USCCA Fined By Washington State

The United States Concealed Carry Association was fined $100,000 by the Washington State Department of Insurance. The violation was “selling unauthorized insurance that illegally covers defense costs for criminal shootings. ” USCCA also agreed to pay “$5,457 in unpaid premium taxes, penalties and interest. “

In a press release dated October 21st, Insurance Commissioner Mike Kreidler (D-WA) said:

“We made two things very clear to USCCA,” Kreidler said. “Insurers must be authorized to sell in our state, and policies can’t cover illegal activity. These law violations are fixable, if the company wishes to do business in Washington state.”

USCCA and other such plans only cover you for viable self-defense incidents and not “illegal activity”. Even though USCCA made this perfectly clear, the Department of Insurance contended that there was no mechanism to reclaim payments made to members who were later convicted of a crime.

Anti-gunners love to talk about “loopholes”. The only loophole I see here is one that allows bureaucrats to make regulations out of whole cloth.

On the authorization issue, Washington is probably correct. Selling insurance in a state does require a license from each individual state and the District of Columbia.

Kreidler’s press release notes that USCCA could possibly still do business in the state.

USCCA could sell insurance legally in Washington by changing its policies to not insure criminal activity, and either becoming a registered insurer or by placing insurance business through surplus lines brokers.

Earlier in the year, Kreidler and the Department of Insurance went after the NRA’s Carry Guard program.

Insurance Commissioner Mike Kreidler today banned the sale of illegal insurance policies branded by the National Rifle Association (NRA) and will fine two companies involved in underwriting and selling them in Washington state. 


Kreidler ordered Illinois Union Insurance Co. to stop underwriting the policies, branded under the NRA as self-defense policies. They are illegal in Washington state because they insure unlawful activity. 


Kreidler also seeks to fine the company $102,000 for selling 811 of the illegal policies to Washington state consumers. 


Kreidler also seeks to fine Lockton Affinity L.L.C. $75,000. Lockton Affinity is the licensed insurance producer that sold the illegal policies on behalf of the NRA.  


“When it comes to insurance products associated with the NRA, it’s buyer beware,” Kreidler said. “The attempt to insure a criminal act is a rip-off for consumers. The policies sold are deceptive and dishonest. I would be remiss as the state’s insurance regulator if I didn’t shut them down.”

Kreidler, 76, is in his fifth term as insurance commissioner. He is an optometrist by training. He served 16 years in the Washington House and Senate as well as one term in Congress. He lost re-election in 1994 after voting for the Clinton “assault weapons ban”.

Wayne Needs A Better Attorney

The New York Daily News is not a fan of the NRA. They have made that very clear over the years. They make that very clear when they refer to the NRA’s defunct CarryGuard insurance program as “murder insurance”.

The context was that investigators with the New York Department of Financial Services served a subpoena upon NRA Executive VP Wayne LaPierre. They want to know what Wayne knows or knew about the marketing of CarryGuard. It should come as no surprise that New York officials would want to put Wayne on the record with a sworn deposition.

I can think of a number of reasons that they would do this. They would include harassment, payback for the Federal suit against Gov. Cuomo and former DFS head Maria Vullo, an opportunity to catch Wayne in a lie, and the list goes on.

What struck me about this article was this:

The gun-rights group’s top lawyer said it was “surprised” by the subpoena and noted that LaPierre has “virtually no information” beyond what others have already told investigators.

“The NRA believes the ‘investigation’ was blatantly political in its motivation,” said William A. Brewer III, lead counsel to the NRA, in a statement. “Nonetheless, the NRA has attempted to cooperate with reasonable requests by (New York).”

Any competent attorney should have expected this subpoena. To be surprised by what should have been a foregone conclusion indicates either Brewer is incompetent or that he is trying to create a smokescreen. I know which way I’m leaning but for the moment I’ll reserve judgement.

Don’t Shoot The Messenger, Part 2

Just like Chinese water torture, I think we are in for a series of NRA articles from The New Yorker detailing self-dealing, lavish spending, accounting irregularities, nepotism, and sweetheart deals at the National Rifle Association. The latest episode was released yesterday and is entitled, “An Internal Memo Raises New Questions About Self-Dealing At The N.R.A.”

