NY Attorney General files lawsuit to dissolve NRA
Director, of operations. Joshua, powell. And for. Corporate secretary, and general counsel. John fraser. These individuals, in the nra, are charged with failing, to manage, the nra's, funds, and failing. To follow, numerous. State, and federal, laws. Which contributed, to the loss. Of more than, 64. Million, dollars. 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 law to register. And file. Annual financial, reports, with the office, 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. Of nra, membership. And that advance. The organization's. Charitable. Mission. However. As today complaints. As today's complaint. Lays out we found that the nra. Instead. Fostered, a culture, of non-compliance. And disregard. For internal, controls. That led to the waste. And loss. Of millions, in assets, and contributed, to the nra's. Current. Deteriorated. Financial. State. Not only were the nra's, internal, policies, repeatedly. Not followed. But they were blatantly. Ignored. By senior leaders. The nra's, board's. Audit committee was negligent, in its duty, to ensure appropriate. Competent. And judicious. Stewardship. Of assets. By nra, leadership. Specifically. The audit committee, failed to assure. Standard. Fiscal, controls. They failed, to respond. Adequately. To whistleblowers. Affirmatively. Took steps to conceal. The nature. And scope. Of whistleblower. Concerns, from external, auditors. And they failed to review, potential. Conflicts, of interest. For employees. In our lawsuit we outlined, 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 fiduciary. Duty. To the nra. 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. Mismanagement. And negligent, oversight. At the nra that was. Illegal. 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. Than mr 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. Mr lapierre. 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 core. At a cost of more than. Five hundred, thousand 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 unwanted.
Travel Consultants, for decades, including. For the booking of luxury. Black car service. In the past two, years alone mr lapierre, spent. More than. 3.6. Million. Dollars. On these travel agent services. He secured, a post-employment. Contract. For himself with the nra, without board approval. Currently valued, at more than. 17, million dollars. He allotted, several, million dollars, annually, in nra, funds. For private. Security, costs. For himself. And his family. Without, sufficient. Oversight. On their use. He received. More than. 1.2. Million dollars in reimbursement. In just a, four year period for expenditures. That included gifts. For favored, friends, and vendors. Travel expenses, for himself and his family. And membership, fees, at golf clubs. Hotels. And other. Member clubs. He even, secured, lucrative. Consulting. Contracts, for, ex-employees. And board members worth millions of dollars. Yet often it resulted, in little. If any actual, work. In addition to grossly misusing, these funds for personal use, mr lapierre, created. An, illegal. Pass-through, arrangement. To conceal, the very nature. Of these expenditures. For decades. Mr lapierre, and the founder of ackermann. Mcqueen. The nra's, long-time, advertising. Firm. Had a practice whereby. Ackermann. Mcqueen. Would pay for these, non-contractual. Out-of-pocket. Expenses. For la for mr la pierre. And other nra, executives. And pass. Those, expenses. Through. To the nra. These expenses, would then be paid for by the nra. Without written approval. Without receipts. Without any supporting, business. Purpose. Documentation. Ackerman. Mcqueen, would, aggregate, the expenses, into. A lump, sum, amount, and then bill them to the nra. Without, any details. On the nature. Or purpose, of the expense. Completely, in violation. Of state law. These expenses, did not comply with irs, requirements, and as a result all such expenses. Should have been included. By the nra, and taxable. Personal, income. For mr lapierre, and other recipients. In, 2017. And 2018. Alone. Just two years. Ackermann. Ackerman. Mcqueen. Was paid. More than 70. Million, dollars. A significant, amount of these funds included payments through this, side agreement. And when board members challenged. Mr lapierre, and the three other defendants. Over this lavish, spending. Their financial. Governance. Or their. Leadership, of the nra, mr lapierre. Retaliated. And turned the board against those who attempted, to challenge. His illegal, behavior. The complaint lays out numerous, other instances. In which mr lapierre. Phillips, mr phillips mr powell and mr fraser. And other executives. And board members, at the nra, abused. Their power. And illegally, diverted. Or facilitated. The diversion. Of tens, of millions, of dollars. From the nra. These funds were in addition to millions of dollars the four individual, defendants. Were already, receiving, in 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 18, causes of action. And 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. Improper, wage reporting. Improper, income tax withholding. Failure, to make required, excise, tax reporting. And payments. Payments in excess of reasonable, compensation. To disqualified. Persons. And waste. Of 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 in salaries, they earned while employees. While they earned while employees.
