Brewer Attorneys and Counselors

Uncategorized

NRA Loses In Court In Tennessee

March 27, 2025 by 5 Comments

US District Court Judge William Campbell, Jr., issued an order today denying the NRA’s motions to dismiss the case brought against it by David Dell’Aquila and others. The case, Dell’Aquila et al v. National Rifle Association, is being heard in the Middle District of Tennessee was originally filed in August 2019. The case originally also included Wayne LaPierre and the NRA Foundation as defendants but they were dropped from the case in 2020. This case has had numerous delays due to the NRA’s abortive filing for bankruptcy, changes of attorneys, and numerous extensions of time. It was revived in August 2022 when Dell’Aquila engaged the Chicago firm of Loevy & Loevy and the Nashville office of Stites & Harbison.

As I reported earlier this month, William Brewer and Brewer, Attorneys and Counselors, withdrew from the case as of March 5th and were replaced with the Nashville firm of Neal and Harwell PLC. However, it should be noted that all the motions filed on behalf of the NRA that were denied today came from the Brewer firm.

The NRA had moved to dismiss the Third Amended Complaint which had been filed in June 2024. They had also moved for oral argument and for a stay on discovery pending the outcome of their motion to dismiss. As noted above, Judge Campbell denied the motion to dismiss. He also denied the motion for oral argument on the motion to dismiss and said the motion to stay discovery was now moot.

The Third Amended Complaint accused the NRA of the following and the NRA had moved to dismiss all allegations.

In the Third Amended Complaint, Plaintiffs bring claims against the NRA for fraud, breach of contract, tortious interference with contract, violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961, et seq., and RICO conspiracy. The NRA seeks to dismiss all claims under Federal Rule of Civil Procedure 12(b)(6).

Judge Campbell noted that the standard for review of a motion to dismiss is that a court must take all factual allegations as true. He found that Dell’Aquila had sufficiently alleged the facts for fraud. The amended complaint had added the claims of breach of contract and tortious interference. He found there was sufficient factual allegations made earlier in the case to support the relation back of amendments. The NRA had contended they were not on notice to argue breach of contract or tortious interference because Dell’Aquila didn’t say earlier there was a contract with the NRA or the NRA Foundation.

Plaintiffs argue they have adequately alleged a claim for breach of contract. Plaintiffs point to allegations that the NRA mails a dues renewal notification to all members that includes a “Uniform Disclosure Statement” which states that “Contributions raised will be used to advance the mission of the NRA.”The NRA also solicits donations through its website, which contains the same statement. Plaintiffs contend this statement sets forth a contractual promise to use donated funds to advance the mission of the NRA, that Plaintiffs and other donors accepted this offer by sending donations, and that the NRA breached the promise by using the solicited funds for purposes not in furtherance of the NRA’s mission….

Plaintiffs have plausibly alleged a claim for breach of contract based on the NRA’s
solicitation of donations with the express promise that any donations would be used to further its
mission and its use of donated funds for purposes unrelated to that mission.

We have heard in the past that significant loans were made by the NRA Foundation to the NRA itself. We also heard in the New York case how significant personal expenditures were disguised through the use of credit cards issued by Ackerman McQueen. This has come back to bite the NRA and has allowed Dell’Aquila’s claim of tortious interference to stand.

Finally, there are the charges of RICO and RICO conspiracy.

As discussed above, Plaintiffs have sufficiently alleged a RICO claim. With regard to
Defendant’s second argument, Plaintiffs point to allegations that the NRA “agree[d] to participate
in the conduct of the affairs of the NRA Foundation enterprise through a pattern of racketeering
activity,” specifically, that NRA had a “decades-long arrangement pursuant to which the NRA
solicited funds through the [NRA Foundation] under false pretenses, transferred those funds to the
NRA, and laundered them through Ackerman [McQueen] to support Mr. LaPierre’s extravagance.” For purposes of the motion to dismiss, these allegations are sufficient to plausibly allege that the NRA “objectively manifested an agreement to participate” in the RICO enterprise.

It should be pointed out that none of Dell’Aquila’s charges have been proven but there is enough there that the case goes on. More importantly, Dell’Aquila and his fellow plaintiffs will be allowed to engage in discovery which, to be honest, could prove very embarrassing to the NRA. While Wayne is gone as is Tyler Schropp and Doug Hamlin has started to clean house at the NRA, the NRA Foundation is still dominated by the old guard. They were put in place to do Wayne’s bidding including the sweetheart loans between the NRA and the NRA Foundation. These loans were sufficiently problematic that the Attorney General of the District of Columbia brought suit and the Foundation eventually entered into a consent decree.

Judge Campbell’s memorandum is embedded below:

Dell’Aquila v NRA opinionDownload
Uncategorized

Brewer Withdraws From Dell’Aquila Case

March 5, 2025 by

When the Brewer law firm said they were severing ties with the NRA, I wondered how long it would take them to withdraw as defense counsel in the case of Dell’Aquila et al v. NRA. Thanks to a Courtlistener alert I received today, we have an answer.

