“If you look at what has happened to…the NRA’s public image and their public communications in the last three years, it’s a graduate level course in what not to do in communication. That organization in 2016 was at its pinnacle. And perhaps the most powerful political organization in the United States at the time. And in three years, it has disappeared from the scene. Not mentioned. Not heard of. And you just got a textbook example [in 2020] of what a national election looks like without the NRA involved.” 

Trial Testimony from Longtime Wayne LaPierre confidant Tony Makris

A twelve-day trial in a Texas federal bankruptcy court marked the first time executives from the National Rifle Association (NRA) — including NRA CEO Wayne LaPierre and others — were examined and cross-examined in open court related to the financial scandals that have engulfed the NRA for the past three years. Put simply: the NRA viewed bankruptcy as a proverbial get-out-of-jail-free card that would solve all its political, financial, and legal troubles. Instead, the bankruptcy process and the recent trial testimony have irreparably damaged the NRA.

While the trial involved novel and complex questions relating to bankruptcy law, what was most significant to NRA members, gun enthusiasts, lawmakers, and regulators were the avalanche of revelations about the NRA’s financial dealings that were unearthed during the trial. The public learned virtually no one at the NRA knew about the plans to file bankruptcy, which is consistent with witnesses that testified that NRA CEO Wayne LaPierre’s management of the NRA was a “trainwreck” and the organization was run as “Wayne’s kingdom” where he employed what he reportedly called “management by chaos.” The trial included new information about LaPierre’s luxurious life on the company dime, including over $13 million for travel and a $17 million contract for a post-employment golden parachute. In addition, LaPierre was forced to testify about his annual week-long trips to the Bahamas, where he stayed on one of two yachts owned by a Hollywood producer who is a stakeholder of key NRA vendors. A longtime LaPierre confidant testified LaPierre told him that lawyer Bill Brewer was the “only one who can keep me out of jail,” and that Brewer was the only one standing between him and “an orange jumpsuit.” Likewise, an NRA board member testified he believes the NRA is seeking “to avoid criminal prosecution.” There was even a shocking revelation that the NRA president burned and shredded NRA documents.   

The issues for Judge Harlin Hale to adjudicate were (1) should the NRA’s bankruptcy filing be dismissed for being filed in bad faith, and (2) if not, should some type of examiner or trustee be put in place to oversee the management of the NRA during the pendency of the trial. In a written decision issued on May 11, the Judge dismissed the NRA’s Chapter 11 filing for not being filed in “good faith,” holding the “NRA is using this bankruptcy case to address a regulatory enforcement problem, not a financial one.” The Court also wrote “there are several aspects of this case that still trouble the Court,” and agreed with comments from the NRA’s own counsel that “there were cringeworthy facts during this trial.” The Court, which heard 12 days of trial testimony, wrote “it has become apparent that the NRA was suffering from inadequate governance and internal controls.” The Court’s decision relied largely on the testimony and actions of NRA CEO Wayne LaPierre in throwing out the case, writing “what concerns the Court most though is the surreptitious manner in which Mr. LaPierre obtained and exercised authority to file bankruptcy for the NRA. Excluding so many people from the process of deciding to file for bankruptcy, including the vast majority of the board of directors, the chief financial officer, and the general counsel, is nothing less than shocking.”

The trial was also bookended by significant developments outside the courthouse. While LaPierre himself sat on the stand, President Joe Biden took significant action on gun safety, nominating a highly qualified ATF Director with a deep law enforcement background; announced life-saving executive actions to stop the proliferation of ghost guns; addressed city gun violence and gun trafficking, and more. And with the trial ongoing, a newly-uncovered, graphic video came to light, published by The New Yorker and The Trace, showing LaPierre horrifically and ineptly hunting an elephant — shortly before hunting of the species was made illegal. The article described LaPierre as “a coddled executive who is clumsy with a firearm,” saying that the footage had been canned out of fear that it would embarrass him. The uncovering of the video, with NRA executives tied up in court, underscored the albatross that the NRA’s legal and regulatory problems have become to the organization.

