The NRA’s Descent Into Turmoil and Its Long Path Ahead

The pro-gun organization is enmeshed in a legal battle that could take years to resolve

By Stephen Gutowski

The National Rifle Association has been embroiled in a crisis that threatens its very existence for nearly three years with no clear end in sight. How did world’s most influential gun group get itself into this mess, and how will it get out? It's a key question because if the NRA cannot overcome its woes, the rest of the gun rights movement will have to make up the nationwide activism and training programs the hulking giant has provided for decades. Even in its shrunken state, the NRA is orders of magnitude larger than all the other national gun rights groups combined.

The story starts in 2019, when New York Attorney General Letitia James began investigating the NRA, a group she had publicly labeled a “terrorist organization,” shortly after taking office. That set in motion a series of internal battles that led to whistleblower leaks, accusations of corruption, a slew of multi-million-dollar lawsuits, a members’ revolt and the sacking of numerous NRA leaders.

Civil War

Then-NRA-President Oliver North alleged that NRA Executive Vice President Wayne LaPierre and other leaders diverted millions of dollars of the nonprofit’s funds toward lavish personal expenses, from fancy suits to private flights and exotic vacations. His claims were met with accusations from LaPierre’s camp that longtime contractor Ackerman McQueen, which employed North as host on one of the shows it produced for the NRA, was attempting a blackmail campaign to force LaPierre out.

The fight played out in full view of tens of thousands of NRA members gathered at the group’s 2019 annual meeting in Indianapolis, Indiana. Then-President Donald Trump spoke to a crowd of members on the field of the Colts stadium as the infighting came to a head. By the time leadership was set to present reports to the members, North had lost and fled the convention, leaving an empty seat to preside over the Members’ Meeting.

NASCAR legend and First Vice President at the time, Richard Childress, was left to stumble his way through leading the meeting after reading a letter from North outlining his charges against LaPierre. The meeting subsequently devolved into chaos. A group of members attempted to pass a resolution calling for the resignation of LaPierre and other leadership members, but this group was ultimately overridden by LaPierre supporters in a close vote after a contentious shouting match between the two sides.

The internal war saw North, Ackerman, two separate CFOs, LaPierre’s chief of staff and the NRA’s top lobbyist ousted. LaPierre maintained control, but his faction’s scorched-earth campaign left numerous lawsuits in its wake. It also didn’t stave off the attorney general. She filed suit against the organization in August 2020, seeking to sack its leadership and completely dissolve the group.

The lawsuit, and unprecedented demand to shut down the group, forced the NRA onto the defensive. In a move described by experts as a Hail Mary, the gun rights group created a passthrough subsidiary in Texas and filed bankruptcy in a Dallas federal court. It did so at the behest of LaPierre without pre-authorization from the board or even a warning to directors.

The NRA’s lawyers argued the move was necessary to escape political prosecution from Attorney General James and other hostile New York officials, and the group’s finances were actually in good shape. It admitted some corruption and diversion of funds had occurred, to the tune of $1.4 million, but argued the bulk of the problems were the fault of Ackerman and former leadership members whom the group had since forced out.

The arguments didn’t convince the bankruptcy judge, who tossed the NRA’s case after determining it wasn’t filed in good faith. That made it clear the NRA will have to fight the case out in the New York state court they sought to avoid. Arguments on the merits of the case are set to begin later this year.

Consequences

The impact of all this turmoil has been stark. While the NRA has avoided dissolution and bankruptcy so far, its finances have been severely restricted by the bad publicity and ongoing pandemic. Recently revealed internal documents show the group’s revenue and spending has been cut in half since 2018. At the same time, its spending on administrative legal fees has surged to 20% of the group’s expenses.

Core services have suffered the most in these cuts. Legal spending through the first eight months of 2021 was more than 10 times what the group spent on programs aimed at education and training, competitive shooting, law enforcement, community engagement, the NRA Range, NRA Firearms Museum and school security combined. Membership in 2021 was also at its lowest level since 2017, despite the firearms industry estimating that more than 13.8 million Americans bought a gun for the first time during the past two years.

