“She Works Hard For The Money”

The latest filings in the NRA’s bankruptcy case contain a treasure trove of information. This is especially true for the NRA’s statement of financial affairs. It goes well beyond a mere balance sheet and includes a complete list of payments and distributions to insiders. Insiders would be the officers of the NRA as well as all members of the Board of Directors.

Reading through the list, most of the payments are recruiter payments. While I might quibble on whether or not directors or their organizations should be compensated for bringing in new members, it is a relatively minor thing and the amount of money was not material (using an accounting term).

Bearing in mind that 2020 was a horrible year, financially and otherwise, for many people, there is one person who did rather well in 2020.

Marion Hammer.

Ms. Hammer received $246,500 in direct payments for “consulting services”. In addition, she received another $183,600 in indirect payments made to United Sportsmen of Florida for a “consulting agreement.” (See pages 53 and 54 of the NRA’s filing.)

As Donna Summer sang, “She works hard for the money.
So you better treat her right.”

Being Wayne LaPierre’s No. 1 defender and attack cat (she is a cat person) is hard work. He must have thought so which is why she got $430,100 of member’s money in an effort to treat her right.

NRA Bankruptcy Updates

In the last week and half there have been a number of updates in the NRA’s Chapter 11 bankruptcy case. I will take them in order.

First, there was a debtor’s motion (the NRA) to allow Brewer, Attorneys and Counselors, to serve as special debtor’s counsel in the case. While the entire filing is 53 pages long, here are some excerpts. It should be kept in mind that the NRA has retained Patrick Neligan of Neligan LLP as its bankruptcy specialist attorney. Mr. Neligan has been practicing high-level bankruptcy law for over 35 years.

BAC and its attorneys are well-positioned to handle these matters for the Debtors because BAC has accumulated a reservoir of knowledge that could not be efficiently offloaded to, or replicated by, substitute counsel.

One way of looking at Brewer’s statement is that they know where the bodies are buried. I don’t think that is their intention but it could be read that way and they are needed to keep them buried.

In 2020 and in 2021, BAC’s standard hourly rates were as follows:
Professionals 2020 Hourly Rates
Founding Partner, William A. Brewer III $1,400
Partner $700-$900
Associate $275-$600
Consultant/Analyst $250-$725
Investigator $250-$350
Public Affairs $375-$800

Are their fees capped?

Did you agree to any variations, or alternatives to, your standard or customary billing arrangements for this engagement?
Response:
Yes. For one of the matters, BAC agreed not to seek fees for its professionals’ time inexcess of $100,000.10 In addition, BAC represents the NRA in another matter pro bono. Otherwise, BAC has not agreed to any variations or alternatives to BAC’s standard or customary billing arrangements. BAC’s engagement by the Debtors in connection with the Debtors’ bankruptcy cases is to serve as special counsel to the Debtors in the litigation that began PrePetition and other related matters BAC has been handling for the Debtors, as well as to assist Neligan LLP (lead counsel to the Debtors) during a transition period after the filing of the chapter 11 cases in order to facilitate the quick, efficient handling of matters drawing on BAC’s institutional knowledge.

In other words, with regard to one aspect of the case they will limit their fees as per agreement to $100,000 but after that the sky is the limit.

Remember that the bankruptcy filing has put many of the NRA’s other cases on hold so Brewer, Attorneys and Counselors has got to make their money somehow.

The Special Litigation Committee of Carolyn Meadows, Charles Cotton, and Willes Lee think having Bill Brewer involved is just dandy and they are all for it. Then again, they pretty much do as they are told by Wayne LaPierre.

Moving on, a mailing list of all additional creditors of the NRA was filed with the court on Monday, February 1st. Included in that 247-page list was the NRA Foundation. It should be remembered that most of the firearms in the National Firearms Museum and the National Sporting Arms Museum are not property of the NRA. Rather, they are on loan from primarily the NRA Foundation as that was to whom they were gifted by donors.

In a February 2nd report by Reuters on the latest hearing in the case before Bankruptcy Judge Harlin D. Hale, attorney Patrick Neligan denied the Chapter 11 filing was in bad faith.

“This is not a bad faith filing and we look forward to using Chapter 11
to resolve litigation and to move forward to emerge out of this
bankruptcy as a company domiciled here in Texas,” Neligan said
during Wednesday’s hearing.


The question of whether the NRA filed the bankruptcy in good faith could arise if the judge is asked to dismiss the case.

Judge Hale did ask both the NRA and the NY Attorney General’s Office to scale back the rhetoric and treat this as “a regular bankruptcy case.”

