State of New York v. NRA et all

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Just Say No!

May 16, 2025 by 1 Comment

This appeared on both X and Facebook sometime late last night.

The last we heard of Wayne was after the New York trial where he had sent in his $4 million plus court ordered repayment to the NRA under appeal. He then rode off to what should have been a well-deserved obscurity somewhere in Texas never to be seen or heard from again.

As a reminder from the Final Judgment:

ADJUDGED that Defendant Wayne LaPierre shall be barred from any fiduciary position as an officer or director of the NRA or any entity under the NRA’s direct control for a period of ten (10) years, from July 29, 2024, to July 28, 2034;

I don’t know whether this is some sort of resurrection tour for Wayne or what. Calling him a patriot and a victim of a “baseless, political attack” is ludicrous. Billy can believe whatever he wants but the damage Wayne did to the NRA far outweighs any good he might have done back in the day. We are still having to clean up the mess Wayne left behind.

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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.

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Two More Reports About The Winter NRA Board Meeting

January 16, 2025 by 3 Comments

NRA Board members Amanda Suffecool and Jeff Knox have posted their reports and observations of the NRA Board of Directors meeting held this past weekend in Dallas.

First, from Amanda, in part, which was posted on RugerForum.com:

…the big items were that the SLC Special Litigation Committee was disbanded and the power was transferred back to three pronged control. The inside General Counsel, the EVP/CEO (Doug Hamlin) and advisory control to the committee chaired by Sandy Froman which I believe is called Legislative Action Committee (which is primarily made up of Lawyers on the board, and who either advises General Counsel and EVP or sends it to the full board for vote) Look at this one as Sunshine is the best disinfectant.

One that was a BIG issue in my mind and the nuances seemed to be missed by the reporters above was a resolution authored by J Sigler that was three parts. The first part wrestled operational control and management approval from the EVP and placed it with the board. the third part put an approval of the hiring of a second level of management with the board instead of with the EVP and Operations. In my opinion – in an attempt to maintain control and to keep the WLP days of overreach from happening – this was a resolution that would have SLOWED down change, improvements and recovery. It would have had the board approving and second guessing any major decision that the departments want to make. This process as outline in the authors own words could have taken as much as 4 months to complete each time. here is an explanation of it I gave on one of the Forums.

The resolution was egregious. It would have SLOWED down the forward momentum of these new energized folks. The argument on the floor was energetic with both sides of the issue sure that they were right. Some saw safety in extreme oversight ( to avoid past sins from happening in the future) while others saw it as an impediment to much needed progress. In the end the resolution was voted down and Doug retains oversight to operations with the board providing directional advisory guidance.

Amanda also noted a number of Board members were prevented by bad weather from making the meeting. Even worse, some got part way there and then got stuck in airports. She also reported that the management team that Doug Hamlin has assembled from both new hires and long-term NRA employees seemed both professional and collegial.

Moving on to Jeff’s report which was posted today on Ammoland.

The SLC lived up to its contentious record right up to the end however, with their last official act being the filing of a notice of appeal in the New York AG case. For practical purposes, the notice has the effect of retaining the option of filing an appeal within the next 6 months. Had the NRA not filed the notice by a Friday, January 10 deadline, the window for filing appeals would have been closed permanently.

The notice of appeal was also the final major act of Brewer Attorneys and Counselors as the NRA’s outside counsel. The firm has terminated its representation of NRA, with only a few housekeeping and transition matters left to clear up.

The object of the NRA’s appeal would be the judge’s early decision to toss out the NRA’s claims of First Amendment violations by AG James. This should not be confused with the NRA’s other First Amendment case against New York, which was titled NRA vs. Vullo and Cuomo, commonly referred to as the Vullo case. That case did a side-track to the US Supreme Court, where NRA won a unanimous decision on a portion of the suit. It was then remanded back to the lower courts for further action and is still ongoing. That SCOTUS decision might put the NRA in a better position in an appeal on this case, but that is yet to be thoroughly explored.

There was significant debate over the filing of the notice of appeal during committee meetings. Unfortunately, with the deadline for filing falling on the day before the Board meeting, the full Board wasn’t able to debate the pros and cons of the action or offer an advisory vote on the issue. The Legal Affairs Committee did look into it, but it was clear that the members of the SLC had already committed to the idea of filing, so any other debate was moot.

The matter was only briefly touched upon during the meeting of the full Board, as Directors already had a very full agenda to cover. Nonetheless, debate continues, with some calling for immediate withdrawal of the notice, while others argue that the appeal should proceed.