Today was the day William Brewer and the attorneys from Brewer, Attorneys and Counselors have officially withdrawn as defense counsel in the case. NRA General Counsel Michael Blaz approved the withdrawal on February 19th and the firm of Neal and Harwell PLC will now represent the NRA in this case. The new firm is out of Nashville, Tennessee which makes sense as the case is being heard in the US District Court for the Middle District of Tennessee.

The case was originally brought by David Dell’Aquila against the NRA, the NRA Foundation, and Wayne LaPierre. The complaint said that they had fraudulently solicited memberships and donations saying the monies would be used to further the mission of the NRA. In 2020, Judge William Campbell dismissed the cases against the Foundation and Wayne LaPierre but allowed one charge against the NRA itself to proceed.

You can see the filings related to the withdrawal by Brewer, Attorneys and Counselors below:

Brewer withdraws from Dell’Aquila caseDownload

Uncategorized

Donald, What Are You Thinking?

February 13, 2025 by 5 Comments

Semafor.com reported yesterday that Sarah Rogers of Brewer, Attorneys and Counselors, has been nominated by President Trump to the the Under Secretary of State for Public Diplomacy. This is confirmed by the White House as her name was included in a list of over 50 nominations for various positions that must be confirmed by the Senate.

Brewer firm photo

The nominations include a New York lawyer, Sarah Rogers, who has defended the National Rifle Association on free speech grounds and litigated against content moderation. Her appointment to be the under secretary for public diplomacy — a role that had, in the Biden administration, been involved in efforts to combat false information on social media, signals that the Trump administration is planning to globalize its push to force social platforms to allow a wider range of speech…

Rogers has no obvious foreign policy experience, but brings a similar point of view on key issues around speech and social media platforms. A partner at the New York litigation boutique Brewer, Rogers represented the National Rifle Association alongside the ACLU in a winning appeal to the Supreme Court last March. She also represented the NRA against the New York State Attorney General, who was seeking to dissolve the organization, which the NRA beat back on First Amendment grounds.

I will acknowledge that Rogers was a co-counsel along with Bill Brewer and Noah Peters on NRA v. Vullo. However, and this is an important point, the counsel of record and the heavy lifter in this case at the SCOTUS was First Amendment law expert Professor Eugene Volokh of UCLA Law. Once the ACLU was brought into the case, you had as many as 10 of their attorneys working on the case while Prof. Volokh remained the Counsel of Record.

While Judge Cohen did mention the First Amendment in his ruling taking dissolution off the table in People of NY v NRA et al, it seems to me to be more of an after thought. He only devoted one paragraph to that argument. More important in his 42-page ruling was whether or not the New York Attorney General alleged facts sufficient to meet the standard for judicial dissolution. He found that she did not. He said you could not conflate “the Individual Defendants with the NRA writ large for purposes of dissolution is inappropriate here for the reasons” he discussed earlier. He went on to say it was the members of the NRA who had suffered the most harm and not the general public.

Rogers did participate in most of the hearings in the New York case as the primary litigator for the NRA. I will give her that.

Trump has in the past shown a certain affection for those educated at Ivy League schools. Rogers satisfies that criteria with an undergraduate degree from Dartmouth and a law degree from Columbia. The Under Secretary of State for Public Diplomacy heads the Bureau of Global Public Affairs (PR for the USA) and the Bureau of Educational and Cultural Affairs (cultivating personal ties with current and future global leaders). Without trying to be snarky, she will be running the fluffier stuff at the State Department.

While Ms. Rogers will be taking a cut in pay, I’m going to say it probably is worth it to get away from Bill Brewer and his shenanigans. Down the road, I’m sure she will be able to parlay her experience as an Under Secretary of State into a prime partnership with a New York or DC law firm.

Uncategorized

Transparency? We Don’t Need No Stinkin’ Transparency

December 31, 2024 by 5 Comments

One of the key pledges of the reform candidates is transparency. It is one of our core values. The members of the NRA have been kept in the dark for much too long.

A friend mentioned something dealing with the NRA’s 2023 Form 990 to me and I decided to investigate a little further. Part VI of the form asks about an organization’s governance, management, and disclosure. All organizations are required to answer all the questions in Part VI though Federal law doesn’t mandate any particular form of management structures, operational policies, or disclosure practices. That said, the IRS does consider the answers to these questions as being helpful in ensuring tax compliance.

There are two questions in particular dealing with transparency as evidenced by disclosure and documentation. They are Part VI, Lines 8a and 8b.

