NRA

As I noted in Part 1, Judge Cohen specified six items of relief in his interim decision. Part 1 cover items one through three and this post will cover the final three. When the trial ended and this decision was rendered, the two items out of the six that got the majority of the attention were numbers four and six.

Jumping right in, item four took direct aim at the NRA’s Audit Committee. Judge Cohen said,

Changing the Audit Committee so that it would not include people, at least not – at the very least not – as chair or co-chair, that served on the committee during the violations found in this action. Despite the changes in some members, there is an argument that there needs to be a sharp break with the past – sharper break with the past – than is reflected in the most recent committee appointments. Similar decisions could be made with respect to other committees, as well.

I believe Judge Cohen took note of NRA President Bob Barr’s assignments to the Audit, Finance, Ethics, Legal Affairs, and Bylaws & Resolutions Committee released on July 10th. He, like many of us, was none too happy to see so many of the Cabal in leadership positions. Chief among those was former NRA President Charles Cotton who was appointed chair of Audit and Ethics, vice chair of Bylaws & Resolutions, and a member of the rest. He had specifically called out Cotton along with Barr for their spin on the jury’s verdict calling it “simply false”.

Barr did take note of Judge Cohen’s “concerns” and replaced Cotton as chair of the Audit Committee with Curtis Jenkins. This was on August 1st. From what I understand, Jenkins and Barr go way back together in Georgia politics. Notice that there is no mention of Cotton being removed entirely from the Audit Committee.

Note that item four did not restrict itself to only the Audit Committee. While that was the only specifically mentioned, Judge Cohen said similar decisions could relate to other committees. David Coy who headed the Finance Committee during the period of the violations is still the chair of that committee. During the jury trial, Assistant Attorney General Monica Connell mentioned 14 board members who had been strong backers of Wayne LaPierre. Thanks to Defense Exhibit 4-2-001, we have those names. Of those 14 board members, eight are on these important committees. Of the remaining six, three have joined with the reformers, two are no longer on the board, and only Tom King was not named to one of these important committees. To think that Judge Cohen is ignorant of that would be wishful thinking by Bob Barr and the rest of the Cabal. I would not be surprised if the final decision is even stronger with regard to those who let the corruption and grifting to flourish under their noses.

Moving on, item five deals with the term of office of the Chief Compliance Officer. Currently, it is a 1-year term just like the EVP, Secretary, and CFO. Judge Cohen suggest that the term of office be extended to a 3-year term at least initially. I think he is rightly concerned that a board controlled by the Cabal could decide to replace the Chief Compliance Officer if he or she didn’t go along with their whims. Judge Cohen would like to make it so that the CCO could only be replaced during that period by the entire board for “good cause”. Some examples of what constitutes good cause would be fraud, theft, drug or chronic alcohol abuse, sexual harassment, or a felony conviction. I believe a bylaw change would be required to put this into effect.

The sixth and final item is a suggestion that there be a bylaw referendum to reduce the size of the board or “to reorganize it to create a smaller, more focused group to oversee the key operations and finances of the organization.” He goes on to suggest what I have been in favor of for a long time. That is, something akin to what many colleges or universities have with a board of trustees and a board of visitors. The trustees or directors deal with the core financial and managerial aspects of the organization while the board of visitors or advisors concentrate on things like fund-raising, building support for the organization, and advisory functions. He goes on to say that a board the size of the NRA’s is just “not a manageable to make decisions on micro issues and, also, to provide close oversight.” He is correct on that and it one of the major reasons Wayne and his fellow grifters got away with it for so long. There is one thing that should not happen when it comes to the reduction in size of the board. That is just to make the existing Executive Committee the new, reduced in size, Board of Directors.

Judge Cohen concludes that these are the types of remedies that he has considered. However, since so much of the bench trial was focused on a special monitor, he wants the parties to discuss it, negotiate, and perhaps to come up with additional remedies beyond those he has suggested for his consent order. He says that ultimately it will be his decision but he would like more precise guidance on what he has suggested.