The NRA has maintained spending on lobbying, and it continues to see some success in pushing permitless gun-carry bills at the state level. Similar bills are even in play at the federal level, despite Democratic control of Congress and the White House.

However, other gun rights groups have benefited from gun companies and owners alike seeking alternatives. The Firearms Policy Coalition and Second Amendment Foundation have both received six-figure donations from key industry players for the first time in recent months, while the National African American Gun Association has seen its ranks multiply. Gun Owners of America has even begun fielding on-the-ground lobbyists in swing states such as Pennsylvania to exert competing influence over state gun legislation.

Still, the NRA remains far larger and more influential than any other gun group on either side of the issue. And it has seen positive developments in recent weeks. First, the NRA settled its dueling lawsuits with former contractor Ackerman McQueen. While the details of the settlement aren’t public, it’s likely the NRA won’t have to pay the $50 million Ackerman was seeking. And it’s one less legal battle for the group to wage as it moves forward.

More importantly, the judge in the New York corruption case dismissed Attorney General James’ request to dissolve the NRA. Justice Joel Cohen found the NRA was not organized for the purpose of unlawfully enriching its leadership, nor did members benefit from the alleged corruption. He further found dissolution would hurt rather than help the members whose money is alleged to have been diverted.

“In short, the Complaint does not allege the type of public harm that is the legal linchpin for imposing the ‘corporate death penalty,’” Cohen wrote. “Moreover, dissolving the NRA could impinge, at least indirectly, on the free speech and assembly rights of its millions of members. While that alone would not preclude statutory dissolution if circumstances otherwise clearly warranted it, the Court believes it is a relevant factor that counsels against State-imposed dissolution, which should be the last option, not the first.”

So, the gun group will not be shut down as a result of the attorney general’s action. But that doesn’t mean the future is bright for the NRA or its leadership. Just as it’s unlikely the NRA will be forced to pay Ackerman what it was seeking, the NRA is unlikely to get the $50 million it sought as part of a countersuit. Also, Justice Cohen allowed Attorney General James’ case to move forward on the charges that didn’t involve dissolution.

Cohen was blunt when describing how seriously he views the charges. If the allegations can be proved, he said they “tell a grim story of greed, self-dealing, and lax financial oversight at the highest levels of the National Rifle Association.” He said the allegations describe corruption that is pervasive and unchecked.

“They describe in detail a pattern of exorbitant spending and expense reimbursement for the personal benefit of senior management,” he wrote, “along with conflicts of interest, related party transactions, cover-ups, negligence, and retaliation against dissidents and whistleblowers who dared to investigate or complain, which siphoned millions of dollars away from the NRA’s legitimate operations.”

Though dissolution is off the table, serious consequences remain in play for the organization. LaPierre and other leadership could be pushed out and forced to repay millions of dollars to the NRA. “The Attorney General’s Complaint seeks restitution and other monetary relief from four current and former NRA officers (to be repaid to the NRA), as well as their removal from NRA employment and permanent injunctions against serving as officers, directors, or trustees of any not-for-profit or charitable organization incorporated or authorized to conduct business or solicit charitable contributions in New York,” Cohen wrote.

A Hard Road Ahead

The NRA’s leadership still faces a tough challenge. The dispute is not whether the corruption happened, but only its extent and who was most to blame. LaPierre and his allies in leadership were in control when the alleged corruption happened, and they are at the center of those allegations. They continue to do controversial things such as filing for bankruptcy before getting the NRA board’s approval. It’s difficult to see how they can remain in power by the end of this case.

But they’ve proved willing to pursue whatever strategy might lead to their victory. All indications are that LaPierre will fight until the end, and the NRA’s lawyers will carry out whatever novel strategy they can come up with. There very well may be years of appeals ahead before the case is finally settled. If those avenues run out, the NRA could even enter bankruptcy once again—a possibility left open by the bankruptcy judge’s dismissal of their previous case.

Whatever path things take from here, the ordeal is probably far from over. The outcome will affect the millions of Americans who've paid to be part of the NRA, but the consequences extend much further than that. If the world's most influential gun rights group remains embroiled in this fight for the foreseeable future, gun owners will be handicapped in the fight over future gun laws.