The lighted stage at the 2022 NRA Annual Meeting
The lighted stage at the 2022 NRA Annual Meeting / Stephen Gutowski

NRA Proposes New Reforms as Board Member Calls for Court-Appointed Monitor

As the final phase of the National Rifle Association’s corruption case kicked off in a Manhattan courtroom, the group’s internal fight intensified.

On Monday, members of the NRA’s audit committee proposed a series of last-minute reforms that mirrored some of those offered up by disgruntled NRA members and the New York Attorney General. But the news was met with a scathing rejection from one of the group’s newest board members. Dennis Fusaro, elected earlier this year on a reform platform, sent a profanity-laced email to the rest of the board attacking members of leadership and outside law firm Brewer Attorneys and Counselors while informing them he planned to ask Judge Joel Cohen to appoint a monitor for the gun group’s finances.

“There are still bad actors clinging to power, dug in like ticks on a hound, who continue to hurt the NRA. These clowns still won’t take responsibility, apologize and quit,” Fusaro said in an email obtained by The Reload.” I can see the emperor has no clothes.”

The reform and Fusaro’s response indicate the NRA’s internal fight is far from settled. Even among the reform contingent, there appears to be significant dissent, with the candidates who ran alongside him in this year’s election rejecting the call for a court-appointed monitor. The new measures promised by the audit committee and Fusaro’s opposition could weigh heavily on Judge Cohen’s final decision on what to do with the NRA.

Judge Cohen did remove one potential option from consideration on Monday when he rejected NRA board member Phil Journey’s email attempting to intervene as an independent party in the case.

“I was in the courtroom at the beginning of the 2nd phase of the trial,” Journey told The Reload. “I was disappointed when Judge Cohen said he did not read my motion to intervene and chose to reject it. If he had read the motion he would have known that the acts that caused me to submit the motion all happened in the last few weeks.”

Journey, a family court judge in Kansas, plans to amend and refile his intervention attempt. But he was unsure if Judge Cohen would take it up.

“Time is now so short that it may preclude reconsideration of the motion,” he said.

However, like Fusaro, he will be testifying in the case this week, and he stuck by his criticism of some NRA leaders.

“The fact remains that President Barr and the new chair of the ethics committee, Charles Cotton, continue their campaign of intimidation, discrimination, and harassment with the help of their attorneys, including the Brewer attorneys,” he said.

Fusaro went further than Journey in his attacks on NRA leaders and the group’s outside law firm. He said he plans to resign from the board, but not before calling on the judge to remove former NRA President Cotton, long-time board member David Coy, who has served on the group’s audit and finance committees, and the Brewer firm.

“So I’m gonna tell Judge Cohen we need a monitor. And Cotton and Coy need to go. Some others too,” he said. “Brewer and company needs to be fired by NRA leadership to show the grassroots members – donors and voters – that real change has happened and the leadership won’t revert to form once the ‘coast is clear.'”

He went on to attack Bill Brewer, the head of the Brewer firm, for his history of donating to liberal politicians and his family connections to the group’s disgraced former top contractor, Ackerman McQueen. He accused the firm of lying to the board about how much complying with a court-appointed monitor for three years would cost.

“The NRA can pay a solid, pro-gun, or at least not a Obama-Clinton-O’Rourke donating, lawyer to work with any monitor the NRA chooses for $1 million total for the three years in Egypt before we can exodus instead of paying the financial rapist prices we pay for Angus McQueen’s son-in-law,” he said.

Fusaro disputed one of the main claims in the NRA’s defense. The group has argued that the investigation by AG Letitia James (D.), a staunch political opponent of the organization, has driven members away instead of the underlying corruption. However, Fusaro said the corruption is what upset NRA members and opened the group up to attacks from James.

“It’s not because Lightweight James is suing us,” he said. “It’s because you idiots on the board before me, and the upper leadership – exceptions noted – brought this on your selves. You knew what the politics and the political players in New York and NYC were like and you still did this stupid shit.”

Neither the NRA nor the Brewer firm responded to a request for comment. However, the audit committee proposal circulated to NRA board members addresses some of the complaints reformers have made over the half-decades since the NRA’s corruption scandal first came to light. Charles Cotton wrote the committe’s plan but said it featured input from the entire committe. That includes Rocky Marshall, who ran alongside Dennis Fusaro on a reform platform in this year’s NRA board elections.

It includes a new internal audit of “Travel and entertainment expenses; Contracts; Related party transactions; and Business ethics (whistleblower system testing)” that would be available to all NRA members. The non-profit financial reports would have to be signed by the CEO and CFO moving forward. The NRA would disclose the “dollar amount; and whether the transaction(s) comply with NRA purchasing/procurement policy” for its ten largest vendors. The group would also disclose the total travel expenses for its executives, related party transactions “(including $ amount and names),” and whistleblower statistics like how many complaints there have been and how many it resolved, but some details would be “omitted where necessary for confidentiality.”

