This Week In Court

After a six-week jury trial in early 2024, a jury found the NRA, former NRA CEO Wayne LaPierre, former NRA CFO Woody Phillips and current NRA General Counsel John Frazer liable on a number of counts. The jury verdict also awarded millions of dollars in damages, but did not address equitable measures, such as the imposition of a monitor or barring the individual defendants from not-for-profit positions. The bench trial before Judge Cohen on such remedial measures began this week. 

Prior to the commencement of this phase, Phillips settled with the NYAG, and agreed to a 10-year ban from serving as a fiduciary of a not-for-profit organization in the State of New York.

Summary of This Week’s Testimony

• On Monday, former NRA President Charles Cotton took the stand, as well as NYAG expert witness Jeffrey Tenenbaum.
  • Cotton testified that the NRA is seeking to recategorize from a charitable to noncharitable corporation under New York Law. He further testified regarding the 10-year contract of another former NRA president, and current board member, Marion Hammer. Cotton told the court that the board’s Ethics Committee would be investigating the matter, including Hammer’s potential excess benefits and the Audit Committee’s approval of the contract, a committee in which Cotton chaired at the time. In his testimony, Cotton also stated that he has flown on the private plane of NRA outside lawyer Bill Brewer. Cotton testified that he received advice from NRA tax counsel that such trips did not need to be disclosed.  
  • Tenenbaum testified regarding the NRA’s compliance program, and that the NRA’s policy manual is a “dumpster fire.” 
• On Tuesday, the proceedings began with testimony from NYAG expert witness Jonny Frank. After Frank, the court heard testimony from current NRA CEO Doug Hamlin and NRA President Bob Barr.
  • Frank, a compliance expert, testified that an independent compliance consultant would cost between $960,000 and $1.6 million over a 3-year term.
  • Hamlin testified that he had been frustrated with NRA leadership, including Cotton, Arulanandam, and board member David Coy. Hamlin told the court that he opposes the NRA’s potential move to Texas. Hamlin further testified that the NRA and LaPierre breached the trust of the members, and acknowledged that membership has declined.
  • Barr testified that despite the jury verdict, he believes LaPierre generally acted in good faith during his time with the NRA.
• On Wednesday, Barr resumed his testimony, which was followed by testimony from NYAG expert witness and NRA member Dan Roach, and NRA board member Judge Phillip Journey.
  • Barr testified that he disagreed with Hamlin on whether the NRA should move to Texas.  He further testified regarding the EVP search, and his appointment of “friend” Charles Cotton to lead that effort. 
  • Roach testified that he does not believe that an organization’s management should sit on its audit committee, because of potential conflict of interest issues. Citing the jury’s verdict, Roach further testified that LaPierre should no longer hold a leadership position at the NRA, and that Frazer should not maintain his position for a “reasonable amount of time.”  In cross examination, NRA counsel introduced a compliance document drafted the day before trial commenced. Roach testified that the document appeared to be “copy and pasted” from a website and “incomplete.”
  • Journey testified that the NRA is nearing another bankruptcy filing, “burning” $50,000 a day, and losing members. He testified that, with respect to NRA leadership, “these leopards are not going to change their spots.” He further testified that Cotton has “misled” the board on the trial proceedings. 
• On Thursday, Journey resumed testimony. His testimony was followed by Andrew Arulanandam, who became interim NRA EVP and CEO after Wayne LaPierre’s resignation.  This testimony was followed by current NRA General Counsel John Frazer, NRA Director of Audit and Compliance David Medrano, and NRA CFO Sonya Rowling.
  • Journey testified that he supported the appointment of an independent monitor for the organization.
  • Arulanandam testified that he signed a $16 million letter of intent to move the NRA to a new Texas location, but has not completed a financial analysis on the potential move. He noted that the letter was not binding on the NRA.
  • Frazer testified that the NRA pays for his legal fees, which he estimated at more than $1 million so far, and that such expenses were approved by the Special Litigation Committee, not the board.
  • Rowling testified that the NRA had liquidated a total of $44 million in investments, its entire portfolio save for endowments, to pay off a line of credit.  Rowling further testified that she believes that the NRA has “no more corrective action to be taken.”

Analysis

Testimony elicited on the first four days of this phase of the trial focuses on one of the NYAG’s core themes: the NRA did not meaningfully change after the commencement of its investigation, or even after the jury verdict against it.  The organization is largely led by the same individuals, with many of the same structures in place. Further, witness testimony from NRA board members, and even its current CFO, confirms that the NRA is in serious trouble – losing members and bleeding money.

What’s Next?

The second phase of the trial continues today with testimony from former NRA CEO Wayne LaPierre.

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.