-knit com­mu­nity com­prised of part­ners and ven­dors who un­der­stand the is­sue and are de­fend­ers of the Se­cond Amend­ment.”

Be­cause gun-con­trol groups have pres­sured com­pa­nies into not do­ing busi­ness with the NRA, Aru­lanan­dam said, “the pool be­comes smaller. There­fore, con­nec­tions be­tween em­ploy­ees or board mem­bers and part­ners are not un­usual.”

Wil­liam Brewer, an out­side at­tor­ney for the NRA, said busi­ness ar­range­ments with direc­tors are ap­proved “where ap­pro­pri­ate” by the board’s au­dit com­mit­tee.

“Nat­u­rally, there are oc­ca­sions where the NRA en­gages ven­dors who have a con­nec­tion to NRA ex­ec­u­tives, em­ploy­ees or board mem­bers — but only when such an as­so­ci­a­tion works in the best in­ter­est of the or­ga­ni­za­tion and its mem­bers,” he said.

The NRA pro­vided The Post with a copy of its con­flict-of-in­ter­est pol­icy, which states that ap­proval by the au­dit com­mit­tee is not re­quired for mi­nor trans­ac­tions, re­im­burse­ment of ex­penses or “trans­ac­tions and ac­tiv­i­ties un­der­taken in the or­di­nary course of busi­ness by NRA staff.”

Ac­cord­ing to the pol­icy, board mem­bers “owe a duty of loy­alty to the NRA and must act in good faith and in the NRA’s best in­ter­ests rather than in their own in­ter­ests or the in­ter­ests of an­other en­tity or per­son.”

Board mem­bers who spoke to The Post de­fended their abil­ity to serve as fis­cal watch­dogs while also col­lect­ing fees.

Former pres­i­dent David Keene, who has been paid $112,000 by the group for pub­lic speak­ing and con­sult­ing since 2017, said he has “never hes­i­tated to ex­er­cise the over­sight re­quired of a board mem­ber and would gladly give up any com­pen­sa­tion if I thought for a minute it was com­pro­mis­ing my judg­ment or re­spon­si­bil­ity.”

“NRA board mem­bers as a group tend to be both forth­right and bull­headed, so I can­not imag­ine any of them would let a few dol­lars af­fect their judg­ment,” he added.

Fi­nan­cial ‘cri­sis’ al­le­ga­tions

In late April, the NRA’s an­nual meet­ing was get­ting un­der­way in In­di­anapo­lis when mem­bers of the board re­ceived an alarm­ing let­ter from LaPierre, who has run the gun lobby for decades.

In it, he wrote that North had warned that the group’s long­time pub­lic re­la­tions firm, Ackerman McQueen, was go­ing to re­lease in­for­ma­tion al­leg­ing “a dev­as­tat­ing ac­count of our fi­nan­cial sta­tus.” LaPierre said North in­di­cated that the mis­sive would not be sent if LaPierre re­signed.

The NRA chief hinted that North was com­pro­mised — con­flicted be­tween his du­ties to the board and his per­sonal fi­nan­cial in­ter­ests, not­ing that the re­tired Marine Corps lieu­tenant colonel had signed a con­tract with Ackerman to host an NRA doc­u­men­tary se­ries for “mil­lions of dol­lars an­nu­ally.”

“I be­lieve our Board and de­voted mem­bers will see this for what it is: a threat meant to in­tim­i­date and di­vide us,” LaPierre con­cluded.

The next day, North was forced to re­sign. But in a part­ing let­ter, he warned that the or­ga­ni­za­tion’s fi­nances were in “clear cri­sis.”

The board sided with LaPierre, him unan­i­mously, ac­cord­ing to NRA of­fi­cials.

“We have full con­fi­dence in Wayne LaPierre and the work he’s do­ing in sup­port of the NRA and its mem­bers,” said Carolyn D. Mead­ows, who re­placed North as pres­i­dent.

At­tor­neys for North de­clined to com­ment.

Since then, the NRA has faced a steady drip of al­le­ga­tions about im­proper spend­ing.

Let­ters from Ackerman’s chief fi­nan­cial of­fi­cer to LaPierre, first re­ported by the Wall Street Jour­nal and ob­tained by The Post, de­tailed large ex­penses billed by LaPierre, in­clud­ing nearly $275,000 in per­sonal charges at a Bev­erly Hills men’s store and more than $253,000 in lux­ury travel to lo­ca­tions such as Italy, Bu­dapest and the Ba­hamas. Bills also show $13,800 to rent an apart­ment for a sum­mer in­tern.

