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.

Brewer Represents NRA But Not LaPierre?

All the filings for the lawsuit brought by the Attorney General of New York seeking dissolution of the NRA are online. You can see when the individual defendants were served and in what manner.

Both Josh Powell and Wilson “Woody” Phillips had their attorneys file a “stipulation of service” which also granted them time to respond. This was done two weeks ago. Interestingly, they each have hired attorneys with big name firms. Powell’s attorney is Mark MacDougall who is a partner with Akin Gump in DC and was formerly a Federal prosecutor. Likewise, Phillips’ attorney Seth Farber, a partner with Winston Strawn in New York, was also a former Federal prosecutor.

John Frazer was personally served at home in Virginia two weeks ago. The description of the person accepting the service fits that of John Frazer himself.

Here is where it gets interesting. It seems Wayne LaPierre and/or his security guards not only refused service at both the office and his home in Great Falls, Virginia, but is not being represented by Bill Brewer.

Stephen Gutowski of the Free Beacon noticed that in this filing that was done this past Saturday. He posted about it on Twitter earlier this evening. If you double-click on the embedded tweet you can see the filing. Look at paragraph 2.

Regardless of who is or will be Wayne’s attorney, I really don’t think the judge presiding over the case will look too kindly on the petulant manner in which Wayne and his henchmen treated the process server. The other three individual defendants accepted service politely or had their attorneys reach out to accept it.

“Will No One Rid Me Of This Meddlesome Priest?”

The quote in the title is attributed to King Henry II of England with reference to his dispute with Thomas a’Becket who was the Archbishop of Canterbury. In response, four Norman knights traveled from Normandy to Canterbury, confronted Thomas, and ultimately killed him. The murder in 1170 was later made into plays by T. S. Eliot and Jean Anouilh as well as a movie with Richard Burton.

This is not meant to be a history or literature lesson. Rather a lawsuit by the NRA against Oliver North in NY Supreme Court, County of Albany made me think of that quote.

I could almost hear Wayne LaPierre saying, “Will no one rid me of this meddlesome president.” To which, William Brewer III replied, “I will, my liege!”

The complaint, much of which is redacted, seeks to have Oliver North removed from the NRA Board of Directors. According to a footnote, they redacted much of the complaint because it might contain information that Col. North might argue should be kept under seal.

The complaint alleges that Col. North has an “irreconcilable conflict” due to his employment with Ackerman McQueen and his membership on the Board of Directors. The Audit Committee, which had approved the arrangement, later rescinded their approval in May 2019 after the conflict between Wayne LaPierre and Col. North had come to a head.

The NRA is seeking a declaration that Col. North’s refusal to terminate his employment with Ackerman McQueen “was an election by him to terminate his NRA Board membership.” Here is where I might note that Col. North was the leading vote-getter in the 2019 NRA Board of Director election.

The attorneys bringing he lawsuit on behalf are Svetlana Eisenberg and William Brewer III of Brewer, Attorneys and Counselors.

When Pete Brownell resigned as President of the NRA in 2018, a great effort was made to get Col. North to be President. At the time, he was under contract to Fox News and would have to resign that in order to become NRA President. I have been told by multiple insiders as well as have seen in court filings that Wayne LaPierre actually negotiated Col. North’s contract with Ackerman McQueen. The whole “they won’t give us the contract” so we can know what conflicts Ollie has is a charade as is the declaration by the Audit Committee.

In reality, the conflict is between Wayne LaPierre, his cronies on the Board, and his attorney who is sucking the NRA dry and those who wanted to return the NRA to effectiveness and to see Brewer gone.

More NY Subpoenas For The NRA

Danny Hakim of The New York Times is reporting that NY Attorney General Letitia James (D-NY) issued new subpoenas to the National Rifle Association last week. While I have been keeping up with issues related to the NRA, I missed this.

