New York AG seeks to dissolve powerful NRA over finances

NEW YORK -- New York's attorney general sued the National Rifle Association on Thursday, seeking to put the powerful gun advocacy organization out of business over claims that top executives illegally diverted tens of millions of dollars for lavish personal trips, no-show contracts for associates and other questionable expenditures.

Attorney General Letitia James' lawsuit, filed in Manhattan state court, highlighted misspending and self-dealing claims that have roiled the NRA and its longtime leader, Wayne LaPierre, in recent years -- from hair and makeup for his wife to a $17 million post-employment contract for himself.

"It's clear that the NRA has been failing to carry out its stated mission for many, many years and instead has operated as a breeding ground for greed, abuse and brazen illegality," she said at a news conference.

"Enough was enough. We needed to step in and dissolve this corporation," after an 18-month probe, she said, just as her office did with President Donald Trump's charitable organization. Trump last year settled allegations he used donations meant for worthy causes to further his own business and political interests.

"No one is above the law, not even the NRA, one of the most powerful organizations in this country," James said.

Still, the lawsuit made only civil claims. James said the investigation was ongoing and any criminal activity discovered would be referred to prosecutors and the Internal Revenue Service.

Simultaneously, the Washington, D.C., attorney general sued the NRA Foundation, a charitable arm of the organization designed to provide programs for firearm safety, marksmanship and hunting safety, accusing it of diverting funds to the NRA to help pay for lavish spending by its top executives.

In a statement, NRA President Carolyn Meadows labeled James a "political opportunist" who was pursuing a "rank vendetta" with an attack on its members' Second Amendment rights.

"You could have set your watch by it: the investigation was going to reach its crescendo as we move into the 2020 election cycle," said Meadows, who announced a countersuit by the NRA in federal court in Albany that could set the stage for a drawn-out legal battle lasting well past November's election.

The troubles, which James said were long cloaked by loyal lieutenants and a pass-through payment arrangement with a vendor, became public as the NRA's deficit piled up and it struggled to find its footing after a spate of mass shootings eroded support for its pro-gun agenda. The organization went from a nearly $28 million surplus in 2015 to a $36 million deficit in 2018.

James, a Democrat, argued that the organization's prominence and cozy political relationships had lulled it into a sense of invincibility and enabled a culture where nont-for-profit rules were routinely flouted and state and federal laws were violated. Even the NRA's own bylaws and employee handbook were ignored, she said.

Though it is headquartered in Virginia, the NRA was chartered as a not-for-profit in New York in 1871 and continues to be incorporated in the state.

The Washington, D.C., attorney general's office has been investigating the NRA Foundation for more than a year. It said its investigation determined that low membership and lavish spending left the NRA with financial problems and so it exploited the foundation to remain afloat.

"Charitable organizations function as public trusts -- and District law requires them to use their funds to benefit the public, not to support political campaigns, lobbying or private interests," Washington Attorney General Karl Racine said in a news release. "With this lawsuit, we aim to recover donated funds that the NRA Foundation wasted."

The New York lawsuit also named LaPierre and three other current and former executives as defendants: corporate secretary and general counsel John Frazer, retired treasurer and chief financial officer Wilson Phillips and LaPierre's former chief of staff Joshua Powell. While the lawsuit accuses all four men of wrongdoing and seeks fines and remuneration, none of them have been charged with a crime.

LaPierre, who has been in charge of the NRA's day-to-day operations since 1991, is accused of spending millions of dollars on private travel and personal security, accepting expensive gifts such as African safaris and use of a 107-foot yacht from vendors and setting himself up with a $17 million contract with the NRA, if he were to exit the organization, without board approval.

The lawsuit said LaPierre, 70, spent millions of the NRA's dollars on travel consultants, including luxury black car services, and hundreds of thousands of dollars on private jet flights for himself and his family, including more than $500,000 on eight trips to the Bahamas over a three-year span.

Some of the NRA's excess spending was kept secret, the lawsuit said, under an arrangement with the organization's former advertising agency, Ackerman McQueen.

The advertising firm would pick up the tab for various expenses for LaPierre and other NRA executives and then send a lump sum bill to the organization for "out-of-pocket expenses," the lawsuit said.

The lawsuit comes at a time when the NRA is trying to remain relevant and a force in the 2020 presidential election as it seeks to help Trump secure a second term.

There has been an ongoing factional war within organization, pitting some of its most ardent gun-rights supporters and loyalists against one another.

The internal battles reached a fevered pitch at its 2019 annual meeting where its then-president, Oliver North, was denied a traditional second term amid a tussle with LaPierre as he sought to independently review the NRA's expenses and operations. He accused LaPierre of exerting "dictatorial" control.

Chris Cox, the NRA's longtime lobbyist and widely viewed as a likely successor to LaPierre, left after being accused of working behind the scenes with North to undermine LaPierre.