Court filings show the NRA is in shambles -- and Wayne LaPierre hopes his lawyer can 'keep him out of jail'
A year after being re-elected as the executive vice president and CEO of the National Rifle Association, Wayne LaPierre has seen his group go from an electoral kingmaker to the edge of financial ruin. He and other NRA executives have urged laid-off employees to seek public assistance benefits. The nation's most prominent pro-gun lobby has lost tens of millions of dollars amid numerous legal woes and investigations that have exposed its questionable financial dealings. Now, the longtime NRA leader hopes his lawyers can "keep him out of jail," according to previously unreported allegations in court documents in the group's legal battle against its longtime public relations firm, Ackerman McQueen.
The documents, which were published in full on NRA Watch, a new database launched by the advocacy group Everytown for Gun Safety, allege that LaPierre has grown "preoccupied with going to jail." Ackerman's allegations paint a picture of an executive who "didn't trust his own accounting department" and instructed associates not to disclose important information to the group's auditors.
The documents also include allegations about the NRA's search for a personal mansion for LaPierre, whose alleged obsession with "purchasing a lavish home for himself" led Ackerman to pull out of the deal. They also allege that LaPierre may have violated his own group's bylaws by improperly using Ackerman to pay off the group's former president, Lt. Col. Oliver North, who left the organization after what it described as a "failed coup attempt."
Shannon Watts, the founder of Moms Demand Action, the grassroots arm of Everytown for Gun Safety, told Salon that NRA Watch aimed to show that LaPierre "used member dues for what looks like personal reasons" while "only 10% of NRA funds in 2018 were even spent on gun safety."
"NRA is losing at the ballot box, in courts, on the balance sheet," Watts said. "We always talk about shining a light under the refrigerators and forcing the cockroaches to run out, and that's really what this website does.
"It's important to point out why the NRA is underwater reputationally and financially," Watts continued. The NRA's policy priorities are killing us, so stopping the NRA is our top priority. But when it comes to legal issues, the secret to our success is that we let the NRA beat itself."
The NRA worked with Ackerman McQueen, creators of the now-defunct online video channel NRATV, since the 1980s, paying them as much as $42 million a year. But the NRA sued the firm in Virginia in 2019, accusing Ackerman of overbilling for its services. More recently, the NRA filed a lawsuit in Texas alleging that Ackerman continues to improperly use the NRA's brand and properties. The NRA later filed an amended complaint in October alleging that Ackerman had breached its fiduciary duties, engaged in fraudulent billing and failed to maintain adequate records. The NRA has also accused Ackerman of a pattern of corruption, including its "failed" NRATV venture, for the purpose of collecting millions in fees.
Some of the new allegations were made in Ackerman's bid to have the law firm of Bill Brewer, a longtime friend of LaPierre, disqualified as the NRA's legal team.
Brewer's firm responded to Salon's questions with a statement from Linda S. Eads, professor emerita at the Southern Methodist University Dedman School of Law.
"After my review, it is my initial opinion that this request for disqualification provides no legal basis for the relief sought," Eads said. "Factually, it appears to be supported only by assumptions and innuendo. Also, it is based on allegations that have not been factually established. It is too early in the litigation process to use such unsupported claims as a basis for disqualification, which is one of the most serious actions a court can take against a litigation party — to cause the party to lose its lawyer."
Brewer's firm is expected to issue a formal response to the new allegations next week. The response comes after Ackerman successfully asked the court in Virginia to stay the litigation pending a resolution of the Texas case, against the objections of the NRA, according to a previously unreported court order.
LaPierre was elected to a second term as the NRA's CEO at the group's annual convention in 2019, one year ago this week. It was not the party that the longtime gun activist had expected. What was supposed to be a coronation quickly devolved into a civil war that has since led to the ouster of multiple top NRA officials.
Before that meeting, North — then the NRA president — began to raise concerns about the large legal fees the NRA was paying to Brewer. By the first day of the meeting, LaPierre wrote a letter to the NRA board claiming that North had attempted to force him to resign by threatening that Ackerman would release a "devastating account" of the NRA's financial dealings.
