From The NRA On X

Click on “show more” to get the full release posted on X or what used to be called Twitter by the NRA on Wayne’s resignation and the elevation of PR flack Andrew Arulanandam to interim CEO.

Wayne LaPierre Resigns!

Just minutes ago it was announced that Wayne LaPierre would resign as Executive VP and CEO of the National Rifle Association effective January 31st. According to a report in the Wall Street Journal, health is the cited reason for his resignation.

Fox News has this from the released statement:

“With pride in all that we have accomplished, I am announcing my resignation from the NRA,” LaPierre said in the NRA’s press release, which was exclusively obtained by Fox News Digital. “I’ve been a card-carrying member of this organization for most of my adult life, and I will never stop supporting the NRA and its fight to defend Second Amendment freedom. My passion for our cause burns as deeply as ever.”

The report goes on to say that Andrew Arulanandam will serve as interim CEO and EVP of the NRA. As was told to me a month ago, Arulandandam was considered an “acolyte” of Bill Brewer which does not bode well for the NRA.

LaPierre had this to say about Arulanandam as his successor according to Fox:

What makes the NRA unlike any other advocacy organization is the depth and experience of its professional team, the unwavering support of its members, and its fighting spirit. I have enormous confidence in our board of directors, executive leadership team, and my long-time colleague Andrew Arulanandam. Andrew knows every facet of this organization and has stood shoulder-to-shoulder with me in every arena imaginable. Andrew knows how to help the NRA win – he’s been one of the key authors of our playbook for decades,”

There had been some speculation about the called Board of Directors meeting being held in Dallas today. One was whether they were going to declare bankruptcy again. While that is still in the cards given their financial issues, it is obvious that having Wayne resign on the eve of the trial “for health reasons” is part of the legal strategy going forward. I have heard that many on the Board were surprised by Wayne’s resignation. However, I am told that when Wayne took the microphone last night at the Chairman’s cocktail party, it was pretty much a goodbye speech.

A former director speculated to me that they thought this was a move to get a settlement with a wrist slap and the Board “will continue stupid”. Unfortunately, he may be correct.

As this is a developing story, I am sure I will have more later.

Judge To NRA’s Attorneys – Knock It Off!

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.

NY Courts Give NRA Two Lumps Of Coal

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.

Who Is Not On The Witness Lists

NRA In Danger had a post yesterday on the pre-trial disclosure, witness lists, and exhibits in the NRA’s trial in New York. It appears that all parties with the exception of Josh Powell have produced witness lists and exhibits. Some such as Woody Phillips and John Frazer have relatively short witness lists. For example, Mr. Phillips only lists himself as a witness. By contrast, the witness lists for both the State of New York and the NRA are quite extensive. I have embedded the State of New York’s list as it includes both their witnesses as well as those of the defendants along with estimated time for cross-examination.

People_of_the_State_of_PRE_TRIAL_DOCUMENT__2487

I will leave it to NRA In Danger to go into more detail on the pretrial disclosures. What I’d like to point out is who is not on the list.

First, there is Joe DeBergalis who has served for a number of more recent years as the Executive Director of General Operations. One of the issues brought up in the New York Attorney General’s case against the NRA is how “troublesome” people are pushed out. Given he was replaced just this past week, I would have thought he would be an obvious person from who to require testimony. However, both his replacement Andrew Arulanandam and his executive assistant Lisa Supernaugh are on the list for a combined 3.5 hours of questioning plus another 45 minutes of cross-examination.

Next, I am surprised that former NRA Managing Director of Tax and Risk Management Emily Cummins is not on the witness list. She spent over 12 years at the NRA dealing with tax, compliance, and risk management issues. She had raised questions regarding billing by Brewer, Attorneys and Counselors, which became public in 2019. She resigned under pressure from Bill Brewer and his alleged “burn books”. Ms. Cummins has a reputation as an ethical person who actually believed in the mission of the NRA and was greatly concerned over questionable expenditures.

Finally, how can you talk about dysfunction in the Board, sweetheart deals, and friends of Wayne without including Marion Hammer. A friend pointed out to me last night Marion would have been an incredibly hostile witness if called by the New York AG. Heck, she is hostile even on her good days! I can see Bill Brewer making the decision to keep Marion under wraps as she knew too much, helped Wayne too much, and got too much. It is obviously a case of letting sleeping dogs lie or in Marion’s case, cat ladies.

I know New York does not televise court proceedings. That is a shame as watching this trial would have been interesting. Indeed, New York could have made it a pay per view and I’m sure they would been able to offset some of their budget deficits.