From the IRS Form 990 Instructions:

Answer “Yes” on lines 8a and 8b if the organization contemporaneously documented by any means permitted by state law every meeting held and written action taken during the organization’s tax year by its governing body and committees with authority to act on behalf of the governing body (which ordinarily don’t include advisory boards). Documentation permitted by state law can include approved minutes, email, or similar writings that explain the action taken, when it was taken, and who made the decision. For this purpose, contemporaneous means by the later of (1) the next meeting of the governing body or committee (such as approving the minutes of the prior meeting), or (2) 60 days after the date of the meeting or written action. If the answer to either line 8a or 8b is “No,” explain on Schedule O (Form 990) the organization’s practices or policies, if any, regarding documentation of meetings and written actions of its governing body and committees with authority to act on its behalf. If the organization had no committees, answer “No” to line 8b.

As you can see in the screen shot below, the NRA answered Yes to 8a and No to 8b. This means that the NRA kept contemporaneous minutes of their Board meetings (8a) but the committees of the Board did not (8b). The committees authorized to act on behalf of the full board include the Executive Committee, the Audit Committee, and the Special Litigation Committee.

Let’s go to a screen shot of the relevant portion of Schedule O to see the explanation of why the NRA answered No on Part VI, Line 8b.

We see that the Executive Committee kept documentation in the form of approved minutes. That’s good.

We also see that the Audit Committee kept documentation of their actions in the form of both approved minutes and written reports. That’s good as well.

And then there is the Special Litigation Committee which meets “informally”.

Informally? You are meeting to discuss litigation that originally called for the dissolution of the NRA and you are only meeting “informally”? WTF!

Whose idea was it to meet “informally” and what was the rationale behind it? Was the purpose to keep the rest of the Board and the members of the NRA in the dark? Mind you, the discussions on the litigation between the members of the SLC and the attorneys from Brewer, Attorneys and Counselors, would have been privileged and not ordinarily discoverable by the NY Attorney General’s Office.

I have been told by one board member when he questioned this that the SLC always met in executive session and thus didn’t keep minutes. So is executive session normally considered “informal”? While I am not a lawyer or an expert on NY Not for Profit Law, I really don’t think so.

Then there is the whole business of approving almost $200 million in invoices for legal fees and only documenting it by email. While a valid method per the IRS, the amount of money expended would seem to demand much more documentation and in a more formal manner. This is especially true as this has drained the coffers of the NRA. Moreover, who received these emails and were they made available to the Board as a whole?

The whole rationale for even having a Special Litigation Committee was that both Wayne LaPierre and John Frazer were named defendants in the NY trial. In a normal litigation, they would have been the two most involved as CEO/EVP and General Counsel. This leads me to ask whether either of them met with the SLC and the attorneys to discuss the litigation and its strategies. Did Wayne get special briefings on the litigation from Bill Brewer and his associates? I can’t imagine Wayne would just go along his merry way staying in the dark about the trial other than what concerned him directly without asking questions of Brewer. Remember, Wayne was in charge of keeping the NRA in existence so as to further his own lavish lifestyle.

This whole lack of transparency with regard to the decisions of the SLC just stinks. Documentation of almost $200 million in legal billings merely by email also reeks. While the SLC will probably be officially disbanded at the NRA Board of Directors’ winter meeting in Dallas, this is an issue that demands answers. At the very least, an audit – preferably a forensic audit – of the billings by Brewer, Attorneys and Counselors, is called for.

Uncategorized

Discussion Of Final Judgment Item By Item

December 11, 2024 by 4 Comments

Judge Joel Cohen’s Final Judgment has been released. Realistically, I think both sides can claim victory as it grants measures to both the New York Attorney General’s Office and to the NRA. On my initial reading of the document, I wish Judge Cohen had gone a bit further. It does emphasize just how important the 2025 Board of Directors election will be for the future of the NRA.

The Final Judgment does follow much of what was said in court in the last hearing. For example, Judge Cohen was critical of the petition process calling it “antiquated” and thought it could be done electronically. That is in the Final Judgment. Another example is that Judge Cohen was leery of having the recommendations from the Committee on Organization on board size die “a quiet death in committee. The Final Judgment mandates the committee have its proposals ready for the April 2025 board meeting.

The Final Judgment itself covers seven pages and the remainder of the 25 page document is composed of exhibits. The Final Judgment starts with the Stipulations agreed to by defendants Joshua Powell and Wilson “Woody” Phillips. It then goes on to dismiss the 5th, 6th, 7th, 8th, 9th, 10th, and 11th causes of action in the NYAG’s Second Amendment Complaint. These dealt primarily with permanent bars on the named defendants along with items covered in the stipulations. The Final Judgment then moves to the remedial actions that the NRA shall implement.

Item One

Starting with the 2026 Members Meeting and continuing for the next five years, the NRA must release an Annual Compliance Report to Members. This would include details on first class travel expenses, charter travel, the number of exceptions to travel policy, and the “top five” persons granted exceptions. The compliance report would follow the outline provided in Exhibit 1. Thus, contract negotiations, whistleblower reports, and related party transactions would also be reported to members. A preliminary report must be released in advance of the 2025 Members Meeting with as many of these items included as possible.