Hours after LaPierre, North and President Trump appeared on stage together at the meeting, news of North's attempted coup had leaked. On the third day of the meeting, North issued a statement announcing that he would not seek another term. The statement was read by another board member as LaPierre, who had reportedly orchestrated North's ouster, looked on next to an empty chair reserved for the group's president.
Though LaPierre was successful in beating back the alleged coup attempt, the NRA's legal entanglements in the year since have laid bare its devolving financial situation and threatened its tax-exempt status. Along with multiple lawsuits involving Ackerman, the attorneys general in New York state and Washington, D.C., have launched investigations questioning the group's tax status. New York Attorney General Letitia James is investigating whether the group violated the state's charities law, which some legal experts and NRA insiders believe could result in a criminal referral related to LaPierre's "use of nonprofit funds for personal expenses," according to the New York Times.
A previously unreported court filing by Ackerman alleged that "[s]ometime in early 2018, LaPierre became preoccupied with going to jail."
LaPierre later allegedly told Angus McQueen, Ackerman's longtime chief executive, that he believed "Brewer was going to keep him out of jail," according to another previously unreported court filing in March.
The NRA roundly rejected Ackerman's claims.
"This is the same stale, desperate and contrived narrative Ackerman has been peddling for a year," Andrew Arulanandam, managing director of public affairs at the NRA, told Salon. "In any event, it does nothing to diminish the confidence the NRA has in Bill or his law firm — or our commitment to hold this former vendor accountable."
"The simple truth is, Ackerman is desperate to distract from the agency's woes and alleged improper actions," Arulanandam added. "It seems the agency has resorted to unhinged rants, based on non-existent communications and allegations from terminated employees."
The group's finances have taken a huge hit as a result of its legal woes.
According to a secret recording obtained by NPR, LaPierre recently told members that the NRA took a "$100 million hit" over the past two years and had to cut "about $80 million" from the budget and "took it down to the studs."
"We're not out of the woods yet," he warned in the recording. "We still gotta wrestle with this financial situation."
Internal documents obtained by The Trace show that the group's finances soured as it spent millions in member donations on salaries for executives, legal bills and lavish travel, while spending less than 10% of its funds on its supposed core mission: gun safety, education and training.
The NRA's members have begun to raise questions about the group's spending after it was reported that LaPierre spent hundreds of thousands on Italian suits and luxury vacations. Brewer has argued that the "vast majority of travel involved donor outreach, fundraising and stakeholder engagement."
NRA board member Allen West, a former Republican congressman from Florida, slammed LaPierre after NRA officials defended their CO. West argued the defense was filled with "outright lies" and said he was removed from key committees for daring to "challenge the cabal of cronyism."
More than 10% of the organization's board has resigned in the past year.
"If you're surprised by this you don't know Wayne LaPierre," Watts said, "because he has a long history of overseeing sweetheart deals and self-dealing to himself, friends and family and others."
Many of the more lurid allegations of impropriety came from Ackerman in response to the NRA's lawsuit. The lawsuit was filed weeks ahead of the 2019 annual meeting, in what appeared to be an attempt to get ahead of the allegations raised by North.
North warned officials that the legal fees paid to Brewer were "draining NRA cash at mind-boggling speed" and "pose[d] an existential threat to the financial stability of the NRA." North claimed that LaPierre had rejected multiple attempts to request a full audit of the legal fees.
After North's ouster, several NRA members spoke out against LaPierre and NRA leaders and initiated motions for a no-confidence vote in LaPierre, though that effort was defeated.
Since then, mounting allegations of wrongdoing have consumed the group. But executive compensation has continued to rise. In 2018, LaPierre's salary increased by 57% to $2.15 million per year. Other "senior staff cashed in, too," the New York Times reported," while oversight "has been complicated by paydays to the 76-member board."
Court filings suggest that shortly after the school shooting in Parkland, Florida, the NRA considered buying LaPierre and his wife a $6.5 million mansion through Ackerman. The NRA sent a $70,000 check to a newly formed LLC to facilitate the transaction.
In a previously unreported declaration, Ackerman's chief financial officer, William Winkler, said that he refused to move ahead with the acquisition when "it became apparent … that Mr. LaPierre was more interested in purchasing a lavish home for himself" than in addressing "alleged safety concerns."
The NRA has dismissed the allegations.
