NRA Files for Bankruptcy Amid New York A.G.'s Lawsuit

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NRA Files For Bankruptcy and Vows to Move Organization From the ‘Toxic Political Environment of New York’

NATIONAL HARBOR, MD - MARCH 15: Wayne LaPierre, CEO of the National Rifle Association, delivers remarks during the second day of the 40th annual Conservative Political Action Conference (CPAC) March 15, 2013 in National Harbor, Maryland. The American conservative Union held its annual conference in the suburb of Washington, DC, to rally conservatives and generate ideas.The National Rifle Association on Friday filed for chapter 11 bankruptcy and announced plans to move its headquarters from New York to Texas, Executive Vice President Wayne LaPierre announced in a letter to members.

LaPierre said the “restructuring plan” would position the guns rights advocacy group for long-term success “free from the toxic political environment in New York.”

The plan can be summed up quite simply: “We are DUMPING New York, and we are pursuing plans to reincorporate the NRA in Texas,” LaPierre wrote.

“Under the plan, the NRA will continue what we’ve always done – confronting anti-gun, anti-self-defense and anti-hunting activities and promoting constitutional advocacy that helps law-abiding Americans. Our work will continue as it always has. No major changes are expected to the NRA’s operations or workforce.”

LaPierre’s animosity with New York stems a lawsuit filed by state Attorney General Letitia James. She is suing the NRA and several of its top executives — including LaPierre — seeking the organization’s dissolution.

The lawsuit, filed in August, accuses LaPierre of using a “poison pill contract” to ensure he would receive an income for life from the NRA worth more than $17 million.  It also says he consolidated power within the organization by nefarious means.

It also alleges that LaPierre used his position to “intimidate, punish, and expel anyone at a senior level who raised concerns about his conduct,” resulting in the diverting of “millions of dollars away from the charitable mission, imposing substantial reductions in its expenditures for core program services, including gun safety, education, training, member services and public affairs.”

Among the dozens of examples of lavish spending that LaPierre was reimbursed for included “private jet travel for purely personal reasons; trips to the Bahamas to vacation on a yacht owned by the principal of numerous NRA vendors; use of a travel consultant for costly black car services; gifts for favored friends and vendors; lucrative consulting contracts for ex-employees and board members; and excessive security costs.”

The suit additionally alleges that former NRA Treasurer and Chief Financial Officer (CFO) Wilson “Woody” Phillips, former Chief of Staff and the Executive Director of General Operations Joshua Powell, and Corporate Secretary and General Counsel John Frazer failed to manage the nonprofit’s funds and violated  numerous state and federal laws.

LaPierre said the organization is hoping that moving to Texas will provide protection from New York’s lawsuit.

“Texas values the contributions of the NRA, celebrates our law-abiding members, and joins us as a partner in upholding constitutional freedom,” he wrote. “Under this plan, we seek protection from New York officials who illegally abused and weaponized the powers they wield against the NRA and its members. You can be assured the Association will continue the fight to protect your interests in New York – and all forums where the NRA is unlawfully singled out for its Second Amendment advocacy.”

James’s office released a statement following the NRA’s bankruptcy announcement.

“The NRA’s claimed financial status has finally met its moral status:  bankrupt,” she said. “While we review this filing, we will not allow the NRA to use this or any other tactic to evade accountability and my office’s oversight.”

James previously reached a $2 million settlement in a different lawsuit that shuttered the Trump Foundation.

This report began as breaking news and has been updated substantially since its initial publication.

[image via Alex Wong/Getty Images]

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Jerry Lambe is a journalist at Law&Crime. He is a graduate of Georgetown University and New York Law School and previously worked in financial securities compliance and Civil Rights employment law.