U.S.A. — The National Rifle Association has received yet another judicial slap-down. Lead counsel Bill Brewer, along with attorneys for Wayne LaPierre, Secretary John Frazer, former Treasurer Woody Phillips, and former executive Josh Powell filed yet another raft of petitions calling for the suit to be dismissed or seriously throttled. In an order issued on June 8, the judge in the case rejected virtually all of these motions and petitions, most of which had already been previously rejected by the court. Not surprisingly, Judge Cohen, who has been very fair and reasonable in his handling of the case, after rejecting the defense motions and affirming several petitions from the plaintiff, NY AG Letitia James, ordered that all parties involved “submit a joint letter proposing a trial plan and schedule so that the Court can reserve the necessary dates” for trial. The ruling is just one more in a long line of defeats for the NRA, with Brewer at the helm of its legal strategy.
Just in case you’ve been living under a rock for the past four years – as is apparently the case with many NRA members and the entire NRA Board of Directors – the Attorney General of New York filed charges against the Association and several of its top executives in August of 2020 after the publication of a damning investigative report in April of 2019. The New York AG charged Association’s paid staff and elected officers with diverting charitable funds away from their intended purposes and into the pockets of NRA brass and their pals.
There is no question that the New York Attorney General is an ambitious, partisan politician who campaigned on a promise to destroy the NRA, and it is undeniable that her pursuit of the Association is very much politically motivated. In their talking points, the NRA “leadership” restates that accurate analysis, and goes on to dismiss everything raised in the suit as just a politically-motivated attack with no substance. The trouble is that dismissal is a lie. There is a great deal of substance to the suits.
When James’ investigators started looking into the organization, they found a seething den of corruption. In short, virtually all of the charges brought by the NY AG are backed up by documentary evidence and appalling levels of self-incrimination on the part of NRA “leaders.”
The sad truth is that NRA executives and their cronies have been blatantly pocketing tens of millions of dollars from the NRA for years. Meanwhile, the NRA Board of Directors, who hold a fiduciary responsibility to the members of the Association, have willfully looked away, abdicating their responsibilities, instead standing resolutely behind Wayne LaPierre and his fellow miscreants.
To make matters worse, the NRA Board had multiple opportunities to head off the whole mess long before the New York probe became public. They could have relatively easily saved the Association well over $150 million in actual costs, and prevented the steep declines in membership, revenue, and political clout that has resulted over the past four years. Had they fulfilled their fiduciary responsibilities by suspending the accused executives, including LaPierre and anyone closely associated with him, appointing an Interim EVP/CEO to oversee day-to-day operations, and bringing in an outside auditor to conduct a thorough and transparent audit and investigation, they could have either proven that the allegations were false, allowing the accused executives to be restored without a pall of doubt hanging over their heads or discovered that the accusations were true, allowing them to take appropriate corrective actions. Instead, the Board rallied around Wayne LaPierre, reelected him, and pushed out anyone who dared to raise questions or challenge the status quo.
This failure on the part of the NRA Board to take substantive action to expose and correct any problems directly resulted in the loss of about one-third of NRA’s Annual Members (the financial lifeblood of the organization), and a decline in annual revenue of approximately 50% (from a high of over $380 million to a current total of less than $200 million), not to mention the substantial loss of political clout and credibility. The NRA is currently spending significantly more money on Brewer Attorneys & Counselors, the single law firm defending the corrupt actions of the Association’s “leadership,” approximately one-third of the Association’s total annual budget. These legal and PR costs have been growing exponentially over the past three years. To be clear, this is not money going toward defense of the Second Amendment, competitions, range development, or educational work. This money is being spent to defend against disturbingly valid charges of corruption, cronyism, and self-dealing among top NRA executives.
To put this into perspective, the NRA has cut its spending on Education and Training by over $100 million, from $176 million per year to only $75 million. Meanwhile, in 2022 the Association paid the Brewer firm over $60 million – more than twice the total annual revenue of all other national gun rights organizations combined.
Let that sink in for a moment. Internet warriors constantly suggest that one or more of the other national rights organizations can and will replace the NRA. Bluntly, that is not going to happen. At least not soon enough. The total combined revenue of the Second Amendment Foundation, Gun Owners of America, the National Association for Gun Rights, the Citizens Committee for the Right to Keep and Bear Arms, and the Firearms Policy Coalition would amount to almost half of what the NRA paid to the Brewer firm just last year. And the gains in membership and revenue that other groups have seen in recent years is nowhere close to the amount the NRA’s revenue and membership has declined.