The subpoena, which was described to The New York Times, was issued last week and covers at least four areas, including campaign finance, payments made to board members and tax compliance. Because the N.R.A. is chartered in New York and the office of the attorney general, Letitia James, has a range of enforcement options, the investigation has alarmed N.R.A. officials already grappling with infighting and litigation. The same office brought a case last year that led to the shuttering of President Trump’s foundation.

Among the documents sought by the subpoena are records related to transfers among N.R.A.-controlled entities, including the N.R.A. Foundation, an affiliated charity. Recent tax filings show that the N.R.A. diverted $36 million last year from the foundation in various ways, far more than ever before, raising concerns among tax experts. The transfers came as the N.R.A. experienced financial strains and challenges from gun-control groups, which outspent the organization in the 2018 midterm elections. An earlier analysis by The Times found that the foundation had transferred more than $200 million to the N.R.A. between 2010 and 2017.

The NRA Foundation, you may remember, is now under an investigation by District of Columbia Attorney General Karl Racine (D-DC). The NRA Foundation is chartered in the District of Columbia.

The New York investigation also is seeking internal documents related to the NRA’s filings with the Federal Election Commission as well as to communication with two political consulting firms. Those firms, Starboard Strategic and OnMessage, are somewhat intertwined. The Cult of Personality known as Giffords has sued the FEC alleging that the NRA paid money to Starboard Strategic as a means to funnel money to Republicans using OnMessage.

The New York Attorney General’s Office had no comments on the subpoenas.

However, NBC reports this response from the NRA outside counsel William Brewer III.

“Of course, the financial records of the NRA and affiliates were audited and reported in tax filings, in accordance with state and federal regulations — a fact that underscores the Association’s commitment to good governance,” Brewer said. “It is easy to understand why the NRA believes that the NYAG’s zeal with respect to this inquiry reflects the investigation’s partisan purpose — not an actual concern that the NRA is not effectively using its assets to pursue its members interests.”

“Regrettably, the NYAG seems to credit hollow rants by a handful of actors who are no longer associated with the NRA,” Brewer continued.

While Brewer seems to dismiss the actions of the NY Attorney General and her office saying it has “a partisan purpose”, she does have extraordinary powers when it comes to non-profit organizations chartered in the state. This includes substantial fines and even the possible dissolution of the NRA. If any of the current or former member of the Board are just sloughing this off as a partisan witch hunt, they are doing so at their peril.

This is serious business. I can’t say that it would not have come up if the Board had been doing their due diligence and taking their fiduciary responsibilities seriously. However, it would have been easier to dismiss as having a “partisan purpose.”

“His contributions to the NRA have been transformative.”

“Wayne LaPierre’s compensation reflects his enormous contributions to our members and the freedoms for which they fight,” NRA President Carolyn Meadows said in a statement. “His contributions to the NRA have been transformative.”

The statement from Mrs. Meadows come in response to reports in the Wall Street Journal, the New York Times, and the Washington Post about Wayne LaPierre’s reported compensation in 2018. This comes from the not-yet public Form 990. That form is a financial report that all not-for-profits must file with the Internal Revenue Service annually.

The AP reports:

According to the filings, known as 990s, longtime NRA CEO Wayne LaPierre’s total compensation rose to more than $2 million. His base salary went from $1.17 million to $1.27 million, he received a bonus of about $455,000, and he got about $366,000 from a deferred compensation plan, according to the documents cited in media reports.

The story from the Wall Street Journal notes that revenues rose 13% while expenses rose 7% for the year. It also noted that Brewer, Attorneys and Counselors, was paid $13.8 million in legal fees making it that third-largest NRA vendor. The largest vendor for 2018 was, as may be expected, Ackerman McQueen.

Ackerman was the largest outside vendor, having been paid $32 million, plus $6.3 million for out-of-pocket expenses, including media buys and “reimbursement of travel and business expenses.”

Given past reports regarding LaPierre’s use of AckMac to disguise his actual spending, I wonder how much of the reimbursement was for his personal expenses.

