NRA In Danger Blog

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While I Was Gone…

September 5, 2024 by 2 Comments

I left for South Africa on the afternoon of Friday, August 23rd and only got back home to North Carolina around noon yesterday. As the Complementary Spouse was home alone (though well armed), I was reluctant to go public that I was out of the country. I had won an auction at the SCI Convention in February for a 7-day hunt at a ridiculously low price to go with a Delta “buddy pass” which had to be used by early September. Thus, my brother-in-law Larry and his son Alex joined me for a trip to Thabazimbi in Limpopo Province. I will have more on that trip in subsequent post but suffice to say it was pretty successful.

However, while I was gone, a lot of stuff happened and it is hard to blog about things when using just an iPad. Lets go over some of the things that have happened while I was gone.

Number 1: I was put on the ballot for the 2025 NRA Board of Directors election by the Nominating Committee. I did quickly post about this on August 28th. As I have said, this was not expected. Some have suggested with some justification that this may have been an attempt to shut down my news and criticism of the cabal and the NRA. I promise that if elected I will not stop exposing issues within the NRA while still being observant of my fiduciary duties. I should also note that I am NOT stopping my campaign to be on the ballot by petition. While it may seem redundant now that I am officially on the ballot, being placed on the ballot by petition to me is the Holy Grail as it comes from the members and not the insiders. My goal in running for the Board is to serve the members, the grass roots, and the cause of advancing our Second Amendment rights.

Number 2: NRA In Danger blog was taken down temporarily. I literally had 3-4 emails within an hour of it going down telling me about it. I had multiple back and forth emails with “NRALifer” over the issue after I was alerted to it. While the conspiracy theorist in me and many others pointed towards that lawyer we all love to hate, in the end it was some WordPress.com anti-spam algorithm that targeted the blog for supposed spamming. I hate to say it but in the old days of bulletin boards, listservs, and Usenet groups it was harder to suppress news and opinion. As social media has grown up, censorship has grown with it. I am an advocate for having and using private hosting services that are less likely to be censored than the corporate ones. For the record, I do not know who runs and writes the NRA In Danger blog.

Number 3: A blistering 8-page “Dear Board Member” letter went out on August 30th from NRA VPs Bill Bachenberg and Mark Vaughan. It took aim at the Special Litigation Committee, the original committee assignments, Brewer, and the cabal. More on this letter in another post.

Number 4: The cabal waited a few days and then issued their response officially (supposedly?) written by cabal member Don Saba. It accused Bachenberg and Vaughan of being “divisive” and “harmful” to the NRA as well as trying to coerce and browbeat the cabal. . The letter was full of innuendo about the reform elements cooperating with the NYAG’s office and how they had help from a “competing second amendment organization” to promote “discord, distrust, and confusion” on the Board and with gunowners. Of course, it is nonsense. I do remember well that Dr. Saba was one of the Directors who vehemently disagreed with my 2020 resolution on succession planning at the Annual Meeting in Tucson.

Number 5: I met and became friends with a member of the 2016 South African Olympic Team. Lindsay Hanekom is a field and track athlete who runs the 400m hurdles and was going to Atlanta for training. He, like Larry and I, got bumped from our flight to Atlanta on Monday night. Thanks to Lindsay, we were able to get a ride to a hotel near the airport with his friend Driaan.

Number 6: Our hunt with Tsala Safaris was mostly a success. While I didn’t get my cull zebra, I did get my trophy impala and blue wildebeest. I also saw giraffes, roan, zebra, golden wildebeest, sable, mongoose, nyala, kudu, waterbuck, eland, red hartebeest, warthogs, springbuck, gemsbuck, Cape buffalo, and probably others than I have forgotten to name. I still marvel at the ability of our trackers Sharma and Filomon to see animals amidst the tangle of the bushveld as they saw animals that even with binoculars I couldn’t see.

The backstrap from my impala was made into lunch a few days later when we had impala stroganoff. It was exceptionally good. For those that are into these things, that ram was taken with one shot at about 175 yards and his horns measure right at 24 inches.

Now it is time for me to try and shake off the jet lag and get to work helping the other petition candidates for the NRA Board. There are a total of 26 reform candidates running for the Board of Directors and only 11 are on the ballot courtesy of the Nominating Committee. Despite Judge Cohen’s suggestion that we have an open election with anyone who wished to run on the ballot, we are not there yet.

