NRA Found Guilty of Misusing Charitable Assets, Officials Ordered to Repay Millions
In a landmark verdict on February 23, 2024, a New York jury found the National Rifle Association (NRA) and three of its current and former officials guilty of misusing charitable assets. The jury determined that the NRA had violated state nonprofit statutes and breached its fiduciary duties. Additionally, two officials were ordered to repay millions of dollars to the gun group. This verdict comes after a six-week corruption trial that followed a lawsuit filed by New York Attorney General Letitia James almost four years ago.
The defendants in the case were Wayne LaPierre, the longtime head of the NRA, Wilson Phillips, the former treasurer and chief financial officer, and John Frazer, who still serves as the group’s corporate secretary and general counsel. The jury found that all three defendants had violated state nonprofit statutes and breached their fiduciary duties. The NRA was also found liable for making false statements in regulatory filings.
Wayne LaPierre, who announced his retirement just before the trial began and officially stepped down during the trial, was ordered to repay the NRA $5.4 million. However, since LaPierre had already repaid over $1 million following an internal investigation by the NRA, he will only have to pay back $4.35 million. It is also possible that he will be barred from ever returning to his position, as the jury recommended his removal. Wilson Phillips was ordered to pay $2 million back to the NRA.
The verdict highlighted the defendants’ violations of three key duties that nonprofit executives must uphold: the duty of care, the duty of loyalty, and the duty of obedience. The evidence presented during the trial revealed that the defendants had used the NRA’s funds for personal expenses such as lavish trips, private jets, expensive clothes, and even makeup for LaPierre’s wife. Such actions were deemed unfair to the organization and a breach of their fiduciary duties.
New York Attorney General Letitia James hailed the verdict as a victory for the people of New York in their fight against corruption. She emphasized that no one, not even powerful organizations like the NRA, should be exempt from the rules. The verdict is likely to result in charitable downgrades for the NRA by rating organizations, as concerns over the organization’s financial transparency have been raised.
The repayment of the millions of dollars owed by LaPierre and Phillips will depend on whether they choose to appeal the verdict. It remains uncertain whether they can afford to pay the owed amounts. The NRA is also expected to face significant legal fees in defending the case.
Moreover, the NRA’s budget heavily relies on dues payments, and it has reportedly lost one million members since reports of improper spending patterns emerged. This loss of membership, coupled with potential financial penalties, may have a detrimental impact on the organization’s future.
Moving forward, another trial will be held to determine if any non-monetary punishments are appropriate for the NRA and the individual defendants. The judge will consider appointing independent monitors and experts to assess the NRA’s financial practices and governance. The judge will also decide on potential future appointments for the defendants within the NRA or other charitable organizations in New York.
In conclusion, the guilty verdict against the NRA and its officials marks a significant milestone in holding powerful organizations accountable for their actions. The case serves as a reminder that no one is above the law, and even influential entities must adhere to the same rules as everyone else. The repercussions of this verdict are likely to have long-lasting effects on the NRA’s reputation, finances, and governance.
