New York and DC Attorneys General Investigations

NRA Trial Day 16: Four Additional Witnesses Testify as the NYAG Winds Down Its Case

January 31, 2024

Today in Court

The examination of Defendant John Frazer, current NRA General Counsel, concluded this morning. After the conclusion of Frazer’s testimony, NYAG called long-time NRA employee Lisa Supernaugh, followed by Second Vice President and Audit Committee Vice-Chair David Coy.  Former NRA First Vice President Willes Lee was then called by the NYAG.

Summary of Today’s Testimony

  • John Frazer’s testimony this morning was fairly brief (a summary of his testimony from yesterday, January 30th, can be found here):
    • After testifying yesterday that he was not consulted in the decision of the NRA to sue Ackerman McQueen, Frazer testified today that he agreed with the decision to sue, because Ackerman had an “abusive relationship” with NRA and had been “problematic for years.”
    • Frazer’s counsel focused on eliciting testimony that Frazer was involved in legal decision-making at the NRA – but that issues relating to the NYAG’s lawsuit against the NRA and individual defendants were delegated to the Special Litigation Committee because of potential conflicts between the NRA and Frazer, as a co-defendant. Frazer testified that he reviewed the bills of the Brewer firm “top-to-bottom” to determine whether they were fair and reasonable.
    • Frazer testified that he had disagreements with former NRA CFO Craig Spray. In particular, the two disagreed on whether NRA policy required written (as opposed to verbal) approval from LaPierre for NRA board members to fly first class.    
  • Next, Lisa Supernaugh gave brief testimony, mainly regarding the process by which travel expenses were approved at the NRA. Supernaugh was the long-time executive assistant to defendant Woody Phillips, and currently works as a director in the NRA’s General Operations division.
    • Supernaugh acknowledged that, pursuant to directions that she received from defendant Woody Phillips, she would remove the departure and arrival locations from LaPierre’s travel invoices that she received from Gayle Stanford. The court was shown several examples of this practice, and Supernaugh confirmed that she removed the locations to prevent “wandering eyes” from seeing the documents for security reasons. 
    • In an email shown to the court, Stanford asked Supernaugh if she would prefer that Stanford remit smaller, separate invoices for under $50,000, instead of one larger invoice for over $50,000. Supernaugh responded to the email in the affirmative, because that would be easier to process. In her testimony, Supernaugh acknowledged that two officers were required to sign-off on invoices above $50,000, whereas invoices under that amount would only require sign-off from Woody Phillips. 
    • Supernaugh testified that she was tasked with processing Millie Hallow’s expenses in or around 2004. She testified that she “very frequently” had to reject Hallow’s expense reports because they contained personal expenses, including for movies. Supernaugh further testified that Hallow had lied to her regarding one expense report for Hallow’s son’s wedding, and told her that LaPierre had approved it. Hallow later apologized to Supernaugh. 
  • NRA Board Member David Coy currently serves as the NRA’s Second Vice President and the Vice-Chair of the Audit Committee. Coy has served on the Audit Committee in some capacity since the early 2000s.
    • In testimony, Coy acknowledged that the Audit Committee received an anonymous letter in 2007 alleging several financial irregularities at the NRA, including travel expenses and spending by Hallow. 
    • Coy also testified that he recalled that an attorney, Jacob Frenkel, was engaged by the Audit Committee in the early 2000s to review NRA policies regarding travel and expense reimbursement after the organization’s auditor, PriceWaterHouseCoopers, raised concerns about NRA expenditures. Frenkel’s report was entered into evidence.
      • One conclusion reached by Frenkel in 2003 was that the “investigation clearly revealed a failure to implement an adequate system of policies and controls governing travel and expense reimbursement.” 
      • Frenkel determined that over $150,000 in charges on Hallow’s NRA credit card were taxable to Hallow, and that $14,000 were personal expenses. These personal expenses included charges for auto repair, a down comforter, sleepwear, handbags as well as a family trip to Puerto Rico.
    • Coy also testified that, at the date of his deposition in June 2022, the NRA had failed to establish an internal audit function or hire a compliance officer. 
    • Counsel for the NRA focused their examination on Coy’s views of the Frankel report.  Coy testified that while he was relieved that the Frenkel report did not find illegalities, he was still “dismayed” about the “laxness” of NRA policies.
  • After repeated delays throughout the day, NRA board member Willes Lee finally made it to the courthouse for his testimony.  Lee was the Second Vice President of the NRA from 2019-2021, and the First Vice President from 2021-2023. (His trial testimony from the NRA’s bankruptcy proceedings can be found here and here.)
    • Over objections from counsel for the NRA and the individual defendants (and after some research/review by the judge) the NYAG entered into evidence a series of public Facebook posts made by Lee. Lee acknowledged that he wrote each of the posts.
      • In an April 17, 2023 post, Lee shares a photograph of the NRA Nominating Committee’s Recommendation of Board Officers, and writes that “no one told me they were in Exec Session.”
        • Lee testified that at this time, he was serving as the First Vice President, and was seeking to become President, or in the alternative, serve another term as First Vice President. 
        • In testimony, Lee acknowledged that he did not support Cotton’s efforts to change NRA Bylaws to allow Cotton to serve for another term as President, and Lee also acknowledged that he was not renominated for any leadership position. 
        • In a follow-up post on the same date, Lee references the 2019 departure of former NRA president Oliver North, noting that North was also “dump[ed]” in Indianapolis. 
      • In one post, dated April 28, 2023, Lee stated that he resigned from the Special Litigation Committee to “maintain [his] integrity.”  
      • In a May 6, 2023 post, Lee stated that “NRA attack dogs can chill” and that he “did much crucial clean up and some disgusting things ‘to save NRA’ … the NRA y’all broke.”
      • According to a July 23, 2023 Facebook post, Lee was ordered by an “old member of [the] Board of Directors” to stop posting on Facebook. Lee further states “We need a cleaned up NRA or we never regain trust.”
      • In another post, dated July 29, 2023, Lee claimed that “board members want to do something” and “ask questions but are afraid of consequences.” Lee wrote that he had been “cancelled [sic].”

Analysis

The allegations made by the NYAG against defendant John Frazer are of a different kind than individual defendants LaPierre, Phillips, and Powell. While the prosecution has focused on those individuals personally benefiting from certain perks or transactions at the NRA, the NYAG’s main allegations with respect to Frazer are that he failed to properly oversee the compliance and legal functions at the NRA. In other words, either he was too deferential to LaPierre and other senior managers, or he simply was asleep at the wheel. Today’s questioning by Frazer’s lawyer attempted to push back on this narrative, invoking several areas where Frazer was purportedly pushing compliance initiatives and involved in overseeing certain legal matters.  

While there were not major revelations in other parts of today’s testimony, the testimony from board member David Coy showed how long there have been allegations of financial irregularities at NRA – the early 2000s. This long pattern of financial irregularities undercuts one of the primary defenses raised by the NRA – namely, that once issues were raised, the organization engaged in a court correction.

What’s Next?

The trial will resume Thursday morning at 9:30am with continued testimony from Willes Lee, and previously recorded video testimony from Millie Hallow. The NYAG has indicated that it will conclude its case with testimony from expert witness Eric Hines.

Disclaimer: The following summaries and analysis are prepared by individuals at the courthouse listening to the testimony being offered in the New York Attorney General’s case against the NRA. These summaries do not purport to cover every fact or occurrence discussed during the trial. The posts may be updated as soon as transcripts are available from the court, including to cross-reference specific testimony.