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NY Court Update And Some Suggestions

August 16, 2024 by 2 Comments

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

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

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

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

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

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

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Tomorrow May Be The Day When The Jury Returns

February 22, 2024 by

Since I’m not in New York and since the state refuses to televise trials, I have been relying upon the reports of others with regard to some aspects of the NRA trial. Documents that have been filed I can access but I can’t see what is happening in the courtroom.

For the day to day reports on witnesses and the arguments from both sides, I have been depending upon NRA Watch. I do realize that it is a tool of Bloomberg’s Everytown but it has fairly reported courtroom proceedings. Other sources such as Courthouse News Service, NRA In Danger, and Stephen Gutowski’s The Reload have been very good but not quite as up to date.

Twitter or X has been very helpful in following the trial since the closing arguments and the case has been sent to the jury. Erik Uebelacker (@Uebey) has been very good. A new source I discovered today, Rachel Scharf of Law360, has been even better.

Here are a couple of her posts from earlier today:

Given this tweet by Erik Uebelacker, I think we are getting close to the end of the jury’s deliberations. They may have skipped around but my gut tells me that they have been taking each item in order.

I also received a text from Judge Phil Journey who also expects a decision as soon as tomorrow. Given his experience as a trial judge, I’d say he has a good feel for how juries behave.

I’m not making any bets on what the jury will return. They have asked for all the exhibits, have sent multiple notes to Judge Cohen including one that asks the meaning of “monetary harm to the NRA”, and a computer with trial transcripts. With the exception of the last item, I believe that have gotten what they have requested. This leads me to believe that they are doing their due diligence, examining every charge carefully, and are working hard to reach the various verdicts fairly. I don’t think anyone will be able to say that they didn’t do their jobs.

So, with any luck, we will see the jury return with their verdicts sometime tomorrow. I plan to keep checking Twitter throughout the day and will report if I hear anything.

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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.

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An Updated Analysis Of The NRA’s Finances

November 7, 2023 by 4 Comments

I have published financial analyses of the NRA by former board member Rocky Marshall in the past. Based upon an audit filed with the North Carolina Secretary of State’s Charities Division by the NRA, he has updated his analysis. I am publishing this with the permission of Rocky.

From Rocky:

RED FLAGS AND REALLY RED FLAGS

  • Revenue continues downward spiral as expenses (mostly legal) will likely increase in 2023-2024.
  • Net Income losses will likely continue 2023-2024.
  • Cash on hand is $12M and monthly expenses are $19M.
  • Recommended minimum cash on hand should be $57M.
  • Additional cash required to cover -$26m projected operating loss for 2023.
  • Additional cash required for contract liabilities of $40M to paid during 2023
  • Additional cash required to cover principal loan payments due in total of $28M during 2024.
  • Line of Credit and other Notes jumped 78%.
  • Increasing debt through loans to cover general operating expenses.
  • Capitalizes computers in excess of $500 and other fixed assets greater than $1,500.
  • Capitalization of purchases is artificially low and reduces expenses in order to boost net income.
  • Assets due from the NRA foundation are $31M and inflate the NRA balance sheet.
  • Most of the NRA foundations assets due have donor restrictions and cannot be used for general expenses.
National Rifle Association Financial Analysis Year Ending 2022    Estimate
(in millions $M)20212022$Change%Change2023
Revenue233.5213.5-20-9%203
Expenses228.2228.60.40%228.6
Net Income5.3-15.1-20.4-385%-25.6
Members’ Dues97.483.2-14.2-15%75
Cash30.412-18.4-61%10
Liquidity Assets65.943.1-22.8-35%34
Note Payable & LOC24.643.719.178% 
Contract Liabilities44.840.2-4.6-10% 
Total Investments717100% 
Total Investments pledges as collateral53.644.2-9.4-18% 
Percentage of Investments collateralized75%62%-13%-18% 

In a marginally related aside, NRA In Danger is reporting that Wayne LaPierre has put his house in Great Falls, VA on the market. The asking price is $2.4 million. NRA In Danger is taking this as confirmation that the powers that be have made the decision to move to Texas. As with the bankruptcy case, the Board has been kept in the dark until it was a done deal. Read his or her full post.

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NRA’s New York Trial Delayed Until 2024

August 9, 2023 by

NRA In Danger is reporting that the trial for People of New York vs. National Rifle Association is now delayed until sometime in early 2024. It was thought the trial would have started in mid-October 2023.