Items Two and Three

The EVP and the Treasurer would be required to certify that both the IRS Form 990 and New York’s CHAR500 contain no “material misstatement or omission” based upon their knowledge. This would be in a form consistent with Section 302 of the Sarbanes-Oxley Act. There is no time limitation for this certification on the Form 990 while the NRA only is required to do this for the next five years with regard to the CHAR500. The Board can continue the practice in perpetuity.

Item Four

The Office of the Secretary has until March 1, 2025 to implement a secure portal to enable encrypted dissemination of Board, committee, and corporate documents to Board members. This portal would also allow encrypted communication between Board members. Item Four also requires that the draft 2023 Form 990 be made available to Board members at least three weeks in advance of the filing date. There is also a required briefing on the Form 990 open to all Board members. This can be either in-person or digital. There is a laundry list of items that are required to posted in this portal ranging from all versions of the bylaws for the last five years to reports and minutes of all committees for the last three years prior to today.

Personally, I am disappointed that Judge Cohen didn’t go further and mandate the publication of the bylaws, financial statements, and Form 990 on the NRA website open to ALL NRA members. There is no excuse for not publishing the bylaws electronically. As to the financial statements and Form 990, members shouldn’t have to go to certain state Secretary of State websites (see North Carolina) or to websites like Guidestar.

Item Five

Judge Cohen had expressed a desire to open up the nominations for the Board and he does it with this item. First, he says that the Nominating Committee shall work to identify up to 20 candidates whose required qualifications meets the standards the NRA set forth in their filing and did not serve more than one term on the Board prior to 2022. The required qualifications include sufficient time to carry out the duties of Board service, a commitment to the fiduciary duties of good faith and care, will abide by the bylaws, is free from potential conflicts, and expresses “integrity, professionalism, and clear support” for the interests of the NRA. This last requirement acknowledges differences of opinion on how to best achieve the interests of the NRA.

The Personal Factsheet and Biographical Questionnaire must be amended to include questions on financial conflicts, a consent to abide by legal duties and Board policy, and a consent for a background check.

As noted earlier, Judge Cohen considered the existing paper petition nomination process to be “antiquated”. While not doing away with the hard copy paper petition, the NRA must provide an online alternative so that the whole petition process can be done electronically including the signatures.

Item Six

For the next three election cycles, the NRA shall publish on its website a statement from each candidate, written by each candidate, at the time of the mailing of the ballots to voting members. Currently, only a 150 word bio of each candidate is published in the Official Journal. This bio does not allow any “campaigning” verbiage.

Item Seven

The NRA’s bylaws must be amended to make the Audit Committee an “elected committee of the board”. This would make it consistent with the requirements of New York non-profit corporation law. Judge Cohen goes on to write that the amendment shall be structured such that the Audit Committee will not be a “committee of the Board” until such time as each of its members have been voted on by the Board. The NRA President will put forward his or her nominations for the Audit Committee and then the Board shall vote on each individual. If a candidate is rejected by the Board vote, then replacement nominations will be taken from the floor.

Item Eight

Judge Cohen does not mess around on this item. No person who served on the Audit Committee during the period between 2014 and 2022 shall be elected to the committee again. Thus, someone like current chair Curtis Jenkins would not be eligible to serve on the elected Audit Committee. I’m not sure of the status of existing members Ron Schmeits or Eb Wilkinson. However, current members Rocky Marshall and Charlie Beers would be eligible to serve on the reconstituted Audit Committee when it becomes a committee of the board.

Item Nine

Within the next 30 days, the NRA and the Chief Compliance Officer shall execute a severance agreement providing for two years salary if terminated without cause or resignation for “Good Reason”. The term of the contract is for three years. This item had already been agreed upon by both the NRA and the NYAG’s office as a workable alternative to provide protection to the CCO.

Item Ten

The NRA is required to update its Conflict of Interest and Related Party Transaction policy to make it consistent with the items in Exhibit 4. These include any exception to the policy must be approved in advance by the Audit Committee and such exception shall be in the best interest of the NRA, that the entire Board must then approve this exception by majority vote, and that no Related Party transaction shall be approved if it wasn’t properly disclosed and approved in advance. Judge Cohen will allow the NRA to set a de minimis threshold amount where full Board approval is not required. The NRA has 30 days to make this amendment and it must make it available electronically to all NRA employees and members of the Board.

Item Eleven

The NRA shall hire a consultant to work with the CCO and staff so as to advise the Board on implementing the directives from the court and to advise on best governance practices. This consultant must be court approved and cannot have appeared as a witness for the NRA in this case. The NRA will submit the name of the consultant to the court and to the NYAG. The NYAG has 14 days with which to comment and then the court will decide to approve the consultant or require the NRA to submit another name.

