Secret Recording Reveals NRA's Legal Troubles Have Cost The Organization $100 Million

12 hours ago
Originally published on April 21, 2020 10:50 pm

The National Rifle Association's legal troubles have cost the powerful gun rights group $100 million, according to a recording of the group's board meeting obtained by NPR.

In the January 2020 recording, NRA CEO Wayne LaPierre criticizes ongoing investigations by the New York and Washington, D.C., attorneys general, bemoaning "the power of weaponized government." And he told the NRA's board of directors, assembled for the group's winter meeting in January, that the organization has had to make $80 million in cuts to stay afloat.

The NRA's internal turmoil burst into the open at the April 2019 annual members' meeting, when then-President Oliver North stepped down from the organization in protest after allegations of self-dealing and poor management of NRA funds were revealed in media reports.

These reports included mentions of LaPierre's lavish six-figure spending on clothing and travel. An attempt to oust LaPierre failed at that same meeting.

Subsequently, the New York and D.C. attorneys general launched investigations into the NRA's finances. Eight board members have resigned over the last year. And the NRA has been locked into protracted and costly legal battles with its longtime public relations firm.

LaPierre, who is the CEO and executive vice president of the gun rights group, said the scandals that have consumed his organization since 2018 have cost the group dearly.

"The cost that we bore was probably about a hundred-million-dollar hit in lost revenue and real cost to this association in 2018 and 2019," LaPierre said, according to a tape recorded by a source in the room. "I mean, that's huge."

These figures, not previously reported, are the first time that LaPierre has put a figure to how much the ongoing legal battles have cost the organization. For context, the NRA and its affiliates raised more than $412 million and spent more than $423 million in 2018, the last year for which there is public reporting,

To weather the storm, LaPierre said that he had dramatically reduced the size of the organization's budget.

"What we did in order to survive and adjust is we took in 2019 and 2020 ... about $80 million in real costs out of the NRA budget," LaPierre said. "I mean, we kinda reframed this entire association. We took it down to the studs."

Although the NRA has maintained its membership level — LaPierre claims it at "right around 5 million" — he said that there was still much to do: "We're not out of the woods yet. We still gotta wrestle with this financial situation."

LaPierre also lashed out at the attorneys general of New York and D.C. LaPierre compared their investigations to oppression from autocratic regimes, calling the probes "the power of weaponized government."

"I've never seen anything like that in the United States of America, to tell you the truth. I mean, that is Cuba, that is communist China, that is Venezuela, it's Russia, it's every other country we look at and we say, 'Thank God we don't live there,' " LaPierre said.

The offices of the D.C. and New York attorneys general declined to comment.

LaPierre made these comments on Jan. 11 of this year during an NRA board meeting in Virginia. While board members made up most of the members in attendance, there were also NRA staff in the room, as well as a few dozen NRA members.

One of those present was Ron Carter, the vice president of Save the Second. His organization consists of NRA members who are urging financial reform and accountability within the National Rifle Association.

"The repeated statement from LaPierre about the $100 million cost to the NRA should have come with an apology for having manifested the situation," Carter told NPR. "The lack of accountability is troubling for many members."

Save the Second is not associated with the recording obtained by NPR. The National Rifle Association did not return a request for comment.

The NRA announced layoffs and pay cuts in late March, blaming the coronavirus crisis for these measures. The coronavirus crisis prompted the cancellation of the group's annual convention, which had been scheduled to take place this past weekend.

While the coronavirus crisis has undoubtedly affected the organization's finances, the tape of LaPierre from January indicates that many of the organization's financial cuts were underway well before the emergence of the public health crisis.

And legal costs remain a heavy burden on the organization: In the ongoing litigation between the NRA and Ackerman McQueen, its former public relations firm, a brief filed by the firm on April 15 indicates its belief that the NRA has paid its outside legal counsel "over $54 million" in the last two years.

Copyright 2020 NPR. To see more, visit https://www.npr.org.

MARY LOUISE KELLY, HOST:

Help is on the way for small businesses. That is according to the Senate, which today approved new funding for the Paycheck Protection Program, the PPP. It was part of the $2 trillion relief package passed late last month, and it supplies forgivable loans to small businesses that keep or bring back workers during this pandemic. Well, that PPP pot of money ran out last Thursday, thus this stopgap funding to top it up. There's also money in the package for hospitals and more testing. Well, joining me now is Sen. Debbie Stabenow of Michigan. She chairs the Senate Democratic Policy Committee.