In addition to the reports on LaPierre’s compensation was this note in the Washington Post on the monies spent by NRA-ILA.

Spending by the political arm of the NRA dropped from $47.1 million in 2014 to $32.51 million in 2018, the filings show. That was the midterm election in which Democrats took over the House and gun-control groups outspent the gun lobby for the first time.

That is very concerning. The monies spent – or in my opinion, wasted – on Brewer, Attorneys and Counselors, could have been used to support the campaigns of pro-gun candidates.

I will be requesting a copy of the 2018 Form 990 from the NRA Secretary’s Office. I have a feeling that it will contain many more unwelcome revelations.

As to the comment from Mrs. Meadows with which I started this post, I agree with her last sentence. LaPierre has been transformative for the NRA. However, if the last few years are any indication, it is not in the way that Meadows means or that you and I would want.

NOTE: If any of my readers has a copy of the 2018 Form 990 or a link to it, please send to me at jpr9954 AT gmail DOT com.

NRA Drops Lawsuit Against San Francisco

The NRA officially dropped their lawsuit against the City and County of San Francisco yesterday. The lawsuit was brought due to a resolution approved by the Board of Supervisors branding the NRA a “domestic terrorist organization”.

NOTICE IS HEREBY GIVEN that pursuant to Federal Rule of Civil Procedure 41(a)(1)(i), Plaintiff the National Rifle Association of America voluntarily dismisses without prejudice the above-entitled action against all Defendants. This notice of dismissal is being filed with the Court before service by Defendants of either an answer or a motion for summary judgment.

San Francisco, in their reply to the original complaint, contended their resolution was a “statement of policy” and “non-binding”.

From the San Francisco Chronicle:

Mayor London Breed had already told city staff that the measure did not limit the city’s dealings with any vendors doing business with the NRA. Stefani said her resolution was a legitimate public denunciation with no binding consequences.

At the time Mayor Breed made her statement that the resolution would not impact dealings with vendors, NRA outside counsel William Brewer III indicated that the lawsuit would continue until the the resolution was formally revoked. As of yesterday, the resolution had not been revoked but nonetheless the case was dismissed.

Both sides are now claiming victory in the lawsuit.

City Attorney Dennis Herrera issues a short statement that said:

“We’re pleased the NRA backed down on its frivolous lawsuit. This was a baseless attempt to silence San Francisco’s valid criticisms of the NRA and distract from the gun violence epidemic facing our country. San Francisco will never be intimidated by the NRA. If the NRA doesn’t want to be publicly condemned for its actions, it should stop sabotaging common sense gun safety regulations that would protect untold numbers of Americans every year, like universal background checks, an assault weapons ban, and restrictions on high-capacity magazines.” 

The NRA and its attorney proclaimed victory in a multipart Twitter post:

Today the NRA withdrew its lawsuit in SF – and now celebrates the important victory it obtained on behalf of its members. As has been widely reported, after the Association challenged the unconstitutional resolution, the City beat a hasty retreat and backed down from its wildly illegal blacklisting scheme. The censors are on notice. The NRA will always fight for the Constitution, and will re-file if the City tries anything like this in the future.

So it appears that each side got a participation trophy allowing both sides to claim victory. The NRA got San Francisco to declare that the resolution was non-binding and San Francisco got the lawsuit dismissed without officially revoking the resolution.

I don’t think anyone can question that the NRA had to sue San Francisco in this case. However, I did find it interesting that the NRA didn’t use attorney Chuck Michel and his firm to handle the lawsuit. Michel and Associates has traditionally been the NRA’s go-to law firm for California related cases. Instead they used Las Vegas based Garman Turner Gordon as their attorney on the ground and Brewer, Attorneys and Counselors, as “of counsel”.

AckMac’s Counter-claim Makes Interesting Reading

I don’t know which side is telling the truth in the divorce between the NRA and AckMac. It could be neither of them. It could be both sides depending upon their perception of the issues.

