Politico

New York AG sues to dissolve the NRA, alleging widespread fraud


New York state is suing to dissolve the National Rifle Association, according to a lawsuit filed on Thursday, presenting a new, major threat to the country’s biggest gun rights group just months before the presidential election.

The civil lawsuit, which New York Attorney General Letitia James filed in state court, alleges that the NRA’s leadership spent funds improperly, engaged in self-dealing, and made false or misleading disclosures to the attorney general and the IRS.

It comes at an immensely precarious moment for the group. The NRA spent big to help President Donald Trump get elected in 2016, but now faces serious financial challenges –– in part because of hefty legal bills.

On top of that, the coronavirus pandemic has hit the NRA hard. It had to cancel its yearly meeting, which is usually a major fundraising event. And it has laid off scores of employees.

But even before the pandemic, the group’s leadership faced criticism for what many characterized as exorbitant spending. And an ugly legal fight with its former longtime advertising firm also pushed the group’s inner drama into the spotlight.

The lawsuit accuses Wayne LaPierre, the NRA’s longtime CEO, of using “a secret ‘poison pill contract’” to guarantee himself lifetime income from the gun group. And it says he hired unskilled people for senior roles to help him misuse the group’s finances to enrich himself.

The NRA’s president, Carolyn Meadows, said in a statement that the lawsuit was a “baseless, premeditated” attack on the NRA and on gun 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,” she said. “It’s a transparent attempt to score political points and attack the leading voice in opposition to the leftist agenda. This has been a power grab by a political opportunist – a desperate move that is part of a rank political vendetta. Our members won’t be intimidated or bullied in their defense of political and constitutional freedom.”

The NRA hit back on Thursday by filing a federal lawsuit against James in the Northern District of New York, claiming James’ actions restrict the corporation’s freedom of speech and seeking a judicial declaration that the NRA complied with state law.

Trump criticized the lawsuit against the NRA in brief remarks shortly after it became public.

“That’s a very terrible thing that just happened,” he told reporters. “I think the NRA should move to Texas and lead a very good and beautiful life. And I’ve told them that for a long time. I think they should move to Texas.”

The lawsuit cites a host of examples of alleged misuse of funds. It alleges LaPierre and his family flew to the Bahamas on private jets eight times in five years –– all on the NRA’s dime. LaPierre even had the NRA pay for private jet transportation for family members when he wasn’t present, the lawsuit claims.

The attorney general also accuses LaPierre and his wife of using thousands of dollars in NRA funds to buy Christmas and birthday presents for the principal stakeholder of a company that did business for the gun group, as well as the stakeholder’s wife and daughter.

LaPierre also stayed on that person’s yacht in the Bahamas multiple times but never disclosed the jaunts to the NRA, which he was obligated to do, according to the suit.

It also alleges a host of other incidents of financial wrongdoing and mismanagement. And the lawsuit says the NRA paid $89,000 to settle a potential sexual discrimination claim against a top NRA employee, Josh Powell.

“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 Thursday in a news conference.

The call to dissolve the organization was based on the scope and severity of the allegations, James said, “given the breadth and the depth of the corruption, the illegality, and the brazen attempts to basically evade the law.”

James did not rule out the possibility of a future criminal investigation, adding that any criminal activity uncovered in the course of the attorney general’s probe would be referred to the Manhattan district attorney’s office.

At a separate news conference Thursday following the announcement, Gov. Andrew Cuomo detailed what he described as the NRA’s “long history of thwarting the rules that govern the not-for-profits in New York state.”

“This state has been, I think, very generous and somewhat lax in the number of not-for-profits that we have granted, and they forget that they are taxpayer subsidized,” he said. “They are receiving a public subsidy. For that public subsidy, there are rules.”

“You can’t be a not-for-profit, publicly subsidized, and then be a political organization, or refuse to disclose certain financial information,” he added.

The NRA and its independent charitable foundation also came under fire in a separate lawsuit filed by the District of Columbia’s attorney general on Thursday.

The D.C. lawsuit alleges that instead of serving its stated charitable purposes, the NRA Foundation became a vessel that supported the NRA’s financial interests.

When the NRA faced financial shortfalls due to “improper, lavish spending,” the lawsuit says the corporation turned to its foundation for help.

The NRA Foundation operates independently from the NRA, but the lawsuit alleges this independence was breached and the Foundation’s Board of Trustees failed in their oversight duty by overseeing millions of dollars in loans to the NRA.

The lawsuit also cites the Foundation’s board approval of a dramatic increase of nearly $6 million in management fees to the NRA.

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