A sign hanging at the 2024 NRA Annual Meeting
A sign hanging at the 2024 NRA Annual Meeting / Stephen Gutowski

Analysis: What the New York AG Wants for the NRA [Member Exclusive]

The final phase of the National Rifle Association’s civil corruption trial begins on Monday, and the New York Attorney General has laid out the details of what she wants the judge to do with the group.

In a series of filings during the lead-up to the trial, AG Letitia James (D.) described the steps she hopes Judge Joel Cohen will take in response to the jury’s findings. In February, the jury in the case decided the NRA failed to safeguard its charitable assets or protect whistleblowers while former members of its leadership diverted millions of the group’s funds toward lavish personal expenses. Now, James wants those former leaders barred from returning to the group and a court-appointed monitor to oversee at least some of its functions.

The requests would keep former CEO Wayne LaPierre away from the NRA for life and use the combined millions owed to the group by him and former treasurer Wilson Phillips to fund the monitor. The monitor would have broad authority to audit the group’s finances but would also be limited in key ways, according to the AG’s filings.

“Tailored Third-Party Oversight, conducted by a person or entity nominated by the NRA and appointed by the Court, with input from [Office of the Attorney General], to work with the NRA’s new compliance personnel, oversee independent testing of the NRA’s internal controls and compliance program, and conduct a governance audit and make recommendations to the NRA and the Court,” the AG’s first filing said. “The oversight would be limited to certain ‘In-scope’ matters and carve-out oversight of mission activities of the NRA. It would easily be funded by earmarking specifically for this purpose part of the monetary awards imposed by the jury against LaPierre and Phillips.”

A second filing provided greater detail on how the oversight process would work and exactly how much access the court-appointed official would have. The AG proposed that the new official serve for three years after being nominated by the NRA and approved by the court. They would primarily be responsible for watching how the NRA spends its money, especially in areas that lead to the corruption central to the case—like related-party transactions and travel arrangements.

“This entails ensuring that the NRA implements and enforces its internal controls, policies, procedures and practices governing financial transactions and matters, including without limitation for purchasing, procurement, conflicts of interest and related party transactions, business ethics, expense reimbursements, travel expenses and gifts, gratuities and entertainment, are effective,” the second filing said. “This means that they are in place, compliant with governing law, communicated to staff, directors, vendors and NRA members, and consistently executed and enforced by the NRA’s management, and the NRA Board has knowledge of the content and operation and exercises reasonable oversight to ensure compliance.”

The filing also laid out what the overseer wouldn’t have authority over. It said the court-appointed official wouldn’t have a say over the “NRA’s Core Fundamental Mission Operations.” Those operations include the “political, legislative and advocacy activities of the NRAILA, including, without limitation, management of donor-restricted funds, the substance of programs comprising the NRA’s nonprofit mission,” as well as “mission-related (meaning advocacy) litigation.”

Perhaps most importantly, the official won’t have a say over “the subject matter and substantive content of marketing, donor, membership and fundraising activities” at the NRA. Nor will it have authority over the “maintenance of any member or donor lists, membership categories, donation histories, and information regarding members and potential members.”

However, the official will oversee “compliance with NRA’s internal financial controls in these areas, including, for example, travel expense and reimbursement, conflict of interest, related party and other finance and governance-related policies.”

While the official’s initial job will be to study how effective specific reforms could be rather than implement them, the thrust of what the AG wants to see is evident in the list of potential reforms. Those include several changes seemingly aimed at addressing long-time concerns of reformers.

For instance, the official would examine the feasibility of creating a secure online “portal for sharing information with Board members” so “all board members have timely access to the information necessary to carry out their fiduciary duties.” They would examine whether board committees should be elected by the board rather than appointed by the NRA’s president. They would also consider whether the NRA should implement “heightened protections for the chief compliance officer” to “insulate him from adverse actions so long as he performs his duties in good faith.”

The official will also try to determine if it would be best for the board to officially re-evaluate the CEO’s performance every year, “periodically” review its bylaws, and “prohibit the use of nondisclosure agreements in the resolution of disputes.”

The plan lays out several board reforms the official would consider recommending as well. Those include a “reduction of the size of the NRA’s 76-member Board,” “formal term limits” for directors, and electing “a majority of new directors who have not served on the Board in the last ten years.” They would also look into “requiring standards, reporting, and disclosure in meeting minutes of all executive sessions of the Board or any committees of the board.”

This is the first time since Judge Cohen tossed AG James’s request to outright dissolve the NRA over its former leaders’ corruption that we’ve gotten a detailed look at what might come of this prosecution. Of course, it will be up to Judge Cohen to decide if the AG’s latest request makes the most sense. The NRA has maintained its position that it dealt with the corruption years ago, and no further court action is needed or warranted. Then there’s NRA board member Phil Journey, who wants to intervene as a separate party from the group and the AG to give Judge Cohen a third way forward.

Judge Cohen will hear those arguments starting on Monday and likely make his decision by the end of the month.

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Created by potrace 1.16, written by Peter Selinger 2001-2019

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Created by potrace 1.16, written by Peter Selinger 2001-2019

Comments From Reload Members

2 Responses

  1. The proposal to fund the court appointed monitor with funds owed to the NRA is appalling. First Wayne and others steal funds from the NRA. Now James proposes using the repayment funds to pay for the monitor. That is just stealing from the NRA members again. Letitia James is no better than Wayne. I have no problem with oversight of the NRA, but paying for it in this way is wrong. Is there a way to present this objection to the judge before he makes a decision?

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