Thoughts On NRA General Operations Changes

In the last couple of days I’ve talked to a number of people about the replacement (firing?) of Joe DeBergalis with Andrew Arulanandam as Executive Director of General Operations at the NRA. The people have included both current and former directors, former NRA staff, and outside observers. The one theme that constantly was brought up is the bylaw provision (Article V, Sec. 2 (f)) that the Executive Director of General Operations serves as the interim Executive VP/CEO if the Office of Executive VP is vacant. He or she would then serve until the next meeting of the Board of Directors.

One theory was that Wayne LaPierre wanted an absolute loyalist heading General Operations in order to approve his legal bills in case the New York court removed him as Executive VP and CEO. This is not to say DeBergalis was not a loyalist to Wayne. One person went so far as to say “his head was up Wayne’s ass”.

Another theory that plays off the one above is the Bill Brewer orchestrated the change and wanted “his guy” in that position. One person who had butted heads with Brewer said Arulanandam was an “acolyte” of Brewer. DeBergalis was not considered, I am told, as amenable to the whims of Brewer. Thus, if Wayne is removed, Brewer has someone in position to keep the money flowing to him until it all runs out.

As to the Board of Directors having any advanced knowledge of this move by Wayne, I was told there was none. Jim Shepherd of the Outdoor Wires confirms that in his post today.

Speaking with a current NRA board members, it seems there was no conversation -at least with them- regarding the abrupt decision. DeBergalis, a retired former New York police official, is a former Board member and longtime NRA supporter.

We’ve reached out to him -and others- and have gotten no response as of this writing. If/when we get any insight, we’ll share it with you.

Wayne was within his powers to replace DeBergalis. Article V, Sec. 2 (c) of the Bylaws explicitly gives him that power without any recourse by the Board unlike the Secretary or Treasurer who can only be suspended with pay.

From all I’ve read over the years and the anecdotes I’ve heard, Wayne is a weak man who has a hard time making a decision. He has relied over the years on others to lead him. This has included his one-time BFF Tony Makris, his wife Susan, his late mentor Angus McQueen, and now Bill Brewer. If I had to bet house money, I would say that Bill Brewer convinced Wayne that it was in Wayne’s best interest to replace DeBergalis with Arulanandam. That it was also in Brewer’s interest should go without saying.

The trial in New York begins a month from today and the Board meets in Dallas on January 5th. All I can say is that January will be an interesting month.

A PR Flack In Charge Of NRA General Operations?

You have to be f’ing kidding me. The NRA trial in the State of New York starts in approximately one month and Wayne LaPierre picks now to replace Joe DeBergalis, Executive Director of NRA’s General Operations, with the organization’s PR flack. What in the hell is going on?

Photo: WAVE 3 News

This went out today:

Effective immediately, I have appointed Andrew Arulanandam as interim executive director of NRA General Operations, replacing Joe DeBergalis. We wish Joe and his family all the best.

Andrew has more than 23 years of experience with the NRA, working for the Association and NRA-ILA. He currently serves as the managing director of public affairs. During his career, he has assisted with a wide range of corporate initiatives, messaging and crisis communications programs, and events at the local, regional, and national levels. He held numerous senior leadership positions in private and public organizations before joining the NRA.

Please join me in congratulating Andrew on his new position and in thanking Joe for his service to the NRA.

Wayne

I started hearing a rumor about DeBergalis being ousted yesterday but could not get a confirmation. Now I have nothing against Andrew Arulanandam other than I can never pronounce his name properly but this makes no sense whatsoever. His expertise according to his LinkedIn profile has always been politics and communications strategy.

As I said in the first paragraph, what the hell is going on in Fairfax? And why now?

NRA Trial Date Set (Updated)

Because last week was Thanksgiving Week and it was devoted to family I missed seeing a court notice in the New York AG’s lawsuit against the NRA. It dealt with jury selection and the trial start date.

Judge Joel Cohen has ordered that jury selection begin on Tuesday, January 2nd, 2024 in the late morning. Jury selection will continue day to day until a jury is selected. It will take place in Room 300 of the New York State Supreme Court Building located at 60 Centre Street in Manhattan.

The trial itself will start at 9:30am on January 8th, 2024 in the same courtroom.

Oh, to have the free time (and money) to fly to New York and stay throughout the trial. I don’t know if the trial will be televised but will check on it.

UPDATE: I probably should have checked on this first before originally posting the above. However, I just assumed New York, like most states, had some provision for the audio-visual coverage of most court cases.

As what often happens when you make an assumption, I was wrong.

From Politico:

Trump’s case again highlights how New York has among the most restrictive laws in the nation banning cameras and broadcasts inside the courtroom in most proceedings, a law that dates back to the 1930s. The state Legislature has barely tinkered with it since then. Only Washington D.C. is more stringent on media coverage inside the court, according a report last year by the The Fund for Modern Courts, a nonpartisan nonprofit.

The Village Sun adds that the law banning cameras and recording devices in the courtroom stemmed from the Lindbergh kidnapping trial case in the 1930s.