The US Trustee in the case appointed an Official Unsecured Creditors Committee consisting of five members. The Pension Benefit Guaranty Corp. was appointed the interim chair of the committee. As seen in the screen shot below, two of the committee appointees will probably cause a bit of consternation in Fairfax as well as in the offices of Bill Brewer.

I sincerely doubt that either AckMac or David Dell’Aquila are going to roll over and play dead for Wayne and the NRA.

Finally, in an interview posted today in FreeBeacon.com by Stephen Gutowski, Mr. Dell’Aquila says he will be pushing for a court-appointed trustee to oversee the NRA’s operations.

“We’re going to definitely do a motion for a trustee,” Dell’Aquila said. “I would not be surprised if the majority of the other creditors don’t join or do a similar thing.”

The article goes on to note that the court could appoint a trustee and that such a trustee would have broad powers. That trustee could “displace” the current leadership and the board. Moreover, the trustee would have the fiduciary duty to act in the best interests of the creditors and could go after Wayne and others for misuse of the NRA’s money for personal expenses.

“It’s in everybody’s best interest to get a trustee in there, certainly from the creditors’ point of view, and, I would argue, even for the five million members because every dime that they waste in frivolous litigation is a dime less that could go to the core mission,” Dell’Aquila said.   

As might be expected, attorney Bill Brewer who had previously dismissed the idea of a trustee back in January expressed his disappointment that Dell’Aquila was on the committee.

“The NRA is disappointed that a disgruntled individual who has filed frivolous claims against the Association is appointed to the committee,” Brewer told the Free Beacon.

Dell’Aquila’s attorney Elliott Schuchardt said that even with some of the defendants dismissed in Dell’Aquila’s class-action suit, the remaining claim against the NRA is worth $64 million potentially making it the largest creditor.

“We think there’s enough evidence of fraud here that we can make a good faith argument to the bankruptcy court judge that somebody else should be running the NRA,” Schuchardt said. 

I have always held that this bankruptcy filing was a gamble. Wayne and Brewer are too clever by half and I think the result will not be to their liking.

There is another hearing scheduled in the case for Wednesday, February 10th by WebEx. I’m sure we will hear something more then.

Wayne’s Letter To The NRA Board

An email went out at 4:01 pm EST this afternoon from NRA Secretary John Frazer to the Board of Directors announcing the bankruptcy filing and plans to reorganize in Texas. According to the time stamp on the bankruptcy filing, it was filed at 2:48 pm CST or less than 15 minutes earlier.

The email repeats much of what was reported in the press release.

Dear Board of Directors:

I am pleased to announce some exciting news about the NRA. 

The NRA announced it will reorganize the Association as a Texas nonprofit to abandon the corrupt political and regulatory environment in New York. This action will ensure our continued success as the nation’s leading advocate for constitutional freedom.

To facilitate the reorganization, the NRA and one of its subsidiaries filed voluntary chapter 11 petitions in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division. As you may know, chapter 11 proceedings are often utilized by businesses, nonprofits and organizations of all kinds to streamline legal and financial affairs. 

Subject to court approval, the NRA’s new strategic plan involves “dumping New York” and reincorporating the Association in the State of Texas – home to more than 400,000 NRA members and site of the 2021 NRA Annual Meeting being held in Houston.

As many of you have observed, New York is no longer a welcome home to our Association, as its leaders have demonstrated their hostility to the constitutional freedoms in which we believe. Our filing today allows us to wisely seek protection from New York officials who illegally weaponized the powers they wield against the NRA and its members.

The NRA is not financially insolvent. In fact, this move comes at a time when the NRA is in its strongest financial condition in years.

The Association will continue with the forward advancement of the enterprise – confronting anti-Second Amendment activities, promoting firearms safety and training, and advancing public programs across the United States. No immediate changes are expected to the NRA’s operations or workforce.  

The reorganization aims to help the NRA streamline costs and expenses, organize various litigation matters that involve related facts, and realize other financial and strategic advantages.

By exiting New York, the NRA abandons a state where elected officials have weaponized legal and regulatory power to penalize the Association and its members purely for political purposes.

The Battle in New York

As you will recall, in summer 2018, New York Attorney General candidate Letitia James vowed that, if elected, she would use the powers of her office to investigate the NRA. Without a shred of evidence supporting her claims, James called the Association a “terrorist organization” and a “criminal enterprise.” As promised, she commenced an “investigation” upon being elected to the Office of NYAG and, predictably, filed a lawsuit seeking to dissolve the NRA just prior to the November 2020 national election.

In response to the anti-freedom actions of the NYAG, the NRA filed a lawsuit in August 2020 against the NYAG similar to its lawsuit against New York Governor Andrew Cuomo and the New York State Department of Financial Services, filed in 2018. The NRA pursues the defendants for attempting to “blacklist” the organization and its financial partners in violation of their First Amendment rights. The NRA will continue those legal actions.  

