NYAG’s Major National Announcement – NRA?

Rumors started flying late last night after New York Attorney General Letitia James’ press office sent out a notice of a press conference to be held today. As the Tweet below from Stephen Gutowski speculates it might have something to do with her investigation into the National Rifle Association and its finances. I have seen other Tweets from journalists that tend to agree.

It might have nothing to do with the NRA or everything to do with the NRA. The announcement could be something about President Trump. Heck, it could even be an announcement that she will be Joe Biden’s VP pick given she fits the narrative.

There is a Livestream of the press conference at 11:30am EDT this morning and I plan to watch.

The link is here.

NY Department Of Financial Services Files Charges Against NRA

The New York State Department of Financial Services has charged the National Rifle Association with violating the state’s insurance laws. The NRA is accused of acting as an unlicensed insurance broker. DFS is seeking civil penalties as well as injunctions against the NRA.

From their press release issued today:

The Department of Financial Services (DFS) today announced that it has served a statement of charges against the National Rifle Association (NRA). The Department alleges that the NRA, which does not have a license to conduct insurance business in New York, violated various New York State Insurance Laws, among other things by acting as an insurance producer without a license in endorsing and marketing insurance programs, including “Carry Guard.” DFS also alleges that the NRA engaged in misleading marketing practices, deceiving its members. The Department is seeking civil monetary penalties, as well as injunctive and other appropriate relief.

In the statement of charges announced today, DFS alleges that, since 2000, the NRA has worked with the Kansas City Series of Lockton Companies LLC (Lockton) to offer a variety of insurance products to NRA members, their families and affiliated businesses. According to the statement of charges, the NRA endorsed the programs as well as marketed them to its members through NRA-affiliated websites and email marketing, despite the fact that the NRA does not hold an insurance producer license from DFS. In return, the NRA received substantial compensation, including royalties based on a percentage of the insurance premiums paid by its members. An entity is required to be licensed by DFS to engage in these activities related to the sale and marketing of insurance products in New York State.

DFS alleges that not only did the NRA act as an “unlicensed insurance broker” with regard to its Carry Guard product, the insurance itself was unlawful. According to the DFS, since a self-defense shooting is an intentional act, it cannot be covered under the state’s insurance laws.

The complaint does not limit itself to Carry Guard. It goes on to include other insurance offerings such as liability insurance for ranges and instructors and theft insurance for gun collectors.

The charges are not confined to the Carry Guard program. DFS alleges that the NRA participated in soliciting its members with respect to many other insurance products, going back to approximately 2000. For example, the charges allege that the NRA participated in offering its members insurance products involving coverage for firearms instructors, gun collectors, gun clubs, gun shows, federal firearms dealers, and other aspects involving firearms, as well as life, health, and property offerings for their members. The charges allege that the NRA participated in the generation of more than 28,000 such policies for New York consumers and allege that the NRA unlawfully received royalties of about $1.8 million between 2000 and 2018 from Lockton on such policies in New York.

In addition, DFS alleges that the NRA misrepresented that the insurance offerings to its members was at the lowest cost possible, when in fact the NRA was taking for itself substantial royalties, sometimes more than 20 percent of the premiums paid.

The Department of Financial Services is seeking up to a $500 penalty for each of the 28,000 policies issued to New York residents.

A hearing is set for April 6th in Manhattan on these charges.

The full complaint can be found here.

The NRA responded through their outside counsel William Brewer III:

“Today’s announcement is about politics, not protecting consumers,” William Brewer, a lawyer for the NRA, said in a statement. “The NRA acted appropriately at all times.”

Brewer goes on to say:

Brewer said the NRA did not underwrite, sell or administer insurance programs, and “like countless other affinity groups … relied on insurance-industry experts to oversee and market products tailored for its members.”

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.