This report summarizes the significant facts that came to light during the trial:

• NRA Wasting Membership Dues on Extravagant Spending and Special Perks for its Top Executives
• LaPierre’s Failed Leadership of the NRA
• The NRA’s Stealth Bankruptcy Filing
• NRA Legal Spending & Suggestions of Potential Criminality
• The NRA’s Plan for the Future? More of the Same.
• What’s Next?

Common Questions About the NRA Bankruptcy Trial

NRA Wasting Membership Dues on Extravagant Spending and Special Perks for its Top Executives

The trial featured damning evidence about the NRA’s extravagant spending — not on core programs to benefit its dues-paying members, but through shady arrangements to benefit its executives. From yachts, to private planes, to expensive African safaris, to golden parachute contracts, details and testimony regarding these arrangements blanketed the trial. 

From the onset of the trial, Wayne LaPierre’s private jet travel took center stage. One of the major revelations was a filing by the New York Attorney General’s office, which attached several spreadsheets detailing millions of dollars in private travel by NRA executives. The flights spanned from 2015 through 2019 and represented the most detailed disclosure of private travel by NRA executives to date. The entries included cost, dates, locations, and in some cases passengers. These flights included several trips to Palm Springs, Las Vegas, and the Bahamas. 

LaPierre admitted to charging the NRA for private jet travel, including trips to pick up his niece in Nebraska. After scrutiny about these expenditures, LaPierre paid back over $300,000 in flight costs — a fraction of the apparent total spent on private flights — to the NRA as an excess benefit transaction. The New York Attorney General, throughout the trial, raised questions about how this $300,000 amount was arrived at, with witness after witness (including the CFO and outside accountant) testifying they did not know the origin of the calculation. 

During his examination, LaPierre explained that he had his own personal travel agent, Gayle Stanford, with whom he would book trips and private flights. The travel agent testified that she didn’t have a written contract with the NRA for more than two decades, between the early 1990s and 2019. The travel agent testified that, without formal approval, she added a 10% fee on all travel booked for the NRA to her invoices. According to the New York Attorney General, the NRA paid Stanford more than $13.5 million, in aggregate, between August 2014 and January 2020, of which one could estimate personal fees to Stanford of over $1 million. In stunning deposition testimony played in court, Stanford said that LaPierre had occasionally instructed her how to word invoices for his travel, including invoices in which LaPierre told her to omit flight details about trips to Nebraska and the Bahamas. 

Trial testimony also indicated that LaPierre received expensive benefits and perks from key NRA vendors. Most notably, LaPierre admitted that, starting in 2013, he began making annual week-long trips to the Bahamas, where he stayed on one of two yachts owned by David McKenzie. McKenzie, a Hollywood producer, is a part or full stakeholder of multiple NRA vendors. LaPierre testified that these trips were “a security retreat” — testimony that was unsupported by multiple NRA witnesses throughout the trial. In addition, LaPierre said he also made multiple annual trips around New Years Eve to the Bahamas, where he would stay at the Atlantis Resort on Paradise Island. He admitted that McKenzie paid for his stays at the resort, too.

LaPierre’s claim, in a pre-trial deposition, that this more than 100-foot yacht was “the one place” he could “feel safe” after high profile school shootings was widely criticized by the public and various press accounts. LaPierre testified “I was basically under presidential threat without presidential security in terms of the number of threats I was getting” and that “this [yacht] was the one place that I hope could feel safe, where I remember getting there going, ‘Thank God I’m safe, nobody can get me here.’”

LaPierre testified the yacht was “the one place I could feel safe, where I remember getting there going, Thank God I’m safe, nobody can get me here. That’s how it happened. That’s why I used it.”