In an­other let­ter, North warned top of­fi­cials that huge fees charged by the Brewer law firm — which he said ap­peared to to­tal $24 mil­lion in the pre­vi­ous 13 months — were “drain­ing NRA cash at mind-bog­gling speed.” Brewer is the son-in-law of An­gus McQueen, the CEO of the NRA’s long­time ad firm.

In the wake of the rev­e­la­tions, Re­tired Army Lt. Col. Allen West, a former Repub­li­can con­gress­man from Florida and two-term NRA board mem­ber, called for LaPierre to re­sign, de­scrib­ing “a ca­bal of crony­ism.”

NRA of­fi­cials said that LaPierre’s wardrobe al­lowance be­gan 15 years ago and that he was urged by Ackerman to make the purchases for his pub­lic ap­pear­ances, a prac­tice that they said has since been dis­con­tin­ued. They said his travel was nec­es­sary for fundrais­ing. The apart­ment was se­cured for a three-month sum­mer in­tern­ship when univer­sity hous­ing typ­i­cally used was unavail­able, the NRA said.

NRA of­fi­cials also said that North’s memo de­scrib­ing the le­gal fees paid to the Brewer firm was “in­ac­cu­rate.”

“It re­flects a mis­in­formed view of the firm, its billings, and its ad­vo­cacy for the NRA,” said Charles L. Cot­ton, chair­man of the NRA’s au­dit com­mit­tee. “The board sup­ports the work the firm is do­ing.” Brewer did not re­spond to a re­quest for com­ment on his fees.

The swirl of al­le­ga­tions is be­ing driven by the NRA’s in­creas­ingly ac­ri­mo­nious split from Ackerman, an Ok­la­homa-based firm that, with af­fil­i­ated com­pa­nies, re­ceived about $40 mil­lion from the non­profit group in 2017, ac­cord­ing to tax fil­ings. Ackerman has pro­duced provoca­tive ads and tele­vi­sion shows that in­creas­ingly marked a de­par­ture from the NRA’s tra­di­tional fo­cus on gun rights.

The gun lobby and the PR agency have sued each other in re­cent months, ac­cus­ing one an­other of im­proper billing and de­ceit.

In a state­ment, Ackerman said it “fol­lowed the ex­plicit di­rec­tions” of NRA of­fi­cials. The com­pany said the NRA con­ducted an au­dit of its pay­ments nearly ev­ery year and can jus­tify all of its billings. “They could chal­lenge any in­voice, but they did not,” the com­pany said.

The NRA has ac­cused Ackerman of con­ceal­ing records, which the firm de­nies, and breach­ing con­fi­den­tial­ity by leak­ing in­for­ma­tion.

The feud comes amid an in­ves­re­elect­ing tiga­tion by New York At­tor­ney Gen­eral Leti­tia James, a Demo­crat, into the tax-ex­empt sta­tus of the or­ga­ni­za­tion, which is char­tered in New York. As part of the probe, her of­fice has is­sued sub­poe­nas to the NRA, as well as or­ders to NRA en­ti­ties and ven­dors to pre­serve records, ac­cord­ing to peo­ple fa­mil­iar with the in­ves­ti­ga­tion.

Brewer, the NRA’s out­side at­tor­ney, said the group com­plies with all reg­u­la­tions and is co­op­er­at­ing with the in­quiry. “The NRA is pre­pared for this, and has full con­fi­dence in its ac­count­ing prac­tices and com­mit­ment to good gov­er­nance,” he said.

Amid the tur­moil, much of the NRA board has re­mained silent — or de­fended LaPierre’s spend­ing.

“This is stale news — be­ing re­cy­cled by those with per­sonal agen­das. In any event, the en­tire board is fully aware of th­ese is­sues,” Mead­ows said in a state­ment.

The or­ga­ni­za­tion has not hired an out­side firm to con­duct an in­ves­ti­ga­tion into the al­le­ga­tions of mis­spending, a mea­sure that le­gal ex­perts note is of­ten taken by non­profit boards in such sit­u­a­tions. Brewer said NRA prac­tices are al­ready un­der “con­stant re­view” by top of­fi­cials and the board.