Dont Shoot The Messenger

In the last couple of days since the lawsuit against Ackerman McQueen I’ve spoken to a former lobbyist for the NRA and two serving NRA Board Members. The conversations were off the record and not for attribution. Then I read this article in The New Yorker thanks to a link to it posted on Facebook by Prof. David Yamane.

The article is entitled “Secrecy, Self-Dealing, and Greed at the N.R.A.” Mike Spies article has a subhead saying “The organization’s leadership is focussed on external threats, but the real crisis may be internal.” I hate to say this given all the attacks on the NRA from every Democrat running for President, the State of New York, and the media but from what I’ve gathered Spies is correct. Just because we don’t like the source doesn’t mean they are wrong.

Last August, the N.R.A., in desperate need of funds, raised its dues for the second time in two years. To cut costs, it has eliminated free coffee and water coolers at its headquarters and has frozen its employees’ pension plan. Carry Guard, which was meant to save the organization, has proved disastrous. According to the memos, in 2017, the year that Carry Guard was introduced, Ackerman McQueen received some six million dollars for its work on the product, which included the creation of a Web site and media productions featuring celebrity firearms trainers. The lawsuit against New York State has created an additional burden. Sources familiar with the N.R.A.’s financial commitments say that it is paying Brewer’s firm an average of a million and a half dollars a month.


An official assessment performed by Cummins last summer dryly describes the N.R.A.’s decision-making during the previous year as “management’s shift in risk appetite.” The document analyzes the organization’s executive-liability exposures and discusses insurance policies that “protect NRA directors and officers from claims by third parties that they have breached their duties, such as by mismanagement of association assets.” From 2018 to 2019, it says, insurance costs increased by three hundred and forty-one per cent. “To say this is a major increase would be an understatement,” Peter Kochenburger, the deputy director of the Insurance Law Center at the University of Connecticut, told me. “This seems to be pretty direct evidence that the N.R.A.’s problems are not due to New York but rather to how the organization conducts itself.”


The memos urged the audit committee to “step up + fulfill its duties!,” but it’s not clear what the board has done to root out malfeasance. James Fishman, a co-author of “New York Nonprofit Law and Practice: With Tax Analysis,” a leading text on nonprofit law, told me, “There is no such thing as a director who doesn’t direct. You’re responsible to make yourself aware of what’s going on. If the board doesn’t know, they’ve breached their duty of care, which is against the law in New York,” where the N.R.A. is chartered. According to Owens, the former I.R.S. official, New York State “could sanction board members, remove board members, disband the board, or close down the organization entirely.”

Read that last line again. New York State could close down the NRA entirely by moving for dissolution. You have a governor and attorney general in New York that hate the National Rifle Association. You have a Board of Directors which is too large to be effective. You have Ackerman McQueen trying to preserve its position and an outside counsel trying to take their position for himself. And then you have internal civil war going on within the organization between loyalists to one executive and friends of another leader.

The bottom line is that there are tremendous troubles within the NRA just when you need it to be steadfast in the face of outside attacks.

How bad are these troubles? A reliable source told me that Marion Hammer who hasn’t attended a Board of Directors meeting since hell froze over the last time will be in Indianapolis to attend the Board meeting. It’s that bad.

UPDATE:  Jeff Knox, son of Neal Knox, and co-head of The Firearm Coalition published an opinion piece of the issue in response to The New Yorker’s article. It is well worth a read. He makes some good points in it and calls for the resignation of Board members on the Audit, Finance, and Executive Committee for not doing their jobs.

People v Berrezueta – More Knife Law Lunacy From New York

The New York Court of Appeals is the highest appellate court in the state of New York. They decided a case last week that is very problematic to everyone who owns an assisted-opening knife in the state. In the case of People v. Berrezueta they declared in a 6-1 decision that a spring-assisted opening knife is a switchblade within the definition of the New York’s penal code. The dissent by Judge Jenny Rivera disagreed strongly and pointed out the deficiencies in the majority’s argument.