My position on the matter is, while I disagree with the way the notice was filed, I don’t see that it creates any significant problems or harm to the Association. The NY AG has a 10-day window to file a counter-appeal, but I’ve seen no indication that she intends to do so. Frankly, the AG’s office doesn’t need NRA’s notice of appeal to instigate further action. Since the notice has been filed, I think the best course for the NRA to take now is to consult with knowledgeable attorneys, then present the Board with a comprehensive report on the pros and cons of pursuing the appeal. A final decision can be made at our next Board meeting after the Annual Meetings in Atlanta this spring.

I would love nothing more than to have a successful suit against Letitia James and New York for her politically motivated attacks on the Association, but I don’t want to spend millions of dollars on a dead end. If the lawyers conclude there’s a very good chance of a resounding win with substantial compensation coming back to NRA’s treasury, I’ll support it, otherwise I’ll advise we walk away.

Jeff has a lot more to say and I suggest reading his whole post. I disagree a bit with Jeff on the filing of the appeal as I think it is both a waste of time and a waste of money. The Final Judgment was more than generous to the NRA and was more than I expected.

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Barr: LaPierre Has Initiated Payment

January 7, 2025 by 3 Comments

According to a letter from NRA President Bob Barr, Wayne LaPierre has “initiated” payment of the $4.6 million that the New York jury determined was owed to the NRA. The letter was a “dear colleague” letter posted on Facebook in the Members Take Back the NRA group. This letter was sent out on Monday afternoon.

Colleagues:

On behalf of the Special Litigation Committee (SLC), I am pleased to announce another step forward in the NRA’s efforts to fully resolve its legal battle with the NYAG.

Following the Court’s final judgment entered on December 11, 2024, the NRA today received notice from counsel for Wayne LaPierre that his client has initiated payment of more than $4.6 million. The payment is intended to satisfy the final judgment. It does not represent a compromise, release, or settlement of legal claims by the NRA.

As previously noted, all payments relating to the final judgment are made to the NRA – not by the NRA. The NRA vigorously supports the pursuit of payments from other individual defendants, including former CFO Wilson “Woody” Phillips and former NRA executive Joshua Powell. We wrote to the NYAG today regarding both remaining payments.

I appreciate Wayne’s compliance with the court’s order. This is another step forward in our journey to fully resolve these matters – in the interests of our millions of loyal members. We now call upon the NYAG to collect and remit other payments owed to the Association.

I am proud that, collectively, we are pursuing improvements to our governance in support of our mission and the members we serve. There has never been a more promising time for the Association and its fight for freedom.

Thank you for your continued support.
Warm Regards,
Bob Barr, NRA President

According to prior settlements with Woody Phillips and Josh Powell, they have agreed to repay with interest the NRA $2 million and $100,000 respectively. These settlement were made with the New York Attorney General’s Office.

Reading through the letter, I do have some questions. When Barr says “initiated payment”, is this for the full amount plus interest in one check or is it a partial payment that will be coming over time? I would wager that very few of my readers could just write a check for $4.6 million. That it is presumed that Wayne can do it is an indication of how much money he has been paid in salary and bonuses over the years.

Moreover, will the Board of Directors be seeking reimbursement for monies paid to P. Kent Correll for Wayne LaPierre’s defense? I know there is a resolution seeking just that which will be presented to the Board on Saturday. Under New York Not for Profit Corporation Law, indemnification is not allowed where the person has been judged liable to the corporation, unless the court approves. (See § 721 through § 725) I know of no approval that was forthcoming on this from Judge Cohen.

While Barr is patting the SLC and himself on the back for their role in this case, it should go without saying that the need for the Special Litigation Committee is long over. One hopes the Board makes that clear this weekend when the resolve to dissolve the SLC. Additionally, the upcoming Board election will determine whether “improvements to our governance” will be superficial window-dressing or meaningful change. Leaving any of the cabal on the Board would be a vote in favor of the former rather than the latter.

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Claw Back Of Wayne’s Legal Expenses

December 19, 2024 by 5 Comments

NRA Director Dennis Fusaro sent me this about a week ago. It is a resolution that will be presented at the NRA Board of Directors’ meeting in January to be held in Texas. Dennis is urging a claw back of some of the legal expenses that the NRA paid on behalf of Wayne LaPierre in the New York trial.

It is my understanding from Dennis that a newer copy of the resolution has been submitted with more signatures attached. I am posting this copy with his permission.

You will note that the resolution specifies that Brewer Attorneys and Counselors cannot be used in this effort. I like that!