Welcome.

DEBBIE STABENOW: Well, Mary Louise, it's good to be with you tonight.

KELLY: Give us your brief take on this deal today. Are you pleased with where this has landed?

STABENOW: I am. I think this is a positive step forward. And, you know, the original small business program that we called Paycheck Protection Program was obviously something that there was a tremendous amount of need around. But we also found that there were particularly our smaller mom and pop businesses, minority businesses that were using community development and financial institutions or others that - our smallest banks and credit unions and farm credit for farmers and so on, they were left out - a lot of them...

KELLY: Right.

STABENOW: ...The first time around. So...

KELLY: Right.

STABENOW: That needed to be fixed.

KELLY: Right.

STABENOW: So we basically have the - you know, that money and then all together 370 billion in total for business. But the final thing I will say is it was incredibly important for us as Democrats to make sure we were focused on health care. This is a pandemic, and if we don't continue to focus on health care, we're never going to get done with this.

KELLY: Speaking of fixing things, this program, the PPP - as you mentioned, it was advertised as - it's supposed to help smaller mom and pop businesses. And yet we saw giant chains - Potbelly Sandwiches, Ruth's Chris Steak House, Shake Shack...

STABENOW: Right.

KELLY: ...All getting in on the action. Did you intend for big corporations to have access, or is that a loophole that should be closed?

STABENOW: Well, that's not what I intended. And I think what the majority of us intended - what ended up happening is that those who have ongoing relationships with banks, and particularly larger banks, were able to move quickly and get at the front of the line.

KELLY: Yeah.

STABENOW: And...

KELLY: Has that been fixed? Has the loophole been plugged in this...

STABENOW: Yeah.

KELLY: ...Latest bill?

STABENOW: I believe, you know, it's not perfect. I think some of this is going to take oversight - you know, an inspector general doing long-term oversight. We have to have transparency on where these - what are the loans and who are they going to. But a big piece has been fixed by adding a specific amount of money for minority-owned businesses, our farmers, veteran-owned businesses, others who - in rural communities that were left out the first time around.

KELLY: Just before we move on from this point, should those big, publicly traded companies - should they have to pay back the money?

STABENOW: Well, that's something we've got to take a real look at. I mean, if they were doing something that was illegal under the program, I mean, that's one question. Ethical is another question. We've already seen some, you know, begin to say they're not going to take the money. I think that would be the right thing to do. Just because it's available doesn't mean that somebody should run at the head of the line because they're well-connected. So I think we've got to really look at that from a number of different angles.

KELLY: Yeah. I mean, just to step back and note, the sums here are staggering. Four spending bills now to fight the coronavirus - today's adds up to nearly half a trillion dollars, and it's a stopgap.

STABENOW: Right.

KELLY: Should Americans be terrified that we're spending our way out of a pandemic and right into a financial hole we're never going to dig out of?

STABENOW: Well, right now we have just probably the biggest challenge of our lifetime - yours and mine and everybody listening right now - when someone can go from having a thriving business to zero income, somebody who's got a good job and then is forced to stay home. And so - and it's all because of a pandemic. So I would say, first of all, that while - you know, two pieces of what we've been trying to do through all this. One is if you have to stay home or if your business is closing that you have income in some way available. And by the way, we need to, in the next round, be reimbursing and adding to the funds of the people who have to work - have...

KELLY: Right.

STABENOW: ...To be a big priority for us as Democrats, a Heroes Fund. But I will say that if we don't get our arms around the magnitude of the health crisis and if we are not doing the level of testing to give us information...

KELLY: Yeah.

STABENOW: ...So that the people who are sick stay home instead of everybody else, we are never going to get out of this hole. And so...

KELLY: It sounds like - just in the few seconds...

STABENOW: Yeah.

KELLY: ...We have left, it sounds like your answer to my basic question - can we afford this? - is we can't afford not to. There's no choice.

STABENOW: Correct.

KELLY: OK.

STABENOW: We can't afford not to, but we'd better keep focused on the health care pandemic...

KELLY: Right.

STABENOW: ...Because if we don't get our arms around that, this is going to go on a long time.

KELLY: That is Michigan Democrat Debbie Stabenow.

Thank you so much, Senator.

STABENOW: My pleasure. Transcript provided by NPR, Copyright NPR.