The only thing that stops a bad guy with a gun is a good friend with a yacht? pic.twitter.com/HvmGlbh6cR

— Shannon Watts (@shannonrwatts) April 5, 2021

In addition, LaPierre admitted that NRA vendor Under Wild Skies covered the costs of hunting trips — including airfare, licenses, professional hunters, and game assistants — to exotic locales like Botswana for him and his wife. The vendor even paid to preserve and ship their hunting trophies to the couples’ home. This testimony came just days ahead of a leaked video which made national news showing LaPierre on one of these hunts in Botswana repeatedly wounding an elephant. The hunt was filmed for a segment of an NRA-sponsored television show, but the segment was reportedly cut from the episode for fear that it would be embarrassing for LaPierre. Shortly thereafter, the species of elephant was declared to be endangered. The footage showed LaPierre shooting the elephant several times in the wrong spot, with the host eventually firing the fatal shot after LaPierre was unable to do so. The footage also showed LaPierre’s wife, Susan LaPierre, shooting and killing an elephant, and then cutting off its tail and holding it over her head while shouting, “Victory!” Parts of the animals were allegedly surreptitiously shipped to the LaPierres by an outside vendor, including the front feet, which were reportedly turned into stools for their home. Mike Spies of The Trace wrote, “the footage, as well as newly uncovered legal records, suggest that behind his carefully constructed everyman image, LaPierre is a coddled executive who is clumsy with a firearm, and fearful of the violent political climate he has helped to create.” 

LaPierre’s longtime Chief Financial Officer, Woody Phillips, was similarly a key component of the trial — despite not saying much of substance. The New York Attorney General played deposition testimony in court showing Phillips invoking his Fifth Amendment rights no fewer than 80 times on several topics, including questions about Wayne LaPierre’s travel, fundraising arrangements with NRA vendors, and LaPierre’s relationship with former longtime PR firm Ackerman McQueen, among other topics. The Fifth Amendment of the U.S. Constitution provides rights to individuals to prevent implicating oneself in a crime or exposing oneself to criminal prosecution. This is significant because, for a non-criminal trial, the court may draw a negative or adverse inference from an individual’s refusal to answer questions on Fifth Amendment grounds. It also foreshadows problems for the NRA in their litigation against the New York Attorney General – where Philllips is a named defendant. 

In May 2018, both Phillips and LaPierre received generous contracts with the NRA. For Philips, the contract came in the form of a post-employment, $360,000-a-year consulting contract from the NRA — even while the NRA’s counsel tried to portray him during the trial as a “man not up for the job.” During the trial, questions were raised about what, if any, services Phillips performed under the contract. Recently departed CFO Spray testified that while the NRA paid Phillips nearly $660,000 in 2019, Phillips did not provide any services to the NRA’s Treasury department that year. That contract pales in comparison to the updated employment contract granted to LaPierre. At trial, LaPierre confirmed that under the May 2018 contract, even in the event of his departure from the NRA, he would receive aggregate payments of $17 million for years after his departure, a staggering “golden parachute” arrangement. Despite its hefty price tag, the post-employment contract was not put in front of the NRA’s full board of directors for approval. LaPierre testified the contract was in effect until 2021, undermining the NRA’s claim that it had undergone a “course correction” starting in 2017.

LaPierre’s Failed Leadership of the NRA

In addition to rank financial mismanagement and extravagant spending, the trial also highlighted the failed leadership of the NRA under Wayne LaPierre. Owen “Buz” Mills, who has been on the NRA board since 2009, called LaPierre a “trainwreck” as a manager of the NRA during his testimony. In addition, Ackerman McQueen executive and longtime Wayne LaPierre confidant Tony Makris testified that LaPierre had described his personal management style as “management by chaos,” wherein LaPierre intentionally kept senior leaders in conflict with each other so he could retain control. As an example, Makris testified, LaPierre would instruct him not to provide certain information to the NRA Treasurer’s Office or other senior NRA leaders.

This type of internal division was also attested to by the NRA’s lead fundraiser, Tyler Schropp, who revealed, in explaining why expensive travel and entertainment was billed through NRA vendor Ackerman McQueen, that there was a time where he did not trust NRA staff with sensitive information. He also admitted that he routed travel expenses through Ackerman McQueen “for donor privacy reasons and Wayne LaPierre security and privacy reasons.” This testimony left many questions unanswered, including how travel receipts would disclose donor information (or how that information would be safer with a third-party vendor). 

