New York Attorney General Letitia James today filed a lawsuit seeking to dissolve the National Rifle Association (NRA), the largest and most influential pro-gun organization in the nation.
James charges the organization with illegal conduct because of their diversion of millions of dollars away from the charitable mission of the organization for personal use by senior leadership, 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.
The suit specifically charges the NRA as a whole, as well as Executive Vice-President Wayne LaPierre, former Treasurer and Chief Financial Officer (CFO) Wilson “Woody” Phillips, former Chief of Staff and the Executive Director of General Operations Joshua Powell, and Corporate Secretary and General Counsel John Frazer with failing to manage the NRA’s funds and failing to follow numerous state and federal laws, contributing to the loss of more than $64 million in just three years for the NRA.
“The NRA’s influence has been so powerful that the organization went unchecked for decades while top executives funneled millions into their own pockets,” said James. “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.”
Since 1871, the NRA has operated as a New York-registered 501(c)(4) not-for-profit, charitable corporation. Under state law not-for-profit, charitable corporations are required to register and file annual financial reports with the Charities Bureau in the Office of the Attorney General (OAG). The assets are required to be used in a way that serves the interests of NRA membership and that advance the organization’s charitable mission.
However, as today’s complaint lays out, the NRA is alleged to have fostered a culture of non-compliance and disregard for internal controls that led to the waste and loss of millions in assets and contributed to the NRA reaching its current deteriorated financial state.
The NRA’s internal policies were repeatedly not followed and were even blatantly ignored by senior leaders. Furthermore, the NRA board’s audit committee was negligent in its duty to ensure appropriate, competent, and judicious stewardship of assets by NRA leadership. Specifically, the committee failed to assure standard fiscal controls, failed to respond adequately to whistleblowers, affirmatively took steps to conceal the nature and scope of whistleblower concerns from external auditors, and failed to review potential conflicts of interest for employees, the suit alleges.
The lawsuit alleges that the four men instituted a culture of self-dealing, mismanagement, and negligent oversight at the NRA 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, the suit alleges.
When board members challenged LaPierre and others over their financial governance and leadership of the NRA, LaPierre retaliated and turned the board against those who attempted to challenge the illegal behavior, the lawsuit alleges.
As a result of all the allegations, James seeks to dissolve the NRA and asks the court to order LaPierre, Phillips, Powell, and Frazer to make full restitution for funds they allegedly unlawfully profited and salaries earned while employees; pay penalties; recover illegal and unauthorized payments to the four individuals.
NRA CEO Wayne LaPierre responded in the Washington DC-based publication The Hill that the gun rights group is ready for the fight following the announcement of a lawsuit from the New York attorney general seeking to dissolve it.
“This is an unconstitutional, premeditated attack aiming to dismantle and destroy the NRA – the fiercest defender of America’s freedom at the ballot box for decades,” he told the publication. “The NRA is well-governed, financially solvent, and committed to good governance. We’re ready for the fight. Bring it on.”