The article starts off describing a one and a half page memo from the NRA’s accountants to the Audit Committee of the Board of Directors. The memo details a range of “questionable transactions and business arrangement” involving several of the NRA’s top vendors and executives. This memo, unlike earlier leaks, does not go into the Ackerman McQueen issues but rather deals with other items that were found to be irregular. These include reportedly payments made to former CFO Woody Phillips’ “significant other”, cumulative rent of $1.8 million paid for a house to be used by Associated Television International and owned by ATI’s president, and to their fund-raising contractor Membership Marketing Partners.

The memo goes on to question management overrides and approval of housing expenses for certain upper executives.

In addition, the memo drew attention to “senior management override of internal controls,” which led to violations of “accounts payable procedures” and “HR policy,” including “hiring of staff without HR knowledge.” It names four executives who, at the time, were receiving “reimbursement of expenses relating to apartments and living expenses beyond HR Policy Manual stipulations and on a permanent basis.” The N.R.A.’s accountants added that there was “no contract to support the reimbursement request,” which the four individuals continued to claim as a “relocation expense.” The executives named include Doug Hamlin, the N.R.A.’s executive director of publications; Eric Frohardt, the director of education and training; Joe DeBergalis, the executive director of general operations; and Josh Powell, LaPierre’s chief of staff.


Andrew Arulanandam, the N.R.A.’s managing director of public affairs, said that the organization “has, at times, made such accommodations for employees who travel extensively for their jobs.” He added, “The practice of providing such accommodations is approved by N.R.A. leadership and is not uncommon for an organization the size of the N.R.A.”

Powell is the person responsible for bringing in CarryGuard while Eric Frohardt is the former Navy SEAL whom Powell installed as director of education and training and director of training for CarryGuard. Frohardt still lives in Colorado where he owns a range and other businesses according to his LinkedIn page. It is my understanding from those who would know that Frohardt is flown in at the NRA’s expense to work 3-7 days a month. While I have the utmost respect for Frohardt’s service to the nation, 12 years as a Navy SEAL does not make one an expert in training civilians in the legal use of a firearm.

As to Josh Powell, the memo to the Audit Committee mentions his multiple conflicts of interest including the hiring of his dad to do photography for the NRA and his wife, Colleen Gallagher, was hired by a top NRA fund-raising vendor McKenna and Associates. It gets worse.

The N.R.A.’s accountants completed their memo in mid-July. Around this period, the N.R.A.’s new C.F.O., Craig Spray, had to temporarily step away from his role at the organization to deal with a health matter. Someone would need to take his place as the organization’s chief manager of financial activities. According to an internal N.R.A. communication, in July, 2018, Powell was appointed acting C.F.O. for about three weeks, placing him in charge of the accountants who documented his conflicts of interest.

I won’t get into the other issues with regard to Powell other than to say his departure from the NRA would help the organization. Placing him as the senior strategist to work with outside counsel William Brewer on New York litigation is a disaster in the making.

I would be remiss if I didn’t note that a lot of the research on the NRA’s problems come from Bloomberg’s The Trace and they did help with The New Yorker articles. I have a theory as to how they are gathering this information. I think Michael Bloomberg and his associates have hired a corps of private investigators whose job it is to find former NRA employees who have left because they were disgusted with the self-dealing and other financial issues. I can’t think of any other way that they could be gathering this inside information unless it was being funneled to them by Ack-Mac.

One way or another the NRA will get its house in order. It can be done either by the Board of Directors or it will be done for them by the State of New York, the Internal Revenue Service, and other outside agencies. Far better that the changes come from within than from without. It can be controlled and managed to make the organization stronger, bigger, and more diverse.

My fear is that new officers of the NRA – Carolyn Meadows, Charles Cotton, and Willes Lee – and much of the Board are such stalwart Wayne LaPierre supporters that they will go along with the status quo (ante bellum) to the NRA’s detriment. Ignoring it is not going to make it go away and will only make matters worse. That, however, is the most probable outcome as things stand now.