This Ruling Comes One Week after the NRA Filed Chapter 11 Bankruptcy in an Attempt to Escape Accountability for Years of Self Dealing
NRA Faces Steep Legal Consequences and Potential Dissolution Stemming from New York Attorney General Lawsuit Over Extraordinary Self-Dealing and Alleged Fraud
NEW YORK –– Everytown for Gun Safety and its grassroots networks, Moms Demand Action and Students Demand, released the following statements responding to New York Supreme Court Judge Joel Cohen’s rejection of the NRA’s attempt to dismiss New York Attorney General Letita James’ lawsuit, pause it, or move it to another court.
The ruling comes one week after the NRA announced it was filing for Chapter 11 bankruptcy and attempting to reincorporate in Texas. The NRA faces steep financial consequences and potential dissolution stemming from the New York Attorney General’s lawsuit, which alleged years of illegal self dealing and fraud by the NRA and its top executives.
“The NRA just can’t stop losing — elections, money, public support, and now a critical court case,” said John Feinblatt, president of Everytown for Gun Safety. “This desperate maneuver was rightfully rejected by Judge Cohen, and we look forward to the NRA finally facing the accountability it has feared and evaded for so long.”
“This ruling shows once again that the NRA can try to run from its years of deception, decadence, and self-dealing, but it can’t hide,” said Shannon Watts, founder of Moms Demand Action. “There is no escaping accountability for turning the organization into a personal piggy bank for its leadership, all while endangering millions of lives. The NRA’s deal with the devil has finally come due, and now it’s time to start paying up.”
This decision comes when the NRA is already mired in immense financial, legal, political, and internal turmoil:
- Legal: Late last year, the NRA settled with the New York Department of Financial Services after being charged for acting as an unlicensed insurance provider and deceiving its members with misleading marketing practices. Additionally, New York Attorney General Letitia James filed suit last year seeking to dissolve the NRA for allegedly violating New York charities law. On the same day, DC Attorney General Karl Racine sued the NRA for allegedly exerting undue influence over the NRA Foundation. Additionally, the NRA was hit with a class action lawsuit and it was already locked in various lawsuits with former business partner Ackerman McQueen. The NRA paid its top lawyer $38.6 million in 2018 and 2019 alone –– and leaked documents show that the line item in the NRA’s financials that accounts for legal costs rose by 41% in 2019, after a nearly 400% increase in 2018.
- Financial: In 2019, the NRA was $57 million in debt and its revenue from member dues declined by 34% while its “legal, audit, and tax costs” increased by 39%. Last year, it reportedly laid off and furloughed over 200 employees. Additionally, earlier this year, NRA CEO Wayne LaPierre said that the NRA suffered “about a $100 million hit” in 2018 and 2019, and that for the NRA “to survive,” he took “about $80 million” out of the budget. This follows years of alleged financial mismanagement, during which NRA executive pay has skyrocketed, money flowed to “unpaid” board members, and the NRA’s own board members and accountants called into question lavish, legally suspect personal spending by its leadership.
- Political: The NRA is struggling mightily politically after betting big on and losing the Presidential election, and also losing control of the Senate. Additionally, a recent New York Times analysis of the NRA’s grades found that the NRA “continues to lose ground in Congress, with the last remnants of its Democratic support vanishing and its still-high Republican support eroding slightly.”
- Internal: Experts believe that Wayne LaPierre’s removal is “a foregone conclusion” due to the NRA’s legal troubles. Additionally, according to The Guardian, the NRA’s “drop in revenues accelerated in 2019 when several large NRA donors began a drive to oust LaPierre over allegations of mismanagement and self-dealing, and to promote reforms.” These donors have boasted that “$165 million in donations and planned gifts had been withheld.”
A detailed history of the NRA’s finances and litigation can be found on NRAWatch.org.