by 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.