Item Twelve

The Committee on Organization is required to study the board composition, standardized protocols, and committee scope. In doing so, they must consider input from the members and the compliance office and consultant, look at best practices for non-profit organizations, examine current and future needs, and comply legal and regulatory requirements. Judge Cohen goes on to say that he wants any recommendations of this committee to reflect a diversity of ideas so as to “secure the freedom of association of all NRA members”. These recommendations must be ready to present to the Board at its April 2025 meeting. Note that the composition of the Board at this meeting will include everyone elected in the 2025 Board election.

Item Thirteen

The NRA shall retain its current independent auditor Aprio to conduct special procedures for at least the next three years. Aprio’s independent audit shall be published and made available to the NRA membership. If the NRA seeks to replace Aprio with another independent auditor, it must get court approval.

The Final Judgment concludes with a number of items relating to the amounts owed by Wayne LaPierre and Woody Phillips, the barring of LaPierre from any fiduciary position with the NRA for the next 10 years, and denying the AG’s requests for relief with regard to John Frazer. LaPierre is adjudged to owe the NRA $4,351,230.02 with 9% interest starting on February 23, 2024. No compromise or settlement on this amount will be effective unless approved by the court. LaPierre’s attorney had danced around this in the last hearing hinting that LaPierre might drag out the proceeding (and payment) unless a settlement of a lesser amount could be reached. Judge Cohen just nixed that.

As I stated at the beginning, both sides got some of what they wanted and neither side got everything they wanted. If the NRA appeals this Final Judgment, it would only be because the Special Litigation Committee is enthralled with the advice from Brewer, Attorneys and Counselors. After dissolution was taken off the table, everything in this Final Judgment realistically could have been negotiated many months ago with millions and millions of legal fees saved. That it wasn’t, well, you know my opinion on that.

Uncategorized

Notes On The NRA’s New York Hearing

November 1, 2024 by 9 Comments

I was able to follow the hearing in the NRA’s New York case in its entirety today thanks to being provided a link to Microsoft Teams. The hearing started at approximately 11am and ran until 12:58pm.

Judge Joel Cohen started the hearing by having the participants introduce themselves. Representing the NY Attorney General’s Office were Stephen Thompson and Monica Connell. Meanwhile, the NRA was represented by Sarah Rogers and Noah Peters of Brewer, Attorneys and Counselors, with NRA President Bob Barr and Chief Compliance Officer Bob Mensinger there as well. Finally, P. Kent Correll was there to represent Wayne LaPierre.

Judge Cohen divided the hearing into seven areas for discussion. These include issues regarding Board elections, the appointment of a compliance consultant, Board committees, protection for the Chief Compliance Officer position, a referendum on reducing the Board size, the “Commitment to Members” document, and then a catchall for remaining miscellaneous issues. He noted that he was pleased with how the process worked between his interim decision and now. The parties’ meetings and proposed final judgments isolated the areas of agreement and disagreement.

First up in the hearing was a discussion of issues related to Board of Directors elections. The NYAG started out by saying that Judge Cohen has indicated he wanted to reduce the “hegemony of the Nominating Committee” but that it remains the “same old, same old”. Stephen Thompson noted the issues with the secrecy of how the Nominating Committee works and said they want to take the subjectivity out of the process. The judge then said vetting of candidates is legitimate and he wasn’t good with selection at random. Sarah Rogers for the NRA tried to blame the problems in the past on Wayne LaPierre and Millie Hallow to which the judge responded that “yes, there were problems.”

This led into a discussion of the petition process which Judge Cohen found “very 20th Century.” He didn’t see why it couldn’t be done online with an electronic signature rather than candidates having to scramble to get physical signatures and then having to mail them into the Secretary’s Office. In response to a question from Rogers asking what the judge would like to see, Judge Cohen responded that it should be broadened, made more open, made more easy, and more accessible to members. This led Rogers to say it can’t be changed due to the bylaws and she went on to say that the judge could not meddle with the process. This was a bit of a red flag for the judge who responded he can indeed make changes with an order. He went on to say that he saw a number of what I’d call the cabal still there going into NRA 2.0. He said there needs to be a measured way to remove the impediments, it needs to be more transparent, and that the current petition process is “antiquated.”

The next item on the judge’s agenda was the advisory compliance consultant. In their Proposed Final Judgment, the NRA had specified that Fox Rothschild, LLP to act as the consultant. Daniel Kurtz of the firm had been an expert witness for the NRA during the trials. The NYAG’s Thompson objected to this on the grounds that Kurtz is a governance expert and, more importantly, that Kurtz had served as an expert witness for the NRA. Sarah Rogers tried to make the case that Bob Mensinger had interviewed many for this role and he was the best. Judge Cohen sided with Thompson on this saying that he would have a problem with former expert witnesses for either side in this role. He wanted a fresh look and the person would be court approved – not AG approved. He also noted in response to a question from Rogers that he would retain authority to name a replacement if the person or firm appointed left before the end of three years.

