After teasing a “major” announcement Wednesday evening, on Thursday, New York Attorney General Letitia James, filed a civil lawsuit against four senior NRA executives and, in addition, rather dramatically seeks to dissolve the 149-year-old National Rifle Association altogether. The state lawsuit follows an 18-month investigation into the powerful gun rights group, finding financial misconduct in the millions of dollars that contributed to a loss of more than $64 million in the past three years. The named defendants in the suit are executive vice president Wayne LaPierre, who has headed the organization for 30 years, general counsel John Frazer, former CFO Woody Phillips, and former chief of staff Joshua Powell. James further seeks that the court bar all four men from ever serving in a leadership position for a New York charity in the future.
James has broad oversight powers over the group because the NRA was formed under the not-for-profit laws of the state of New York. As such, the state attorney general is responsible for overseeing the activities of New York not-for-profit corporations and the conduct of their officers and directors. The 164-page complaint—which hits the NRA as it is roiled by internal conflict—closely follows the template of the suit brought by New York against the Trump Foundation in 2018. The complaint alleges that the group and its officers engaged in self-dealing and made false or misleading disclosures to the attorney general and the IRS, and that the officers breached their fiduciary duties to the NRA, wasted the NRA’s charitable assets, and caused false and materially misleading filings to be made in New York state.
The case against the four officers is devastating. Whether James will prevail in her efforts to shut down the entire storied organization is more doubtful. The NRA called the lawsuit a “baseless, premeditated attack” by a “political opportunist.” And President Donald Trump suggested that in response, “the NRA should move to Texas and lead a very good and beautiful life.”
The lawsuit functions as a proxy attack on corrupt organizations that have escaped real scrutiny for years. It is virtually impossible to read the allegations of misconduct cataloged—LaPierre is alleged to have spent hundreds of thousands of dollars on private travel, for himself and his family, staying at luxury golf clubs, expensing lavish meals and pricey hotels and travel services—without replaying the whole song in the key of Trump. In her press conference announcing the lawsuit, James very deliberately noted that she was taking this action to shutter the NRA, “just as we did with the Trump Foundation,” which agreed to shut down under judicial supervision in 2018. She described the organization as “a breeding ground for greed, abuse, and brazen illegality.” It was impossible to ignore the echoes of Trumpian conduct in the attorney general’s claim that the abuse, corruption, and fraud had gone unchecked for years because the group appeared all-powerful, but also that “no organization is above the law.”
LaPierre had allegedly directed hundreds of thousands of dollars to private trips for himself and his family, including eight visits to the Bahamas and all-expense paid safaris in Africa with his wife. Over the past two years, LaPierre also allegedly spent $3.6 million on travel consultants. The complaint details private flights for his niece and his daughter, travel to “celebrity retreats” and jaunts on a yacht (named Illusions) when he stayed in the Bahamas. LaPierre claims he required the private flights and the yachts for “security purposes.” LaPierre also spent lavishly on travel consultants, long after he was told that the services were overpriced. (From August 2014 to January 2020, the NRA paid LaPierre’s travel consultant more than $13.5 million).
The suit also details a long-standing arrangement between the NRA and its former advertising firm Ackerman McQueen that allowed Ackerman McQueen to spend tens of millions of dollars in vague “out-of-pocket expenditures” and “public relations and advertising” that included yet more entertainment and travel spending as well as hair and makeup costs for Susan LaPierre.
The NRA has long been seen as all-powerful, but it has suffered significantly in recent years, as a result of catastrophic handling of school shootings, self-dealing, public intramural feuding, and soaring litigation costs. A secret recording of a recent board meeting had LaPierre telling his audience that the NRA’s legal troubles had set them back $100 million. The NRA reportedly laid off 200 staffers this year citing declines in revenue. According to the complaint, while the NRA had a $27.8 million surplus in 2015, that had dropped by $64 million by 2018. Much of the misconduct alleged had been widely reported in the press, and James had taken office with a pledge to investigate. But this lawsuit and its accompanying fanfare suggest that, as with the Trump Foundation case, New York is making an example of those who purport to be running charitable entities, yet seemingly serve only to enrich their millionaire officers.
Make no mistake: This is a warning shot directed at Trump, even if it’s indirect. With Wednesday’s revelations from the New York Times that Deutsche Bank has turned over Trump’s financial records after the Manhattan District Attorney’s Office issued a subpoena last year, there was some speculation that James’ announcement would involve a broadening investigation into Trump’s finances. Those folks are bound to be disappointed. But as a message that nobody is above the law, the symbolism is hard to avoid: The NRA spent millions to get Donald Trump elected and to seat a Supreme Court amenable to its worldview. The NRA was also part of the Russian meddling in domestic politics story of the 2016 election. If James can prove her claims, and the organization shutters forever, it will go a long way to signaling both that the law is not just for suckers, and that millionaires are not immune from oversight. It may also galvanize Trump’s base and add to the possibility of chaos in the upcoming elections.
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