NRA money flowed to board members amid allegedly lavish spending
A former pro football player who serves on the National Rifle Association board was paid $US400,000 ($NZ600,953) by the US lobby group in recent years for public outreach and firearms training.
Another board member, a writer in New Mexico, collected more than $US28,000 for articles in NRA publications. Yet another board member sold ammunition from his private company to the NRA for an undisclosed sum.
The NRA, which has been rocked by allegations of exorbitant spending by top executives, also directed money in recent years to members of its board – the very people tasked with overseeing the organisation’s finances.
In all, 18 members of the NRA’s 76-member board, who are not paid as directors, collected money from the group in the past three years, according to tax filings, state charitable reports and NRA correspondence reviewed by The Washington Post
The payments received by about one-quarter of board members, the extent of which has not previously been reported, deepen questions about the rigour of the board’s oversight as it steered America’s largest and most powerful gun rights group, according to tax experts and some longtime
The NRA, founded in 1871 to promote gun safety and training, relies heavily on its 5 million members for dues. Some supporters are rebelling publicly and questioning its leadership.
“I will be the first person to get in your face about defending the Second Amendment, but I will not defend corruption and cronyism and fearmongering,” said Vanessa Ross, a Philadelphia-area bakery owner and lifetime NRA member who previously worked at the Virginia headquarters managing a programme for disabled shooters.
Among the revelations that have burst into public view: CEO Wayne LaPierre racked up hundreds of thousands of dollars in charges at a Beverly Hills clothing boutique and on foreign travel, invoices show.
Oliver North, forced out as president after trying to oust LaPierre, was set to collect millions of dollars in a deal with the NRA’s now-estranged public relations agency, Ackerman McQueen, according to LaPierre.
And the NRA’s outside attorney reaped “extraordinary” legal fees that totalled millions of dollars in the past year, according to North.
The duelling allegations, coupled with multimillion-dollar shortfalls in recent years and an ongoing investigation by the New York attorney general, threaten the potency of the NRA, long a political juggernaut and a close ally of President Donald Trump.
The NRA said that its finances are healthy and that the allegations of misspending are unfounded. In a statement last month, a dozen board members said they have “full confidence in the NRA’s accounting practices and commitment to good governance”. LaPierre declined to comment.
The gun rights organisation’s board includes firearms industry executives, conservative leaders, gun enthusiasts, and a handful of sports and entertainment celebrities.
Among its members, whose names are not listed on the NRA website, are former Republican Representative Bob Barr, former NBA star Karl Malone and Joe Allbaugh, who served as the director of the Federal Emergency Management Agency in the George W. Bush administration. (The three are not among the directors the NRA reported paying.)
After learning about the money his fellow board members received, Malone said he was concerned.
“If these allegations are correct and 18 board members received pay, you’re damn right I am,” he said. “If it’s correct, the members who pay their dues should be damn concerned, too.”
The NRA does not require board members to donate or raise funds for the group, as many nonprofit organisations do. They do not have term limits.
State and federal laws allow members of nonprofit boards to do business with their organisations under certain guidelines. The IRS can impose penalties if top officials and their families receive economic benefits that exceed fair market value.
Tax experts said the numerous payments to certain NRA directors create potential conflicts of interest that could cloud the board’s independent monitoring of the organisation’s finances.
“In 25 years of working in this field, I have never seen a pattern like this,” said Douglas Varley, a Washington attorney at Caplin & Drysdale who specialises in tax-exempt organisations and reviewed the NRA’s federal and state filings from 2016 through 2018 for The Washington Post.
“The volume of transactions with insiders and affiliates of insiders is really astonishing.”
Varley said he did not see any apparent violations of the law, and noted that the NRA, for the most part, appeared to have properly disclosed the payments.
“But the pattern raises a threshold question of who the organisation is serving,” he said. “Is it being run for the benefit of the gun owners in the country and the public? Or is it being run as a business-generating enterprise for officers and employees of the organisation?”
NRA spokesman Andrew Arulanandam said the number of financial relationships between directors and the NRA is “small”, considering the size of the board and the organisation.