And Pay penalties. To remove. Mr lapierre. And mr frazier. From the nra's, leadership. And to ensure, none of the four, four individual, defendants. Can ever again, serve on the board. Of a charity. In new york state. It's important to note that mr, phillips. And mr powell 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. Has operated, as a breeding, ground, for greed. Abuse. And brazen. Illegality. In this state we have a. Set of laws that every individual, and entity, must be held accountable, to. Regardless, of who you are. Regardless, of your power. Size. Influence. Wealth. Or station, in life. One set of, laws. 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. Organizations. In this country. Again i'd like to, thank the chief of the charities, bureau. Jim sheehan. And the co-chief, of the enforcement, section, emily stern. And they led with a dedicated. And. Experienced. And professional. Team of attorneys, who i am very proud to be associated, with. Also a team of accountants. And legal assistance. And they include. Assistant. Attorney general and special counsel. Of the litigation, bureau. Monica. Connell. Assistant, attorney general william, wong, wang. Assistant, attorney general, sharon, sash. Assistant, attorney general, jonathan, conley. Assistant, attorney, general, stephen, thompson. And assistant, attorney, general, erica, james. All of the charities, bureau. With additional, assistance, from chief accountant. Judith. Welsh. Libros. Assistant. Associate, accountant. Darren, buchamp. And associate, accountant, charles aganu. In addition to numerous. Other, individuals. At the office of attorney general. The charities bureau is part of the division for social justice. Which is supervised, by chief deputy, attorney general megan fox. And, first deputy attorney general. Jennifer levy. Who were integral. And instrumental. In overseeing. This. Entire. Process. And now my friends. I'm happy, to take. Questions. I can see this already, uh developing, from the president and certainly the republicans, who are going to say, that you're only going after the nra, because of their support of him, and because of their support. Of the republicans. How would you respond, to that. By no means this was an investigation, that started in 2019. Until this day, it's based on the facts, we follow the facts, and the law. And we come to conclusions, of law, and as a result of that, we've come to the conclusion, that the nra, unfortunately, was serving as a personal piggy bank, to four individual, defendants. Why. Call, you know this is as you said a very powerful, organization's, been around for so many years, this could not have been an easy decision. Uh in some ways, to come to. Why, call for the dissolve, for it to dissolve, instead of just the removal, of these people, and try to keep this, organization. Intact why is it that this organization. Now needs to basically, go away because the corruption, was so broad. And because of the level of waste. And because they have basically. Destroyed all of the assets of, the corporation. It was critically, important. That one of the causes of actions and, one of the remedies that we are seeking, is the dissolution.
Of The nra. Larry. Courts always look for prior precedence. To do something like this. Uh, what's the prior, precedence, that you would cite, for, dissolving, an organization, over. Cloud. So there, are two prior cases in the last couple of years. One is called the uh. Multicultural. I'm, i'm not. Multicultural. Um. Federation, of multicultural. Programs. Out of brooklyn. And the second is the trump foundation. In terms of criminal charges, here, why are there no criminal charges. Um the office of attorney general, particularly, um, in regards to the not-for-profit, law, is. Um, tasked with, um having jurisdiction, over not-for-profits. Um in the civil realm and not the criminal realm, um and that's why, this is a civil enforcement, action. If the nra. From the us. The nra, was to be dissolved. What sort of effect or what would that mean for the wider issue of gun violence, in this country i know you've been uh, supportive, and outspoken. Of, gun control before. So, this, um has nothing to do with my personal, opinion with regards, to gun violence. This has to do with the fact that four individual, defendants. And the nra, as a corporation, unfortunately. Did not follow, not-for-profit. Law in the state of new york, and as a result of that they should be held accountable. And that's why we seek their dissolution. We seek the banning of these four individual, defendants. We seek restitution. It's primarily, because these individuals, unfortunately did not follow the mission, of the nra. Is going after, the individual. To bring the organization. Down is this the moment that you've been waiting for. It's, it's not a question of a moment that i've been waiting for this is a question again, of, following the facts, and applying, the law. And when you apply the law and you come to a conclusion, the only conclusion, that you can come to, is that these four individual, defendants, as well as the nra.
