Experts: James’ NRA lawsuit is warranted, no sign of bias

New York State Attorney General Letitia on August 6th taking questions after announcing that New York State will sue the NRA. after announcing
New York State Attorney General Letitia on August 6th taking questions after announcing that New York State will sue the NRA. after announcing
Kathy Willens/AP/Shutterstock
New York State Attorney General Letitia on August 6th taking questions after announcing that New York State will sue the NRA. after announcing

Experts: James’ NRA lawsuit is warranted, no sign of bias

Charity law experts say the allegations are bad enough to pursue dissolution, but that’s an unlikely outcome.
August 10, 2020

New York Attorney General Letitia James made national news when she filed suit last week against the leading gun rights advocacy group, the National Rifle Association. Charges of engaging in self-dealing, diverting the nonprofit’s funds for personal use and awarding contracts to close associates are among the accusations laid out against leadership at the NRA, leading James to call for the group’s dissolution.

The organization quickly fired back that James’s action stems from political bias, referring to it as a “premeditated attack aiming to dismantle and destroy the NRA” in a statement. Critics have also pointed to James’s promises on the campaign trail to investigate the NRA’s nonprofit status and comments referring to it as a “terrorist organization” as further proof of her targeting the institution. 

But experts in nonprofit law say that there is substantial enough evidence against the NRA that questions of political bias are rendered moot. “The case speaks for itself,” said Daniel Kurtz, former assistant attorney general-in-charge of the state Attorney General’s Charities Bureau. “That’s essentially just a distraction. Motive is essentially irrelevant. Why did you bring this? I don’t know, it’s pretty egregious.”

A result of an 18-month investigation into the conservative pro-gun membership-based group, the state’s lawsuit specifically targets four top officials affiliated with the NRA, including CEO Wayne LaPierre. LaPierre is being accused of spending more than $3.6 million on travel consultants, taking at least eight private flights to the Bahamas with his family using NRA funds and awarding himself a $17 million post-employment contract without board approval. 

LaPierre’s arrangements could violate nonprofit law if they aren’t shown to be valid business expenses, many of which were also not reported to the attorney general’s office according to her complaint. “I think the NRA’s officers and directors forced her hand. They’re not close to compliance, based on the reported details and what’s in the complaint,” said Philip Hackney, an expert in nonprofit law at the University of Pittsburgh School of Law, noting that it also harms members of the organization when funds are misused. 

Pushing to dissolve the organization is also well within the attorney general’s rights, the experts said, given the seemingly pervasive nature of the fraudulent behavior noted in the complaint. The New York attorney general’s office has also been responsible for dissolving the Trump Foundation amid accusations of misuse of charitable dollars, in a lawsuit that President Donald Trump claimed was politically motivated.

As an active, large organization the NRA will likely have a stronger defense than the Trump Foundation, where officials rarely met. The NRA could potentially make a case for reform instead, acknowledging its nearly 150-year-old history and various services it offers as proof of its value aside from a few “bad apples” at the organization, Kurtz said. 

Particularly as the NRA faces a financial crisis, it’s likely that the call for dissolution is meant to pressure the organization to come to a settlement sooner, said James Fishman, professor at the Elisabeth Haub School of Law at Pace University. “Generally, neither the (attorney general) nor the courts want to dissolve an organization that’s come on hard times if you could clean it up, which you probably could do with the NRA.”

Fishman and Hackney said it wasn’t likely for dissolution to occur, though other requirements to promote good governance such as ousting leadership or having a court-appointed monitor oversee its practices would likely follow. Still, the negative press and cost of litigation could jeopardize the NRA’s reputation. “Even after the organization has cleaned up its act, (donors) may not open the checkbook again,” Fishman said. 

Placeholder blue outline avatar
Kay Dervishi
is a staff reporter at City & State.
20200925