No other group can offer the wide variety of programs and services traditionally offered by the NRA, yet the NRA is actively squandering that advantage by making wholesale cuts to those programs and services. At the same time, the Association is massively increasing spending on lawyers.
Worse yet, for all the money the Brewer firm has been raking in from NRA coffers, all they have to show is an almost unbroken string of courtroom defeats. There have been a few technical or procedural victories. They succeeded in getting the judge to agree that dissolution of the NRA – which the NY AG originally asked for – would not be an appropriate resolution to the charges in that case. They also prevailed in a suit blocking former NRA President Oliver North from charging the NRA for his personal legal expenses in related matters. North had been pushed out of his position as President after he had raised questions about the millions of dollars per month the NRA was paying to the Brewer firm. But those minor skirmishes are negligible victories compared to the crushing defeats NRA has been handed in the New York case and other matters.
Along with the NY AG suit, the Brewer firm represented the NRA in suits against the Association’s former PR company, Ackerman McQueen, which apparently not coincidentally, was founded and headed by Mr. Brewer’s estranged father-in-law, Angus McQueen. They eventually settled those suits with a payment of $12 million from NRA to Ack-Mac. NRA and Brewer also sued and were counter-sued by Ack-Mac executive Tony Makris over payments to his company Under Wild Skies, which produced a hunting show sponsored by NRA, and which featured NRA executives and Board members going on lavish hunts around the world (at NRA expense). They lost that suit as well, having to pay Makris. Brewer also represented the NRA in a suit filed by former NRA President Oliver North, asking the court to prevent the NRA Board of Directors from kicking him out of the Association. North won an injunction in that case, pending the outcome of the NY suit.
In one of their most glaring and downright stupid defeats, the Brewer firm represented NRA in a suit trying to avoid paying Chris Cox, the former Executive Director of NRA-ILA, the NRA’s lobbying division, his contractually obligated severance package. Cox was pushed out of his position in 2020 after it was discovered that he had suggested that LaPierre might need to resign for the good of the Association. He was accused of “disloyalty” and charged with participating in an “attempted coup against LaPierre. Cox’s contract called for two years worth of his annual salary, valued at a total of around $2.5 million. In the end, NRA had to pay the full severance, along with all of Cox’s legal fees. When combined with NRA’s own legal fees in the matter, the whole debacle cost NRA members over $10 million. Brewer wasn’t satisfied with that though; after losing that case, he and NRA turned around and sued the firm that arbitrated the case, claiming bias and again losing at the expense of NRA members.
Brewer was also in charge of a First Amendment “restraint of trade” suit against the state of New York, which Wayne LaPierre reported in 2020, had cost the Association over $100 million. They lost that suit and have now appealed the decision.
Then there was also the ill-advised attempt at entering Chapter 11 bankruptcy, which appears to have been another clever and extremely expensive idea from Brewer. Not only did the failed bankruptcy cost the Association millions of dollars before it was finally thrown out by an angry bankruptcy judge, it opened the Association’s books and records to the NY AG’s investigators, and provided opportunities for top NRA executives and key Board members to be questioned under oath.
The lowlight of that proceeding was former Treasurer Woody Phillips repeatedly invoking his Fifth Amendment right against self-incrimination. Philips invoked the Fifth more than 60 times in his testimony. The Chair and Vice Chair of the NRA’s Audit Committee (the committee of the Board tasked with preventing financial chicanery and conflicts of interest) probably should have followed Phillips’ lead. Instead, they both admitted under oath that they had steered outside auditors away from Wayne LaPierre’s office and had not scrutinized LaPierre’s books based on their personal friendships with him. Those two, Charles Cotton and David Coy, are still Chair and Vice-Chair of the Audit Committee, and they also serve as President and Second Vice President of the Board, respectively. In fact, in April of this year, the Board passed an amendment to the Association’s Bylaws, allowing Cotton to serve an almost unprecedented third term in the presidency. At the same time, First Vice President Willes Lee, who would have normally been elected to the presidency, was passed over and removed from the chairs, replaced by former Congressman Bob Barr. Apparently, Lee, like North before him, was asking too many uncomfortable questions and refusing to go along with secretive schemes.
Lee has been alluding to this in recent posts on Twitter and Facebook, in which he has questioned the lack of concern among fellow Board members regarding the way he was ousted, the ongoing plans to sell the Association’s Virginia headquarters building, and the secretive planning among officers and executive staff regarding a planned move to Texas and a variety of other major issues that should – by law and NRA policy – be under the purview of the Board.