According to a comment by Frank Tait, it is thought the reason for the delay is the withdrawal of Akin Gump Strauss Hauer & Feld LLP as counsel for Josh Powell. As I noted earlier, they had a parting of the ways over Powell’s ability to pay his legal bills.

One must wonder if this case will ever get to the trial stage. The case is now officially 3 years and 3 days old. I think the only people who are happy about this are the attorneys for the defendants as it gives them even more time to run up their bills with more useless filings.

UPDATE: Stephen Gutowski of The Reload is reporting that Josh Powell intends to represent himself at the trial.

Even as far back as the 1700s, it was thought foolish to represent oneself in court. I wish Mr. Powell well but history has not been kind to those who represent themselves.

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NRA Finances And An Interesting Proxy

February 9, 2023 by

The blog NRA In Danger has posted another look at the NRA’s finances by former director Rocky Marshall. As I noted in introducing his guest post on this blog, he has significant expertise in examining a company’s or organization’s finances. Rocky brings up the concept of industry related metrics as a way to validate financial forecasts. As it is, he holds that the NRA’s forecasts for revenue are unrealistic and have no substantiating business plan to validate them.

From Rocky at NRA In Danger:

A Realistic Projection: The obvious relationship most closely associated with NRA revenues are U.S. Gun sales¹. In reviewing US gun sales data, NRA Revenues will increase or decrease as gun sales vary from year to year. From 2004 through 2019, the NRA received on average $25 for every gun sold in the United States.  However, after the breaking news of corruption in 2019, the NRA revenue dropped 48% to $13/gun sold.

The ratio of NRA Revenue/US Gun Sales is a useful metric because revenue for the NRA can be easily calculated for 2023 with a high degree of certainty.  Based on the current declining trend of US gun sales, it is projected that total US gun sales will be similar to historical (pre-covid) norms of roughly 13 million guns sold². With this in mind, a quantifiable estimate of projected revenues for the NRA in 2023 is $169 million (13 million guns sold at $13/gun). 

The NRA is projecting $230 million in revenue, which would equate to $18 for every gun sold in the US.  This is the same group that also planned $241.2M for last year and missed this estimate by $36M. The NRA estimates are not based on any practical industry metrics or upon a viable business plan to increase revenue; but, instead are misleading the BOD once again into a false premise.  

Using firearm sales as a proxy in the metric is interesting and makes sense. Both actual gun sales and actual NRA revenue are known from government reports. Actual gun sales are found from the Annual Firearms Manufacturing and Exportation Report submitted to BATFE and the NRA”s revenue is reported on the IRS Form 990. Forecasts on future firearm sales do come from the NSSF and the industry in various forms. The FBI’s NICS data could be used but, as we know, it isn’t a direct correlation with firearm sales. The NSSF-adjusted numbers would be more accurate.

When comparing the ratio of NRA Revenue/US Gun Sale for the pre-2019 and post-2019 time periods, there is another factor in play that was not mentioned. Pre-2019, it was often the case that if you purchased a new firearm from one of the major manufacturers, it would come with a coupon entitling the buyer to a free one-year membership in the NRA. I know Taurus offered this and I seem to remember getting the same offer from Marlin and Ruger. I also remember the Ruger campaign where they would donate $1 for each firearm sold if they reached the 1 million mark. That was in the 2012-2013 timeframe. The key point here is that the industry seems to have backed away from the NRA once the dirty laundry started coming out.

The second part of Rocky’s post on NRA In Danger deals with the cost of corruption in terms of lost revenue. Read the whole thing as Rocky provides hard numbers of the revenue drop and the amount is shocking. Suffice it to say, the longer that Wayne remains as CEO/Executive VP of the NRA, the more potential lost revenue.

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NRA Wants Jury Trial In NYC

January 9, 2023 by 1 Comment

Initially, it was only the New York Office of Attorney General that was asking for a jury trial in the lawsuit against the NRA and the four defendants. However, that was a demand for jury trial on only some issues. Even though it was only on some issues, finding a jury in Manhattan that would sympathetic to a case against the NRA shouldn’t be too hard.

Today, the blog NRA In Danger reports that in response the NRA along with Wayne LaPierre and John Frazer have demanded a jury trial on all issues.

From the Demand for Trial by Jury filed by Svetlana Eisenberg on behalf of the NRA:

Therefore, the National Rifle Association of America (the “NRA”) hereby demands a trial by jury of all issues triable of right by a jury, including, but not limited to, issues of fact related to each element of (i) Plaintiff’s claims; and (ii) the NRA’s defenses. The NRA asserts this demand pursuant to, inter alia, (i) Section 2 of Article I of the Constitution of the State of New York; (ii) Section 18 of Article VI of the Constitution of the State of New York; (iii) Section 112(b)(1) of Not-For-Profit Corporation Law; and (iv) article 41 of Civil Practice Law and Rules (the “CPLR”) (including Sections 4101 and 4102 of the CPLR).