While there is a bill pending in the New York Senate and Assembly that would allow televising of court proceedings, it has been referred to committee where it remains. Interestingly, the bill is opposed by the NY chapter of the ACLU on the grounds that there is no provision for a defendant to preclude televising a trial. They contend this could impair a criminal defendant’s right to a fair trial.

I guess we will have to rely upon news reports, sketchy as they will be, to know what is going on in the trial day to day.

UPDATE II: NRA In Danger has more on what to expect in the trial now that a date has been set. If what was quoted from a motion transcript carries over to the trial, and there is no reason to expect it won’t, this is not going to be pretty. Even the most ardent backers of Wayne should be cringing over all the dirty laundry of his that will be aired. The old excuse of “well, Wayne told me it isn’t true” just won’t cut it anymore. Those who listened to it and excused his actions should be hanging their heads in shame as they must accept some responsibility for the perilous state of the organization.

An Updated Analysis Of The NRA’s Finances

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.

Willes Lee Is Balking On Supplemental Deposition

Now that the New York Attorney General’s Office is requesting a supplemental deposition from Willes Lee due to his social media posts, he is balking. This past Friday, September 29th, Sarah Rogers of Brewer, Attorneys and Counselors, filed a “Memorandum of Law in Opposition” to the state’s motion to compel further testimony from Lee. She included a number of exhibits with this filing including an affidavit from Lee. I should note that Rogers represents the NRA including Lee as a member of the Board of Directors.

The Memorandum of Law in Opposition asserts two main issues. First, it is asserted that the NYAG has failed to show “unusual and unanticipated circumstances” within the meaning of the rules of the court. Second, Rogers says that the NYAG would not suffer “substantial prejudice” if they did not have the supplemental deposition from Lee. Rather, she says it is the NRA and its attorneys who would suffer as it impairs their pretrial preparation especially with intervening holidays. I presume she means Thanksgiving, Hannukah, and Christmas but not Halloween.

The majority of the Memorandum is devoted to the first issue. They assert that Lee’s postings are nothing unusual and that he has not suffered any retaliation from the NRA’s leadership. Moreover, even if Lee’s posting provide somewhat contradictory or inconsistent information from his prior depositions, they say this is not grounds to allow a “post-note of issue” supplemental deposition. They then say differences of opinion within a 76-member board are not unusual and are par for the course. The NRA says that if the Attorney General’s Office wishes to question Lee about his postings, then do it during cross-examination at trial.

So while the arguments by the NRA’s attorneys in response to the motion of the Attorney General’s Office are on interpretations of law, I find the affidavit filed by Willes Lee to be of greater interest. He says he is an unpaid volunteer and that a supplemental deposition would place “an unreasonable burden on my personal and professional schedule.” I’m not sure whether a deposition legally could be done by Zoom or WebEx but will note this court has already had hearings using such electronic means.

I found Paragraph Five of the affidavit to be most interesting.

Moreover, contrary to the NYAG’s motion, my recent social media posts are not “unusual.” In fact, ever since first joining the NRA Board, I have raised questions and posed challenges to the NRA’s leadership, and urged other directors to do the same in the service of the NRA’s members. And since I began posting my “challenges” in a public forum, not a single member of the NRA leadership has tried to silence me.

Given the assertions of Lee that he raised questions and challenges to the leadership as well as urged others to do so were at odds with what I understood, I sought out a number of former NRA directors who served on the Board during this period for their impressions. I sent them a copy of the affidavit and asked if the assertions in Paragraph Five correlated with what they saw and heard. The responses I got cast serious doubt on Lee’s assertions.

One director said, ” I still can’t understand how anybody has taken his self-righteous reversal seriously.  He WAS the cabal. He enabled the CABAL.”

Another director who I asked if Lee had done as he said he did responded, “Nope. I only saw him as a cheerleader for the establishment.” A third director said, “If he ever did anything in the way of resistance to their “plans” it was not in my sight.”

Finally, there is this from a fourth director, “Willis never spoke out at any time on any issue ever! Even during the contentious meeting where the BOD had to ratify the bankruptcy filing after the fact, he sat at the head table like a stone.” He went on to add, “Willis was complicit in his silence and bears as much responsibility in the wrong doing as Charles Cotton because he was on the SLC and did not oppose anything that had occurred. It is rich, that after he was removed as an officer, suddenly he found so much wrong doing.”

While the NRA certainly doesn’t wish that Lee be deposed again, I would wager house money that many of the “Friends of Wayne” would cheerfully throw him under the bus after his spate of social media posts. They would agree with the former directors that Lee never challenged the leadership nor encouraged others to do so. I do understand why Lee doesn’t wish to be re-deposed. His social media rants are not under oath unlike his prior depositions. He could be accused of being a hypocrite but perjury would remain off the table. A supplemental deposition under oath might change things along those lines.