"The agency introduced Mr. LaPierre to its preferred local real estate agent, directed a tour of multiple homes, and established a company to manage the investment," Arulanandam said in a statement to the Washington Post last year. "No matter, Mr. LaPierre ultimately rejected the opportunity and not one dime of the NRA's money was spent on this venture."
In a separate transaction that even the NRA's own accountants described as "vague and deceptive," the NRA paid $1.8 million to rent a house in Southern California from a production company that worked on a show featuring LaPierre, according to The New Yorker.
The NRA also "used unorthodox means to arrange [LaPierre's] travel, including his use of private jets for almost every trip," according to the Wall Street Journal. The group's accountants were "instructed to pay" for certain trips "without the usual detailed supporting documentation, which was held in a private file in the NRA treasurer's office," including private flights that "totaled about $2 million in one recent year."
The big spending extended to other officials as well. A previously unreported February court filing by Ackerman alleged that LaPierre convinced North to "leave his paid position at Fox and become the next President and an employee of [Ackerman] by hosting a television show on NRATV."
"The NRA agreed to compensate [Ackerman] for Col. North reimbursing [Ackerman] for his work," the filing claimed.
The contract may have violated the group's bylaws, Everytown for Gun Safety said.
"The pass-through nature of the contract raises serious questions about whether the NRA was attempting to conceal its payments to its board president, especially since the NRA's organizational bylaws do not provide for compensation of the board president," according to a report from NRA Watch. "One concerned NRA employee wrote a memo shortly afterward, warning that 'using a vendor to provide compensation to' North 'does not work to hide disclosure of the compensation.' Months later, the NRA audit committee retroactively approved North's contract."
The NRA's relationship with vendors like Ackerman sparked concern within the group's audit committee, which held an emergency meeting in 2018 to discuss the spending. Documents obtained by The New Yorker show that the group's accountants were concerned that the "NRA pays overbilled, deceptive, vague invoices to 'preferred' vendors and contractors" and "decisions are made in the best interests of vendors," not the organization.
A previously unreported filing by Ackerman alleged that "[t]hroughout his tenure with the NRA, LaPierre has routinely used third-party vendors like [Ackerman] to conceal his penchant for personal spending, seemingly with the NRA's blessing."
The filing goes on to allege that LaPierre "on many occasions, told [Ackerman] that he didn't trust his own accounting department within the NRA" and that "on several occasions, LaPierre would specifically instruct [Ackerman] not to disclose certain information to certain auditors" in the NRA's accounting department.
The relationship with Brewer also drew scrutiny after the NRA paid the firm more than $24 million in legal fees, according to North. Ackerman has alleged that Brewer's firm is a "PR firm masquerading as a law firm to try cases in the 'court of public opinion,' not the courtroom." The filings also raise questions about the firm's methods. Revan McQueen, the son of former Ackerman CEO Angus McQueen (who died in July of 2019), alleged in a previously unreported declaration that attorney Bill Brewer "had detailed knowledge about Angus's cancer treatment and used that information to time his litigation and media attacks."
Another filing by Ackerman alleged that Brewer "engaged in deeply personal and calculated attacks on the McQueen family … at times strategically coordinated with Angus [McQueen's] medical treatment, his final family events, his declining health, and ultimately the period of grief following his death."
The past year has also seen several congressional investigations aimed at the NRA. Rep. Brad Schneider, D-Ill., called for the IRS to investigate the organization's nonprofit status after a yearlong probe into allegations of self-dealing and corruption. Rep. Jamie Raskin, D-Md., and Rep. Gerry Connolly, D-Va., separately urged the IRS to investigate financial fraud by the NRA. Reps. Don Beyer, D-Va., Dwight Evans, D-Pa., and Tom Suozzi, D-N.Y., followed with their own call for an IRS probe.
In the Senate, Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, led an investigation that found that "NRA leaders may have violated tax laws that prohibit use of organization resources for personal benefit." Wyden and Senate Democratic Leader Chuck Schumer have called on the IRS to investigate the group's tax-exempt status.
Raskin and Sen. Sheldon Whitehouse, D-R.I., have separately called for an investigation into whether the NRA violated campaign finance laws by coordinating communications with the Trump campaign and other Republicans.
