NY v. NRA and Wayne LaPierre: Opening Statement and NY’s Pretrial Memorandum

Guns are big business in America.  Even for the NRA and its fiduciaries, according to NY.  NRA Watch has a running log of the trial, by the way.  Here is its summary of NY’s opening argument:

The New York Attorney General’s (NYAG) office began their case by telling the jury “Ladies and gentlemen, this case is about corruption in a charity. It’s about breaches of trust and it’s about power.”

NYAG: “The evidence will show the NRA did not operate according to the law or even according to its own rules”

The NYAG asserted that the evidence at trial would show the NRA operated on a “Wayne says basis” and then launched into several examples of financial transactions that LaPierre allegedly directed and/or benefited from.

The NYAG’s presentation detailed the NRA’s relationship with Membership Marketing Partners – alleging the NRA spent over $135 million with that particular vendor over a 10-year period. AAG Connell then described how the evidence would show Wayne LaPierre and his family benefitted from this relationship with regular yacht trips, and free trips to the Bahamas, Greece, Dubai, India, and other locations. 

The NYAG estimated that the NRA spent over $1 million on private flights that CEO Wayne LaPierre wasn’t even on (whereas the primary justification for these flights from the NRA has been LaPierre’s “security”), including several flights for his family. In total, the NYAG estimated over $11 million in private flight expenses were incurred by the NRA and not properly authorized by the Board.

AAG Connell told the jury they would be hearing from several former NRA insiders who raised questions about the NRA’s decisions, only to then find themselves on the outs with NRA leadership. In particular, she highlighted to the jury that they would be hearing testimony from former NRA President Lt. Col. Oliver North, former board member Esther Schneider, and former board member Judge Phillip Journey.

She told the jury that former NRA 1st Vice President Willes Lee was “canceled” from the NRA when he raised questions about leadership. The NYAG highlighted various ways in which they believed LaPierre kept those loyal to him in positions of power in the NRA. In one particularly strong example, the NYAG said the jury will hear testimony that Josh Powell once raised whether NRA General Counsel John Frazer was up to the job. In response, the NYAG said the jury would hear testimony that Wayne LaPierre responded “well we can control John [Frazer], so we have to keep him.”

In one slide, the NYAG ticked through “how LaPierre maintained control?” with four core themes: self-serving management, spending, secrecy, and suppression.  AAG Connell told the jury that the NRA’s ill-fated bankruptcy filing cost the organization $12 million.  At the conclusion of her opening statement, AAG Connell noted that Wayne LaPierre recently resigned as CEO of the NRA. She told the jury that the NYAG would still seek a finding from the jury, at the conclusion of trial, that there was “cause for removal” with respect to individual defendant LaPierre.

Besides the theater of it all, NRA Watch provides links to significant pleadings.  Like NY’s Pre-Trial Memorandum. Full of all kinds private inurement, excess benefit and private benefit.  The memo also constitutes a primer on how nonprofit profiteering is addressed under state law.  Here’s an excerpt from the Statement of Facts:

1.      Wayne LaPierre

LaPierre is the NRA’s EVP, a position he has held since the early 1990s. In this role, which is functionally equivalent to a chief executive, he is responsible for overseeing the NRA’s eleven divisions, as well as its day-to-day affairs. He also has access to the budget allocated to the Office of the EVP, including its consulting budget. On January 5, 2024, one business day before trial, LaPierre publicly announced his resignation as NRA EVP effective January 31, 2024.

As the evidence will show, during his tenure as EVP, LaPierre has consolidated his power and control over the NRA. The evidence will also show that LaPierre routinely abused his authority to cause the NRA to improperly, and in violation of the NRA’s own policies and the law of this State, incur and reimburse LaPierre for expenses that were entirely for his personal benefit or the personal benefit of his family, friends, and loyal insiders. These expenses include:

• Use of private jet travel, including multiple chartered flights for LaPierre’s wife and extended family where LaPierre was not even a passenger. 
• Acceptance of valuable and undisclosed gifts, including from top NRA vendors and their principals such as David and Laura McKenzie, owners of Associated Television International and Membership Marketing Partners (“MMP”), entities to whom the NRA has paid hundreds of millions of dollars, including tens of millions in violation of NRA policies. 
• Use of LaPierre’s personal travel consultant, Gayle Stanford, to arrange private air travel and other accommodations, such as limousine services, through an unnecessarily complex transaction structure designed to hide the amounts of money spent. 
• Reimbursements to LaPierre for personal expenses, including gifts to friends and favored employees. 
• No-show or low-show “consulting” or “speaking” contracts for, among other persons, former NRA presidents and Board members who were loyal to LaPierre and helped him consolidate control. 

Plaintiff will also prove that LaPierre ignored NRA policies and permitted its assets to be diverted to NRA vendors who (i) provided him with financial benefits, including free use of a luxury yacht in the Bahamas, and (ii) paid for his and other NRA insiders’ travel and expense disbursements, concealing that those disbursements were for private benefit and avoiding the application of the NRA’s expense reimbursement process. LaPierre also retaliated against NRA employees, officers, and directors who raised concerns about the organization’s misuse of charitable assets. For example, when Board officers Lt. Col. Oliver North and Richard Childress raised concerns about NRA spending and violations of NRA internal controls, and particularly about the $2 million per month the NRA was paying in improperly-authorized fees to its outside counsel Brewer, Attorneys & Counselors (“Brewer firm”), LaPierre, with the assistance of Frazer, retaliated against them.