NY attorney general files lawsuit against National Rifle Association

The lawsuit seeks to dissolve the powerful gun lobby for a multitude of alleged violations of state law governing charities.
14:23 | 08/06/20

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Transcript for NY attorney general files lawsuit against National Rifle Association
Just a few minutes ago. My office filed a lawsuit against the National Rifle Association. To dissolve the organization in its entirety. For years of self dealing. And illegal conduct. That violate New York's charities law. And undermine its own mission. The National Rifle Association. Where the NRA. Is the largest. And most influential pro gun organization. In the nation. Since its founding in 1871. The NRA has been a registered not for profit charitable corporation in the State of New York. The attorney general's office has a wide range of regulatory and enforcement powers. Over charitable corporations and their trustees. Including the NRA. The NRA's influence has been so powerful that. The organization went unchecked for decades. While top executives. Funneled millions it into. Their own pockets. Four years. The NRA diverted millions. And millions. Of dollars away from its charitable mission. For personal use by senior leadership. To award contracts to the financial gain of close associates and family. And appeared to dole out lucrative no show contracts. To former employees. In order to buy their silence. And continued loyalty. This lawsuit specifically charges the NRA as a hole in addition to four. Individual. Defendants. One the first individual. Longtime executive vice president Wayne Lapierre. Who was in the face. Of the NRA and for decades. Two. Former treasurer and chief financial officer. Wilson woody. Phillips. Period. Former chief of staff in the executive director of operations. Joshua Powell. And for. Corporate secretary and General Counsel. John Frazier. These individuals in the NRA hard charged with failing to manage VN RA's funds and failing. To follow numerous state and federal laws. Which contributed to the lost. Of more than 64. Million dollar Ers. In just three years. Since its founding in 1871. The NRA has been a registered not for profit charitable corporation in the State of New York. And these organizations are required by a lock to register and file. Annual financial reports with the off this of the New York State attorney general and the assets of such an organization are legally required. To be used in a way that serves the interest. And an area membership. And that advance the organization's. Charitable. Mission. However. It has to date complaints. As today's complaint lays out we found that the NRA and instead. Fostered a culture of non compliance. And disregard for internal controls. And led to the waste. And loss. Millions in assets and contributed to the NRA's current. Deteriorated. Financial state. Not only where the NRA's internal policies repeatedly not followed. But they were blatantly. Ignored. By senior leaders. The NRA's boards. Audit committee was negligent in its duty to ensure appropriate. Competent. And judicious stewardship. Of assets. I NRA leadership. Specifically. The audit committee failed to assure standard. This school controls. They failed to respond adequately. To whistle blowers. Affirmatively took steps to conceal. The nature and scope. Of whistle blower concerns from external auditors. And they failed to review potential. Conflicts of interest. For employees. In our lawsuit we outline dozens of examples. Of these failures. Many of which were led and perpetuated. By the four individual defendants named. In this lawsuit. Who failed to fulfill their fight judiciary duty. To be entering. They use millions. Upon millions. Of dollars from the NRA for personal use including for lavish trips for themselves and their families. Private jets. Expensive meals. And other private travel. Wayne Lapierre. Woody Phillips. Joshua Powell. And John Frazier. Instituted a culture of self dealing. Miss management and negligent oversight. At the scenery that was illegal. Oppressive. And fraudulent. They overrode and they invaded. Evaded. Internal controls to allow themselves. Their families. Favorite board members employees and vendors to benefit through reimbursed. Expenses. Related party transactions. Excess compensation. Side deals. And waste of charitable assets without regard to the NRA's. Best interest. The central figure. Behind this scheme. Was none other. In mister Wayne Lapierre. The national face of the NRA who was entrusted. With running its day to day operations. Mr. Lapierre. Exploited the organization for his and his family's financial benefit. And the benefit of a close close circle. Of NRA staff. Board members and vendors. Specifically in the still up here spent hundreds of thousands of dollars. Of the NRA's charitable assets for personal private plane trips for himself and his family. Including extended family when he was not present. He visited the Bahamas. By private air charter at