I firmly believe this strategic plan represents a pathway to opportunity, growth and progress. One important part of the plan is reincorporating in a state that values the contributions of the NRA, celebrates our law-abiding members, and joins us as a partner in upholding constitutional freedom. This is a transformational moment in the history of the NRA.

The NRA’s day-to-day business operations will continue uninterrupted.

This proven mechanism is a positive for us, allowing our advisors to pursue strategic advantages for the NRA as our leadership team continues to advance our mission.

We will continue to promote our Second Amendment advocacy, firearms education and training, and public endeavors. We do not anticipate any measurable impacts to our staffing, public programs or Second Amendment advocacy.

We are forming a special committee to study the possibility of relocating key segments of our business operations to Texas or other states.

A new committee, under the direction of First Vice President Charles Cotton, will study opportunities for relocating segments of NRA business operations to Texas or other states. We are exploring any option that may work in the best interests of the NRA and its members.

In the meantime, the NRA’s general business operations will remain in Fairfax.

Building Our Strengths

I have added Marschall Smith as our Chief Restructuring Officer. Marschall is a former Senior Vice President and General Counsel of 3M Company and ADM, among others, and has more than 35 years of legal and business experience with an emphasis on compliance, corporate finance, and corporate governance.

A native Texan, Marschall served 10 years as a Marine Corps officer, including four years of active duty with combat service in Vietnam. He left the Marines with the rank of major. He was a member of the Carter/Mondale presidential transition team and served as a special assistant to the Director Designate of Central Intelligence. He received his bachelor’s degree, cum laude, from Princeton, followed by a Juris Doctor degree from The University of Virginia and an MBA from The University of Chicago.

Marschall will work closely with the NRA senior leadership team. I know he looks forward to meeting all of you – as we embark upon this journey together.

Do not believe everything you hear in the media. We fully expect our adversaries to try to gain some sort of perceived advantage over the NRA by mischaracterizing this strategic plan. They will portray a so-called “bankruptcy” as a negative and, once again, predict our demise.

The liberal media, anti-gun gadflies, and left-wing politicians will desperately try to advance another distorted truth about the NRA.


The NRA is financially strong and well-positioned on all fronts. I am confident our members, employees, and most loyal stakeholders will appreciate the extraordinary benefits of this plan and realize the value of the NRA charting its own path forward – on its own terms. (We are making immediate outreach to our members, instructors, donors, and other key stakeholders.)

Again, this plan allows us to streamline our legal and business affairs, escape a radicalized New York political environment, and position ourselves for the long-term. It is the first step of an ambitious and exciting blueprint for the future.

We will stay in regular communication with the board. In the meantime, please visit www.nra.org/forward for more information. If you receive any public inquiries, please refer them to Andrew Arulanandam, managing director of NRA Public Affairs, at aarulanandam@nrahq.org.

Thanks in advance for your loyalty and partnership. I’m confident we have never been better positioned in the history of our organization – or more prepared to keep winning the fight for freedom.

Wayne

I think much of the Board was caught unawares by this legal move. My legal sources are casting some doubt that this will end the case in New York unlike the impression given by the happy, rah-rah tone of the letter and other press releases.

NRA’s Bankruptcy Petition

There are two major things of note in the National Rifle Association’s Chapter 11 bankruptcy petition. First, there is the resolution passed at the January 7, 2021 Board of Director’s meeting in Dallas giving Wayne LaPierre the authority to “reorganize or restructure the affairs of the Association.”

The second item of note contained in the bankruptcy petition is the list of unsecured creditors. At the top of that list is Ackerman McQueen with a disputed claim of $1,273,800.12. Also disputed are claims from Tony Makris’ Under Wild Skies and the Ack Mac subsidiary Mercury Group. The rest of the unsecured creditors are an assortment ranging from Google to UPS. Most seem to be related to fund raising or advertising.

What is most interesting in that list is what is not there. There is no mention of any legal bills due to William Brewer III’s firm Brewer, Attorneys and Counselors. This could mean that he is a secured creditor or that any monies due him have already been paid.

It seems obvious that this move has been in the works for many months. Sea Girt LLC was established in November 2020 according to the filing with the Texas Secretary of State’s office. Moreover, the litigation committee was set up in September and probably had been discussed many months in advance of that.

According to the letter from Wayne LaPierre, this move will not impact members as the NRA is simply leaving a toxic state for one that is welcoming.

