NRA Wins, Ollie Loses On Reimbursements

The National Rifles Association will not have to pay former NRA President Oliver North’s legal bills. That was the ruling today by Justice Joel Cohen in the lawsuit brought by the NRA seeking a declaratory judgement. Col. North had sought indemnification for legal expenses incurred as a result subpoenas in the second Ack-Mac case and the Senate Finance Committee’s request for documents.

From Bloomberg.com:

Justice Joel Cohen said Thursday that the gun rights group isn’t required under its internal rules or state bylaws to indemnify North for expenses he’s incurring as a witness in legal matters triggered by the infighting, including a probe of the NRA’s nonprofit status by New York’s attorney general.


The turmoil began when North alleged that Wayne LaPierre, the organization’s longtime leader and public face, used the NRA to enrich himself, an accusation LaPierre denied. North was accused of trying to overthrow him.


Ruling from the bench, Cohen said the case boiled down to the meaning of a 93-word sentence in the NRA’s bylaws and didn’t hinge on allegations between the parties, including the group’s claim that North acted in bad faith when he began looking into alleged wrongdoing at the organization.


“No sentence should be 93 words long, but once you wade through it, the meaning is clear,” Cohen said. “Colonel North’s reading would require something close to a blank check, and that’s just not what the bylaw says.”

As of this writing, the NY State Courts Electronic Filing system does not have the actual ruling posted.

As might be expected, NRA outside counsel William Brewer III called this a “resounding win” for the NRA. What would be interesting to know is how much Brewer, Attorneys and Counselors billed to handle this case. It would also be interesting to know what the legal bills submitted by Col. North amounted to by comparison.

This case was on the surface about whether Col. North was entitled to indemnification or reimbursements of his legal bills incurred. Below the surface you have a very successful effort to get rid of Chris Cox who was a potential successor to Wayne LaPierre. It also consolidated the hold that Brewer has over LaPierre by damaging those who were independent of Brewer or who opposed him. You see more and more of that coming out as time has passed.

The NRA, The New York Lawsuit, Ollie North, And Chris Cox

The news yesterday regarding the National Rifle Association was headlined by a story in the New York Times that said Chris Cox, head of the NRA-ILA, was suspended and put on administrative leave. This followed a late Wednesday filing in New York Supreme Court (the trial level courts in that state) in which the NRA sought a declaratory judgment that Ollie North was not entitled to his legal expenses as a director of the NRA. Also suspended was Scott Christman who served as Cox’s deputy chief of staff at the NRA-ILA.

Both Cox and Christman are accused along with NRA Board member and former Congressman Dan Boren of participating in a failed “coup” attempt orchestrated by Ackerman McQueen and Ollie North. Cox vehemently denies this.

“The allegations against me are offensive and patently false,” Cox said. “For over 24 years I have been a loyal and effective leader in this organization. My efforts have always been focused on serving the members of the National Rifle Association, and I will continue to focus all of my energy on carrying out our core mission of defending the Second Amendment.”

The New York lawsuit was filed on behalf of the NRA by outside counsel William Brewer III and his firm. It seeks a declaratory judgment stating that Ollie North is not entitled to reimbursement for legal fees and expenses incurred as a result of subpoenas in the second Ackerman McQueen lawsuit and the Senate Finance Committee’s request for documents. When a declaratory judgment is sought, it is making a statement that the facts are not in question and that the only thing sought is a declaration as to matters of law. That said, the complaint filed is a mish-mash of allegations that in no way could be considered a 100% recitation of facts. The full complaint is here.

The complaint alleges that North is an employee of Ackerman McQueen, that he had been asked to either resign from AckMac or the NRA board, that he has done neither, and that he orchestrated the “coup” attempt to oust Wayne LaPierre at the behest of AckMac. North is also accused of acting in bad faith and breaching his fiduciary duties to the NRA.

The complaint then includes this gratuitous mention of Chris Cox and Dan Boren. This is the only paragraph where either of these two are mentioned.

