Judge Joel Cohen

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Discussion Of Final Judgment Item By Item

December 11, 2024 by 1 Comment

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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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.

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Going Deeper Into Judge Cohen’s Interim Decision, Part 2

August 11, 2024 by 1 Comment

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

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

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

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

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

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

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

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

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

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

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

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Going Deeper Into Judge Cohen’s Interim Decision, Part 1

August 11, 2024 by 2 Comments

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

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

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

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

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

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

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

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

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The NRA, LaPierre, And Frazer Appeal

July 8, 2024 by 6 Comments

Attorneys for the NRA, Wayne LaPierre, and John Frazer all filed appeals in People of New York v. National Rifle Association of America et al on Friday. They are appealing Judge Cohen’s decision and “order on motion” in which he denies their motions to set aside the jury’s verdict and enter a judgment for them as a matter of law. Frazer’s motion was to only set aside part of the jury’s verdict but that was also denied. Attorneys for Wilson “Woody” Phillips had filed a similar motion to set aside the verdict but are not appealing. As noted earlier, it appears he has settled with the New York Attorney General’s Office.

The appeals will go to the Appellate Division of the Supreme Court of the State of New York, First
Judicial Department. That same court has denied all previous appeals made by any of the defendants and have upheld all of Judge Cohen’s rulings in this case. The Appellate Division is the intermediate appellate level in New York State with the Court of Appeals being akin to Supreme Courts in other states.

Noah Peters of Brewer, Attorneys and Counselors, is arguing on behalf of the NRA. His argument centers around whether there enough evidence to find that the NRA payments for Susan LaPierre’s hair and makeup, to David Keene, and to Woody Phillips were anything other than “de minimis”. He goes on to question whether people like Phil Journey, Craig Spray, Rocky Marshall, Ollie North, and others should really be considered “whistleblowers”. Finally, he questions whether the jury had sufficient cause under New York’s Executive Law to find the NRA submitted false filings.

The attorney for Wayne, Kent Correll, is arguing that the Attorney General lacked the “power, authority, capacity or standing to seek or procure a judgment” under New York law to seek monetary damages against an officer of a not-for-profit, to seek the removal of such officer, and to bar the re-election of a person who is no longer employed by the non-for-profit. He also attacks the sufficiency of the evidence against Wayne.

John Frazer’s appeal argues that since the jury did not find grounds for either monetary damages or removal from office, it erred in finding he failed in his fiduciary responsibilities. Moreover, since no claim of false statements were made against the NRA’s accountants, they should not have found he knowingly signed off on a false filing.

Given the past history of appeals in this trial, I really don’t seeing any of these defendants winning their appeals. Moreover, with the exception of Frazer who is essentially fighting to stay employed, I think the other appeals are going through the motions because a) they will generate more billable hours and b) for the public relations aspect of it. Wayne is fighting to say he really wasn’t a grifter and the NRA is trying to assert that the jury should never have agreed with the Attorney General because, you know, she hates us and wants us gone.

Vendetta or no vendetta, the attorneys for New York had a strong case against the NRA and the individual defendants. Josh Powell and Woody Phillips have realized it and settled. That the NRA has not settled like that did with the Attorney General for the District of Columbia is a shame. I think what they will get now in terms of punishment is going to be worse than if they had settled. The only winners are the attorneys who will rake in even more fees that are being paid out of members’ dues or, at least, that is the case for sure with regard to the NRA. Who is paying the fees for Wayne and Frazer and whether it will ultimately be the NRA is up in the air.

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NRA Trial – Phase 2 Conference

March 2, 2024 by 1 Comment

Judge Joel Cohen issued a notice today that a pretrial conference will be held next Wednesday, March 6th, in preparation for Phase 2 of the People of the State of New York v National Rifle Association of America et al. The meeting is to discuss the schedule, logistics, and scope of Phase 2 as well as any post-trial motions related to jury phase of the trial.. This is the part of the trial where Judge Cohen will assess penalties and remedies based upon the jury’s findings of liability.

From the notice:

The parties are asked to confer in advance, with the goal of finding common ground on schedule and logistics issues. The parties may, but are not required to, submit letters in advance of the conference if they believe that would assist in focusing the discussion. Such letters should not include legal argument on the merits of any claims or proposed relief. That will come later.

For attorneys that cannot attend in person, he will be using Microsoft Teams to facilitate their participation. Interestingly, there will be a public “view-only” link available for those who request it through the court’s website. I will add any link to that if I can find it.

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Josh, You There?

January 4, 2024 by 1 Comment

Judge Joel Cohen issued a court notice yesterday asking, in essence, if Josh Powell or his attorneys intended to show up for jury selection and the trial. Given jury selection started on Tuesday, January 2nd, I take it that neither Powell nor an attorney representing him showed up for it.

You may remember that his prior attorneys, Akin Gump, dropped him for what appeared to be a failure to pay his legal bills. Indications at that time were that Powell was then going to act pro se or as his own attorney.

Now I have to wonder if he will just default by not showing up for the trial. It would be foolish to do so especially if he had been trying to cut a deal with the New York Attorney General’s Office. Oh, well, more than one former director has told me that Powell was not the sharpest knife in the drawer.