NRA supporters will continue to enjoy all their full member benefits – from new members to Life Members to Benefactor Members. We will continue to publish and deliver your magazines. We will continue to train Americans and teach them firearm safety. We will continue to teach hunter safety. But most importantly, we will continue to fight for your freedom and the freedom of all Americans – as we have for all these years. In fact, we are expanding our national platform.

The plan aims to streamline costs and expenses, proceed with pending litigation in a coordinated and structured manner, and realize many financial and strategic advantages.

You know that our opponents will try to seize upon this news and distort the truth. Don’t believe what you read from our enemies. The NRA is not “bankrupt” or “going out of business.” The NRA is not insolvent. We are as financially strong as we have been in years. (emphasis his)

While I think it is good that the NRA ditches New York, I really wish that they had listened to Professor Joe Olson when, as a board member and expert in corporate law, he urged them to do it in 1991. Think of all the monies that would have been saved in litigation expenses that could have been used to promote the Second Amendment.

NRA To Reincorporate In Texas

After 150 years, the National Rifle Association is finally abandoning New York. They have filed a Chapter 11 bankruptcy filing in the US Bankruptcy Court for the Northern District of Texas and plan to reincorporate in Texas.

Here is the full press release sent out this afternoon by Wayne LaPierre. I will have more on the bankruptcy filing after I have had time to read it. Imagine how much time and legal expense they could have saved if they had listened to law professor Joseph Olson when he suggested as a board member in 1991.

NRA Leaves New York to Reincorporate in Texas, Announces New Strategic Plan

NRA Plans to Exit New York to Pursue Opportunity, Growth and Progress in Texas; Plan Benefits Association, Its Millions of Members, and All Supporters of the Second Amendment

Fairfax, VA – The National Rifle Association of America (“NRA”) today announced it will restructure the Association as a Texas nonprofit to exit what it believes is a corrupt political and regulatory environment in New York. The move will enable long-term, sustainable growth and ensure the NRA’s continued success as the nation’s leading advocate for constitutional freedom – free from the toxic political environment of New York.

The NRA plan, which involves utilizing the protection of the bankruptcy court, has the Association dumping New York and organizing its legal and regulatory matters in an efficient forum. The move comes at a time when the NRA is in its strongest financial condition in years.

The NRA will continue with the forward advancement of the enterprise – confronting anti-Second Amendment activities, promoting firearm safety and training, and advancing public programs across the United States. There will be no immediate changes to the NRA’s operations or workforce.  

The Association will seek court approval to reincorporate the Association in the State of Texas – home to more than 400,000 NRA members and site of the 2021 NRA Annual Meeting in Houston.

“This strategic plan represents a pathway to opportunity, growth and progress,” says NRA CEO & EVP Wayne LaPierre. “Obviously, an important part of this plan is ‘dumping New York.’ The NRA is pursuing reincorporating in a state that values the contributions of the NRA, celebrates our law-abiding members, and will join us as a partner in upholding constitutional freedom. This is a transformational moment in the history of the NRA.”

The restructuring plan aims to streamline costs and expenses, proceed with pending litigation in a coordinated and structured manner, and realize many financial and strategic advantages.

The Path Forward

The NRA will move quickly through the restructuring process. Its day-to-day operations, training programs, and Second Amendment advocacy will continue as usual.

By exiting New York, where the NRA has been incorporated for approximately 150 years, the NRA abandons a state where elected officials have weaponized the legal and regulatory powers they wield to penalize the Association and its members for purely political purposes.

In the summer of 2018, then New York Attorney General candidate Letitia James vowed that, if elected, she would use the powers of her office to investigate the “legitimacy” of the NRA.

Without a shred of evidence to support the claim, she called the Association a “terrorist organization” and a “criminal enterprise.” As promised, she commenced an “investigation” upon being elected to the Office of NYAG and, predictably, filed a lawsuit seeking to dissolve the NRA just prior to the November 2020 national election.

The NRA filed a lawsuit in August 2020 against the NYAG similar to its lawsuit against New York Governor Andrew Cuomo and the New York State Department of Financial Services, filed in 2018. The NRA pursues the defendants for attempting to “blacklist” the organization and its financial partners in violation of their First Amendment rights. The NRA will continue those legal actions.  

“Under this plan, the Association wisely seeks protection from New York officials who it believes have illegally weaponized their powers against the NRA and its members,” says William A. Brewer III, counsel to the NRA in those cases. “The NRA will continue the fight to protect the interests of its members in New York – and all forums where the NRA is unlawfully singled out for its Second Amendment advocacy.”

With respect to its headquarters, the NRA has formed a committee to study opportunities for relocating segments of its business operations to Texas or other states. The Association will analyze whether a move of its headquarters, now located in Fairfax, Virginia, is in the best interests of its members. In the meantime, the NRA’s general business operations will remain in Fairfax.