North and his co-conspirators orchestrated these threats through, among other
things, a string of text messages that are filed herewith. The text messages were produced in the
Virginia Litigation by Dan Boren, an NRA board member employed by one of Ackerman’s other
major clients, the Chickasaw Nation
. Boren relayed the contents of Ackerman’s threatened letter
to North and helped to choreograph the ultimatum they presented to Mr. LaPierre. Moreover, in
email correspondence transmitted over non-NRA servers, Boren admitted his knowledge that
Ackerman may have been invoicing the NRA for full salaries of employees who were actually
working on the Chickasaw Nation account. The same text messages and email messages
demonstrate that another errant NRA fiduciary, Chris Cox —once thought by some to be a likely
successor for Mr. LaPierre—participated in the Ackerman/North/Boren conspiracy
.

The text message can be seen in this exhibit. It should be noted that from what I’ve been told that exhibits are not usually submitted when asking for a declaratory judgment. Reading the texts between Boren and Cox, I fail to see this as a “coup” attempt. Rather, in my opinion, it seems they are concerned about the war between AckMac and the NRA and its future impact on the NRA. Cox is correct when he calls what had been going on “a tragic mess”.

This whole affair is so Byzantine. It reminds more of a Soviet-style purge where ministers and members of the Politburo are being purged after the head of the KGB whispers in the ear of the aging General Secretary that they are plotting against him. Insert Wayne LaPierre into the role of the aging General Secretary and William Brewer into the role of KGB head and there you have it.

NRA Issues Subpoenas To 3 Board Members In Ack-Mac Lawsuit (Updated)

I missed this story when it came out three days ago. It seems that attorneys for the NRA in their suit against Ackerman McQueen have issued subpoenas to three Board members. The subpoenas for documents were sent to Oliver North, Lance Olson, and Dan Boren.

From the Daily Beast which I acknowledge is a left-leaning anti-NRA publication:

Previously unreported court documents show the group served a subpoena on Oliver North late last month. It also subpoenaed Lance Olson and Daniel Boren, according to the documents; all three men are members of the NRA’s own board.


The subpoena asks for a number of documents from North: anything sent from April 10 to May 22 regarding people who work for the NRA’s longtime ad firm, Ackerman McQueen; any communications sent over the NRA’s contentious Indianapolis convention about CEO Wayne LaPierre or Ackerman McQueen; documents about the NRA’s expenditures; documents about North’s expenses; and communications about leaks.


The subpoena points to the friction between the NRA and its former president and highlights the extent to which the fight roiling the organization is focused on money and media. It specifically demands communications “related to a ‘leak’ or dissemination of previously non-public documents or information,” and cites stories from the Washington Free Beacon and The Daily Beast. The NRA previously alleged that the ad firm leaked confidential information to media outlets as part of an effort to damage senior officials in the NRA.


The NRA made the same document demands of Boren and Olson. It also demanded that North appear for a deposition on June 13 in a location the two parties would agree to, and that Olson do the same on June 17.


Lawyers for North did not immediately respond to a request for comment. A spokesperson for Ackerman McQueen declined to comment.

The story did not publish the court documents nor did it specify whether the subpoenas were in relation to the first lawsuit the NRA filed against Ack-Mac or the second. Without paying a significant fee, access to the City of Alexandria Circuit Court filings is limited to a dated notation listing the filing in a case.

I can see the NRA’s attorneys issuing a subpoena to Oliver North as he is at the center of the lawsuits. I can even see the subpoena for Dan Boren who is from Oklahoma and reportedly opposed Wayne LaPierre at a reception during the NRA Annual Meeting. However, I don’t understand the subpoena to Lance Olson nor why certain other members such as Lt. Col. Allen West or Richard Childress didn’t receive subpoenas.

It will be interesting to see what happens at the next NRA Board meeting scheduled for September 13th in Anchorage, Alaska. Will there be a move to expel certain board members such as Lt. Col. North, Allen West, and others from the Board of Directors? An unnamed board member told me not to be surprised if this happens. North, by the way, was the leading vote getter in the 2019 BOD election surpassing even Ted Nugent.

