NRA Trial Day 2: The NYAG Starts its Case & the NRA Preview its Defense
Today in Court
In the morning, the NRA’s attorney Sarah Rogers presented an opening argument to the jury that lasted approximately an hour. This was followed by opening arguments by the lawyers for the individual defendants: Wayne LaPierre, Woody Phillips, and John Frazer. The jury then heard from the first two witnesses called by the New York Attorney General (“NYAG”): former board member Rocky Marshall and former board member Esther Schneider.
Quick Summary of Today’s Opening Arguments and Testimony
- The NRA’s opening argument, which lasted about an hour, largely deflected blame for mismanagement at the organization, and minimized the importance and impact of some of the executive perks and spending that was highlighted by the New York Attorney General (NYAG) the day before.
- Particularly noteworthy is how the NRA would talk about the organization’s longtime leader, Wayne LaPierre – who announced his resignation from the NRA just last week. Rogers said in her opening that LaPierre was a “valuable and visionary leader”, but “not always a meticulous corporate executive.”
- Rogers on LaPierre during her opening: “the NRA is not this man.”
- She argued that the free yacht trips referenced by the NYAG the day before that LaPierre and his family received from a key NRA vendor did not cost the NRA any money: “zero, nothing.”
- Further, she argued that the cost of LaPierre’s private flights that the NRA had determined were improperly charged to the organization were “repaid to the NRA with interest.”
- Further, counsel for the NRA told the jury that those NRA employees and officers involved in much of the underlying conduct were no longer at the organization and/or no longer had contracts with the NRA. In particular, Ms. Rogers pointed to the departures of former chief of staff Josh Powell, defendant and former CFO Woody Phillips, longtime public affairs vendor Ackerman McQueen, and various travel agents the organization had worked with.
- Counsel for Wayne LaPierre, Kent Correll, followed with his opening statement, defending LaPierre’s use of private jets and a yacht in the Bahamas owned by a stakeholder in multiple NRA vendors. With regard to LaPierre’s financial stewardship of the NRA, Correll said that LaPierre “didn’t study business administration, business or accounting,” but rather political science.
- Correll defended LaPierre’s use of a yacht in the Bahamas owned by a stakeholder in multiple NRA vendors, insisting that it is not true that “anyone who goes on a yacht is a bad person.” When it came to accepting trips on the yacht, Correll said LaPierre thought of it as a “nice invitation.” Correll insisted that LaPierre “advanc[ed] the interests of the NRA” through these trips because he met celebrities on the trips and “he understood that people respect celebrities.”
- Correll also defended LaPierre’s regular travel on private jets, claiming that LaPierre did so for security reasons or commercial flights weren’t available. Correll insisted that “[LaPierre] had [the] authority” to decide his means of transportation but admitted: “Was his thinking always exactly right? No.”
- Following Mr. Correll’s opening, Seth Farber, counsel for the NRA’s longtime CFO, Woody Phillips, gave his opening. Farber said that Phillips “devoted more than 25 years of his life” to the NRA, and that “everything he did in that job, he did for the good of that organization.”
- Farber insisted that Phillips did not “cause the NRA” to enter a post-employment contract with him, which has been at issue in the trial, and that Phillips engaged with the negotiations “at arms length.”
- The final opening was given by Will Fleming, who represents the NRA’s current General Counsel and Corporate Secretary John Frazer.
- Fleming told jurors that as NRA secretary, Frazer dealt with a “demanding” board of directors in a “turbulent” organization. Fleming exclaimed at one point: “The organization is not perfect: newsflash!” He described Frazer as a “deeply ethical person” who made concrete efforts to improve financial disclosures. With regard to these efforts, Fleming added that “Mr. LaPierre doesn’t get enough credit,” because LaPierre never said “don’t do that.” After describing the circumstances that led to his charging by the NYAG, Fleming told the jury: “John Frazer’s not perfect, but none of us are.”
- The NYAG called its first witness: former NRA board member Rocky Marshall.
- The NYAG used Marshall to explain how the NRA works to the jury. He spoke plainly to how board members were elected, who key players were at the NRA, how board meetings were run, and how the NRA’s finances were declining.
- He described a March 2021 board meeting as akin to “the food fight scene” in the movie Animal House. This discussion involved board member Phillip Journey attempting to discuss the need for independent oversight at the NRA.
- Marshall described how the real power on the board was with a group of 12 to 15 directors who had been on the board for a long time and who were loyal to Wayne LaPierre. Marshall said he nicknamed this group “the cabal.”
- Marshall told the jury that he did not believe LaPierre or Frazer should have any role at the NRA going forward. In fact, he opined that he hoped the Judge would appoint a monitor to oversee the NRA and get it “back on track” (this opinion was struck from the record by the Judge as not relevant to the jury’s deliberations).
- The trial day ended with direct testimony from the NYAG’s second witness, former NRA board member Esther Schneider. She is a firearms dealer and instructor.
- In what appears to be a new revelation, Ms. Schneider testified that NRA board votes for officers and committee chairmanships were orchestrated by NRA leadership. She testified that “little sheets” would be handed out telling board members how to vote.
- A text exchange between Ms. Schneider and Millie Hallow, Wayne LaPierre’s assistant, was shown to the jury that showed Hallow instructing Schenider “the sheet is how you vote.”
- The jury was also shown several memos and emails from Schneider attempting to raise questions about potential financial malfeasance at the NRA, including one where she wrote “When is WLP [Wayne LaPierre} going to repay the NRA?”
- Schenider testified: “I spoke out and I was retaliated against for asking questions.” Specifically, Schneider pointed to her subsequently being appointed to zero committee assignments after speaking out. The NYAG then introduced an email from longtime board member Marion Hammer that seemed to confirm this, saying “some board members were, in fact, stripped of their committee assignments.”
The opening argument made clear that the NRA’s legal strategy would be to blame individual NRA executives and board members for misconduct, but at the same time argue that these were proverbial bad apples, and that the NRA has taken remedial steps to clean things up. There are several risks to this strategy, most notably that the “bad apple” defense is made difficult by the sheer number of NRA executives and board members involved in either the related-party transactions or the questionable vendor relationships at issue. Based on their opening argument, the NYAG will disregard the “bad apple” defense and instead point the jury to the entire orchard, introducing evidence of systematic, widespread, and long-running mismanagement at the NRA.
The NYAG started its case with testimony from former board members – this is consistent with a case that will largely be built around the accounts (and contemporaneous documents) of NRA officers, directors and employees who personally witnessed the problems at the NRA.
Meanwhile, the individual defendants appear to be mounting a defense focused on their supposed good faith while leading the NRA. Attorneys for LaPierre, Phillips, and Frazer all insisted that their clients did the best they could. LaPierre’s attorney’s tried to minimize his culpability by pronouncing that LaPierre “didn’t study business administration, business or accounting” and therefore isn’t an expert in all things financial management. This defense would be undermined by evidence showing that LaPierre undermined the organization’s internal financial controls over years, controls that would potentially ensure that any lack of knowledge that LaPierre had in that field would be compensated for by real expertise. Former NRA leaders have previously testified that the NRA was run as “Wayne’s kingdom” and that it had a “Wayne said” culture in which verbal authorizations by LaPierre would lead to the circumvention of controls.
The trial will resume on Wednesday morning at 9:30 AM with the cross examination of Esther Schneider. Counsel did not indicate who else will be called tomorrow, except that the jury may hear deposition testimony from NRA executive Rick Tedrick (who is unable to testify in person).