And All of its. Directors, and officers, violated, the law, and they did it over a period, of year, and it went on unchecked, for a period of year, and, we came to the conclusion, based upon our thorough investigation. That enough was enough, and we needed to step in and dissolve this corporation. Just as we did with the trump foundation. Do you have any concerns, for your own safety, considering, the nra, is such a powerful organization. And, does have so much, support, now now that you're sort of leading this. Do you have any concerns, none whatsoever. Okay we're gonna go to, virtual, calls my colleague kelly will introduce, the callers on the phone. Good afternoon, for the reporters, who have joined us virtually, for today's press conference, please use the raise hand function at the bottom of your screen if you wish to ask questions. Our first question, today will come from danny hakeem, from, the new york times. Yeah hi, hello, attorney general, hi danny um, do you anticipate. Uh. Seeking, or making a criminal referral, in this matter, and. Would you. Rule out doing so in the future if you're not planning to do so now, this is an ongoing inve, first of all thank you for the question it's an ongoing investigation, and if we uncover. Any uh criminal activity, we will refer it to the manhattan district attorney, but at this point in time we're moving forward again in civil enforcement. Our next, question, will come from tara lenning of the washington. Post. Attorney general james, this is carol lenig thanks for your news conference, i have a question, about your findings, regarding. La pierre's lapierre's. Ability, to avoid, reporting. Expenses. As personal, income, on his personal, income taxes. Have you or will you refer that to the irs. And do you believe he evaded, personal, income taxes, in a pattern, over several years. So i will not uh again. Come to a conclusion, on whether or not he, violated, the. Internal revenue code. We are in the midst of um, submitting, our complaint, to the irs, and we will contact the irs accordingly. Thank you our next question will come from stephen, gandol, from cbs. Hi thanks very much for taking my question. So many people today were speculating, that the conference was going to be related to president donald trump, can you give us an update on any investigations. You have of president trump or the trump organization. The manhattan d.a has reportedly, received documents from deutsche bank you have also subpoenaed deutsche bank, have you had they comply with your subpoena. And if so give us a sense of what they've uh given you, thank you for that question which is not the subject, of today's press conference, and will not comment on any other investigation. Thank you. Our next question will come from john campbell from ghana news. Hi attorney general, uh. The the trump foundation, lawsuit, which uh, you know predated, you here it resulted, in a settlement, are you open to any sort of settlement, talks with the, the nra. That that would result, in anything less than, the dissolution, of the organization. Um thank you for the question, and it is not um my habit to negotiate. Um. Any resolution, in public, um we have filed our complaint today, um there are 18 causes of action, they include but are not limited to the dissolution. Of the nra in its entirety. Our next question will come from mark maramont, from the wall street. Journal. Sorry, i was muted. Uh, attorney general thank you so much for the time. I was wondering, uh, if the um. Since you're seeking to dissolve, this organization. Is it possible, that. That this could lead to, some kind of a kit for ted in other words conservative. Attorney generals, and other.