Doug Ritter has more in an alert he sent out this morning:

URGENT New York State WARNING
Are Assisted-Openers Now Illegal Switchblades ?


As if New York wasn’t already a confusing legal and regulatory nightmare for honest, law-abiding knife owners, the highest court in the state just upheld, in a one paragraph opinion, the conviction of a person in possession of an assisted opening (spring-assisted) folding knife under the theory that it was an illegal switchblade knife under New York law.


The decision was overwhelming, 6 to 1, but it’s worth noting the excellent dissent by Judge Jenny Rivera which is detailed, analytical, logical and very well-reasoned.


Click here to read the decision including her brilliant dissent.


Assisted opening folding knives are widely and routinely carried by millions of law abiding individuals, and given the momentous nature of this decision, certainly affecting hundreds of thousands of pocket knife owners in New York State, a review of the briefs suggests that the seriousness of the issues at stake was not presented to the court. The prosecution fundamentally mischaracterized the nature of the knife as being a switchblade. The significant and fundamental differences between a switchblade and the assisted-opening folder the defendant was carrying were not before the Court.


In addition to completely redefining what a knife’s handle is, essentially eliminating the difference between the handle and the blade, the Court disregarded the fundamental difference in how the two types of knives operate – switchblades being automatic (an essential element of the definition) while assisted-openers are not.


Given that this confusion goes against clear historical precedent and that nobody in the real world is likely to interpret that statute in that manner, it creates a trap for all knife owners who would rationally never consider an assisted-opening folder to be a switchblade, especially if they were intimately familiar with plain wording of New York’s switchblade statue.

265.00 Weapons Crimes – Firearms and Other Dangerous Weapons
Definitions


4. “Switchblade Knife” means any knife which has a blade which opens automatically by hand pressure applied to a button, spring or other device in the handle of the knife. (emphasis ours)

Regardless of whether we win our current civil rights case against New York City and District Attorney Cyrus Vance, Jr. over their unconstitutionally vague gravity knife prosecutions of those carrying common folding knives, the hundreds of thousands of knife owners who possess an assisted-opening folding knife anywhere in New York state could now be liable to being prosecuted for simply possessing a per se (inherently) illegal switchblade under §265.01, which is a serious crime, a fourth degree misdemeanor with a potential penalty of a year in jail. And, as we have seen far too often in our Federal gravity knife case, anyone who has had a prior conviction, even decades ago, is likely to have the charge against them upgraded to a felony with potentially years of jail time and loss of civil rights.


Actually carrying an assisted-opener will certainly raise the likelihood of arrest and prosecution.


At this juncture we must warn anyone living in New York State, or who visits or travels through New York State, that you risk arrest and jail if you carry an assisted-opening folding knife. Retailers within New York State may want to consider their potential criminal liability in continuing to sell assisted-opening knives.


We’ll certainly be looking to find a solution to this problematic decision, but for now, discretion is the better part of valor with regards to assisted-opening folders in New York State.


And, just to be clear, this assisted-opener issue that covers the entire state of New York is entirely separate from New York City’s gravity knife arrests and prosecutions; as well as New York City’s administrative code prohibiting open carry of a knife (including being clipped to a pocket or “printing”) and its under 4-inch blade length limit. Details at: https://kniferights.org/legislative-update/new-york-city-administrative-code-knives/

NY SAFE And Jobs

It isn’t only the large firearm manufacturers whose business is affected by the NY SAFE law. While I’ve talked about Remington in the past, the law also impacts small manufacturers who have less clout. A case in point was recently publicized by WHEC-TV of Rochester.

Just Right Carbines of  Canandaigua makes a modern version of the camp carbine in 9mm, .40 S&W, and .45 ACP. The design of the JR Carbine allows it to be made with some off-the-shelf parts from the AR including the stock, pistol grip, and trigger mechanism. Therein lies the problem – the pistol grip. Because the JR Carbine uses a pistol grip, it is illegal to sell in New York.