least eight times. In an approximate three year period with his family at a Clark I at a at a cost of more than 500000. Dollars. To the NRA. He traveled on multiple luxury hunting safaris. In Africa. At the expense of an NRA vendor. He spent millions of dollars on un wanted. Travel consultants for decades including. For the booking of luxury black car service. In the past two years alone mr. Lapierre spent more than three. Point six. Million dollars. And ease travel agent services. He secured a post employment contract for himself with the NRA without board approval. Currently valued at more than seventeen million dollars. He a lot of several million dollars annually an NRA funds for private security cost for himself. And his family. Without sufficient. Oversight. On their use he received more than one point two. Million dollars in reimbursement in just a four year period for expenditures that included gifts. For favored friends and vendors. Travel expenses for himself in this assembly. And membership fees and golf clubs. Hold tales. Another member clubs. He even secured lucrative consulting contracts for ex employees and board members worth millions of dollars. Yet often resulted in little. If any actual work. In addition to grossly misusing these funds for personal use. Mr. Lapierre created eating and illegal pass through arrangement to conceal the very nature. Of these expenditures. For decades mr. Lapierre in the founder of Ackerman McQueen. The NRA's longtime advertising firm had a practice whereby Ackerman McQueen would pay for these non contractual. Out of pocket expenses. For locked in for mr. Lapierre. And other NRA executives. And pass those expenses through. To the NRA. He's expenses would then be paid for by the NR ain't without written approval. Without receipts. Without any supporting business purpose. Documentation. Ackerman McQueen would aggregate expenses in two. A lump sum amount and then build them to the NRA without any deet tails. On the nature. Or purpose of the expense. Completely in violation. Of state law. He's expenses did not comply with IRS requirements and as a result all such expenses. Should have been included by the NRA in taxable. Personal income for mr. Lapierre and other recipients. In 2017. And 2018. Alone. Just two years. Ackerman in Ackerman McQueen was paid. More than seventy million dollars. A significant amount of these funds included payments through this side agreement. When board members challenged mr. Lapierre and the three other defendants over this lavish spending. Their financial. Governance. Or their leadership of the NR AMR La Pierre retaliated. And turn the board against those who attempted to challenge. Is illegal behavior. The complaint lays out numerous other instances. In which mr. Lapierre. Phillips mr. Phillips mr. Powell and mr. Frazier. And other executives and board members at the an array abused. Their power. And illegally diverted. We're facilitated the diversion of tens of millions of dollars. From the NRA. These funds weren't addition to millions of dollars before individual defendants while already receiving and grossly. Excessive salaries. And bonuses. That were baseless. And did not adhere to prudent standards. For evaluating. And determining. Compensation. As is required by law. Altogether. There are eighteen causes of action. In these actions violated multiple laws including. The laws governing the NRA's charitable status. False reporting on annual filings with my office. And the IRS. Improper expense documentation. In proper wage reporting. Improper income tax withholding. Failure to make required excise tax reporting and payments. Payments it in excess of reasonable compensation. To disqualified. Persons. And waste. The NRA assets. Amongst other offenses. For these years of fraud and misconduct. We are seeking. An order. To dissolve the NRA in its entirety. To require mr. Lapierre mr. Phillips. Mr. Powell and mr. Frazier to make full restitution. For funds they unlawfully profited and salaries they earned while employees. While they earned while employees and pay penalties. To remove mr. Lott pier and mr. Frazier from the NRA's leadership. And to ensure none of the floor or individual defendants. Can never again serve on the board of a charity. In New York State. It's important to note that mr. Phillips. Missed apparel have left the NRA. It's clear that the NRA has been failing to carry out its stated mission for many many years and instead. As operated as a breeding ground for greed and abuse. And brazen illegality. In this state we have a set of laws that every individual entities must be held accountable to. Regardless of who you are. Regardless of your power. Size. Influence. Wealth. Station in life. One set of lives. And today. We send a strong and loud message that. No one is above the law. Not even the NRA. One of the most powerful organization it's. In this country.

This transcript has been automatically generated and may not be 100% accurate.

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