States, Might take some kind of an action like this. Or is it possible that the nra, could say okay if you want to dissolve, us then we'll just move to. Wyoming, or oklahoma, and you know. Now we're done with new york in other words you no longer would have power over the over this occupation. I'm not going to speculate. Um as to the, future plans of the nra. The nra, again was formed under the not-for-profit. Laws in the state of new york, and as a result, the office of attorney general has supervisory. Jurisdiction. Overall not for profits including but not limited. To the nra. All right. Next question will come from eric larson, of bloomberg. Uh yes hello. Um the allegations, that you've laid out here um suggests that the nra. Donors, and members here, were really essentially, victimized. Allegedly. By these actions. And then, is it not further victimizing. Them by. Forcing their. You know their organization, to close. An organization, that's pretty popular across the whole country. Um is that is that necessarily, fair to these victims here, the, it's, the issue is the following, a number of, donors, have contributed, to the nra, because they believe in their mission. At this at this point in time the nra, right now. Is um, financially, isn't it's in a deficit. I mean as a result, of, four individual, defendants, who have basically, looted its assets. And so, one would think, um that the, donors. Uh would like for an organization, to have some governance. Some standards. Um some. Standards, of behavior. And that they would recognize, their fiduciary. Duty, uh to a not for profit and or its mission, as opposed to, looting. A. Looting assets, and using it for their own personal benefit, and or, and their family. Okay, our next question will be jesus, garcia, from. Lgrio. Hi thank you thank you general attorney. Do you find that part of that money was used in political, campaigns. If yes which one. So that is, not a subject, of this, press conference, today. But i do want you to know that our investigation, is ongoing. Thank you our next question will be. Henry, rosoff. From pix11. Hello attorney general thank you for taking my question. Um i was just wondering. If you could walk us through the next couple of immediate, steps with the understanding, that this type of legal action can take years what will we see in the coming weeks and months. So i'm, confident that there will be a response, that will be filed. By the nra, we will go through a series of motions, there will be discovery. It's a normal course of action in all of our cases. And so we will continue, to keep you abreast. Of the status, of this litigation. Our next question will be from victoria. Tempest, from the new york city quotes media. Hi attorney general james uh thanks for taking my question. Um, many have criticized. Uh the settlement your office brokered, with the weinstein, company, maintaining, that the sum would have been greater if weinstein, personally, had to pay into it, at any point during the settlement, process did you consider, or advocate, for, harvey weinstein, paying into the settlement, and if not why not, so that's not the subject, of the press conference here today. We will be providing, giving you an update in regards to the weinstein. Negotiations. And i thank you for the question. We have time for, two more questions. Our next question, will be from paul durienzo. From, wbal. Okay. Thank you very much for your, taking this call, attorney general, my question is. Will you attempt, to freeze the assets, of the targets of this investigation. Or of the nra. Or in any way try and prevent them from doing business, uh during this investigation. That is, one of the remedies that we are seeking, um, under under. Our in our pleadings. And so we look forward to again, doing um, investigation, to determine, whether. Where if there are any hidden assets, and whether or not they can be frozen, for the again for the purposes, of benefiting, those donors who have given to the nra, over there, over the years. For. The its intended, mission.
Thanks And our last question today will be from sonia moog from the cnn. Hi attorney general thanks so much for taking my question uh it's actually a two-parter. One. It seems like there's a lot of allegations, of, potential, tax fraud here has this been reported, to the irs. And two um, why take the measure to dissolve, the entire, organization, instead of just removing these members can you speak to why, that was necessary, in this case. We thank you for those questions that were previously. Asked and answered, but we will answer them again. We will, be forwarding the complaint to the irs. And we'll be in touch with the irs, in regards, to any violations, of the internal revenue, code, um, and uh two, uh because, of the, numerous, complaints, and and um and based upon the facts and the application, of law. Uh, we concluded. Um, that the best way to, um. Address this, matter. Was to seek resolution. Um before, a, new york state supreme court judge, and that is what we are seeking. Again given the breadth. And the depth. Of the corruption. The illegality. And the brazen, attempts. Uh to basically. Uh evade the law, i thank you all for. Coming. You.
2020-08-11 03:59
