Letitia James launches the investigation as infighting plagues the NRA’s executive ranks.
Letitia James, New York’s attorney general, opened an investigation into the National Rifle Association’s nonprofit status Saturday, just hours after the group’s president announced he would not seek a second term.
The NRA, and several businesses connected to it, received subpoenas Saturday, said Kelly Donnelly, a spokeswoman for James.
A lawyer for the NRA said the organization will “fully cooperate” with the investigation, and added, “The NRA is prepared for this, and has full confidence in its accounting practices and commitment to good governance.”
The organization is chartered as a tax-exempt group in New York state and James, a Democrat, made targeting the NRA a platform of her campaign during the 2018 election cycle.
In a 2018 interview with Ebony, James said the NRA styles itself “as a charitable organization,” but argued it is actually “a terrorist organization.”
The New York Times and Wall Street Journal reported on large monetary transfers, executive compensation, and the awarding of certain contracts that financial experts said could have violated laws governing nonprofits. The NRA’s outgoing president, Oliver North, cited these reports and a potential investigation of the group’s finances as problems that needed to be addressed in a letter to the organization’s board ahead of his departure.
The investigation arrives amid an acrimonious leadership change
The National Rifle Association (NRA) faced a leadership crisis at the group’s annual meeting this week: its CEO Wayne LaPierre accused the organization’s president, Oliver North, of pressuring him to resign and extorting him. North, in turn, called for an investigation into LaPierre’s handling of the NRA’s finances.
Saturday, North, a former Marine Corps colonel best known for his role in the Iran-Contra affair, announced he will not seek another term as president in a letter read by NRA Second Vice President Richard Childress at the group’s annual meeting in Indianapolis. North’s term ends Monday.
In the letter, North repeated his concern over the state of the NRA’s finances, claiming one of the first meetings he took as president was with “NRA board members and donors who were concerned about the amount of money the NRA was paying to the Brewer law firm.” He also reiterated his fear that the NRA could soon lose its nonprofit status.
This most recent letter comes after another letter to the NRA board was published by the Wall Street Journal Friday. In that missive, LaPierre claimed North had threatened to send a letter detailing financial improprieties and sexual harassment claims unless LaPierre stepped down.
“The letter would contain a devastating account for our financial status, sexual harassment charges against a staff member, accusations of wardrobe expenses, and excessive staff travel expenses,” LaPierre wrote, according to the Washington Post. “But then, Col. North explained that the letter would not be sent — if I were to promptly resign as your Executive Vice President. And, if I supported Col. North’s continued tenure as president, he stated that he could ‘negotiate’ an ‘excellent retirement’ for me.”
North responded to LaPierre’s allegations in a separate letter to the board, writing he has questions about LaPierre’s financial management of the organization, and that he plans to assemble a committee that will investigate both the NRA’s finances and “allegations of financial misconduct related to Mr. LaPierre.”
“I did this because I am deeply concerned that these allegations of financial improprieties could threaten our nonprofit status,” North wrote.
The NRA is currently registered as a nonprofit organization; North claims LaPierre has jeopardized that designation through conflicts of interest with vendors, among other improprieties.
The organization is chartered in New York, and authorities there have threatened to investigate the NRA’s tax-exempt status. Gun control group Everytown for Gun Safety filed an IRS complaint in January that alleged the NRA’s financial decisions “stray from the norms and rules governing charities” and that called for its tax-exempt status to be revoked.
The fight became public just before prominent Republican leaders, including President Donald Trump, spoke at the NRA leadership convention in Indianapolis, Indiana. The power struggle between the group’s leaders will likely come to a head Monday when the NRA’s full 76-member board meets.
The NRA is vulnerable financially and legislatively
LaPierre has insisted that it is North whose financial dealings require further review.
North is under contract with NRA contractor Ackerman McQueen, Inc., an ad agency that runs the online video service NRATV. North hosts the NRATV program Oliver North’s American Heroes, and was paid “millions of dollars annually” for 12 episodes, according to LaPierre. However, only three episodes have been delivered so far.
The NRA’s relationship with Ackerman McQueen was already strained over the direction the agency decided to take NRATV in, and did not improve when the NRA filed a lawsuit alleging Ackerman McQueen misled the NRA about its spending practices. The agency’s spending was recently questioned again when the NRA demanded to know “what, exactly, it is paying for” given the slow completion of North’s episodes.
As Vox’s Jane Coaston reported, the NRA is not believed to have overly full coffers at the moment. In the Trump era, the organization has been faced with reduced revenue from membership (a 21 percent decrease since 2016, according to transparency organization OpenSecrets) and a time consuming federal investigation into the NRA’s ties to Russian actors.
The organization has also failed to advance three major legislative initiatives: one that would have allowed those with concealed carry licenses in one state to have those licenses recognized by other concealed carry states; another reviewing the legality of bump stocks; and a third that would have made it easier to purchase gun suppressors (also known as silencers). All three initiatives were defeated in part thanks to public support for gun control following a series of tragic mass shootings, like those in Las Vegas and at Marjory Stoneman Douglas High School.
Despite these troubles, the NRA it still has powerful allies in figures like President Trump, and with the election of a Democratic majority House of Representatives, has a new foe to rally its supporters against, Coaston explains:
To be sure, the NRA isn’t going to go away, particularly with a Democratic House now in office, one the group called a “hostile, anti-gun Congress.” In that press release on the bump-fire stock ban, the organization stated, “It’s critical that all gun owners unite and prevent the Bloomberg-bought Congress from dismantling our Second Amendment freedom.” Perhaps gun owners will unite again under the NRA banner in response to the potential threat of gun control measures stemming from the House, giving the group the revenue it so badly needs.
The perceived threat presented by the Democratic House may not be enough for the NRA to find cohesion and refocus on its legislative goals.
The New York investigation into the NRA’s finances will likely make it difficult for the organization to commit its full resources to the advancement of its platform. A lawsuit with Ackerman McQueen and revenue concerns will also take up NRA time and resources in the months to come. And restructuring is not over at the top of the organization — North needs a replacement, and as the board’s longtime lawyer, Steve Hart, has been suspended.
Author: Gabriela Resto-Montero