He called the gun rights movement “a close-knit community comprised of partners and vendors who understand the issue and are defenders of the Second Amendment”.
Because gun-control groups have pressured companies into not doing business with the NRA, Arulanandam said, “the pool becomes smaller. Therefore, connections between employees or board members and partners are not unusual.”
William Brewer, an outside attorney for the NRA, said business arrangements with directors are approved “where appropriate” by the board’s audit committee.
“Naturally, there are occasions where the NRA engages vendors who have a connection to NRA executives, employees or board members – but only when such an association works in the best interest of the organisation and its members,” he said.
The NRA provided The Post with a copy of its conflict-of-interest policy, which states that approval by the audit committee is not required for minor transactions, reimbursement of expenses or “transactions and activities undertaken in the ordinary course of business by NRA staff”.
According to the policy, board members “owe a duty of loyalty to the NRA and must act in good faith and in the NRA’s best interests rather than in their own interests or the interests of another entity or person”.
Board members who spoke to The Post defended their ability to serve as fiscal watchdogs while collecting fees.
Former NRA President David Keene, who has been paid $US112,000 by the group for public speaking and consulting since 2017, said he has “never hesitated to exercise the oversight required of a board member and would gladly give up any compensation if I thought for a minute it was compromising my judgment or responsibility”.
“NRA board members as a group tend to be both forthright and bullheaded, so I cannot imagine any of them would let a few dollars affect their judgment,” he added.
SHOWDOWN IN INDIANAPOLIS
In late April, the NRA’s annual meeting was getting underway in Indianapolis when members of the board received an alarming letter from LaPierre, who has run the gun lobby for decades.
In it, he wrote that North had warned that the group’s longtime public relations firm, Ackerman McQueen, was going to release information alleging “a devastating account of our financial status”. LaPierre said North indicated that the missive would not be sent if LaPierre resigned.
The NRA chief hinted that North was compromised – conflicted between his duties to the board and his personal financial interests, noting that the retired Marine Corps lieutenant colonel had signed a contract with Ackerman to host an NRA documentary series for “millions of dollars annually”.
“I believe our Board and devoted members will see this for what it is: a threat meant to intimidate and divide us,” LaPierre concluded.
The next day, North was forced to resign. But in a parting letter, he warned that the organisation’s finances were in “clear crisis.”
The board sided with LaPierre, reelecting him unanimously, according to NRA officials.
“We have full confidence in Wayne LaPierre and the work he’s doing in support of the NRA and its members,” said Carolyn Meadows, who replaced North as president.
Attorneys for North declined to comment.
Since then, the NRA has faced a steady drip of allegations about improper spending.
Letters from Ackerman’s CFO to LaPierre, first reported by The Wall Street Journal and obtained by The Post, detailed large expenses billed by LaPierre, including nearly $US275,000 in personal charges at a Beverly Hills men’s store and more than $US253,000 in luxury travel to locations such as Italy, Budapest and the Bahamas. Bills also show $US13,800 to rent an apartment for a summer intern.
In another letter, North warned top officials that huge fees charged by the Brewer law firm – which he said appeared to total $US24 million in the previous 13 months – were “draining NRA cash at mind-boggling speed”. Brewer is the son-in-law of Angus McQueen, the CEO of the NRA’s longtime ad firm.
In the wake of the revelations, Retired Army Lieutenant Colonel Allen West, a former Republican congressman from Florida and two-term NRA board member, called for LaPierre to resign, describing “a cabal of cronyism”.
NRA officials said that LaPierre’s wardrobe allowance began 15 years ago and that he was urged by Ackerman to make the purchases for his public appearances, a practice that they said has since been discontinued. They said his travel was necessary for fundraising. The apartment was secured for a three-month summer internship when university housing typically used was unavailable, the NRA said.
NRA officials also said North’s memo describing the legal fees paid to the Brewer firm was “inaccurate”.
“It reflects a misinformed view of the firm, its billings, and its advocacy for the NRA,” said Charles Cotton, chairman of the NRA’s audit committee. “The board supports the work the firm is doing.” Brewer did not respond to a request for comment on his fees.