The reforms would also deal with how the board, and the audit committee in particular, would operate. The plan creates a new “online portal to access board and committee materials,” with a potential individualized watermarking system to prevent documents from being leaked. It would still allow the NRA President to nominate audit committee members but would give the NRA board the ability to “ratify or reject” those nominations. It would also require anyone running for the NRA board to “consent to a background check; commit to an information-sharing policy,” and “sign an acknowledgement of board-member duties” as well as bar them or their immediate family from engaging in related party transactions unless the board or Executive Committee approves them.

Fusaro thrashed the reforms as half-measures and said the NRA got itself to this point.

“You’re gonna have to live with a monitor. You bought it,” he said. “Even the so-called reformers are now giving cover to this.”

The final phase of the NRA corruption trial is scheduled to run through next Friday. Judge Joel Cohen is expected to deliver his decision on July 29th.

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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

3 Responses

  1. Where is the commitment to a third-party audit of finances, at least annually? How about a third-party administered whistleblower program? Take a page (or 30) from Sarbanes-Oxley and engage a third-party, evidence-based audit of your organization’s financial controls and their effectiveness – every year! These problems have known solutions that work in the for-profit world. They would go miles to inspire some confidence that that the organization is doing JUST the basics.

    Instead, it sounds like they’re trying to re-invent the wheel. As if this stuff hasn’t ever been figured out by other organizations. It really drives home the idea that there’s a huge shortage of experience in corporate governance, and of course there’s a demonstrable track record of willful resistance to good governance. The latter is becoming less and less relevant to the solutions, which being systemic, effectively control for the presence of bad actors by design.

    These programs cost money, but the business case is an exercise in risk management. Pay the regular operational overhead of the programs every year ($$) or periodically pay lawyers and pray for delivery from serious existential threats ($$$$$$). There are a host of other rationales to be sure (lower insurance premiums, better organizational effectiveness, etc.).

    What characterizes all these little half-measures and point solutions for governance is that it describes an environment where nobody is on overwatch for a larger program to mature compliance in the organization. Likely nobody has experience in such an undertaking, and leadership is not endorsing (authorizing and supporting) such a campaign. This is the Dilbert principle, right? Incompetence is everywhere. The court proceedings evidence rampant corruption, yes. But even absent that, we’re leaning on people to change an organization who have never seen what “good” looks like.

    So a valuable (broadly experienced) court-appointed monitor would come in and drive such a program in spite of this management environment. This means the monitor is going to have to be in a leadership role (unofficial and culturally) which will lead to a lot of conflict over the next couple years. The monitor must rely on third-party organizations to implement the programs since the expertise and manpower doesn’t exist inside the org (and importantly, it goes some way towards divorcing the programs from bias). But that’s really the only path to any flavor of success at this point.

    As an aside – If Brewer were smart corrupt bastards, they would get in front of this, endorse the monitor and compliance program and hope people forget about them as they get eclipsed by the coming drama in organizational reform, recognizing they can still continue to milk such an environment in retainer overages for years to come. Seen it happen. “Still got the shovel.” I’m not advocating that: Brewer needs to go. Just pointing out that we have B-team non-profit leadership (worse, frankly) all around – even the corruption is ham-handed and incompetent.

    1. I would add that compliance programs – programs, not projects – are comprised of cyclical (e.g. annual) remediation projects to correct control deficiencies, steadily moving controls upwards along a maturity curve. The first cycle of gap analysis and control creation yields a lot of benefit, but it takes many cycles and therefore years for these programs to hone the organization and especially to change culture from bottom-up (greater buy-in, lower resistance, value recognition, etc.). There is some brilliance in the NYAG pointing out that repayments from LaPierre, etc., will more than cover the costs of the court-appointed monitor and associated programs. However, one of the monitor’s challenges is to implement a program that survives their inevitable departure. In other words, once monitor is onsite, even with a budget, the clock is ticking on their job of instituting cultural reform, which generally takes years not months. How do they make sure that the compliance programs aren’t gutted as soon as the court releases them or the cash from repayments runs out?

      This just underscores the challenge the monitor will have implementing resilient reforms without the support and good faith of leadership. It’s forcing a sick cat (NRA) to swallow a pill (compliance). It will fake you out and spit it back up the second you take your eyes away, unless you can stay present long enough to make sure that pill is swallowed.

      It _must_ be inevitable at this point that a monitor is appointed, but it’s still a very rough road ahead.

      1. You clearly know your stuff. That’s a very detailed picture you’ve painted. I will say that the audit committee does reference Sarbanes-Oxley in their proposal on auditing. So, they may be proposing some of what you’re suggesting here. The proposal is only two pages long, though. So, I’m not entirely clear what the details would be.

        They’re definitely going for more broad strokes in their reform plan than anything else.

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