A particularly powerful part of the trial involved testimony from several current or former NRA board members who spoke to the organization’s dysfunction and mismanagement. They painted a picture of a board incapable of or unwilling to execute meaningful oversight over management, in part due to Wayne LaPierre’s stranglehold over the organization and a lack of transparency from his team. 

It was NRA board member Philip Journey, who is also a Kansas state judge, that filed a motion with the court to appoint an examiner to investigate the allegations of fraud and waste at the NRA. Judge Journey’s motion alleged the NRA board had been reduced to a “figure head while management steered the [NRA’s] overall direction,” while also raising questions about the conduct of the NRA board of directors legal counsel, saying that both NRA management and the board’s own lawyer withheld information from board members. Journey further alleged that “On one occasion, the board’s attorney ostensibly told a board member to sit back, shut her mouth, stop asking questions, and trust NRA management had everything under control.” 

In an especially dramatic moment of the trial, Journey testified he has come to realize the NRA “essentially operated as a kingdom rather than a corporation,” adding that it was “Wayne’s kingdom.” He added that “[i]t became clear that corporate governance and […] the systems of checks and balances were essentially non-existent” and the state of compliance “was worse than I ever imagined.” 

Buz Mills testified to the dysfunction of the NRA board. Mills stated his belief that the NRA’s current problems were “our fault” because “[t]he board had failed to provide adequate direction and supervision.” When asked about the NRA’s purported “self-correction” that has been at the heart of the NRA’s defense during the trial, Mills testified “I believe that the management is corrupted and I believe the board is corrupted. I don’t see anything there that is salvageable.”

“I believe that the management is corrupted and I believe the board is corrupted. I don’t see anything there that is salvageable.”

Buz Mills testified to the dysfunction of the NRA board

During trial, the NRA called LaPierre-supporters from the board, such as Willes Lee who called Wayne LaPierre of “the highest character.” Likewise, board member Tom King called LaPierre the “leader the NRA has needed.” The core of the NRA’s position at trial was that LaPierre is indispensable to the NRA’s success and any of the allegations of improper behavior are political attacks or untruths. This position was contradicted by the testimony of Journey, Mills, and also former board member Esther Schneider who testified to LaPierre’s power over the board, saying “[t]here are no decisions made pertaining to the board or the operation of the NRA that do not have Wayne’s blessing.” 

Former CFO Craig Spray testified that he had described the culture at the NRA as a “Wayne said culture” where verbal authorizations by LaPierre would lead to the circumvention of internal financial controls. He cited a recent example of three NRA board members flying first class or business class on the NRA dime without written authorization. When he found out, Spray was upset and sent an email to some NRA staff members, saying, “Frankly, I’m disappointed in all of you” and “I can’t emphasize what a breakdown this is.” The November 2020 date of this incident clearly undercuts the NRA’s claims that the organization had cleaned up its act.

LaPierre himself testified that the NRA had cut spending on programs for hunters in recent years, saying the NRA support of hunters is “less than it used to be in terms” of spending, he estimated “it’s probably $15, 16 million — used to be in the 20s.” A key criticism of the NRA in recent years has been that NRA management has turned its back on the organizations more traditional functions related to gun safety and hunter education. 

LaPierre’s inability to answer questions posed to him during cross examination prompted Judge Hale to repeatedly sustain objections and instruct LaPierre to answer the question asked. On his first day of testimony, the Judge chided LaPierre, saying “Mr. LaPierre, please don’t do that again. All right? … Would you not make me keep saying that, too? Would you please listen to the question and the answer because I’ve done this a few times this afternoon.” Remarkably, the NRA’s own lawyer took the extraordinary step of moving to strike LaPierre’s own testimony on several instances. This culminated in this exchange between LaPierre and the Judge on LaPierre’s second day of trial testimony.

JUDGE: And I’m about to say something I’ve said for a day and a half now. Can you answer the questions that are asked?

