NRA Trial Day 5: Week Ends with Defendant Woody Phillips Taking the Stand
Today in Court
The morning began with additional audio testimony clips being played for the jury from Rick Tedrick, the NRA’s Managing Director of Finance. The trial day ended with testimony from former NRA CFO and defendant Woody Phillips.
Quick Summary of Today’s Testimony
- The day started with Judge Cohen indicating that he had received a question from one of the jurors. The juror explained that they understand that there are individual defendants in the case, and that each party has their own attorneys, but they wondered why “the NRA lawyer at times seems like she’s against her own client.”
- Outside the presence of the jury, the Judge responded that he can make it clear that each defendant needs to be “judged separately,” and when the jury came back he did so, reminding them that each defendant will get their own verdict. The parties will discuss the issue of giving further instructions to the jury next week.
- The New York Attorney General (“NYAG”) continued to play audio testimony clips from Rick Tedrick, who is unable to be in New York to give live testimony. The testimony lasted approximately one hour.
- During his testimony, the NYAG showed Tedrick an October 2016 email where he considered liquidating NRA investments so that the group would not run out of cash. The email read: “I might have to liquidate the other $5 million in investments” and extend “the big vendors… particularly Ack Mac.”
- In what appears to be a new revelation, the testimony included Tedrick being asked about $30,000 monthly payments the NRA was making to the conservative newspaper The Washington Times. He said he did not know what the payments were for. The NYAG showed him a 2017 email about the Washington Times payments where the subject line was “David Keene.” [Note: Mr. Keene has long been affiliated with the Washington Times; he is also an NRA board member and former NRA president]
- Tedrick testified that the NRA’s bankruptcy caused American Express to tell the NRA it no longer qualified for its existing corporate credit cards. The NRA was forced to transition to a lower status corporate card. With respect to the bankruptcy filing, Tedrick said “that stays on our record for quite a while.”
- Woody Phillips, the NRA Treasurer and CFO from 1992 to 2018, then became the first individual defendant to take the stand.
- Phllips acknowledged that he entered into a post-employment consulting contract with the NRA that was supposed to pay out nearly $2 million to Phillips in his retirement. He said that Wayne LaPierre, then-NRA President Pete Brownell, and then-NRA board member Carolyn Meadows were present when his contract was signed. However, the contract was not presented to the NRA’s Audit Committee.
- He also testified that the NRA entered into a post-employment contract with Wayne LaPierre, in the event LaPierre left the NRA, that would pay LaPierre more than $17 million over an 11 year period. LaPierre’s contract was signed the same day as Phillips’. Philips testified that LaPierre’s deal was reached without approval from the NRA Audit Committee. [Note: after the details of this agreement became public, the NRA and LaPierre replaced the contract.]
- Phllips also acknowledged having a romantic relationship with a woman who was the principal of an entity that the NRA contracted with from 2014 to 2017 to develop software for the NRA. Phillips testified that he did not disclose this relationship until the fall of 2018, after the contract was over. The disclosure was shown to the court and detailed that the entity had been paid “approximately $1,360,000” during the three year time period.
Analysis
While the audio testimony from Rick Tedrick was lengthy and, at times, tedious, the case ended its first trial week with important testimony from defendant Woody Phillips. Outside the courtroom, Philips found himself in the news this week when a ProPublica article revealed a recorded meeting between Phillips and executives of former NRA vendor Ackerman McQueen plotting a plan to conceal luxury expenses at the NRA.
Timing the examination of Phillips as the last thing the jury heard before the long weekend provided a strong arc for the first week of testimony for the NYAG: the first thing the jury heard was an effective and organized opening argument, and the last thing it heard was testimony of a former NRA executive who did little to explain several questionable financial decisions at the heart of the case. Phillips and LaPierre’s multi-million dollar post-employment “consulting” contracts, executed on the same day and without approval of the NRA Audit Committee, are particularly galling examples.
What’s Next?
The trial will resume on Tuesday morning at 9:30am after the long weekend, with the NYAG continuing its examination of defendant Woody Phillips. Judge Cohen has previously said that he expects to have trial days Tuesday, Wednesday, Thursday, and Friday next week.