Fresh allegations of systemic financial mismanagement at the top of the National Rifle Association erupted into the open this weekend.
Documents leaked online anonymously on May 10 and subsequently verified by the Daily Beast and Wall Street Journal purport to expose the extent of the NRA’s financial entanglements. Top executives including CEO Wayne LaPierre allegedly engaged in lavish spending on the account of a top NRA vendor, and the gun group is spending millions of dollars to cover legal costs associated with the various lawsuits and investigations currently entangling the gun rights group.
The documents — which include itemized receipts and letters from NRA ad vendor Ackerman McQueen — allege that $24 million went to the NRA’s outside general counsel, William Brewer, in only 13 months.
Recently deposed NRA President Oliver North and NRA official Richard Childress cautioned in a letter to NRA leadership last month that the group can’t afford to burn through some $100,000 a day on these legal fees, which “pose an existential threat to the financial stability of the NRA.”
The allegations laid out in the documents deepen the threat the NRA is facing from a wide-ranging probe by New York Attorney General Letitia James. James is reportedly investigating whether the NRA violated state charity law via self-dealing, unauthorized political activity, and submitting inaccurate regulatory filings.
Marcus Owens, a former chief of the IRS’s non-profit unit, told TPM that some of the accusations North makes could intensify James’ investigation.
“New York State law in essence requires that charitable funds be used for charitable purposes,” Owens said. “So excessive compensations, payments that don’t relate to the achievement of the charitable purpose — all of those are in violation of state law.”
The leaked documents purport to offer the inside story of the conflict between the NRA and Ackerman, which burst into public view last month when the gun rights group sued its longtime image-maker, accusing Ackerman of failing to provide it with documents necessary to fully audit the pair’s financial relationship.
According to the documents, North accused LaPierre of filing the lawsuit without letting the group’s board of directors know.
“The suit was filed without consultation and without informing members of the NRA Board of Directors or key officers of the NRA, and its public airing of what might be an internal dispute has cast the NRA in a bad light,” North wrote in an April 25 memo.
The lawsuit itself cast North in a particularly “bad light,” stating that the gun rights group needed documents from Ackerman to investigate whether North had signed a separate contract with the ad firm that “superseded” his duties to the NRA.
North – who was fighting to stay in his position as NRA president at the time – goes on to say that Ackerman “responded to the lawsuit with a series of letters” accusing LaPierre of charging the ad firm for international travel and some $275,000 on apparel at the luxury Beverly Hills shop Ermenegildo Zegna.
“During the recent audit sequence, specifically with FRA, transactions with related parties were discussed,” the Ackerman letter reads. “We realized during these discussions that we need to address your wardrobe that you required us to provide, specifically, purchases at the Zegna store in Beverly Hills, CA.”
The suit-related expenses piled up over a relatively lengthy time period: 2004 to 2017.
But Owens told TPM that allegations that LaPierre may have concealed the expenses from the NRA board could be fodder for investigators.
In one letter sent in the aftermath of the lawsuit, Ackerman writes to LaPierre that “at your request, we issued you an American Express card and agreed to the travel fee from II&IS. Both with the intent to keep your business travel confidential and secure.”
“Due to your demands in the lawsuit, we are notifying you that you have failed to provide written approvals, receipts, and other support for expenses related to your travel, etc,” the letter reads.
Owens told TPM that the “intent to keep your business travel confidential” suggested that “people involved in approving the credit cards and the transactions knew that they were doing something inappropriate, and it seems fairly clear that they wanted to conceal it.”
He added that while it’s hard to reach a firm conclusion on that single statement, “it’s an “indication that the attorney general will probe more aggressively and more deeply.”
The documents also contain allegations that Brewer, the NRA’s main outside counsel, took in $24 million from the NRA over a 13-month period, from March 2018 to April 2019.
Brewer is the son-in-law of Ackerman executive Angus McQueen.
North writes in one April 18 letter about the payments that the group should review the transactions “to comply with New York not-for-profit law,” while calling the expenses “mindboggling.”
Newly sworn-in NRA President Carolyn Meadows called the allegations “stale news” in a statement to the Wall Street Journal.
“The entire board is fully aware of these issues. We have full confidence in Wayne LaPierre and the work he’s doing in support of the NRA and its members,” the statement reads. “It is troubling and a bit pathetic that some people would resort to leaking information to advance their agendas. This has no bearing on the board’s support of Wayne—and the work the NRA does to protect America’s constitutional freedoms.”
Brewer has previously the high fees his firm charges, telling the Journal, “We’re a premium law firm, we make no bones about that.”
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