Breaking down the allegations in the New York attorney general’s lawsuit seeking to dissolve the gun group.
By Tom Kutsch & Will Van Sant
The Trace (8/17/20)
After more than a year of investigating the National Rifle Association, New York Attorney General Letitia James announced on August 6 that her office is seeking to dissolve the organization because of vast financial misconduct. In addition to the NRA itself, the suit targets four current and former senior executives: CEO Wayne LaPierre; general counsel and secretary John Frazer; ex-COO Joshua Powell; and ex-treasurer Woody Phillips.
Many of the allegations contained in the 164-page civil complaint are based on reporting from The Trace. In our April 2019 investigation, published in partnership with The New Yorker, former Trace staff writer Mike Spies unearthed a laundry list of financial improprieties and self-dealing. Follow-up reporting by Spies and others fleshed out how top executives had lined their pockets with lucrative compensation packages and racked up suspicious six-figure charges.
James’s complaint adds a slew of new details about how the NRA and its leaders spent the money of rank-and-file members and failed to exercise due diligence. Below, you’ll find some of the most shocking details.
Wayne LaPierre’s enormous golden parachute
Last year, the Trace reported that LaPierre’s contract provided for an annual retirement package that would start at his final base salary — then more than $1 million — and later be reduced. The attorney general’s suit specifies that the total value of that package was more than $17 million, and alleges it was secured without proper approval from the nonprofit’s board of directors.
A Hollywood producer cashes in on gun-rights advocacy
In May 2019, The Trace reported that the NRA paid $1.8 million to Associated Television International to rent a home owned by its proprietor, Hollywood producer David McKenzie. McKenzie’s attorney told The Trace that the property was used in conjunction with the production of Crime Strike, a crime re-enactment program that featured LaPierre.
The Wall Street Journal has identified McKenzie as the “principal stakeholder” in four companies that were paid more than $100 million by the NRA since 2011. Between 2013 and 2017, LaPierre took private jets to California to meet with McKenzie at least 20 times, usually staying at a historic Beverly Hills hotel.
In addition, LaPierre and his family flew by private charter to the Bahamas on at least eight occasions since 2015, costing the NRA more than $500,000. On several of those trips, LaPierre and his family used a 108-foot yacht named Illusions, which McKenzie owned. The suit says that LaPierre never divulged using the yacht on NRA financial disclosure forms that asked about receiving gifts worth more than $250 from NRA contractors. McKenzie also paid for LaPierre’s stays in the Bahamas to attend what the suit describes as “celebrity retreats.”
Passing the buck to the NRA’s former PR firm
The Trace first reported on how the NRA’s former marketing firm, Ackerman McQueen, would cover many out-of-pocket expenses for LaPierre and other executives, then bill the NRA, which would pay the costs without approval or supporting documentation. According to James’s lawsuit, the arrangements included the NRA directing Ackerman to buy memberships at an exclusive cigar bar in Virginia, and Ackerman paying more than $250,000 to LaPierre’s personal travel consultant.
The NRA and Ackerman McQueen are now locked in an acrimonious court battle, but for years, the Oklahoma-based public relations firm was its biggest vendor. In 2017 and 2018, the suit says, the NRA paid the company $52,318,532 on “public relations and advertising” and $18,077,176 on “out-of-pocket expenditures.”
Questionable travel arrangements for LaPierre and his relatives
Last year, reporters at The Wall Street Journal and elsewhere broke a number of stories about the lavish spending habits and questionable travel arrangements of LaPierre, his family, and his colleagues. The suit documents many examples, including a $1 million tab between May 2015 to April 2019. In October 2016, LaPierre approved a solo private flight for his wife from Madison, Wisconsin, to Kearney, Nebraska, for $8,800. Asked why she didn’t fly commercial, he told state investigators: “I think it was probably easier to fly private, more convenient.”
Hiring people with strange or spotty backgrounds
As we reported back in 2018, chief of staff Joshua Powell had several business flops and unpaid debts before landing a cushy job at the NRA. LaPierre also brought former NRA employee John Frazer back into the fold as general counsel when he had only 18 months in private law practice under his belt. LaPierre acknowledged to investigators that he had not reviewed Frazer’s full legal credentials and background.
Ex-treasurer Woody Phillips, embezzled at least $1 million from his prior company before being hired by the NRA, according to former colleagues. And in 1995, LaPierre hired a personal assistant after she had been convicted of embezzling from a nonprofit where she worked in the 1980s. According to the suit, she had her corporate credit card suspended in the 2000s, after paying personal expenses with NRA funds. And in 2012, she billed the NRA for $18,000 for expenses related to her son’s wedding, which she never reimbursed.
Dubious post-retirement contracts for former employees
In 2008, an NRA employee of 35 years, Wayne Sheets, retired and assumed the role of executive director of the NRA’s charitable foundation. The Trace reported that he continued to be paid $30,000 per month as a fundraising consultant. According to the complaint, Sheets “admitted that he did not keep accurate records of fundraising he conducted” and that “his position was not subject to quantifiable outcomes or any form of metrics.” The contract included “actual reasonable and necessary expenditures, which are directly related to the consulting services” that were processed without documentation. But in 2016 alone, the NRA reimbursed him for $148,314 for fees that included monthly truck leases and membership costs for fraternal organizations like the International Order of St. Hubertus.
Little to no internal oversight of spending
In May 2019, The Trace and The New Yorker reported on a memo drafted by NRA accountants for the group’s audit committee — a select group of board members tasked with financial oversight — that described “vague and deceptive” accounting practices and violations of internal policies. The attorney general alleges that the board’s lack of “oversight resulted in waste and loss of the NRA’s charitable assets and contributed to the NRA reaching its currently deteriorated financial state.” The chair of the audit committee told investigators that “he had no knowledge of New York law governing audit committees, whistleblowers, or conflicts of interest, and could not recall the last time he had seen the charter” of his own NRA committee.