New York Attorney General Letitia James announced Thursday that the state is taking action to dissolve the National Rifle Association. The lawsuit alleges that the NRA is "fraught with fraud" and that senior leadership of the gun rights group squandered millions in donations on personal vacations, private jets, gifts, and expensive meals.
An 18-month investigation into the NRA allegedly revealed financial misconduct that contributed to a loss of more than $64 million over three years.
"The NRA's influence has been so powerful that the organization went unchecked for decades while top executives funneled millions into their own pockets," James said during a Thursday morning news conference. "The NRA is fraught with fraud and abuse, which is why, today, we seek to dissolve the NRA, because no organization is above the law."
James said that the NRA was "a breeding ground for greed, abuse, and brazen illegality."
NRA President Carolyn Meadows responded to the lawsuit:
This was a baseless, premeditated attack on our organization and the Second Amendment freedoms it fights to defend. You could have set your watch by it: the investigation was going to reach its crescendo as we move into the 2020 election cycle. It's a transparent attempt to score political points and attack the leading voice in opposition to the leftist agenda. This has been a power grab by a political opportunist – a desperate move that is part of a rank political vendetta. Our members won't be intimidated or bullied in their defense of political and constitutional freedom. As evidenced by the lawsuit filed by the NRA today against the NY AG, we not only will not shrink from this fight – we will confront it and prevail.
The lawsuit claims that top NRA executives misused millions of illegally misappropriated funds. The suit also accuses head NRA executives of awarding contracts to family members and friends.
The lawsuit names four current and former NRA executives: Executive Vice President Wayne LaPierre, general counsel John Frazer, former CFO Woody Phillips, and former chief of staff Joshua Powell.
The complaint demands that executives named in the suit pay full restitution. The complaint also recommends that all four executives should never be permitted to serve on the board of a New York charity.
The NRA is a tax-exempt nonprofit organization and has 501(c)(4) status, which means it is regarded as a "social welfare organization" by the Internal Revenue Service. Donations to such groups are not tax-deductible as allowed by law.
The NRA is headquartered in New York, which falls under James' jurisdiction. The suit was filed in the New York State Supreme Court.
The suit claims that LaPierre and others re-routed their expenses to its former advertising firm, Ackerman McQueen. Then the Oklahoma-based company allegedly billed the National Rifle Association for the personal expenses under the guise of advertising expenses.
Ackerman McQueen and the NRA had an unceremonious separation last year, punctuated by the NRA suing Ackerman McQueen over its billing practices, and Ackerman McQueen counter-suing with a defamation case.
The AG's lawsuit claims that Ackerman McQueen spent $70 million on such "out-of-pocket expenditures" and "public relations and advertising" in 2017 and 2018. The expenses reportedly a cover-up for travel by NRA executives, including eight trips to the Bahamas and all-expense-paid safaris in Africa. There were also alleged payments for personal hair and makeup for Susan LaPierre, wife of the NRA CEO.
James, who is a Democrat, also claims that the salary of former NRA chief of staff Joshua Powell tripled in a little more than two years into his tenure.
The NRA reportedly laid off more than 200 employees in 2020 because of a "deepening financial crisis," according to The Guardian.
In a 2018 Ebony interview, James said, "The NRA holds [itself] out as a charitable organization, but in fact, [it] really [is] a terrorist organization."
The NRA spent over $30 million on Trump's 2016 presidential campaign, according to Federal Election Commission data.
The official Twitter account of New York Attorney General Letitia James' Office released a statement:
I filed a lawsuit to dissolve the National Rifle Association for years of self-dealing and illegal conduct. The NRA is fraught with fraud and abuse. No organization is above the law. We are seeking to dissolve the NRA for years of self-dealing and illegal conduct that violate New York's charities laws and undermine its own mission. The NRA diverted millions of dollars away from its charitable mission for personal use by senior leadership. Our lawsuit charges the NRA as a whole and four senior leaders, including Wayne LaPierre, with failing to manage the NRA's funds and failing to follow numerous state and federal laws. These actions contributed to the loss of more than $64 million in just three years for the NRA. The four defendants failed to fulfill their fiduciary duty to the NRA and used millions upon millions from NRA reserves for personal use, including: trips for them and their families to the Bahamas & safaris in Africa private jets expensive meals and other private travel. They and board members at the NRA abused their power & illegally diverted or facilitated the diversion of tens of millions of dollars from the NRA. The NRA has failed to carry out its stated mission for many years, and instead, operated as a breeding ground for greed and abuse. In New York, we have a set of laws that every individual and entity must be held accountable to, regardless of its size, influence, power, or wealth. No one is above the law, not even the NRA, one of the most powerful organizations in this country.