To facilitate its strategic plan and restructuring, the NRA and one of its subsidiaries filed voluntary chapter 11 petitions in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division. Chapter 11 proceedings are routinely utilized by businesses, nonprofits and organizations of all kinds to streamline legal and financial affairs.  

The NRA also announced Marschall Smith will serve as Chief Restructuring Officer. A former Senior Vice President and General Counsel of 3M Company, Smith has more than 35 years of legal and business experience with an emphasis on compliance, corporate finance, and corporate governance.

“I am honored to join the nation’s oldest and largest civil rights organization during this important time,” Smith says. “Our goal is to work through the restructuring process efficiently and quickly – even as NRA leadership approaches 2021 with renewed energy and an expanding national platform. This plan has no impact on the NRA’s most important goal:  serving its membership and protecting the Second Amendment.”

The NRA will propose a plan that provides for payment in full of all valid creditors’ claims. The Association expects to uphold commitments to employees, vendors, members, and other community stakeholders.

“The plan allows us to protect the NRA and go forward with a renewed focus on Second Amendment advocacy,” says NRA President Carolyn Meadows. “We will continue to honor the trust placed in us by employees, members and other stakeholders – following a blueprint that allows us to become the strongest NRA ever known.”

Additional Information:

Patrick J. Neligan of Neligan LLP, Dallas, Texas, is serving as debtor’s counsel; William (Wit) Davis is counsel to the NRA Board of Directors and its Special Litigation Committee; Brewer, Attorneys & Counselors, Dallas, Texas, serves as special counsel to the NRA. To learn more, please visit www.nra.org/forward.

NRA Releases 2019 Tax Filing

Non-profit organizations are required to release and make public their IRS Form 990 filings. The Form 990 is their equivalent of a corporate tax return. The submission is usually almost a year after the end of the prior year.

Today, the Washington Post reported that the NRA’s 2019 Form 990 was made public. It has some interesting admissions contained within it. I’m just going to hit the highlights and will post a link to the actual Form 990 so that you can examine it for yourself.

From the article by Beth Reinhard and Carol Leonnig:

The tax return, which The Washington Post obtained from the organization, says the NRA “became aware during 2019 of a significant diversion of its assets.” The 2019 filing states that LaPierre and five former executives received “excess benefits,” a term the IRS uses to describe executives’ enriching themselves at the expense of a nonprofit entity.

The disclosures in the tax return suggest that the organization is standing by its 71-year-old chief executive while continuing to pursue former executives of the group.The filing says that LaPierre “corrected” his financial lapses with a repayment and contends that former executives “improperly” used NRA funds or charged the nonprofit for expenses that were “not appropriate.”

LaPierre has reimbursed the organization nearly $300,000 in travel expenses covering 2015 to 2019, according to the tax return, which does not explain how that amount was determined or when LaPierre paid it.

As was reported in the Wall Street Journal in October, the Internal Revenue Service is supposedly investigating Wayne LaPierre for criminal tax fraud. There is a lot of speculation that this tax filing which was signed by Wayne himself was a way to mitigate the damage of that investigation.

Three tax and accounting experts who reviewed the 2019 tax return for The Post said the disclosures show the organization and LaPierre trying to take responsibility and avoid further legal jeopardy.

“This is the type of cleanup I would expect to see after a history of gross violations of nonprofit law,” said Philip Hackney, an associate professor of law at the University of Pittsburgh who worked at the IRS for five years until 2011 providing legal oversight of tax-exempt organizations.

LaPierre personally signed the 2019 tax return; such a document is customarily signed by the organization’s treasurer. “He is putting himself on the line, under penalties of perjury, which is what you do if you are trying to get in someone’s good graces,” Hackney said.

New York lawyer and expert on nonprofits Daniel Kurtz said, “It’s a smart move by the NRA instead of digging in their heels, though who knows how they came up with the numbers. It’s an admission of wrongdoing, for sure.”

It also appears that this Form 990 is also trying to throw a number of former NRA executives such as Chris Cox and David Lehman of ILA under the bus along with Oliver North. Josh Powell is also mentioned as having received previously unreported excess benefits. Some undisclosed directors are also mentioned as having traveled First Class without “authorization”.

Cox resigned in June 2019 after LaPierre accused him and North of orchestrating a coup — a claim they both denied. The tax return says the organization is seeking to recover more than $1 million it says Cox improperly received for travel, meals and tickets to sporting events.

Cox’s lawyer, Tom Buchanan, called the allegation “false” and said all of the lobbyist’s expenses during his 24 years with the NRA were reviewed and never questioned. Buchanan said also that Cox has provided the New York attorney general with “thousands of documents” and has not been implicated in her investigation.