Attorneys for the Attorney General’s Office and the NRA will meet tomorrow for a face-to-face meeting to hammer out an agreement based upon the judge’s six items as well as any additional items that might be proposed by each side. If they can’t hammer out an agreement on the six items, then they will each work on separate proposals which they will present to Judge Cohen for his consideration. Given the reasonableness of Judge Cohen’s six items especially for the NRA, I would hope that they can come up with a joint agreement tomorrow so that this case can come to a conclusion. The sticking points might be the opening up the 2025-2027 board elections, who else is to be removed from a committee, and the mechanics of reducing the size of the board.

I will be looking out for any news released after that meeting and will report on it when I get reliable information.

Judge Joel Cohen issued an interim decision on July 29th in the New York trial of the NRA. Beyond deciding that a special monitor was not warranted, he specified six items of relief that he was considering. He ordered both parties, the NY Attorney General’s Office and the NRA, to do a post-trial briefing and negotiation on the six items. This post will examine items one through three while a second post will look at the remaining three items.

The first item was that some or all of the “NRA Compliance Commitment to Members” be incorporated into a court order. Included in that document were a number of items that would be reported to members on an annual basis. These included, in part, a compliance officer and internal audit annual report on travel and entertainment expenses, contracts, related party transactions, and business ethics. In addition, a report from the independent auditor would be published annually, the IRS Form 990 would be signed by both the CEO and CFO, a bylaw change making the Audit Committee elected by the whole board, adoption of a policy forbidding related party transactions unless approved by the whole board, and mandatory disclosures by any candidate for the Board of Directors. There would also be a secure online portal for board and committee members to access documents prior to meeting. This was over a concern about “leaks”.

Most of these are good ideas and were developed by the entire Audit Committee. I do have misgivings about a policy to “stop leaks” as it seems counter-intuitive to their professed concern about being open with members. I will also say that as a candidate for the board myself I have not yet been asked to consent to a background check or any of the other items. This may be because it will only apply to those actually individuals whose names will appear on the ballot.

Judge Cohen’s second item goes directly to the election of members of the Board of Directors. He wants to make it easier for people to run for the Board for at least the next three years. He took note indirectly of the election of the Four for Reform as well as the Nominating Committee’s continual re-nomination of sitting directors every three years. He found the past work of the Nominating Committee “led to significant and unhealthy entrenchment of both management and the board” which made it very hard for new members to have any impact. As such, he is strongly suggesting that for the next three years that anyone who meets the minimal qualifications for election to the board be allowed to run if they so desire. The current minimal qualifications are that candidates have been a life member for at least five years. He goes on to add that there would be no need to go through the petition process.

The nominating process has already started. The time period for submission of names to the Nominating Committee has closed and documentation from candidates needed to be received by the Office of the Secretary by August 8th. The committee will meet on August 24th to review the potential nominees and make their decision. Petition candidates have until October 8th to have their petition signature sheets returned to the Office of the Secretary. Judge Cohen’s final order on this item could toss all of this. The replacement would be a long ballot consisting of those whose names have been submitted along with anyone else who wanted to run. We shall see.

Item number three on the list is a requirement that the NRA retain an independent compliance consultant of their choice for at least a three year period. This person would work with the Chief Compliance Officer “and staff to make recommendations to the board.” More importantly from the NRA’s perspective, this person would not be reporting to either the Court or the NYAG. The goal of this consultant would be to provide an independent perspective to the board and to help them implement best practices to carry out Judge Cohen’s final directives.

This item makes perfect sense to me. My primary hope is that the selection of this compliance consultant be made by Doug Hamlin without the interference of Bill Brewer or any of the Cabal. As the Chief Compliance Officer cannot be replaced by the EVP and Robert Mensinger was pushed to the NRA by Bill Brewer, any compliance consultant must be truly independent and without taint. Mr. Mensinger may be worth every bit of his $400,000 salary and be cleaner than the driven snow. However, I have a hard time trusting anything or anyone connected to Bill Brewer or Brewer, Attorneys and Counselors. The damage that Brewer has done to the NRA, financial and otherwise, is incalculable. Even Mike Bloomberg and his billions could not have done as much damage.

Part 2 will now look at the final three items in Judge Cohen’s interim decision.