I will note that the AckMac description of the influence on Wayne LaPierre by William Brewer III does strongly correlate with what insiders have told me. Brewer was described to have isolated LaPierre from long time friends and associates and fed his paranoia.

That said, the narrative in Ackerman McQueen’s reply and counter-claim filed on October 1st makes for interesting reading. Of particular interest are pages 19 through 42. The rest is mostly legalese. I have embedded it below. If you click on the heading, you can also download it to read later.

Ackerman McQueen Texas Coun… by Stephen Gutowski on Scribd

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.

Someone Is Going Under The Bus

The New York Times ran a story by Danny Hakim regarding the financing of the “Russia trip”. It appeared in Thursday’s paper. The “Russia trip” was a visit to Moscow organized by Maria Butina. It was attended by former NRA President David Keene, then-1st VP Pete Brownell, Sheriff David Clarke, and some other board members. The trip was for the purpose of building stronger ties between the NRA and gun-rights supporters in Russia.

The financing of the trip has been of interest to both Congressional investigators and to NY Attorney General Letitia James. There have been a complicated series of personal checks and reimbursements which has attracted their attention. According to the article, the NRA’s outside counsel William Brewer III has asserted in internal presentations that “those involved had exposed themselves to wire fraud charges.” Other attorneys disagreed with this assertion.

Brewer is also asserting that Wayne LaPierre was opposed to the trip. This, however, is contradicted by emails from the time which marked trip-related invoices as “Wayne approved”.

While the whole financing issue is of interest to investigators, it is what is buried in this story that caught my attention. In other words, the story within the story. It concerns the bureaucratic infighting between some of LaPierre’s closest associates.

The invoices for the trip were overseen by LaPierre’s closest aide Millie Hallow.

The 2016 transactions were overseen by Millie Hallow, an aide to Mr. LaPierre, according to emails. In one February 2016 email, Ms. Butina sent an invoice directly to Ms. Hallow for “Hosting of NRA leadership group for six days in Moscow,” according to the document, and thanked her “for your invaluable advice these past few months.”

In a May 26 email that year, Ms. Hallow told other N.R.A. officials that an invoice related to the trip submitted by Mr. Brownell’s company, the firearms retailer Brownells, had been authorized: “Wayne approved these special projects involving Outreach that Brownell has done,” she wrote.

Now it appears that Josh Powell, Chief of Staff to LaPierre, is trying to throw Millie under the bus.

On Thursday, Josh Powell, the N.R.A.’s chief of staff, said in a statement that “in order to facilitate the transfer of funds to Brownell, Millie falsely stated that Wayne approved of certain expenses when he had not. In fact, Millie apologized to me (and others) later for the misrepresentation.”

You may remember that in late July I did a blog post regarding Millie Hallow. It detailed how she had been convicted of felony embezzlement while directing the DC Commission on Arts and the Humanities. My impression was that had been kept a closely guarded secret. I had NRA board members tell me they didn’t know Ms. Hallow was a convicted felon until that post was published.

It now appears that someone wants that information in the public domain.

But Ms. Hallow is one of Ms. LaPierre’s closest aides, and raising questions about her credibility comes at an inopportune time. The N.R.A. is relying on her word in its battle with Oliver North, the organization’s former president, who stepped down this year shortly after making a call to Ms. Hallow that N.R.A. officials described as threatening toward Mr. LaPierre. Ms. Hallow also once pleaded guilty to a felony related to the theft of money from an arts agency she ran in Washington. (emphasis mine)

It would be interesting to know which one of Hakim’s sources pointed that out to him. It does serve the purposes of Josh Powell but the question remains whether he is smart enough to made use of it. I don’t see it serving the purpose of Brewer as he needs her to be a credible witness against Ollie North. That is, unless it is more important to protect LaPierre in the Russia investigation than it is to continue the fight against Ollie North. If that is the case then there is a lot more substance to this whole Russia fiasco than we previously thought and it is a lot more dangerous to the personal fortune of LaPierre. Time will tell.