North was ousted as NRA president last year after accusing LaPierre of spending recklessly on legal fees for Brewer’s firm. The new tax filing says the NRA has “reason to believe” North received excess salary that he failed to earn. North declined through his attorney to comment on the tax return.

North has previously argued that the NRA has falsely accused him of financial improprieties in retaliation for his cooperating as a key witness in the New York investigation, according to pleadings in New York State Court.

“In public, the NRA has said these allegations of misspending were completely unfounded, but these official filings present a picture that a lot of the claims made were accurate and the only question is who was at fault,” said Brian Mittendorf, an accounting professor at Ohio State University.

A quick glance at the Form 990 shows that overall revenues were down by over $60 million and the ongoing operating deficit was $12.2 million for the year. Mind you, this is for 2019 which was pre-pandemic.

There is a lot more there. Now is the time I wish I had taken more accounting classes.

NRA 2019 IRS Form 990 by jpr9954 on Scribd

The really interesting stuff starts at about page 77 and goes from there.

NRA Meeting Rumors

The NRA Meeting of Members is scheduled for 9am on October 24th in Tucson, Arizona. As noted before, it will be at the Loews Ventana Canyon Resort. Due to COVID-19 restrictions in Arizona, you will need a ticket to be admitted to the meeting. Unfortunately, the meeting is at capacity according to a notice on the ticket website.

That said, even if you don’t have a ticket to attend the actual Meeting of Members, you can still come to the resort, have your voting eligibility confirmed, and vote for the 76th Director.

From the ticket website:

The Voter Verification room will be located in the Ventana Room at the Hotel and will be open Friday October 23, 9am – 8pm, and Saturday October 24 from 8am until the conclusion of the Annual Meeting of Members. All voting booths for the 76th Director will be located in the Voter Verification room.

If you are in the area and eligible to vote, take some time and vote.

As of now, petition candidate Frank Tait is the only declared candidate for the 76th Director. I both gathered signatures for his petition and endorsed him in his run for the Board. I continue to support Frank. He is both a training counselor and an experienced businessman. He would bring a lot to the Board.

Here is where the rumors come in. Anyone of the people who ran for the Board of Directors and failed to be elected is eligible to run for the 76th Director. Thus, Rocky Marshall, Robert Wos, John Cushman, Jim Wallace, Craig Schwartz, Kevin Hogan, and Frank Tait are eligible to run. Rumor has it that the powers that be are seeking anyone other than Frank Tait to be the “endorsed candidate”.

As a reminder, Wayne LaPierre used your membership money in the past to pay for people to campaign for the “endorsed” candidate. Listen again to Dezarae Payne and Michael Schwartz describe how Paul Payne carried out Wayne’s wishes.

It takes nerve, chutzpah, arrogance, and outright disdain for the NRA members to continue in a strategy that has been both exposed and is downright dishonest.

Worse than that, it is stupid.

New York Attorney General Letitia James and her staff have made it plain that they are trying to dissolve the NRA. Stunts like this only play into her hands. If Wayne and his henchmen don’t think they are watching, they are bigger fools than I thought they were.

With no offense meant to any of the directors or candidates, the plain truth of the matter is one director on the bloated 76 member Board of Directors cannot do much. This makes it all the more stupid.

Wayne LaPierre And The IRS

I wouldn’t want to be Wayne LaPierre right now. Not only is he named as a defendant in the New York Attorney General’s complaint against the NRA but now word has leaked that he is under investigation for tax fraud by the Internal Revenue Service. This comes from a story in the Wall Street Journal that was posted just earlier this afternoon.

You may remember that Letitia James said in her news conference in August that she was referring matters to the IRS. At that time, she claimed that LaPierre had received personal benefits that should have been reported by the NRA to the IRS on his Form W-2. If the Wall Street Journal’s sources are correct, she kept her word.

From Mark Maremont’s report:

The Internal Revenue Service is investigating longtime National Rifle Association CEO Wayne LaPierre for possible criminal tax fraud related to his personal taxes, according to people familiar with the matter.

Mr. LaPierre was paid $2.2 million by the NRA in 2018, the most recent year available, the nonprofit group’s public filings show. His total reported pay from 2014 to 2018 was $11.2 million.

The story has the obligatory comment from William Brewer III. However, it is interesting to note he is representing the NRA and not LaPierre.

An attorney for Mr. LaPierre had no immediate comment.

“The NRA is not aware of any IRS inquiry but, of course, will fully cooperate with any appropriate requests for assistance,” said William A. Brewer III, an outside attorney for the NRA, who noted that the group’s tax filings are audited.