The response of Gov. Cuomo’s office is illustrative of the disdain they have for the firearms industry.

“For years, gun manufacturers have modified their products for sale in
New York State, and the new law does not change that. The SAFE Act is
designed to keep military-style assault weapons that have the potential
to cause the greatest harm out of our communities while still respecting
New York’s long tradition of hunting and sport shooting.”

Let’s be clear about one thing. Cuomo and the rest of the gun prohibitionists respect nothing about hunting or sport shooting.  It is only something that they have to endure so as to get the votes from those “Upstate hicks”. If it costs a few jobs in western New York, so be it. I would imagine that as soon as an industrial recruiter from South Dakota or Texas or Alabama sees this story, Messrs, Fargnoli and Cutri will be getting a call.

Oh, The Irony!

In the little Mohawk Valley village of Ilion (population 8,053) sits the nation’s oldest continuously operated arms manufacturer Remington Arms. It employs over 1,300 well-paid and talented workers in a region that has seen over 11,000 manufacturing jobs lost since 1990.

The village had a town meeting in January before the vote on the NY-SAFE Act. As you can well imagine, their concern was over jobs and not gun control.

The NY-SAFE bill was enacted into law and the concerns over jobs was ignored.

So it should come as no surprise that a number of states have contacted the Freedom Group about moving their Remington Arms plant to a state that is more appreciative of gun rights and gun manufacturing jobs.

At least five states have contacted the parent company of Remington Arms to encourage the gun manufacturer to relocate in response to New York’s new, tougher gun control laws.

Lawmakers from Michigan, South Carolina, Arizona and Oklahoma have all sent letters to Remington’s owner, Freedom Group, since the state Legislature passed tougher gun control legislation two weeks ago. Texas first contacted the company in November 2012.

While North Carolina isn’t mentioned in that list, I would be surprised if officials from the state’s economic development office haven’t already trekked to Madison, NC to speak with Freedom Group executives about relocation. If they haven’t, they are being derelict in their duties.

Mohawk Valley economic development officials and politicians are taking these contacts very seriously. Assemblywoman Claudia Tenney (R-New Hartford) called fears that Remington might relocate “realistic” while Herkimer County IDA Executive Director Mark Feane said they are very concerned given the incentives that other states might offer.

No one knows at this time what the Freedom Group will do. However, if they do move the Remington Ilion plant, I would find it deliciously ironic if the trucks moving the plant’s machinery just happened to detour around the Governor’s Mansion and the New York Capitol Building on their way out of state. It might lengthen the journey by a few hours but it would be worth it to remind politicians about the law of unintended consequences.

What’s Banned In New York

The office of Gov. Andrew Cuomo (D-NY) has provided a graphic summary of what rifle features are now banned under NYSafe. That is the draconian law pushed through so quickly that even law enforcement if prohibited from having more than 7 rounds in their magazines. NY(un)Safe stands for Secure Ammunition and Firearms Enforcement Act.

As you look through the pages of the graphic you need to ask yourself how the absence of a bayonet lug or a muzzle break will make the people of New York State any safer. The obvious answer is that it won’t.

NY State – Banned Rifle Features by

“David Gregory” Clause In NY Gun Law?

William Jacobson of the Legal Insurrection blog is a law professor at Cornell University Law School. As a class project in one of his courses, they are trying to unravel the new 39 page gun law that Gov. Andrew Cuomo rammed through the NY State legislature.

Jacobson was interviewed by Cam Edwards of NRA News about the new law on Friday. The key point made by Jacobson in discussing this new law is that it is so complicated and full of pitfalls for the law abiding that the intent seems to be to discourage gun ownership entirely. He notes that there are all sorts of ways to run afoul of the new law. For example, Jacobson said that a previously legal “assault weapon” under New York law must now for the first time be registered. He could see someone not realizing this and being stopped with a non-registered rifle on the way to the shooting range. That person would now be a felon if convicted and lose all gun rights.