LAPIERRE: Yes, sir, Your Honor.

JUDGE: Okay. And do you understand that I’ve said that to you more than a dozen times over the last day?

The NRA’s Stealth Bankruptcy Filing

The evidence presented at trial made clear that the NRA, under the direction of CEO Wayne LaPierre, orchestrated a stealth Chapter 11 bankruptcy filing.  LaPierre testified that he did not inform any of the other salaried officers at the NRA about the bankruptcy until the day it occurred, including the General Counsel and CFO. In fact, General Counsel John Frazer and then-CFO Craig Spray explicitly testified that they were not consulted ahead of time about the NRA bankruptcy filing. 

LaPierre himself admitted, during testimony, that he did not inform the full NRA board of directors about the bankruptcy. Other than three members of the board, LaPierre was unable to identify any other member of this 70-plus person board of directors he informed of the bankruptcy. NRA board member Charles Cotton, a LaPierre supporter, similarly admitted on the stand that the full board of directors was not informed of the NRA bankruptcy ahead of the Chapter 11 filing.

NRA board member and Kansas state court judge Phillip Journey corroborated other testimony that NRA leadership did not tell the board of directors about its plan to file bankruptcy. He went further, and testified that he believes he was misled at the NRA board meeting prior to the Chapter 11 filing. Journey said that he believed the NRA “membership deserves the truth,” and that after he raised his concerns, he was ostracized by NRA board leadership. This included not permitting him to speak at the board meeting, and that he was “shouted down” by NRA 2nd Vice President Willes Lee when he tried to explain his concerns to the full board. 

The manner in which the bankruptcy was approved raised even more unanswered questions about the NRA’s honesty and governance. Days prior to the NRA bankruptcy filing, a new contract for Wayne LaPierre was approved by the board giving LaPierre the authority to “reorganize or restructure the affairs” of the NRA, yet there was no explicit discussion of “bankruptcy” with the board of directors. This was despite the fact that there had been discussion among LaPierre and outside lawyers for months about the potential for bankruptcy. The board ratified the contract, not knowing just days later the “reorganize or restructure” language would be used to plunge the NRA into Chapter 11. Moreover, a Texas state “choice of law” and “venue” provision included in LaPierre’s final contract — which Charles Cotton admitted may have raised questions among board members about the focus on Texas had they seen it — was not included in the draft of the LaPierre employment agreement shared with the board. 

Former NRA CFO Craig Spray testified that, despite then-being CFO and treasurer, he was surprised by the NRA’s bankruptcy filing and there was no financial reason for the NRA to file bankruptcy. The testimony supported the contention the Chapter 11 filing was not in good faith.

NRA Legal Spending & Suggestions of Potential Criminality

Ahead of the trial, there had been extensive reporting about the influence of outside lawyer Bill Brewer over the NRA. Indeed, it was the influence of Brewer and the size of his legal bills that caused former NRA board president Oliver North to raise questions about Brewer to NRA management and the NRA board in 2019. IRS Form 990 disclosures filed by the organization indicated the NRA spent approximately $38 million on the Brewer law firm in 2018 and 2019. 

However, trial testimony indicated that — in total — the NRA has spent between $50 and $60 million on the Brewer law firm in the past three years. This included more than $17 million between October 2020 and January 2021 alone, more than what the NRA spent to help re-elect President Trump in the 2020 election. The following examples, elicited during trial testimony, demonstrate the scale and scope of the NRA’s legal spending: 

Moreover, the nearly endless string of scandals and investigations appear to be taking their toll on NRA leadership. Makris noted that LaPierre told him and other colleagues that lawyer Bill Brewer was the “only one who can keep me out of jail,” and that Brewer was the only one standing between him and “an orange jumpsuit.” Others have previously made the same claim about LaPierre. Likewise, NRA board member Phillip Journey testified he believes the NRA is seeking “to avoid criminal prosecution,” and that “[i]t’s obvious to me that the next step is criminal investigation and I believe that is ongoing.” Judge Journey did not provide any details, for his belief that such an investigation was “ongoing,” but LaPierre is reportedly under criminal investigation for potential tax fraud.