The story concludes with the note that this usually is a civil matter with some exceptions.

If the IRS believes a taxpayer has underreported income, the agency often pursues the matter through a civil audit, claiming the taxpayer owes back taxes and penalties. To show criminal behavior, tax specialists said, the IRS would have to demonstrate that a taxpayer willfully underreported income, typically over multiple years.

It couldn’t be determined how far along the investigation is, and such probes can end with no charges filed.

I wonder if any mention of this will be made at the Meeting on Members in Tucson on October 24th. For some reason, I doubt any official comments will be made but I’m sure it will be one of the many topics of gossip in the hallways.

While I am in no way making any side by side comparisons, I will note that running afoul of the IRS is what put Al Capone in the slammer.

Court Rules Donors’ Fraud Suit Against NRA Has Standing

Judge William Campbell, Jr. of the US District Court for the Middle District of Tennessee ruled yesterday that David Dell’Aquila’s class action suit against the NRA has standing to proceed. The NRA, the NRA Foundation, and Wayne LaPierre had argued that the lawsuit failed to meeting the requirements of Rule 9b of the Federal Rules of Civil Procedure.

Rule 9(b) states: In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.

In his ruling yesterday, Judge Campbell found that this standard had not been met with regard to both the NRA Foundation and Wayne LaPierre. However, it had been met with regard to the NRA itself.

David Dell’Aquila and the other plaintiffs had alleged that monies that they had donated to advance the mission of the NRA had been used for, among other things, to buy suits for Wayne LaPierre, to pay for private travel for LaPierre and his family, to pay for a luxury apartment for intern Megan Allen, and to pay for makeup and hairstyling for Susan LaPierre.

Judge Campbell wrote, with regard to the NRA,

The NRA next argues that Plaintiffs did not allege “in more than a passing conclusory assertion that the NRA knew of and intended the falsity of its statements.” (Id. at 12). The NRA argues that because the statements regarding the use of funds relate to the promise of some future action, Plaintiffs must allege that the NRA had no present intent to carry out the promise. The NRA further argues that Plaintiffs cannot plead the element of intent for “any future expenditures that were not in contemplation at the time of the Solicitation.” In other words, the NRA argues that if, at the time of the solicitation, it did not specifically plan to spend money on, for example personal expenses of Wayne LaPierre, there can be no plausible allegation of intent with regard to that expenditure.


The Court declines to read the intent requirement so narrowly. First, Plaintiffs allege that the funds were spent on things that were not in furtherance of the mission of the NRA. It was not necessary that the NRA know at the time what the extraneous expenditures would be, only that they knew that money would be spent outside the mission.Moreover, Rule 9(b) allows the element of intent to be alleged generally. See Fed. R. Civ. P. 9(b). Given the extent of the alleged misspent funds – in both duration and volume – the Court finds Plaintiffs’ allegation that the NRA knew donated funds would not be used to advance the mission of the NRA sufficiently plausible to state a claim.

He goes on to say:

At this juncture in the litigation, making all inferences in the light most favorable to the Plaintiffs, the Court finds Plaintiffs have sufficiently alleged a claim for fraud against the NRA. Although the Court will not engage in a statement by statement review of the allegations, it bears noting that many of the statements cited by Plaintiffs do not make any representations regarding the use of donor funds. However, because some of them do, and Plaintiffs have alleged the remaining elements of the claim, the Court will deny the NRA’s motion to dismiss the claim for fraud.

Judge Campbell goes on to dismiss the RICO claims against the NRA noting that it cannot be both an enterprise and a person for purposes of the RICO statute. He also dismissed the RICO claims against the NRA Foundation and LaPierre as the plaintiffs didn’t adequately argue claims of fraud against them.

The bottom line is that the Foundation and LaPierre are both off the hook and the lawsuit against the NRA itself has enough standing to proceed. In retrospect, I’m sure the NRA will eventually find that it would have been cheaper to give the plaintiffs their money back with a non-disclosure settlement than to keep using the services of William Brewer. Indeed, Brewer’s fees were part of the argument that donor money had been misused.

One last note – to anyone thinking that this is a Democrat-appointed judge coming down on the NRA, think again. Judge Campbell was appointed by President Trump in 2018.

This Was Supposed To Be The Big Day for Josh Powell

If you had been paying any sort of attention to the mainstream media, you might know that today was the day that Josh Powell’s tell-all book was to be released. The book entitled, Inside the NRA: A Tell-All Account of Corruption, Greed, and Paranoia within the Most Powerful Political Group in America, is supposed to tell us the inside scoop about Wayne and company.