As the investigations mounted, LaPierre issued statements warning gun owners that their rights were under attack by lawmakers who want to make "Americans less safe and less able to defend themselves."
"The NRA is mired in crisis and they're strapped for cash and their leaders keep going back to the old playbook to bail them out: fear-mongering about the collapse of society to raise money [and] to sell guns," Watts told Salon. "And it's so dangerous right now given that there are increased risks of domestic violence, unintentional gun violence [and] gun suicides because of the coronavirus crisis."
The past year also saw NRATV shutter after three years after the NRA spent upwards of $20 million annually to sustain the network. The NRA later said in court filings that some NRA leaders found the network's content to be "distasteful and racist" and described the overall effort as an "abject failure."
The past year has also seen a purge of NRA board members who had spoken out about the alleged financial misconduct. Eight of the group's board members have resigned and multiple high-ranking officials have left the group, including former top lobbyist Chris Cox, who was executive director of the NRA Institute of Legislative Action.
The NRA suspended Cox in June of 2019 after accusing him of participating in North's attempted coup. Cox, once considered the "heir apparent" to LaPierre, resigned days later as NRA-ILA spokeswoman Jennifer Baker insisted that "any notion that Chris participated in a coup is absurd." Baker was subsequently fired as well.
But the purge has not stopped the leaks about questionable spending at the group. Internal documents obtained by the Washington Post show that the organization spent $9.3 million on office supplies in 2018, roughly $12,000 per employee. To make up for the big spending, the NRA cut funding for gun training, a key component of its purported core mission.
According to the NRA's financial report, the group ended 2018 with a $10.8 million deficit, marking the third straight year it spent more than it brought in, even as it continued to increase executive pay.
This year, the NRA announced across-the-board 20% pay cuts and layoffs, urging affected employees in a leaked memo to "contact any germane state or federal agency to determine eligibility for any additional aid."
LaPierre in the memo blamed "extraordinary challenges resulting from COVID-19" for the cuts despite years of deficits and increased legal spending.
But the revelations in the court documents and news reports make it clear, Watts said, "that the pandemic is not what's bankrupting the NRA. "That's its own corrupt leadership. It's really showing that even though Wayne LaPierre is scapegoating, he and the rest of the NRA leaders have used the organization as their personal piggybank for years."
The NRA has also seen its political influence wane as its election spending has dropped precipitously. In the group's home state of Virginia, voters elected a Democratic legislative majority in 2019 that quickly passed a package opposed by the NRA that implemented expanded background checks, a "red flag" law and other gun-control measures. The previous Republican majority had refused to take up the issue even after the mass shooting that killed 12 people at a municipal building in Virginia Beach.
"We outspent the NRA eight-to-one in Virginia, we outworked them on the ground, making hundreds of thousands of calls and knocking on tens of thousands of doors," Watts told Salon. "And as a result we flipped both chambers" of the state legislature.
Watts said the Virginia elections were only one example of the NRA's waning influence: "The NRA is weaker than it's ever been and we are stronger than we've ever been. We outspent and outworked them in 2018. We were able to flip the U.S. House of Representatives and change the makeup of seven state legislatures and elect over 1,000 'gun sense' candidates across the country."
Going into the 2020 elections, Watts said, her group has "already committed to spending $60 million, which is twice what the NRA spent in 2016. And the NRA is so deep underwater that even the president they worked so hard to elect no longer wants to work with them."
President Trump received more than $30 million in backing from the NRA during his 2016 run, but has recently complained to aides that the group is "going bankrupt," according to the New York Times, and tweeted that the NRA "must get its act together quickly, stop the internal fighting, & get back to GREATNESS – FAST!"
"Donald Trump talks about the Second Amendment, but he doesn't so much talk about the NRA anymore," Watts said. "Some of the NRA's own board members have distanced themselves from the NRA and major donors have begun to distance themselves from the NRA, so it's really not surprising that Donald Trump would as well if he sees them as possibly an albatross around his neck.
"If you look at the way this country has been going since the 2016 election, background checks continue to pass, red-flag laws, laws that disarm domestic abusers. We have a 90% track record in the last five years of stopping the NRA's agenda in state houses. So politically, they have not been as successful."