The swirl of allegations is being driven by the NRA’s increasingly acrimonious split from Ackerman, an Oklahoma-based firm that, with affiliated companies, received about $US40m from the nonprofit group in 2017, according to tax filings.
Ackerman has produced provocative ads and television shows that increasingly marked a departure from the NRA’s traditional focus on gun rights.
The gun lobby and the PR agency have sued each other in recent months, accusing each other of improper billing and deceit.
In a statement, Ackerman said it “followed the explicit directions” of NRA officials. The company said the NRA conducted an audit of its payments nearly every year and can justify all of its billings. “They could challenge any invoice, but they did not,” the company said.
The NRA has accused Ackerman of concealing records, which the firm denies, and breaching confidentiality by leaking information.
The feud comes amid an investigation by New York Attorney General Letitia James, a Democrat, into the tax-exempt status of the organisation, which is chartered in New York. As part of the probe, her office has issued subpoenas to the NRA, as well as orders to NRA entities and vendors to preserve records, according to people familiar with the investigation.
Brewer, the NRA’s outside attorney, said the group complies with all regulations and is cooperating with the inquiry. “The NRA is prepared for this, and has full confidence in its accounting practices and commitment to good governance,” he said.
Amid the turmoil, much of the NRA board has remained silent – or defended LaPierre’s spending.
“This is stale news – being recycled by those with personal agendas. In any event, the entire board is fully aware of these issues,” Meadows said in a statement.
The organisation has not hired an outside firm to conduct an investigation into the allegations of misspending, a measure that legal experts note is often taken by nonprofit boards in such situations. Brewer said NRA practices are already under “constant review” by top officials and the board.
Instead, NRA leaders say gun-control advocates are ginning up the controversies to sabotage the organisation. “Our financial house is in order – we aren’t going away,” read a May 22 letter to members signed by Meadows and 11 other board members, many of them former presidents of the organisation.
But some longtime NRA members are losing faith in the leadership – and considering walking away.
“You have these facts coming to light, what to most NRA members seem very unreasonable amounts spent on luxuries and conveniences,” said NRA member and firearms trainer Robert Pincus of Florida.
“And at the same time you have the NRA cold-calling and fundraising, claiming they are going to go bankrupt if they don’t get money to fight New York state,” Pincus said.
“Then you have the [new] president saying they are in great financial shape, all the financial problems of the past have been fixed. Those three messages don’t all go together.”
‘NOTHING NEFARIOUS ABOUT IT’
Federal and state filings show that the NRA has turned to its board members for a variety of paid services in the past three years – including to bring in new members.
Attorneys who specialise in nonprofit organisations said it is unusual for board members to be paid membership commissions for recruitment.
“Most groups lean on board members to give money, not for board members to get money,” said New York lawyer Daniel Kurtz. “I think the contributing public would look at that with a dim eye.”
Among those paid such commissions was board member Owen Mills, who runs Gunsite Academy, an Arizona firearms training facility, which received about $US11,000 in 2016 and 2017.
Mills defended the financial ties between board members and the NRA, saying they should be able to do business with the group as long as their prices are competitive.
“There’s nothing nefarious about it,” Mills said. “The NRA buys a lot of stuff. And so it wouldn’t be unusual to do business with your board members, and all of that is open to the public process.”
Since 2016, large sums have flowed to board members for consulting, public filings show. NRA officials provided additional details about the specifics of some of the work they did.
Lance Olson, a former police officer from Iowa, received a total of $US255,000 for outreach to gun collectors and fundraising, and Dave Butz, a former NFL player, received $US400,000 for public outreach and firearms training, according to the NRA.
Olson did not respond to requests for comment. Butz, who was not reelected to the board in April, declined to comment.
A firm run by White House communications aide Mercedes Schlapp, who resigned from the board when she joined the administration in 2017, received a total of $US85,000 in 2016 and 2017 for media strategy consulting.
She did not respond to requests for comment. Schlapp’s ability to represent the organisation in Spanish-language media “made her firm highly qualified”, the NRA said.