In­stead, NRA lead­ers claim gun-con­trol ad­vo­cates are gin­ning up the con­tro­ver­sies to sab­o­tage the or­ga­ni­za­tion. “Our fi­nan­cial house is in or­der — we aren’t go­ing away,” read a May 22 let­ter to mem­bers signed by Mead­ows and 11 other board mem­bers, many of them past pres­i­dents.

But some long­time NRA mem­bers are los­ing faith in the lead­er­ship — and con­sid­er­ing walk­ing away from the or­ga­ni­za­tion.

“You have th­ese facts com­ing to light, what to most NRA mem­bers seem very un­rea­son­able amounts spent on lux­u­ries and con­ve­niences,” said NRA mem­ber and firearms trainer Robert Pin­cus of Florida.

“And at the same time you have the NRA cold-call­ing and fundrais­ing, claim­ing they are go­ing to go bank­rupt if they don’t get money to fight New York state,” Pin­cus said. “Then you have the [new] pres­i­dent say­ing they are in great fi­nan­cial shape, all the fi­nan­cial prob­lems of the past have been fixed. Those three mes­sages don’t all go to­gether.”

‘Noth­ing ne­far­i­ous’

Fed­eral and state fil­ings show that the NRA has turned to its board mem­bers for a va­ri­ety of paid ser­vices in the past three years — in­clud­ing to bring in new mem­bers.

At­tor­neys who spe­cial­ize in non­profit or­ga­ni­za­tions said it is un­usual for board mem­bers to be paid mem­ber­ship com­mis­sions for re­cruit­ment.

“Most groups lean on board mem­bers to give money, not for board mem­bers to get money,” said New York lawyer Daniel Kurtz. “I think the con­tribut­ing pub­lic would look at that with a dim eye.”

Among those paid such com­mis­sions was board mem­ber Owen Mills, who runs Gun­site Acad­emy, an Ari­zona firearms train­ing fa­cil­ity, which re­ceived about $11,000 in 2016 and 2017.

Mills de­fended the fi­nan­cial ties be­tween board mem­bers and the NRA, say­ing they should be able to do busi­ness with the group as long as their prices are com­pet­i­tive.

“There’s noth­ing ne­far­i­ous about it,” Mills said. “The NRA buys a lot of stuff. And so it wouldn’t be un­usual to do busi­ness with your board mem­bers, and all of that is open to the pub­lic process.”

Since 2016, large sums have flowed to board mem­bers for con­sult­ing, pub­lic fil­ings show. NRA of­fi­cials pro­vided ad­di­tional de­tails about the specifics of some of the work they did.

Lance Ol­son, a former po­lice of­fi­cer from Iowa, re­ceived a to­tal of $255,000 for outreach to gun col­lec­tors and fundrais­ing, and Dave Butz, a former NFL player, re­ceived $400,000 for pub­lic outreach and firearms train­ing, ac­cord­ing to the NRA.

Ol­son did not re­spond to re­quests for com­ment. Butz, who was not re­elected to the board in April, de­clined to com­ment.

A firm run by White House com­mu­ni­ca­tions aide Mercedes Sch­lapp, who re­signed from the board when she joined the ad­min­is­tra­tion in 2017, re­ceived a to­tal of $85,000 in 2016 and 2017 for me­dia strat­egy con­sult­ing.

She did not re­spond to re­quests for com­ment. Sch­lapp’s abil­ity to


 ?? DANIEL ACKER/BLOOMBERG NEWS ?? At­ten­dees stand for the na­tional an­them dur­ing a lead­er­ship fo­rum at the NRA’s an­nual meet­ing in In­di­anapo­lis in April. Du­el­ing al­le­ga­tions be­tween CEO Wayne LaPierre, bot­tom left, and former pres­i­dent Oliver North, bot­tom right, cou­pled with mul­ti­mil­lion-dol­lar short­falls in re­cent years and an in­ves­ti­ga­tion by the New York at­tor­ney gen­eral, threaten the po­tency of the or­ga­ni­za­tion.
DANIEL ACKER/BLOOMBERG NEWS At­ten­dees stand for the na­tional an­them dur­ing a lead­er­ship fo­rum at the NRA’s an­nual meet­ing in In­di­anapo­lis in April. Du­el­ing al­le­ga­tions be­tween CEO Wayne LaPierre, bot­tom left, and former pres­i­dent Oliver North, bot­tom right, cou­pled with mul­ti­mil­lion-dol­lar short­falls in re­cent years and an in­ves­ti­ga­tion by the New York at­tor­ney gen­eral, threaten the po­tency of the or­ga­ni­za­tion.

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