UPDATE: The number of people getting subpoenas is now at least four. Rob Pincus acknowledged on Facebook that he had been served with one by the NRA’s lawyers with reference to the Ack-Mac lawsuit. Stephen Gutowski of the Free Beacon tweeted about it a few hours ago. A copy of the subpoena with Rob’s address information redacted can be found on Scribd.com here. He is being asked to produce letters, memos, and other communications concerning “previously non-public” information related to Wayne LaPierre, Oliver North, Marion Hammer, and Tyler Schropp. Mr. Schropp is in charge of the NRA’s fund raising operations.

UPDATE II: Checking the case number on the subpoena served on Rob Pincus it comes from the second NRA lawsuit against Ackerman McQueen. This is the lawsuit which accuses Ack-Mac of instigating a “coup” against Wayne LaPierre. I presume the other three who have been subpoenaed are being subpoenaed as a result of this suit as well.

The big picture question in all of this is what role is being played by the NRA’s outside counsel William Brewer III. Due to his ethics issues in Texas which are now before the Texas Supreme Court, he has not been granted leave to practice in Virginia.

UPDATE III: Checking the docket for this case, I see that there have been a total of six subpoenas issued. Two more were issued on June 4th. As to whom they were issued, I don’t know yet. I will report on that when I find out. To read case documents for that case directly from the City of Alexandria Clerk of Circuit Court’s website is $50 per month which I don’t anticipate me deciding to pay anytime soon.

The NRA Sues Their Ad Agency Ackerman McQueen (Update)

I don’t begin to know or understand all the internal politics and machinations at the National Rifle Association. I do know that advertising firm Ackerman McQueen and their PR subsidiary Mercury Group have long been considered the power behind the throne. If reports are to be believed, they are the ones who orchestrated the ascension of Wayne LaPierre and the eventual departure of the late Neal Knox. Having heard the story from multiple sources, I give them a lot of credence.

Thus, it was quite surprising to read in yesterday’s Wall Street Journal that the NRA was suing Ackerman McQueen and Mercury Group. The story has since been picked up by the New York Times, Fox News, the Washington Post, and a number of other media outlets.

The lawsuit was filed on Friday, April 12, 2019, in the Circuit Court for the City of Alexandria (Virginia). The lawsuit accuses Ackerman McQueen of impeding efforts by the NRA to inspect book and records including contracts related to the existing services agreement. This inspection is essential for the NRA Board to fulfill its fiduciary duty and to comply with New York non-for-profit law which governs the NRA’s activities since it is incorporated in that state.

The specific concerns that the NRA sought to investigate include:

  • Out of pocket expenses that lacked documentation as required by the Services Agreement
  • Lack of transparency regarding annual budgets as well as adherence to the budgets by Ackerman McQueen
  • Lack of transparency regarding “fair market value” determinations for services
  • Concerns that the NRA was being invoiced for the full salaries of NRA-Dedicated Personnel despite these people spending time on non-NRA clients
  • Refusal to provide data in writing on number of visitors, viewership numbers, and other performance metrics related to NRATV

A footnote also said that many of NRA’s stakeholders were concerned “that NRATV’s messaging – on topics far afield of the Second Amendment – deviated from the NRA’s core mission and values.” I know many of my friends in the Second Amendment community shared this concern.

I should note at this point that NRATV is owned by Ackerman McQueen and that personalities such as Cam Edwards and Ginny Simone are actually Ack-Mc employees. This, in turn, is the heart of the other major aspect of this lawsuit – the role of Oliver North with Ackerman McQueen and to whom he owes his allegiance.

The lawsuit alleges that Audit Committee of the Board of Directors sought to review the full contract between Ackerman McQueen and Col. North but was rebuffed. Moreover, North’s attorneys indicated he would only “disclose a copy of the contract to the NRA subject to AMc’s consent.”

