In January of 2017, the National Rifle Association was at the peak of its power. Already known as one of the mightiest interest groups in the United States, it had been an early backer of Donald Trump, spending more than $50 million to get him and a handful of Senate Republicans elected. It had just launched NRATV, a streaming channel featuring strident conservatives who would expand the gun lobby’s voice and influence. The group also had a bold wish list of laws it expected the new Republican Congress to adopt, from repealing restrictions on silencers to forcing states to allow concealed-carry permits. As NRA leader Wayne LaPierre bragged, “This is our historic moment to go on offense and to defeat the forces that have aligned against our freedom once and for all.”
Less than four years later, the NRA is in shambles. None of its major legislative priorities have been enacted. As of late July, it had spent less than $250,000 on the 2020 federal elections, a startling fall from the huge amount it shelled out in 2016. And on Thursday, New York Attorney General Letitia James announced that she is suing to dissolve the organization for alleged fraud and self-dealing. Broke, rudderless, and mired in costly litigation, the NRA is now facing a real possibility of going out of business—or being forcibly dismantled. How it happened is a remarkable story of self-dealing, betrayal, and two small, seemingly innocuous New York state regulators few have ever heard of.
The NRA’s troubles started in October 2017, when New York state launched an investigation into Carry Guard, an insurance program the NRA had rolled out a few months earlier to cover legal fees and expenses incurred by gun owners who use their firearms in self-defense. Everytown for Gun Safety, a leading gun reform group that had been seeking innovative ways to take on the gun lobby, tipped regulators off to the NRA’s potential violation of insurance law, claiming that it was soliciting customers without the proper license.
The ensuing investigation—which was led by the New York Department of Financial Services—coupled with renewed scrutiny of the NRA after the February 2018 Parkland massacre, prompted LaPierre to hire a new lawyer, William Brewer. An outspoken, aggressive, $1,400-an-hour attorney with experience in high-stakes lawsuits, Brewer was nonetheless a surprising choice. A longtime Democrat, Brewer has donated to a roster of campaigns that looks like an NRA Enemies List: Barack Obama, Hillary Clinton, and even Beto “Hell, yes, we’re going to take your AR-15” O’Rourke. Yet LaPierre believed that Brewer’s powerful connections in New York could help in negotiations with state regulators, and he authorized Brewer to conduct an extensive internal audit of the NRA’s finances and contracts with vendors. That included Ackerman McQueen, the advertising agency responsible for much of the NRA’s messaging over the past 40 years, and the brains behind NRATV.
According to a lawsuit filed by the NRA, Ackerman couldn’t account for how it had spent the $40 million it was allegedly receiving from the NRA annually, raising suspicions that the ad agency was pilfering from the gun lobby. Both sides dug in, and the ensuing power struggle devolved into civil war. The feud came to a head at the NRA’s annual convention in April 2019, when NRA president and Ackerman ally Oliver North reportedly threatened LaPierre with an embarrassing letter, detailing sexual harassment charges, accusations of improper wardrobe expenses, and excessive staff travel, if LaPierre, the longtime face of the NRA, didn’t resign. The matter came before the NRA board, but LaPierre, who had the support of many of the directors, survived the coup. LaPierre went on to purge the NRA of anyone who opposed him—not only North but also the NRA’s chief political lobbyist, its longtime lawyers, its former president, one of its main legal strategists, and several board members.
The litigation and press leaks that followed revealed a host of questionable practices by the NRA. Not only was LaPierre taking a $2.1 million salary, enormous for the head of a nonprofit—the NRA is a tax-exempt 501(c)(4) social welfare organization—but he was also spending hundreds of thousands of dollars at the luxury retailer Zegna. Meanwhile, the group was also so low on cash that it had to borrow repeatedly from its 501(c)(3), the NRA Foundation, often with questionable accounting. Numerous employees and members of the board were receiving big paydays; one director was paid $270,000 for consulting, one $40,000 for writing speeches, and another, actor Tom Selleck, nearly half a million dollars for vintage guns from his collection. Although the NRA presidency is traditionally unpaid, Oliver North, who was a host on NRATV, had a contract with Ackerman said to be worth millions of dollars. After reviewing reports of these transactions, Marc Owens, the former director of the Exempt Organizations Division of the Internal Revenue Service, which oversees nonprofits, said they indicate “a tremendous range of what appears to be the misuse of assets for the benefit of certain vendors and people in control.”
All this drew the attention of another New York regulator, the Charities Bureau, which oversees nonprofit organizations chartered in the state. (The NRA has been incorporated in New York since its founding in 1871.) Although relatively obscure, the Charities Bureau had recently made headlines when it exposed massive misuse of funds at President Donald Trump’s charitable foundation, forcing the nonprofit to shutter and the president to pay more than $2 million in damages. The bureau now wants to see if the NRA’s financial arrangements with Ackerman and various board members had violated New York’s relatively strict nonprofit law. (New York–based nonprofits can engage in business transactions with insiders, but usually only if the terms meet certain conditions and if specific procedures are followed.) The Charities Bureau also wants to know if the NRA misused its funds or resources in the 2016 campaign to elect Trump.
The NRA claims much of its money comes from small donors who support the Second Amendment. But some gun owners are beginning to realize that the organization is instead spending their donations on personal expenses for bigwigs and on attorneys who are working to cover up the leadership’s alleged misdeeds. A group of NRA members has formed “Save the Second,” a body pushing for internal reforms to make the organization more accountable, and some major benefactors are withholding contributions until changes are made. “I’m not donating another dime to the NRA until Wayne LaPierre and all of his cronies are out of there,” one NRA donor told The Christian Science Monitor late last year. “Nobody is watching the piggy bank. Everyone is getting fat off the hard-earned dollars of NRA members.”
Fighting these battles has cost the NRA an eye-popping amount of money. (Ackerman has countersued, alleging defamation.) At a meeting with board members in January, LaPierre said the audits and investigations were “probably about a $100 million hit in lost revenue and real cost to this association in 2018 and 2019.” The result has been devastating. LaPierre said he has made $80 million in cuts. The experiment with NRATV was terminated, as was the Carry Guard program, which had brought in at least $14 million in revenue. As a result of this financial crunch, coupled with the coronavirus, the NRA has reportedly laid off or furloughed 200 of its staffers while cutting salaries of many who remain by 20 percent. LaPierre said he had been forced to “take it down to the studs.”
The Charities Bureau is now seeking to raze whatever is left. If the courts find that the NRA violated New York nonprofit law, the Charities Bureau could obtain damages, as well as the removal of LaPierre and other directors and officers of the organization. (Within the NRA, some worry that LaPierre may eventually face criminal charges for converting NRA funds to his personal use, although New York has not filed any criminal charges yet.) The Charities Bureau could also seek to do to the NRA what it did to the Trump Foundation: force it to shutter and distribute all of its assets. The NRA, once invincible, would no longer exist.
Perhaps it was that veneer of invincibility that drove NRA leaders and those of its ad agency to play fast and loose with the NRA’s money. But whatever the reason, the NRA’s problems could not have happened at a worse time. The 2020 election season is in full swing, bringing with it the potential of a Joe Biden presidency and a blue wave of Democrats determined to do more to crack down on gun violence. Of course, there are still a lot of single-issue pro-gun voters who will make their voices heard on Election Day. But it seems likely that the NRA will have neither the money nor the focus to lead them. Instead of fighting for its expansive vision of the Second Amendment, it will be too busy trying to save itself.
