The NRA recently rolled out its second dues increase in two years.
By Mike Spies & John Cook
The Trace (11/28/18)
The National Rifle Association paid more than $100,000 in personal expenses for an official who is now leading an austerity campaign within the organization, new tax filings show.
The official, Josh Powell, is the NRA’s executive director for general operations. The Trace and Mother Jones reported two weeks ago that Powell, along with the NRA’s new treasurer, Craig Spray, is seeking to impose steep cuts to the gun group’s budget. The effort is so stringent that the NRA did away with free coffee and water coolers at its Fairfax, Virginia, headquarters, causing consternation among NRA staffers. Today, NRATV staffer Cameron Gray announced on Twitter that he and “several colleagues” had been laid off.
The filings come at a time when the organization finds itself, by its own admission, in a precarious financial state. Last year, total revenue fell by almost $55 million, and yet overall executive compensation increased by $1.2 million.
According to the NRA’s latest tax filing, released earlier this month, Powell’s total compensation for 2017 was almost $800,000. Of that, the records say, $102,484 took the form of “taxable personal expenses.” Another executive, Todd Grable, generated more than $132,000 in expenses, the documents show. The filings do not specify the type of personal expenses that were paid, but an NRA spokesperson told The Trace that it provides “corporate living arrangements” for Powell “so that he may maintain a home near headquarters and address the personal living needs of his family in Michigan.” (The returns disclose for the first time that the NRA pays housing costs for a total of four unnamed executives.)
A Trace investigation into Powell’s business history published last month revealed a long trail of defaulted debts, including 20 lawsuits for more than $400,000 from unpaid vendors.
Welfare for execs
It’s not unheard of for companies or nonprofits to pay some personal expenses — car payments, housing, travel — of highly sought after executives. But experts say the scale of expenses covered for Powell and Grable is highly unusual. Previous NRA tax returns have not disclosed what, if any, portion of executive compensation was reimbursement for personal expenses.
“The fact that the NRA made no effort to argue that they were work-related personal expenses means they really were personal,” said Marc Owens, a former head of the Internal Revenue Service division overseeing tax exempt enterprises. “It’s truly unusual that an executive from a nonprofit would be able to command that sort of additional income. It’s a very large amount, and an extraordinary admission.”
The NRA’s 2017 tax filings contain much more detail than they have in prior years, laying bare financial arrangements and transactions that had previously been opaque. One puzzling disclosure regards the compensation of a former executive, Michael Marcellin, who was the NRA’s managing director of affinity and licensing. Marcellin’s duties included managing special offers for members, including insurance products like the controversial Carry Guard program, which sparked multiple investigations from state insurance regulators, including New York and Washington State. Carry Guard was administered by a firm called Lockton Affinity, which split revenue from the product with the NRA. Lockton cut ties with the NRA after February’s mass shooting in Parkland, Florida, and the two are now embroiled in a lawsuit.
The 2017 tax returns identify Marcellin as a “former” employee, yet they indicate that he received a base salary of $522,426 from the group last year. Supplemental notes, however, say that he received precisely the same amount — $522,426 — from “an unrelated organization, Lockton Affinity LLC.” The notes also say Marcellin received $455,000 from Lockton in 2016, a detail that was “inadvertently excluded” from the previous year’s tax records. In 2016, Marcellin was still a fulltime NRA employee, earning a total of nearly $630,000, according to that year’s filing.
Three nonprofit tax law experts consulted by The Trace said they could not fathom why the income was paid by Lockton, or why it was disclosed by the NRA. “I don’t know why they’re reporting that,” said Philip Hackney, a professor at the University of Pittsburgh Law School who specializes in nonprofits. “It wouldn’t seem to fit, since it’s not a related organization, so you wouldn’t put that in. But they put it in. Reporting unrelated entity income is more than a belt and suspenders approach.”
Marcellin did not return a message seeking comment. A spokesman for the office of the Washington State insurance commissioner, which has been investigating Carry Guard, told The Trace that “Washington insurance law does not allow compensation to an NRA employee for soliciting, selling or negotiating coverage,” but that the payments would be legal if they were reimbursements for other services.
Russia connection
Other disclosures in the returns include a $32,000 payment to David Keene, a board member and former president who has been closely associated with the alleged Russian spy Maria Butina. Keene visited Moscow in 2013 to attend the annual meeting of a pro-gun group founded by Butina, and has been a longtime associate of Butina’s boyfriend, Paul Erickson. Reached by a reporter, Keene said only: “I don’t talk to The Trace. Merry Christmas.” …
Read the Rest and Link to NRA Tax Document
- Documents Point To Illegal Campaign Coordination Between Trump and NRA — The National Rifle Association spent $30 million to help elect Donald Trump — more than any other independent conservative group. Most of that sum went toward television advertising, but a political message loses its power if it fails to reach the right audience at the right time. For the complex and consequential task of placing ads in key markets across the nation in 2016, the NRA turned to a media-strategy firm called Red Eagle Media. One element of Red Eagle’s work for the NRA involved purchasing a slate of 52 ad slots on WVEC, the ABC affiliate in Norfolk, Virginia, in late October 2016. The ads targeted adults aged 35 to 64, and aired on local news programs and syndicated shows like Jeopardy! and Wheel of Fortune. In paperwork filed with the Federal Communications Commission, Red Eagle described them as “anti-Hillary” and “pro-Trump.” The Trump campaign pursued a strikingly similar advertising strategy. … Read the Rest
- ‘Something weird happened with the NRA in 2016’: Maddow Says Their ‘money just doesn’t make sense’ — “Could the resolution of Maria Butina’s case finally give us a window into what has been going on here?” Maddow asked. “If the FBI has been investigating, among other things, the possibility that the NRA was used as a large-scale conduit for Russian money into the effort to elect Trump president, will the Maria Butina case give us a window into that investigation and it’s potential conclusions?” Link to Story and 16-Minute Video
(Commoner Call cartoon by Mark L. Taylor, 2018. Open source and free for non-derivative use with link to www.thecommonercall.org )