Amazon is running this as the blurb for the book:

A shocking exposé of rampant, decades-long incompetence at the National Rifle Association, as told by a former member of its senior leadership.

Joshua L. Powell is the NRA–a lifelong gun advocate, in 2016, he began his new role as a senior strategist and chief of staff to NRA CEO Wayne LaPierre.

What Powell uncovered was horrifying: “the waste and dysfunction at the NRA was staggering.”

INSIDE THE NRA reveals for the first time the rise and fall of the most powerful political organization in America–how the NRA became feared as the Death Star of Washington lobbies and so militant and extreme as “to create and fuel the toxicity of the gun debate until it became outright explosive.”

INSIDE THE NRA explains this intentional toxic messaging was wholly the product of LaPierre’s leadership and the extremist branding by his longtime PR puppet master Angus McQueen. In damning detail, Powell exposes the NRA’s plan to “pour gasoline” on the fire in the fight against gun control, to sow discord to fill its coffers, and to secure the presidency for Donald J. Trump.

ABC News’ Pierre Thomas had an exclusive interview with him. It was so earth-shattering that they ran it on Friday on World News Tonight, on Sunday with George Stephanopolous, and again on Monday on GMA.

Powell described himself as a “huge Second Amendment supporter” with a sizable gun collection and a lifelong passion for hunting and shooting. As the NRA’s “No. 2 guy,” he said he “worked side by side” with LaPierre over several years. An NRA spokesperson, in a statement, said that Powell “had zero input or influence on the NRA’s political or legislative strategy,” but Powell says he was involved in “every single important conversation that went on in the NRA.”

But he became disillusioned with the organization and LaPierre’s leadership, he said, as LaPierre’s alleged misuse of members’ money came into focus. Powell says his work became “soul-sucking,” and he now considers it a “low point in [his] life.”

Danny Hakim of the New York Times reported that Powell is now calling for red flag laws and universal background checks.

A hunter since childhood and former Chicago options and derivatives trader, Mr. Powell says that the N.R.A. has fundamentally lost its way, abandoning “its roots as an organization focused on gun safety and education.” That has led it to limit its own long-term membership growth, he argues, by turning its back on the majority of gun owners who support background checks.

With this kind of build up plus dishing all the dirt on Wayne LaPierre and the NRA, you would think the New York Times Review of Books would give it a glowing review just to get Powell’s narrative out there.

And…you would be mistaken.

The review of the book was brutal. It starts off with this:

This is a sad book, and a bad one, and you shouldn’t buy it. The thinking in it is poor; the writing is worse. The author “exposes” evils that, if you’ve been paying even scant attention, you already know. Expect it soon in a Walmart remainder bin near you.

I had always assumed that Powell had a ghostwriter. Given the review of the writing style, I might be mistaken on that. Either that or he had the worst ghostwriter that money could buy.

It gets worse.

The unrelenting barrage of clichés is worse. The N.R.A. has debased the American language, and Powell adds to the sludge. If you only skimmed this book, you would think it was about a fox in a henhouse who caught flak and was thrown under a bus for playing laser-focused hardball like gangbusters and getting the short end of the stick while sensing blood in the water.

It concludes:

Powell’s book is a mea culpa. About the N.R.A.’s Kool-Aid, he writes, “I sold it, stirred it, drank it every day.” He lost his soul, he writes, and became part of the swamp. He’d like, he claims, again unconvincingly, to see the N.R.A. largely return to its roots as an organization dedicated to gun safety.

The N.R.A., in this telling as in others, is an organization in free fall. About New York’s attorney general, Letitia James, who has taken existential aim at the N.R.A., he writes, “I’m not betting against her.”

Bearing in mind that Powell is one of the four named defendants in the suit brought by Letitia James and because he appears to be a sociopath willing to do anything to save his own skin, I’m guessing he has already rolled over and is providing James all the gossip.

You might remember I noted that Powell’s attorney is a partner at Akin Gump. I had wondered how a guy without a job could afford such an expensive attorney. Five years ago the reported partner billing rate for the firm was over $1,200 per hour and undoubtedly is higher now. I might have an explanation for that. A friend who is a DC attorney said that lots of the big DC firms will take cases like this pro bono in exchange for the publicity.

It is either that or perhaps a former big city mayor who hates the NRA enough has decided to foot the bill so that even more dirt about the NRA is released just prior to the election. Nah, that would make me look like a conspiracy theorist or something.

Finally, if you are wondering how such an incompetent grifter ever got hired to a high position at the NRA, my sources say that the blame falls on Pete Brownell and Wayne’s former BFF Tony Makris. Sometime after Powell was elected to the NRA Board of Directors, they pitched him to Wayne as someone for his executive team. The rest is history as the saying goes.