Should NRA settle w NYAG? Can we settle? What would each get/give up?
(Asking for Board of Directors & 4 million NRA members.) pic.twitter.com/f79I92YhwS
— Willes Lee (@WillesLee) June 27, 2023
Public is only place we hear of NRA relo. For real or to throw off scent of the move, or no move?
We’re not telling Relocation Committee nor Board bc, we’re the NRA. Especially not going to allow staff to prepare bc … we’re the …. https://t.co/9jBqPWYp5T
— Willes Lee (@WillesLee) June 27, 2023
The question that keeps coming up is, “Why isn’t the Board of Directors doing anything?”
That’s definitely the $100 million question. Not only are they allowing the NRA to be driven into bankruptcy by an overpriced and demonstrably ineffective attorney, but their inaction also opens them up to personal, civil, and possibly criminal charges for failing to adequately attend to their legally binding fiduciary responsibilities.
Academics are using the NRA as a case study of how not to run a nonprofit organization and have written articles anticipating a total financial collapse of the organization. Yet members of the Board continue to allow themselves to be kept in the dark, refuse to even ask about what’s really going on, and seem oblivious to the fact that they are very likely to be the next targets of Letitia James’ crusade against the Association.
James wants the NRA destroyed. The judge has taken dissolution off the table. There remains some hope that the Association can be rebuilt after the almost certain loss it is about to suffer in the New York case, but James retains the option of doing even more damage by going after individual members of the Board. Incredibly, those Board members don’t seem to realize that they are completely naked, vulnerable to legal attacks, with no substantive insurance to help cover their legal expenses and no reasonable excuse for their failure to act on the information that has been right in front of them for years.
Many close followers of this slow-motion train wreck believe the Association’s “leaders” are again preparing to file bankruptcy. A couple of successful events, along with the Biden administration’s ongoing attacks on guns and gun owners, have provided a short-term boost to NRA finances, but it is not nearly enough to offset the years of decline and the Association’s dramatically out-of-balance balance sheet.
Whatever these “leaders” have up their sleeves, they only have a few months left to play those cards because the judge in the NY case has ordered all parties to begin working out trial dates for this October or November. Whether bankruptcy, other delays, or attempts to reach a settlement, time is running out. Up to this point, Letitia James has been happy to go along with Brewer’s delaying tactics and allow the case to drag out. She is well aware of the NRA’s financial situation and has been more than willing to see NRA’s resources dwindle as they are shoveled into Brewer’s pockets.
Through all of the twists and turns of the past five years, there are just two things that can be looked at as constants: In spite of accusations and supporting evidence, Wayne LaPierre remains the Chief Executive and figurehead of the NRA, and regardless of ever-increasing costs and ever more embarrassing losses in court, William Brewer keeps getting paid. (On an interesting side note, the Brewer firm was recently highlighted in legal journals for bucking the trend in the industry by paying their attorneys significantly better than most other firms. Starting salary for new associates in the Brewer firm is being reported as $250,000 per year.)
One case not mentioned above is a suit against NRA originated by NRA member David Del’Aquila. That suit has reached a 3rd Amended Complaint and will be seeking certification as a Class Action in the coming weeks. The suit asserts fraud on the part of NRA and its leadership in their fundraising tactics and financial dealings. The case hasn’t received much media attention over the past year or so, but it has been chugging along, again with Brewer representing the NRA, engaging in delaying tactics, and, as always, getting paid handsomely for his work.
The NY suit is supposed to go to trial by October or November. Observers are almost unanimous in the belief that if the case does finally get to trial, the NRA and the named defendants are going to lose badly. NRA and Brewer are rapidly running out of options for delays and sidetracking the case.
A reckoning is coming, and it will not be pretty.
About Jeff Knox:
Jeff Knox is a second-generation political activist and director of The Firearms Coalition. His father Neal Knox led many of the early gun rights battles for your right to keep and bear arms. Read Neal Knox – The Gun Rights War.
The Firearms Coalition is a loose-knit coalition of individual Second Amendment activists, clubs and civil rights organizations. Founded by Neal Knox in 1984, the organization provides support to grassroots activists in the form of education, analysis of current issues, and with a historical perspective of the gun rights movement. The Firearms Coalition has offices in Buckeye, Arizona, and Manassas, VA. Visit: www.FirearmsCoalition.org.