New York and DC Attorneys General Investigations

NRA Trial Day 17: NYAG’s Last Witness Sums it Up – “Consistent Control Violations” at the NRA

February 1, 2024

Today in Court

The morning began with the conclusion of brief testimony from board member and former NRA First Vice President Willes Lee. Following Lee’s testimony, the jury heard previously recorded testimony from longtime aide to Wayne LaPierre, Millie Hallow, as well as travel agent Gayle Stanford. After the video testimony, the New York Attorney General’s Office (NYAG) called its final witness, financial expert Eric Hines.

Summary of Today’s Testimony

  • Counsel for the NRA elicited brief testimony from Lee regarding his social media critiques of NRA leadership discussed during his testimony yesterday. Lee testified that he considered himself a “prolific” social media user.
    • Lee testified that he only received one NRA board committee assignment in 2023, even though he wanted to be selected for other positions, including the Finance Committee. NRA President Charles Cotton determined committee selections. 
  • NYAG played January 20, 2022 video testimony from Millie Hallow. Hallow worked in the NRA executive office as an aide to Wayne LaPierre for decades, and identified herself as the “Managing Director of Executive Operations” in her testimony.
    • In Hallow’s video testimony, counsel for NYAG elicited testimony regarding Hallow and LaPierre’s involvement in the board nomination process. Hallow claimed in her testimony that she “[did] not suggest candidates to the nominating committee” or “instruct” them on which candidates to nominate for the NRA board.
    • The jury was then shown exhibits in which Hallow attached “crib sheets,” (a term Hallow defined as an informal list) that instructed the recipients to “renominate all incumbents” or, in other instances, listed names of individuals to nominate. In a text exchange with NRA Board Member Barbara Rumpel, Hallow referred to the list as “confidential,” and asked her to not forward it. 
  • The jury also briefly heard the previously recorded testimony of travel agent Gayle Stanford, who booked NRA travel for over 25 years.  Due to video quality issues, the first part of her testimony was read into the record.
    • In her testimony, Stanford corroborated prior testimony that the NRA did not execute a contract with her or her companies.  Stanford also testified that her monthly fees were not negotiated, and that, prior to 2019, she instead had a verbal agreement with former CFO Woody Phillips. When shown a sample monthly invoice that she sent to Phillips’ assistant Lisa Supernaugh, Stanford confirmed that $10,000 as an “NRA fee” and $5,000 as an “ILA fee” were standard and that she was instructed to bill this way.
    • Stanford further testified that she was told to bill former NRA vendor Ackerman McQueen by either Phillips or Lisa Supernaugh. Stanford corroborated prior testimony that some invoices sent to Ackerman McQueen were for services provided to the NRA.
    • Stanford testified that in addition to the annual fee charged by Stanford, Phillips also told Stanford that as she was getting older, she could “add money” to invoices, and Stanford began adding around 10% commission to travel that she booked.  Stanford said that Phillips further instructed her to “not break [the commission] out” from the actual travel costs incurred. 
    • In addition, Stanford testified that she charged $24,000 to the NRA every January as an annual “fee for logistics” and advanced scheduling. Stanford testified that no additional services were provided to the NRA for this fee. 
    • Stanford testified that LaPierre had instructed her to remove information from travel bookings, including passengers and private charter stops. The jury was shown examples of such invoices, with omitted stops in Nebraska and the Bahamas, and Stanford acknowledged that LaPierre instructed her to remove the information. In the case of one $41,850 invoice for a private flight between Washington D.C., Milwaukee, and Nassau, Stanford confirmed that LaPierre asked her, and she subsequently did, modify the flight invoice to reflect travel between Washington D.C., Milwaukee, and “Florida,” rather than Nassau. She also testified that Lisa Supernaugh told her to remove passenger information from the invoices. 
  • The NYAG’s final witness was forensic accountant and expert witness Eric Hines.  Earlier this week, a version of Hines’s presentation was publicly filed in the case that summarizes the findings of his lengthy expert report filed last year.
    • Hines testified there were “a number of internal control failures” with respect to the NRA relationship with vendor David McKenzie and his companies. Hines determined that between 2011 and 2021, the NRA paid four entities in which McKenzie was a stakeholder a total of $135,235,600.
      • Hines testified that the NRA board approved a contract between the NRA and MMP, an entity in which McKenzie was a stakeholder, that capped fee increases at 10% annually.  Yet, the contract actually executed by MMP did not contain a cap on fee increases, and in some years MMP MMP increased fees by as much as 25%.   
      • Prior testimony by several witnesses, including LaPierre, described numerous trips by LaPierre and his family on McKenzie’s luxury yachts.
    • Hines also testified to the NRA’s relationship with Under Wild Skies, and Tony Makris. Hines found that of the $12.4 million paid to UWS between 2015 and 2019, $4.3 million was done so without supporting contracts. Hines found in his assessment that the NRA’s relationship with UWS contained fraud risk indicators, including overly complex transactions, missing documentation, poor documentation regarding awarded contracts, and undisclosed conflicts of interest. 
    • The expert witness also testified to consulting agreements made with former NRA employees, finding that the agreements “did not comply with the NRA’s internal controls.” Hines specifically pointed to payments made to Wilson Phillips, Robert K. Weaver, and Michel Marcellin, who were each awarded, over various years, $170,692, at least $1,680,000, and $2,609,438 respectively. In the case of Phillips and Weaver, Hines found that there was no documentation for services rendered, and that Marcellin had been paid in an overly complex arrangement through a third party.

Analysis

The report and presentation prepared by expert witness Eric Hines paint a damning portrait of an organization whose leaders repeatedly circumvented or even failed to implement internal controls to prevent malfeasance. His testimony that the version of the contract executed by one of the NRA’s largest vendors left out a cap on fee increases included in the version of the contract approved by the board is especially notable given that the stakeholder in that vendor repeatedly paid to host Wayne LaPierre on his yachts over the years of the contract. Expert witnesses often are useful at pulling various pieces of evidence together and adding context for the jury – that appears to be what happened today, although Hines still faces cross examination on Monday.

Today’s testimony corroborated some of the most impactful testimony from the NRA’s bankruptcy trial: that Wayne LaPierre instructed his personal travel agent to omit or change on her invoices certain destinations he traveled to. This included trips to the Bahamas and to Nebraska, where he would often pick up his niece en route to other destinations.

What’s Next?

The NYAG is expected to conclude its case-in-chief Monday, and after cross-examining expert witness Eric Hines, the defense will begin presenting their case. The first witness expected to be called by the NRA is current NRA employee Lisa Supernaugh, who has previously testified in the case.

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.