Attorney General James seeks to dissolve NRA for using gun group as a piggy bank

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Attorney General Letitia James announced a lawsuit by her office that will seek the ouster of the NRA leadership and the organization’s dissolution for misappropriation funds and leadership using it as a piggy bank. (Photo by Todd Maisel)

New York Attorney General Letitia James wants to put the National Rifle Association out of business, filing a lawsuit Thursday seeking removal of its leadership and disbanding the powerful gun group for essentially acting as a piggy bank for its leaders and its friends.

The civil attack on the organization comes as the NRA lobbies to re-elect President Donald Trump and its Republican allies. The NRA normally spends tens of millions of dollars on advertising and campaign contributions to those that favor current gun laws and laws that would weaken local gun restrictions.

“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.”

James claims the lawsuit, a result of an 18-month investigation, is not political, but “just following the facts of the law” and that “not-f0r-profits are within our jurisdiction.”

The lawsuit accused the organization of “illegal self-dealing that funded lavish lifestyles of NRA leaders.” James said her office’s finding will also be turned over to the Internal Revenue Service for pursuit of federal violations of laws that prevent charities from being used as piggy banks for its leaders.

Further, James said the state will seek to freeze the NRA’s assets and force its leaders to pay restitution for funding vacations, expensive homes, and other luxuries. It also recognizes that leaders dealt themselves large salaries and high expense accounts.

James charged the organization with illegal conduct because of their alleged diversion of millions of dollars away from the charitable mission of the organization for personal use by senior leadership. The lawsuit further accuses the NRA of 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.

Attorney General Letitia James announced a lawsuit by her office that will seek the ouster of the NRA leadership and the organization’s dissolution for misappropriation funds and leadership using it as a piggy bank. (Photo by Todd Maisel)

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 flouting numerous state and federal laws, contributing to the loss of more than $64 million in just three years for the NRA.

In the complaint, James laid out dozens of examples where the four individual defendants failed to fulfill their fiduciary duty to the NRA and siphoned away tens of millions from NRA reserves for personal use — including trips for them and their families to the Bahamas, private jets, expensive meals, and other private travel.

In addition to shuttering the NRA’s doors, James seeks to recoup millions in lost assets and to stop the four individual top officials from serving on the board of any not-for-profit charitable organization in the state of New York again.

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. The complaint lays out that 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.” 

James said 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.

Past lawsuits against the NRA for its pro-gun stands have not borne fruit, but James said significant information and records show the NRA leadership was “self-dealing” and “spending on luxury items for its leaders and top vendors.

The lawsuit seeks to dissolve the NRA and removal of its officers and would force those officers to pay restitution “for funds they unlawfully profited and salaries earned while employees, pay penalties and recover all illegal and unauthorized payments.

James said that those board members who complained in the past suffered retaliation, as LaPierre took lavish vacations, including eight trips to the Bahamas with his family on the NRA dime.