Moving forward, the court then moved to board committees and how they were populated. This proved more contentious. In addition to the Audit Committee, Thompson said the Ethics, Finance, Legal Affairs, and Bylaws and Resolutions Committees were areas of concern. He said they were still led by directors who had been on the Board for years. After the judge said he was not sure of a criteria that would be either over or under inclusive of new blood, Thompson stated that David Coy, Charles Cotton, Joel Friedman, Curtis Jenkins, Bob Barr, and Sandy Froman all must be removed from these key committees. Rogers moved to defend both Jenkins and Froman and then said committee composition had changed. When Thompson objected, Rogers replied that Barr had been elected by the same Board that had elected Bill Bachenberg and Mark Vaughan.

Judge Cohen noted that both sides agree that the Audit Committee will be a Committee of the Board. Rogers said the NRA only wanted the Audit Committee as a Committee of the Board and that they wanted to avoid more 12-hour Board meetings. This led to Thompson saying how Audit Committee members are nominated doesn’t meet New York law which Rogers disagreed with. Judge Cohen wondered if the proposal to have the President nominate members takes discretion from the Board. Rogers replied the President nominates and then the Board votes on them but they didn’t take nominees from the floor. I’m not sure how Judge Cohen will rule on board committees but it will probably have something for each side.

The next item on Judge Cohen’s agenda was protection for the Chief Compliance Officer position. In this case, both sides have come to an agreement to use a severance agreement that would provide two years salary if the person was terminated without “Good Reason”.

On the issue of a referendum on the size of the Board, Thompson noted that it would generous to say the parties have agreed to study the issue. He objected to David Keene being on the Committee on Organization noting the jury had found Keene had engaged in a related party transaction not properly approved by the Audit Committee. The NYAG’s Office also noted they had not addressed the final size of the Board. Judge Cohen then gave his thoughts about governing versus advisory board members noting both could call themselves “Board members”. He was “not offended by thinking about it.” Thompson replied that the rank and file members should have a say and they want the size issue done sooner than later.

The NRA’s response was that they now have a Committee on Organization studying the issue, that there would mediation on the size of the Board, and that the Board grew over time as areas of interest expanded. Rogers then said that the Board was elected in a democratic process and that the will of the Board on the issue would reflect this. This led Judge Cohen to wonder how to assess that the issue doesn’t “die a quiet death in committee.” Rogers then replied that the “world is watching” and it would be difficult and expensive to do now as ballots are in the process of being printed.

The next to last issue was how to frame the order based upon the NRA’s Compliance Commitment to Members. This document was submitted to the court at the beginning of the bench phase of the trial and was composed by the members of the Audit Committee. This led to a discussion that centered around the internal audit reports and the signing of the Form 990 by the EVP and CFO. Thompson said the AG’s Office wants the external audit reported to the members. Neither side had any objection to the audit firm Aprio going forward. The discussion about the signing of the Form 990 centered around what it signified. Thompson said it should attest to the adequacy of the internal controls to which Rogers objected. Judge Cohen said it was really not a matter of who signs but that the signers are attesting that the Form 990 is accurate to the best of their knowledge. He went on to say the required signer must make some assessment that it is accurate.

The final issues discussed were a miscellany including protection for whistleblowers, the Special Litigation Committee, an independent internal control audit, and how the NRA was to recover the funds from LaPierre, Wilson, and Powell. There was quite a bit of back and forth about whether Judge Phil Journey and Dennis Fusaro could be considered whistleblowers. Judge Cohen said he’d take it under advisement as it appears to be a new claim. With regard to the Special Litigation Committee’s status, Thompson made the argument that a majority vote of the Board should have done away with it under New York law. Rogers argued it was not necessary as the Board will vote on it in January 2025 as it had now been noticed. Judge Cohen was not sure whether to dissolve it or not as he thought it a new claim and he doubted his authority in the matter.

LaPierre’s attorney P. Kent Correll then entered the discussion regarding how payments should be made to the NRA. Judge Cohen said sending money to the state is easy while sent money out is hard. He thought the payment probably should be made directly to the NRA which Thompson of the NYAG’s Office had no issue with. Rogers then said they had not received the $100,000 that Josh Powell was supposed to pay and they want some assurance that they can enforce the judgment. Here is where it starts to get interesting. It appears Correll wants the ability to negotiate the actual settlement amount on behalf of LaPierre. He wondered if the Attorney General’s Office would settle for a presumably lesser amount than the jury-assessed $4.3 million if LaPierre didn’t appeal or would it drag out for five years. There was a back and forth on who controlled the settlement and it got into derivative payees. Finally, Judge Cohen said the plaintiff, i.e., the Attorney General’s Office on behalf of the State of New York, controls the settlement.

Judge Cohen concluded the hearing at 12:58pm after saying each side assumes his own cost in the trial and that he would work with Correll on Wayne LaPierre’s home address being in the judgment order. Correll was worried that publishing LaPierre’s address could put him in danger.

Nine current members of the Board were on the Microsoft Teams feed listening in as were myself, some Brewer attorneys, and Stephen Gutowski. I have been told by another Board member that many others on the Board were being informed of what was happening by text.

