NRA Trial Phase 2, Days 5-8: Course Correction or Insider Cabal?
This Week In Court
During this week’s testimony, NRA witnesses testified that they opposed the appointment of an independent monitor for the organization, although testimony also showed that the NRA had previously sought one during its 2021 bankruptcy and that many of the leaders of the NRA had been in place for decades. To that end, some NRA board members testified to a “lack of due diligence and accountability” and that certain board members who were part of the “cabal” that caused the problems were still in leadership, including NRA President Bob Barr and longtime Audit Committee Chairman Charles Cotton.
Summary of This Week’s Testimony
On Monday, NRA reform advocate and recently elected board member Jeff Knox, NRA CFO Sonya Rowling, and Greg Plotts, an auditor at the NRA’s auditing firm Aprio, took the stand.
- Knox testified that he believes there is “a small cadre at the top” who are “making too much money off the members” and “a lack of due diligence and accountability.” Knox testified that he supported the appointment of an independent monitor, with some limitations, because “[o]ur members have been abused for years.” To that end, Knox complained that the newly elected reform-minded board members had not received key committee assignments and that “virtually everyone” on those committees is a member of the old guard that Knox believes caused the NRA’s current predicament.
- Rowling testified that remedies sought by the NYAG, including an independent monitor, were “insulting” and failed to acknowledge the NRA’s efforts to reform itself. In subsequent testimony, she admitted that the NRA had in fact sought a court-appointed monitor when it filed for bankruptcy in January 2021.
- Plotts testified that the NRA’s “revenue trends are going downward” and the organization was facing “high legal fees.” He also confirmed that Aprio was not testing internal financial controls at the NRA, but would notify the organization if they were detected during their other work.
On Tuesday, Plotts concluded his testimony and forensic accountant and NRA witness Bruce Blacker took the stand. After Blacker, longtime board member and newly-elected NRA 1st Vice President Bill Bachenberg and newly-elected 2nd Vice President Mark Vaughan testified. Finally, new NRA Director of Audit and Compliance David Medrano testified.
- Blacker testified that the NYAG’s requested relief is not warranted because he believes it has limited benefits given the NRA’s purported course correction, claiming the NRA had “ousted the abusers.” In later testimony, Blacker acknowledged that dozens of board members have been serving since at least the 2000s.
- Bachenberg, who proclaimed his support for longtime Audit Committee chairman and former NRA President Charles Cotton, acknowledged that he spent years on the Audit Committee but did not see any indication that problems existed.
- Vaughan said that when he ran for the position of 2nd Vice President this year, he did not consider himself to be a reform candidate and did not question the past leadership. To that end, he said that he held Cotton “in the highest regard” and understood from Cotton that the previous stage of the trial had found that the NRA “in large part” had been the victim of certain individuals in the organization.
- Medrano argued against an independent monitor, claiming that such remedies reflected “things that occurred in the past,” but that the NRA has now “addressed those things.”
On Wednesday, Medrano concluded his time on the stand. Then NRA witness and auditor Matthew Lerner, NRA Chief Compliance Officer Bob Mensinger, and NRA President Bob Barr testified. Finally, nonprofit compliance expert and NRA member Daniel Roach and NRA board member Phil Journey testified.
- Lerner was critical of a forensic accounting report compiled by a witness for the NYAG, but admitted that he did not conduct a compliance assessment or audit of the NRA.
- Mensinger testified about the new compliance measures in place at NRA as evidence that an independent monitor was unnecessary. He claimed that the problems at the organization were caused by “two people at the top” who “concealed information,” but that those two people were no longer at the NRA. Mensinger testified that the NRA has a good chance of attaining a “World’s Most Ethical Company” designation but that it wouldn’t happen if the organization had an independent monitor.
On Thursday, NRA board members Charlie Beers and Rocky Marshall, as well as former chief of the New York Attorney General’s Charities Bureau Daniel Kurtz and economist Ryan Sullivan, testified.
- Charlie Beers testified that the NRA had course corrected and did not require an independent monitor.
- Rocky Marshall testified to the same, but his testimony also underscored that there are still members of the so-called “cabal” that caused these problems, including Cotton and Barr, serving on the board. Marshall characterized the misconduct at the NRA as a “trainwreck” and testified that the individuals that were in leadership at the time should be removed, including Barr and Cotton. He testified that the NRA had paid its outside law firm Brewer, Attorneys & Counselors a total of $182 million.
- Kurtz claimed that the potential appointment of an independent monitor was “ridiculous” and that the investigation of the NRA was politically motivated. During cross-examination, NYAG elicited testimony regarding Kurtz’s previous comments about the case, in which he said that claims of political motivation were “essentially just a distraction” and “The case speaks for itself […] it’s pretty egregious.”
- Sullivan testified that he believes the potential costs of a monitor would exceed the potential benefit to the NRA.
What’s Next?
Monday July 29 is set to be the final day of the trial and will feature testimony from former NRA CEO Wayne LaPierre and current NRA Secretary John Frazer, along with closing arguments.