New York and DC Attorneys General Investigations

Case Summary

As a result of the sprawling evidence of financial mismanagement, self-dealing, and questionable business practices, New York Attorney General Letitia James launched an investigation into whether the NRA violated New York’s charities law.  District of Columbia Attorney General Karl Racine similarly investigated the NRA and NRA Foundation for suspected violations of nonprofit law. These regulators have a particular interest in the organization, since the NRA is chartered in New York, and the NRA Foundation is chartered in Washington DC.

On August 6, 2020, the New York Attorney General filed a complaint against the NRA in New York State Supreme Court (New York County) on August 6, 2020.  The AG’s complaint charges 18 causes of action against the NRA and four executives (CEO Wayne LaPierre, General Counsel John Frazer, former Chief of Staff Josh Powell, and former CFO Woody Phillips). While the complaint contains nearly 700 paragraphs, the factual allegations largely center around widespread looting of the NRA as a charity, with CEO LaPierre as the ringleader of that activity. The complaint alleges improper personal benefits for senior NRA executives, including that NRA leaders used vendors and contractors to hide improper expenditures, self-dealing, and related party transactions. According to the complaint, “LaPierre effectively dominates and controls the NRA Board as a whole through his control of business, patronage and special payment opportunities for board members, and his public allegations to the NRA membership of a ‘criminal conspiracy’ against board members and officers who question his activities” 

Similarly, the Washington D.C. Attorney General filed a complaint against the NRA and NRA Foundation in D.C. Superior Court on August 6, 2020. The DCAG’s complaint contains five causes of action against the defendants, including that the NRA Foundation exceeded and abused the authority of the charity, and that the Foundation acted contrary to the non-profit purpose of the NRA Foundation. The DCAG alleges that the NRA controlled the Board of Directors of the NRA Foundation and caused the Foundation to undertake actions not in the best interest of the NRA Foundation. The crux of the allegations by the DCAG are that “in recent years, the NRA has experienced financial problems related, in large part, to low membership and the NRA’s decision to continue to waste funds on improper, lavish spending. To plug holes caused by its own poor management, the NRA turned to the Foundation’s funds.” 

While these cases are still at their initial stages, two pre-litigation (i.e., during the investigation) disputes between the NRA and the Office of the New York Attorney General (OAG) have spilled out into court filings.  

First, as part of its investigation, the OAG subpoenaed Lt. Col. Oliver North, a former NRA president and current member of the NRA board of directors, to produce documents and give testimony.  Incredibly, the NRA – the subject of the investigation – demanded to attend the testimony of Col. North.  When the OAG refused, the NRA brought a lawsuit to try to force the OAG to allow NRA lawyers to participate in North’s testimony. After a full briefing and hearing on the issue, the New York State Court rejected the NRA’s lawsuit.

Second, in October 2019, the OAG was forced to sue the NRA after “a pattern of obstruction and interference” in the investigation, including efforts to prevent its former vendor, Ackerman McQueen, from promptly complying with a subpoena. Once again, the court ruled against the NRA.

The filings on this page are a selection of the more significant filings in the matter.  The full docket can be accessed at the New York courts website here

New York Deepens Its Investigation Into the NRA

New York Times, Dec. 9, 2019

Timeline

April 26, 2019
NY Attorney General commands NRA to preserve documents relevant to investigation.
August 16, 2019
NRA petition's to participate in Oliver North’s deposition
August 18, 2019
Attorney General argues the NRA may not participate in North deposition
August 19, 2019
The Court denies the NRA’s petition to attend North’s deposition
September 30, 2019
NYAG petitions the court to force Ackerman’s compliance with subpoenas.
February 24, 2020
Court rules against the NRA on discovery motion concerning Acerkman materials
August 6, 2020
NYAG Files Suit Against NRA
August 6, 2020
DC AG Files Complaint Against NRA and NRA Foundation