If I had to hazard a guess, the Final Judgment will have items that will please both sides and items that will disappoint as well. There will be nothing dealing with the SLC and perhaps little regarding whistleblowers. The only thing I know for sure is that the severance agreement for the CCO will be in the Final Judgment.

Uncategorized

That Horse Has Already Left The Barn

October 6, 2024 by 2 Comments

Both the NRA and the New York Attorney General’s Office have submitted their proposals for a final judgment in the New York case on Friday. They both make for interesting reading. I will deal with the substance of both in future posts. However, for now, there was something in the NRA’s memorandum for their Post-Trial Submission & Final Judgement Proposals and the accompanying exhibits that really caught my eye. It dealt with candidates for the Board of Directors and how they are selected.

From the memorandum signed by Sarah Rogers of Brewer, Attorneys and Counselors, on page 9 of the document:

Gathering input from Board members and stakeholders this summer, the NRA repeatedly
and consistently heard the following concerns:

  • The NRA must retain an “immune system” against hostile candidacies by
    adverse advocacy groups, who have boasted of attempts to infiltrate or
    hijack the NRA in the past    ;
  • There must be a mechanism to recruit and prioritize potential directors with
    desirable skills or backgrounds; and
  • There must be a way to limit the total number of candidates on the printed
    ballot, for logistical reasons.
    Rogers Aff. Ex. A at ¶ 9. Accordingly, the NRA cannot simply agree to nominate any five year life member who applies—a framework that could result in millions of candidacies.

And then in Exhibit A which is the Affidavit from NRA President Bob Barr in Item 9 on page 2 there is this:

  1. As it gathered input, the SLC repeatedly heard the following concerns regarding
    the director nomination process:
    ” That the NRA must retain an “immune system” against candidacies promoted by
    adverse advocacy groups, who have boasted of attempts to infiltrate or hijack the
    NRA in the past;
    ” That there must be a mechanism to recruit and prioritize potential directors with
    desirable skills or backgrounds; and
    ” That there must be a way to limit the total number of candidates on the printed
    ballot, for logistical reasons.

Talk about not seeing the forest for the trees!

Barr, the Special Litigation Committee, and the cabal are worried that some anti-gun billionaire like a Bloomberg or a Soros is going to come in, buy a boatload of life memberships for their supporters, and then recruit anti-gun candidates who are 5-year life members to do their dirty work. Instead of being paranoid about some hypothetical infiltration by gun prohibitionists, why not recognize the real source of the damage being done even now to the NRA?

It is Bill Brewer and his cohorts who have sucked the liquidity out of the NRA’s finances with their overpriced (and ineffective) legal “advice”. The same Bill Brewer who has donated to Kamala Harris in January and has donated to Hillary Clinton, Beto O’Rourke, and tons of other anti-gun Democrats. The same Bill Brewer who convinced the Special Litigation Committee that it would be “brilliant” for the NRA to file for bankruptcy so it could avoid the New York courts.

The damage done to the NRA by Brewer is incalculable yet the cabal in their paranoia is more worried about some hypothetical infiltration of the NRA by “adverse interest groups.” If you ever wondered why the NRA has lost almost two million members, you are seeing the reason why. The inmates were running the asylum so to speak and that needs to change.

The only immunity that the cabal really seeks is to avoid being tossed from office. Their actions have guaranteed that they will be tossed on to the ash heap of history and remembered solely for their role in helping to run the NRA into the ground.

Uncategorized

Al Hammond Urges Hamlin To Fire Brewer

August 26, 2024 by 1 Comment

NRA Director Al Hammond has sent a letter to the members of the Board of Directors encouraging them to support NRA EVP Doug Hamlin and to encourage Hamlin to fire Bill Brewer and his law firm. From everything I’ve read and everything I’ve heard, Hamlin as EVP has the authority to hire and fire any and all vendors including Brewer. While some are strongly holding to the theory that only the Special Litigation Committee has that power, I think ultimately that they are in error.

From Al Hammond’s letter to the BOD:

Subject: Letter to Support Doug Hamlin to Terminate Bill Brewer

Fellow NRA BOD members,  We have come to a critical time in the history of the NRA.  Myself having worked for the NRA for close to 30 years and then joining the BOD I have never seen this association in such dire straits financially and continuing down a path dooming our beloved NRA. We have to take a stand and turn this organization around.  

The first step is to terminate Bill Brewer and his legal team and allow our elected CEO/EVP to do his job without constraint.  I have sent a letter to Doug Hamlin encouraging him to do so and I would ask you to consider sending one in support of Doug as well. My letter is below. 

Now is the time to stand and be counted and help rewrite history as being part of the patriots who saved not only the NRA but our Country. We owe this to our NRA members, our Country and our children to continue to protect these rights every day.  Now is your chance to be heard. Please send Doug Hamlin a support letter for all the good work he has accomplished and continues to do for our NRA everyday.