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Judge To NRA’s Attorneys – Knock It Off!

December 28, 2023 by 5 Comments

I think Judge Joel Cohen is getting a little bit aggravated by NRA’s attorneys attempts to delay the trial before it starts.

The attorneys for the NRA, primarily Noah Peters, are trying to argue that the term “properly administered” is unconstitutionally vague. The term is used in New York’s Estates, Powers
and Trusts Law (“EPTL”) § 8-1.4(m) which provides the basis for the First Cause of Action against the NRA in the NY Attorney General’s amended complaint. In my layman’s opinion, properly administered means you don’t buy suits for Wayne, pay for hair and makeup for Susan, or take free trips from major vendors.

Reading the letters to the judge from both the NYAG and Peters, it appears that this motion to dismiss the First Cause of Action is the fourth such attempt. New York wants to respond to this motion 30 days after the jury delivers a verdict while Peters and the NRA want it ASAP. Both of these letters were sent yesterday.

You may remember that on the Friday before Christmas Judge Cohen had given the NRA a lump of coal when he told them to stop screwing around. He told them then that they could have made this motion months earlier and that he didn’t anticipate delaying trial preparation to give it any attention. Nonetheless, attorneys for the NRA as shown above have continued on their quest to delay.

Today, Judge Cohen issued another notice with regard to the aforementioned letters that the briefing and hearing schedule on the NRA’s motion is stayed until further notice.

From the Court Notice:

The Court has reviewed the NRA and OAG letters regarding the briefing schedule for the NRA’s recently filed motion to dismiss (NYSCEF 2569, 2570). The NRA’s concerns about the timing for briefing this belated and procedurally questionable motion ring hollow, as it is a circumstance entirely of its own making. The Court remains far more concerned about the motion interfering with the trial rather than the other way around. Until further order of the Court, the briefing and hearing schedule on this motion is stayed. The Court will discuss the schedule with the parties during a break in jury selection the week of January 2, 2024.

As I said, I’m just a mere layman when it comes to the law. However, when a judge calls your motion “procedurally questionable” and that your concerns “ring hollow”, he is telling you to knock it off. To continually ignore his plainly given signals as the NRA’s attorneys have done is both arrogant and stupid. This case is finally coming to trial almost 3 1/2 years after it began and Judge Cohen is not going to let anything that could have been done months ago delay it further. Bill Brewer and his group of lawyers need to recognize that and move on.

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NY Courts Give NRA Two Lumps Of Coal

December 24, 2023 by 2 Comments

The first lump of coal comes from the Appellate Division, First Division. As NRA In Danger reported, the Appellate Division affirmed Judge Joel Cohen’s ruling in which he refused the dismiss the New York AG’s first cause of action in their complaint.

The court said in an unanimous decison:

Plaintiff alleged in detail that the NRA failed to properly administer charitable assets, resulting in improper administration and diminution of property held for charitable purposes; engaged in waste and diversion of charitable assets; and retaliated against whistleblowers. These allegations are sufficient to state a claim under EPTL 8-1.4, which enhances New York Attorney General’s enforcement powers and authorizes it to institute proceedings against trustees who fail to properly administer charitable assets.

As NRA In Danger notes, the court considered the remaining arguments posed by the NRA and found them “unavailing”.

The NRA’s motion from August 15, 2022 is here while Judge Cohen’s denial of the motion to dismiss is here.

The second lump of coal comes from Judge Cohen in a Court Notice issued on December 22nd. The notice states that Judge Cohen has reviewed letters from the NRA with a proposed motion to dismiss the First Cause of Action on the grounds that the statue is “unconstitutionally vague”. He notes that while the AG’s office argues such a motion is procedurally barred, he disagrees given the Commercial Division Rules. He then throws a bone to the NRA’s attorney by saying motions that represent their client’s best interests are not limited. Judge Cohen then lowers the boom.

In any event, given that the parties have undertaken the effort, the Court will provide the following comments. The NRA has had multiple opportunities to present dispositive motions, and each has been dealt with at great length and with extraordinary expenditure of time and effort by the parties and the Court. The newly proposed motion (which would be, at least, the eighty-sixth motion filed in this case) is not based on new facts or a change in the law, and the NRAs arguments clearly could have been asserted in one of its earlier (timely) motions to dismiss or for summary judgment, but was not. Instead, it is being proposed on the eve of trial, with the attendant distraction and potential for delay at a critical period for the parties and the Court as we all prepare for trial. The Court believes this is precisely the type of motion the single motion rule was designed to prohibit. Moreover, the Court is not persuaded that the proposed motion is a challenge to the Courts subject matter jurisdiction, which as the NRA notes is typically an argument that the Court can (and should) consider at any time. All that said, as noted above, the NRA does not need the Courts permission to file its proposed motion. However, the Court does not anticipate interrupting trial preparation or the trial itself (thereby extending the service time of jurors) to devote substantive attention to a motion that could have been brought months or years ago.

I think Judge Cohen’s legal response could be translated to say what Mom’s everywhere have told kids forever- just because you can doesn’t mean you should. A Dad’s response might be more to the point – quit fucking around and get to work.