WTF?!

I have to agree 100% with NRA In Danger when they wrote:

This is insanity, we can find no other word for it, and our attorney friends agree. The judge seems actually to be impartial and concerned with doing the right thing. Why would NRA and LaPierre demand to be tried instead by a Manhattan jury? If we searched, could we find a worse group to try NRA?

I can think of no rationale reason for the NRA to demand a jury trial. The only person who benefits is Bill Brewer as he runs up the billings. Did the NRA Board of Directors even have any input into this? Or is it still the Special Litigation Committee making the decisions?

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The Frenkel Report

December 2, 2022 by 4 Comments

From what I can gather, the Frenkel Report was a confidential document prepared by an outside attorney for the NRA in approximately 2003. The attorney’s name was Jacob Frenkel. His specialty is conducting internal investigations and providing white collar criminal defense. The report in question concerned expenditures by Wayne LaPierre for travel as well as multi-million dollar payments to favored vendors. This report was provided to the Audit Committee and then laid dormant until recently.

The blog NRA In Danger has done great work in bringing out the testimony and legal wrangling over disclosure of this report. The NRA wants the document kept sealed contending that it is covered by attorney-client privilege while the New York AG’s office and the Special Master disagree.

Judge Joel Cohen agrees with the Special Master and the NYAG regarding the sealing of the document.

From NRA In Danger:

The ruling was that the NRA attorneys screwed up and waived the argument by not raising it earlier. “The NRA’s piecemeal approach to raising objections to producing this document is inefficient. and inappropriate. All objections to production should have been raised and litigated in connection with the prior motion. Those that were not argued are waived. The fact that the NRA purported to reserve the right to assert additional objections at a later date does not make it so.”

The court adds that the objection would have lost anyway. Attorney-client privilege is lost if the client shares the document with non-attorneys, and NRA shared it with its accountants. “In any event, even if the privilege objection is considered timely, it is unavailing. The Report was, by design, shared with a third party, namely PricewaterhouseCoopers. Any privilege that otherwise might have attached to this document was waived.”

Again, Brewer, Attorneys and Counselors, have lost in court and the NRA has racked up even more legal bills.

More on the Frenkel Report can be found here and here. As NRA In Danger notes, whatever is in that 19 year report must be “really hot”. If I had to speculate and this is all it is, the report must be enough to at least bring criminal charges against Wayne along with potential liability to both the current President and 2nd VP of the NRA who have served on the Audit Committee.

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Hear No Evil, See No Evil, Speak No Evil

October 11, 2021 by 2 Comments

I am sure new NRA President Charles Cotton would be pissed off to see himself represented by a trio of monkeys. However, given his performance as Chair of the NRA Board of Directors Audit Committee, it is wholly warranted.

This has become even clearer thanks to a report in the blog NRA In Danger. Several good, honest, and forthright NRA staffers sent a memo to the Audit Committee outlining “top concerns”. I’ll let NRA In Danger tell the story of how Mr. Cotton decided to neither hear nor see the problems.

A major event in the beginning of the controversy over internal corruption came when NRA Treasurer “Woody” Phillips left suddenly in 2017, and the inexplicable decision was made to hire an honest Treasurer, Craig Spray. Several employees who were deeply concerned about what was going on wrote a “Top Concerns” memo for the Audit Committee, which was presented at an emergency meeting in July, 2018. Note this is nearly a year before the scandals burst into the open (April-May 2019). The Committee’s response? Its chair, Charles Cotton, left the room before the memo was presented. Its Vice Chair, who then served as chair, never gave Cotton the memo (obviously he knew Cotton didn’t want to hear of it).(emphasis mine) The committee (which is entrusted by the board with keeping everything honest) made no mention of the event to the board. Officially, nothing happened that day in July.

Read the “top concerns” memo yourself. It was an exhibit filed by the New York Attorney General in the NRA’s abortive attempt at bankruptcy. Given Mr. Cotton’s behavior that day and many others since, I am somewhat surprised that the complaint asking for dissolution has not been amended to make him a co-defendant.

NYAG-Bank-Ex-72_Top-Concerns-Memo-2