Best Regards

Al Hammond

NRA BOD

Hammond then goes on to release the letter he sent to Doug Hamlin in encouragement. You may remember that some of the cabal had referred to Hamlin as the “interim EVP” which he is not. I presume that was because they preferred a more compliant EVP and one not associated with the reformers.

From that letter to Hamlin:

Doug, 

As a member of the National Rifle Association Board of Directors my fiduciary responsibility is to represent our members and promote and protect this great association.

With the continuation and constant legal maneuvering by the Brewer law firm to keep the NYAG law suite and other lawsuits without a resolution it is time to terminate and replace our current legal counsel and replace them with our own internal legal counsel and/or another outside legal counsel firm who can get the job done.

We have paid the Brewer firm in excess of 190 million dollars and we can no longer afford this high priced counsel with dismal positive results.  We are cash strapped and the current legal counsel and our President, Bob Barr, along with the entire Special Litigations Committee seem to have turned a blind eye and insist we continue to use Bill Brewer for not only the NYAG case but other pending cases and any new legal cases we enter into.  Enough is enough.

As the duly elected CEO/EVP you have the full authority to decide on any legal counsel moving forward and termination of any currently being utilized.  I fully support and ask you to dismiss the Brewer Firm from any and all lawsuits currently and any moving forward. Our members have had enough of their hard earned money and the support they have given being squandered on poor legal representation.

Thank you for all that you have done and continue to do to bring back the NRA to what it should be and let’s build a bigger and stronger NRA  working together.

Best Regards

Al Hammond

NRA BOD

Uncategorized

NY Court Update And Some Suggestions

August 16, 2024 by 2 Comments

NRA In Danger reported yesterday evening that the meeting in the NYAG’s office between the attorneys for both parties would be continued. They will meet again on Monday, August 19th, to hammer out the consent decree. The goal is to present it to Judge Cohen by August 27th. If neither party can agree, they will each present their versions.

Much more interesting in the report was a joint letter that Buz Mills and Rocky Marshall sent to Judge Cohen. The letter states that the leaders of the NRA who have not accepted responsibility “misuse and malfeasance of NRA members’ donations” (Barr, Cotton, etc) do not speak on behalf of the NRA, the majority of its directors, nor its members. They go on to state that elected leaders such as Doug Hamlin, Bill Bachenberg, and Mark Vaughn are being kept out of the negotiations with the NYAG’s office. Finally, Buz and Rocky present what they feel should be in the final decree that would meet with the judge’s six dicta.

It is beyond obvious that the time for a Special Litigation Committee is over. Wayne is gone and John Frazer is no longer the General Counsel. Thus, the rationale for it being established is over. One thing being requested in the letter is that Judge Cohen order it dissolved. That said, this should have come from the Board the moment John Frazer was no longer the General Counsel.

A friend suggested to me yesterday that Doug Hamlin should fire Bill Brewer and his firm immediately. He went further to suggest that Hamlin order Sonya Rowling not to cut or sign any checks payable to Brewer or his law firm. If the Executive Committee were to suspend Hamlin as a result, he thought Andrew Arulanandam would serve as interim EVP. I pointed out that the position of Executive Direct of General Operations is vacant and the bylaws do not provide an immediate replacement for the EVP. Things could get interesting.

Giving it some serious thought, I would go further than my friend. If, as has been suggested by the letter from Buz and Rocky, that duly elected officers of the NRA had been kept out of the negotiations and thus unable to perform their fiduciary duties, then it is time for hardball. By hardball, I mean that they should file bar complaints with the New York State Bar against Bill Brewer, Sarah Rogers, Svetlana Eisenberg, and Noah Peters. Preventing officers and directors of a non-profit corporation from doing their legally required fiduciary duties under NY law is a serious offense. It certainly should be grounds for a bar complaint. I should note that a similar complaint currently exists with the Virginia State Bar against John Frazer from his actions while General Counsel.

I would not be surprised if Judge Cohen demands some answers sooner than later.

Uncategorized

Well, Well, Well. Isn’t This Interesting

August 12, 2024 by 6 Comments

I have a LinkedIn account which I don’t use much any more. Every now and then I might wish someone a happy work anniversary or link an article. I checked it today because I got an email saying I had a message waiting which turned out to be spam. Go figure.

While there I happened to see this notification.

Since I have nothing to hide I don’t really care one way or another. That said, I find it interesting that they would be checking out my LinkedIn profile. It certainly is not because they plan to offer me a job or that I’ve applied for one with them.

Perhaps they just want to know who that damn John Richardson is that wants to cut off their gravy train.

When I see how much money was wasted on legal fees to that firm, I could cry. That is because with a budget of half that amount ,the NRA-ILA could have engaged in so much pro-2A litigation the gun prohibitionists would not have known what hit them.

One other thought has come to mind. Could it be that the Brewer firm has been engaged to do background checks on all candidates for the NRA Board of Directors? If so, someone in Fairfax has some explaining to do.