 The NRA’s General Counsel was finally allowed to see the contract but was not allowed to have a copy. This review by the General Counsel led to many questions. These included a) was North a 3rd-party contractor or an employee of Ack-Mc with a duty of loyalty to them; b) whether previously disclosed costs borne by the NRA for the “North Contract” were accurate; and c) “whether the contract imposed obligations on Col. North that prevent him from communicating fully and honestly with other NRA fiduciaries about AMc.” Thus, the NRA says it became determined to resolve these issues.

The suit asks that Ackerman McQueen be found in breach of contract, that they be required to furnish the NRA copies of all AMc-Third Party NRA Contracts, that they be ordered to furnish the NRA with copies of annual budgets for the period 2016-2018, a list of all NRA-Dedicated personnel and the amount of time they devote to the NRA account, and copies of all records that would show the costs to the NRA or the NRA Foundation (from Jan 1, 2018 through April 1, 2019) incurred by North’s American Heroes series, from compensation to Col. North, from office space rented for Col. North or related staff, and whether each item was billed specifically to the NRA, the Foundation, or both.

Ackman McQueen contends this lawsuit is the work of the NRA’s outside counsel William Brewer III who is the in-law of their co-CEOs Revan and Angus McQueen. However, the lawsuit is brought by the Virginia law firm of  Briglia Hundley not by Mr. Brewer’s firm. Todd Rathner, NRA Board Member, speculates that the attack on Mr. Brewer is the work of the pro-AckMc faction of the Board in an effort to undermine Wayne LaPierre.

Board members Todd Rathner and Joel Friedman are on the record about the lawsuit with the New York Times.

The suit culminates the fracturing of a more than three-decade relationship between Ackerman and the N.R.A., going back to the shaping of such memorable lines as Charlton Heston’s proclaiming that his gun would have to be pried “from my cold, dead hands.” Wayne LaPierre, the longtime chief executive of the N.R.A., had previously been a steadfast champion of the Ackerman relationship.


“I think it says something about Wayne’s character, even though he’s had a long-term working business relationship with a vendor, he’s willing to do what is right and necessary for the N.R.A. and its members,” said Todd Rathner, a board member of the rifle association.


Joel Friedman, another board member, said he was dismayed that the documents had not been turned over.


“It leaves you questioning, and you can come up with all these potential different scenarios as to why, but none of them are good,” he said.


“My mind goes to: Are they overcharging us? That’s one,” he added. “Two, are there things charged to us that were not part of the contract? Then, No. 3, has there been a misallocation of personnel?”

It will be interesting to hear the discussion, if any, of this case at the NRA Annual Meeting which starts in little more than a week. As for me, the fact that Board members are finally questioning the costs as well as the role of Ackerman McQueen is good news. In a saner world, with a smaller board that held actual power, the Ackerman McQueen contract would have been put up for bid multiple times over the years. That it hasn’t is a disgrace.

UPDATE:  Sebastian at Shall Not Be Questioned had this to say, in part, about the lawsuit.

This is a struggle that needs to happen. Bitter and I are not as anti-Ack-Mac as some folks. We think there’s merit to some of their work, and they do some things do well. But we also believe their relationship with NRA is unhealthy, and there probably is not be any fixing it. Sometimes you’re just better off pulling the tooth, rather than trying to save it. This is probably one of those cases.

I had a call out of the blue late this afternoon from a person on the NRA Board. It was off the record and not for attribution. This person thinks that the lawsuit might be a smokescreen to protect the NRA from New York State. It gives the impression that they are taking their fiduciary and financial duties seriously. As both the lawsuit notes and I mentioned above, the State of New York revised their statutes to require not-for-profits to do more due diligence and to pay more attention to where members and donors money is being spent.

The rationale behind this being a smokescreen to protect the NRA is that, according to this person, the NRA had not been requiring any sort of invoices or other detailed record-keeping for services rendered in years gone by. In other words, Ack Mc said here is how much we want and please send us a check. God forbid that they were that slack but I believe it.

So that you can read the whole lawsuit, I’m embedding it at the bottom of this post.