I think Dennis has a point. While it might be hard to argue that 100% of the legal fees expended on behalf of Wayne should be clawed back, the jury’s finding does negate any expectation that the NRA (and its members!) are responsible for the whole amount.

It will be interesting to see where the Board goes with this.

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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.

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Another View Of The New York Hearing

November 2, 2024 by 2 Comments

NRA Present Bob Barr sent out a memo to the Board yesterday after the hearing before Judge Joel Cohen. I would make the humble suggestion to read this and then compare to my report on the hearing published earlier this evening.

After a nearly two-hour hearing today in his New York City courtroom, Justice Joel Cohen indicated he would issue a final order shortly. Today’s hearing was argued by Sarah Rogers as NRA counsel and attended in person by President Barr and Chief Compliance Officer Bob Mensinger—along with various Board members who observed the proceedings electronically.

The judge began the hearing by praising the careful process that the NRA and its Board followed in formulating its Final Judgment proposals, stating that it was clear that those proposals reflected a lot of work. He also posed numerous questions to both sides in assessing the following issues that are before him for resolution:

— The process according to which NRA Board members are nominated and then selected — which we believe robustly identifies individuals with the background and skills most necessary for the advancement of the NRA and its mission.

— The composition of NRA committees, how their members are selected, and whether any committees in addition to the Audit Committee fall within the Court’s purview.

— Protections for our Chief Compliance Officer: the parties agreed on the NRA’s proposed severance contract.

—Whether the NRA should be required, per the NYAG’s request, to retain an additional third-party internal auditor.

—Whether the NRA should retain an advisory consultant who was not a testifying expert (for either side) at trial.

— Whether the NRA should be forced to conduct a referendum on the size of our Board, or, as we have argued, allow the Special Committee on Organization to continue its work to carefully and comprehensively consider such issues and report back to its recommendations the Board of Directors, as directed by the Board at its September 7th meeting.

— In response to the NYAG’s arguments for dissolution of the SLC, the judge raised questions about his jurisdiction with regard to the issue.

Additionally, as a final matter during the hearing, there was a robust discussion regarding collection of the money judgments against the individual defendants, including Wayne LaPierre. Both the NRA and Mr. LaPierre’s counsel argued that monies — once collected — should be paid straight away to the NRA, not held in escrow by the NYAG. The judge signaled agreement on the latter point and suggested further that the NRA could come to him if the collection was not being appropriately pursued (for example, if problems were encountered with the NYAG dragging its feet or placing some type of roadblock in the NRA’s ability to collect such monies).

We anticipate the judge will render a final, written order soon, and will keep the Board timely apprised of further developments.

Best regards,

Bob Barr

For the SLC

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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.

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Will It Be Trick Or Treat For The NRA?

October 31, 2024 by 3 Comments

Judge Joel Cohen has scheduled the oral arguments on the final judgment proposals for tomorrow at 11am. Unfortunately, New York being New York, we cannot watch or listen to the oral arguments live as that is prevented by New York law. You can thank the media who covered the Lindbergh kidnapping trial back in 1935 for that.

Since the oral arguments are scheduled for Halloween, the question is whether the final decision will be a trick or treat for the NRA.

Having read both sets of proposals – and I’m not counting the one from disgraced former EVP Wayne LaPierre – my expectation is that Judge Cohen’s final decision will tend to be closer to the proposal offered by the New York Attorney General’s Office than that of the NRA. My reasoning is that their proposal more closely follows his dicta in his interim decision. For example, the NYAG’s proposal more fully opens up the nomination process while the NRA’s speaks of seeking out certain attributes for directors. The latter could be used to eliminate candidates who might not buy into the party line.

While not having a crystal ball, I also would not be surprised if Judge Cohen orders that Paul Babaz and Charlie Brown be added to the ballot. Both were late in delivering petitions due to storm-related issues.

As I wrote earlier, neither proposal addresses information sharing with the members. I would hope that Judge Cohen realizes this is not addressed and adds that as a requirement. NRA members should be able to view up-to-date bylaws online, see the financial filings for a period of at least five years, and be able to read the minutes and agendas for Board meetings. This is the minimum that should be available online for members to access. If anyone is worried about the opponents of gun rights having access to it, make it available to members only just as they do with the ratings from the NRA-PVF.

I don’t think we will have to wait long to receive Judge Cohen’s final judgment. I would not be surprised if he doesn’t have a draft in place that only needing some tweaking following the oral arguments.

Fingers crossed that the final judgment will be a treat for the members and a trick for the cabal whose acquiescence to the whims of Wayne LaPierre put us in this position to begin with.