The decision of longtime NRA CFO Woody Phillips to plead the Fifth Amendment during a pre-trial deposition suggests that NRA leadership may be concerned about the potential for criminal investigations or criminal charges. And serious question about what the NRA may be trying to shield from disclosure were raised by the revelation that NRA Board President Carolyn Meadows acknowledged that she “shredded and actually burned” her notes from phone calls and meetings in the early part of 2019. She said she did so because NRA General Counsel John Frazer told her “they could be subpoenaed or used.” Meadows described the conversation with Frazer as a consultation, and said the destruction of documents occurred ahead of receiving a formal document hold notice. After shredding and burning the existing notes, Meadows testified that she stopped taking notes. In his trial testimony after Meadows’s admission, Frazer confirmed he was aware of Meadows’ testimony about the destruction of documents, adding “she later testified that it was someone else that she had discussed it with.” While further information is necessary, Meadows’ admission could raise the prospect of potential charges relating to destruction of evidence or obstruction of justice.

The NRA’s Plan for the Future? More of the Same.

Given the testimony of extravagant spending, lax compliance, and general mismanagement of the NRA, it was very surprising to see the NRA’s legal defense offer no real change of course for the future of the organization. Indeed, at trial the NRA doubled down on embattled CEO Wayne LaPierre. 

Longtime LaPierre confidant Tony Makris testified to the damage LaPierre had done to the NRA, saying “If you look at what has happened to…the NRA’s public image and their public communications in the last three years, it’s a graduate level course in what not to do in communication. That organization in 2016 was at its pinnacle. And perhaps the most powerful political organization in the United States at the time. And in three years, it has disappeared from the scene. Not mentioned. Not heard of. And you just got a textbook example of what a national election looks like without the NRA involved.”

As a response, the NRA offered testimony from LaPierre’s subordinates and supporters on the board as to his centrality to the future success of the NRA. In addition, the NRA offered the Court – as an alternative to the appointment of an examiner of a trustee – the option of allowing the NRA to hire a Chief Restructuring Officer (“CRO”) to assist the NRA with the bankruptcy. But under cross examination, the New York AG and Ackerman established the CRO would only have responsibility for a fairly discreet part of the NRA operation, with LaPierre maintaining power over most of the NRA. The CRO would report to the Board’s three person “Special Litigation Committee” – a committee packed with three longtime and vocal Wayne LaPierre supporters.

Details about the proposed CRO’s financial compensation were revealed during the trial and harkened back to some of the big spending that landed the NRA in so many controversies over the past few years. The proposed CRO, Louis Robichaux III, has a billing rate as high as $1,155 an hour, and his contract with the NRA provides for a $1 million bonus if a Restructuring Plan is approved by the NRA Board of Directors. 

And as for the NRA’s supposed “course correction” and improvement in compliance?

In one head-shaking moment at the trial, a document offered into evidence as Wayne LaPierre’s most recent conflicts of interest form was dated the day of his trial testimony, raising the possibility that he had just executed the conflicts form ahead of being questioned about it. It was also revealed that LaPierre never attended any of the NRA’s compliance trainings.   

For all of the details about the NRA that its inner workings highlighted during trial, there was no indication the NRA planned on making any real course correction to its affairs or management. This was proven out by the NRA’s proposed plan of Reorganization from Chapter 11, filed May 3, 2021, that explicitly indicated that the NRA’s existing directors and senior management will remain the same going forward.

What’s Next?

The NRA will exit the Chapter 11 process and return where it started – in legal battles all across the country with attorneys general, former vendors, spurned donors, and others. In addition, it will have to deal with several of the facts unearthed during this trial. The NRA filing for bankruptcy was a disaster and a colossal mistake for the organization. Not only is the New York Attorney General now well positioned to litigate its case against the NRA in New York state court, but because of this trial, the Attorney General got a free bite at the apple, eliciting damaging testimony of NRA executives and developing a factual record of mismanagement and corruption at the NRA.