The New York Attorney General just announced a grave investigation of the National Rifle Association’s non-profit status for financial improprieties and illegal self-enrichment by top insiders.
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It has been a chaotic weekend national convention for the NRA which is in the midst of a civil war just as the IRS begins to close in on exposing their illegal business practices and a new lawsuit landed aiming to force the FEC to find the group in violation of election laws.
The NRA’s President Oliver North abruptly quit today after his high-profile coup attempt failed. Now, the gun rights group is reeling from New York’s new probe, which could result in the state equivalent of the death penalty for the NRA. NPR’s Tim Mak reports:
“The Office of New York State Attorney General Letitia James has launched an investigation related to the National Rifle Association (NRA),” a spokesperson for the attorney general told NPR. “As part of this investigation, the Attorney General has issued subpoenas. We will not have further comment at this time.”
The NRA has received a document preservation notice in connection with the investigation being undertaken by the New York attorney general, according to a source familiar with the matter.
The NRA responded to the announcement of the investigation by pledging its cooperation. “The NRA will fully cooperate with any inquiry into its finances,” said William A. Brewer III, an outside lawyer for the NRA.
It’s not just an investigation into the NRA, but also its affiliated foundation and political arms. The New York Times reports that it has to do with transfers between the different organizations:
On Friday, Ms. James’s office sent letters instructing the N.R.A. and affiliated entities, including its charitable foundation, to preserve relevant financial records. Some of the N.R.A.’s related businesses also received subpoenas, according to people with knowledge of the inquiry.
Earlier this year, The New York Times reported that the N.R.A.’s affiliated charity, the N.R.A. Foundation, had transferred more than $100 million since 2012 to the N.R.A., and that it also lent the N.R.A. $5 million in 2017. Donations to the N.R.A. Foundation are tax-deductible, while those to the N.R.A. are not, and the transfers concerned some tax experts.
Depending on the outcome of the NY AG’s investigation, the NRA could face dissolution just like the Trump Foundation suffered in court.
Fordham Law Professor Jed Sugarman explained why dissolution for a corporation is analogous to the death penalty, and only applies to the most serious cases, in the Times’ Opinion section when he wrote about the nonprofit Trump Foundation’s demise for fraud:
New York’s highest court has described this remedy of civil dissolution as a “judgment of corporate death,” and for the state to invoke such a corporate death penalty, the corporation’s “transgressions” must not be merely incidental, but “material and serious; and such as to harm or menace the public welfare.”
In fact, the previous attorney general, Barbara Underwood, brought a similar action — to potentially dissolve fraudulent nonprofits — against the Trump Foundation. In June, Ms. Underwood filed a civil petition citing a long list of the Trump Foundation’s abuses of nonprofit privileges. . . Six months later, the Trump Foundation agreed to its dissolution with judicial supervision, while the attorney general’s petition still seeks restitution and further judicial remedies.
Yesterday, the NRA’s Executive Vice President Wayne LaPierre said, “Without the NRA, there’s no Trump.” Then, President Trump appeared at their convention to spread some of his perfunctory lies, cancel a military weapons control treaty, and make his typically inflammatory remarks.
By midday, news broke that a federal judge handed down a stiff sentence to the NRA’s back channel to Putin, even though she cooperated in a plea deal.
Next, a bombshell story dropped in the Wall Street Journal from LaPierre, complaining that North was extorting him to resign from the group with a “generous” golden parachute. This afternoon, the Board’s longtime lawyer also suddenly quit.
Follow Grant Stern on Twitter @grantstern and buy his first book on pre-sale today: Meet the Candidates 2020.
The NRA’s civil war began with a blizzard of investigative news reports about the NRA frittering away millions to benefit of insiders when the New York Times revealed in March, that the group’s “Advancement Director” owned a percentage of the production company that got paid $18 million to produce the show “Under Wild Skies” for NRA TV.
On April 15th, the NRA sued its longtime advertising agency Ackerman McQueen (known as “Ack Mack”) who created NRA TV and even wrote Charlton Heston’s infamous lines about prying his guns only from his “cold, dead hands.”
Two days later, the New Yorker revealed how Ack Mack and the NRA “have become so intertwined that it is difficult to tell where one ends and the other begins.” They exposed its president Oliver North for raking in millions from the advertising agency Ack Mack just for making documentaries for the group’s failing digital tv station.
Not only has the infamous North – who led the GOP’s Iran-Contra scandal coverup – been on the payroll of its advertising company while double-dipping to get paid by the NRA, but he has also only produced three of the twelve promised films. (Normally, the NRA’s president is an unpaid volunteer position.)
Today’s news of an attorney general investigation means that the National Rifle Association is facing severe penalties, while it is suing it’s most important vendor, and it is leaderless under the stewardship of insider LaPierre, who even gun nuts despise for his own self-enrichment atop the group.
The once-powerful NRA raised nearly half a billion dollars in 2016, helped elect Donald Trump and helped his son, Don Jr., party with the Russians who infiltrated the group in order to influence GOP politics.
Tonight, it looks like the National Rifle Association is on death’s doorstep amidst infighting, dirty laundry lawsuits and a flurry of investigations.