Longtime director and former NRA President Marion Hammer received at least $US610,000 in the past three years for consulting services and legislative lobbying in Florida. Hammer declined to comment.
In a statement, the group called her a “tireless supporter of the NRA’s fight to protect the Second Amendment”.
Director Bart Skelton, a writer in New Mexico, received at least $US28,750 over three years to produce articles for NRA publications and $US6550 in compensation in 2017. He did not respond to requests for comment.
NRA director and rock performer Ted Nugent’s company received $US50,000 for appearances at the 2016 NRA convention, while director and country music singer Craig Morgan’s company got $US23,500 for musical performances.
Neither responded to requests for comment.
In other cases, the NRA paid businesses run by members of its board.
The NRA Foundation, the group’s charitable arm, bought nearly $US3.1m in ammunition and other supplies in 2017 from Crow Shooting Supply, a business controlled by Pete Brownell, a former NRA director and president.
NRA officials and Brownell say the group began purchasing supplies from Crow before Brownell took over the company in 2011.
However, the first time the foundation disclosed the contract in tax filings was in 2017, as The Wall Street Journal first reported.
NRA officials said the foundation made the disclosure in 2017 “in an effort to provide greater visibility regarding the Foundation’s mission and activities”.
A spokesman for Brownell, who announced last week that he was stepping down from the board to focus on his business, said the contract was vetted by the audit committee.
“Crow is one of the only wholesalers in the country who can meet the programmes’ volume and shipping needs,” spokesman Ryan Repp said. “Pete takes his ethical obligations seriously,” Repp said, adding that Brownell abstained from voting on issues that directly affected his business.
The amount of money collected by one board member remains unknown because she was paid by Ackerman, the marketing agency. Julie Golob, a gun activist in Kansas City, Missouri, hosts and consults for NRA video programming produced by the firm, according to internal documents.
She declined to comment on how much she is paid or on her dual roles as NRA director and subcontractor. The NRA has said that the arrangement was approved by the audit committee and that Golob does not participate in discussions related to Ackerman.
In addition to the 18 board members paid in recent years, the NRA also reported paying an undisclosed amount to a son of board member James Porter, a former president of the group.
The son, who works for the Bradley law firm, has been involved in extensive litigation involving guns, according to his biography. Neither father nor son responded to requests for comment.
Another director, Republican Representative Don Young, received thousands of dollars in donations from the NRA’s political arm to his campaign. Young did not respond to a request for comment.
$US17M SHORTFALL IN 2017
Longtime NRA members said they are worried that allegations of insider dealing and big spending at the NRA could create the appearance of impropriety.
“The NRA cannot afford to give fodder to the public and to the media that we are anything but above board,” said Tiffany Johnson, a firearms instructor in Memphis and lifetime member.
“We can’t give anybody any reason to even intimate that we have impermissible conflicts of interest, that there is self-dealing.”
Compounding the situation are signs that the NRA’s finances are under strain.
Public filings show that the gun rights group – which spent $US31m to help elect Trump during the 2016 presidential campaign, more than any other outside group – had a more than $US17m shortfall in 2017, the most recent tax filing available. That year, it collected nearly $US312m in revenue.
NRA officials said the organiSation is “on budget” this year and “meeting all banking and supplier obligations”.
But it is under intensifying scrutiny in Congress, where Democrats on the Senate Finance Committee have been examining the group’s ties to Russia. That inquiry has expanded to include the allegations of self-dealing.
Meanwhile, the turmoil at the NRA has benefited some other gun rights organisations, which said they have seen an uptick in memberships and contributions.
“In recent months, we have seen an over-20 per cent increase in support,” said Alan Gottlieb, founder of the Second Amendment Foundation and chairman of its sister organisation, the Citizens Committee for the Right to Keep and Bear Arms.
He said donors are giving in response to “reports of lavish spending” at the NRA and the support for gun control among Democratic presidential contenders.
NRA directors say the current fracas has been overblown and will not inflict long-term damage.
“We are the most influential body representing firearms owners in the world,” said Mills, the director from Arizona, “and we will survive this little speed bump and come out all the stronger and remain the guardian of civil rights.”
The Washington Post