An unnamed NRA supporter, appalled at what was developing, two years ago put together a prediction of what the NY Attorney General would argue and how she would destroy the NRA, and sent that to a few selected directors in hopes they would spread it and take action. This is, we repeat, a mythical memo, written in an exercise at predicting enemy action so that it can be counteracted. The name of the mythical staffer, “Opfor,” is a military abbreviation for “Opposing Force,” people who are really on your side but must in an exercise function as the enemy, using the enemy’s tactics and SOP:
To: Letitia James, Attorney General
From: Ronald Opfor, Deputy
Re: NRA Investigation, Status Report
Date: August 21, 2019
Our investigation is proceeding; opposing counsel has agreed to accept service of our subpoenas, sparing us the effort of obtaining and serving ninety out-of-state subpoenas. Analysis of the results is ongoing. This is a brief summary of what we already know or suspect we can prove.
I. Known Improprieties
A. $247,000 wardrobe for WLP. This was purchased via an AM credit card, then billed to NRA as a video “production” expense.
Further investigation will explore: (1) tax implications. Since business clothing is not a deductible expense, this should not have been expensed by AM, and should have been reported as taxable income to WLP. Determine its tax treatment. (2) Given high total, was any clothing was for Mrs. WLP?
NRA may try to justify, but we should have no problem persuading a judge or jury that this is improper. No judge or juror has spent that much on clothes in his/her lifetime. DC has many fine men’s clothing stores; what was the charitable purpose in shopping in Beverly Hills?
B. $200,000 in travel
Appears to be using $7,000/hr leased private jets. Charitable justification? Security? Senators fly commercial; this won’t persuade judge or jury. Same with European and Bahamas trips. Judge or jury will see these as vacations with a thin and invented charitable justification.
Further investigation: who accompanied WLP on these trips? Mrs. WLP? Did the leased jet trips include some to the Beverly Hills clothing store?
C. Evidence of unrestricted “double dipping.”
Wayne Sheets – Exec. Director of NRA Foundation, at a big salary, while receiving hundreds of thousands as a fundraising consultant to NRA itself.
$2 million for “fundraising consultants,” one of which is a firm that has the same officers as one of NRA’s fundraising contractors.
Investigate: Who authorized these? Who signed the contracts? Why the extra cash to the fundraiser, why hide it? Probably many more such deals.
D. WLP Dallas mansion
What’s the charitable purpose? Why Dallas, when WLP lives and works in Fairfax? Or was it to be a retirement home? (Even more improper).
How was it to be carried on NRA books? Why was the LLC used to buy it? Likely: LLC has “investments” in its name, so it would be listed as one more NRA investment. We can argue to the court that “Investments” are used to hide diversions of millions to “charitable” organization officials.
Who approved? Who authorized signing of the $70,000 check? Did anyone seek Board approval? Or were staff and AM free to commit millions of NRA dollars in secret deals? Further investigation: If so, what else might have been done over the years?
E. AM – this is going to require a detailed forensic audit. $42 million spent in its last year – one eighth of the entire corporation’s budget. AM appears to have been used to “launder” improper expenditures (wardrobe, air flights, Oliver North salary, the mansion). Those are just what we know; investigation will likely uncover much more.
F. Wm Brewer and his lawsuits, against us and others. His bills are running $40 million for 14 months, or over 10% of the entire corporate budget. He has a small firm, a dozen attorneys; how are they billing that much? Why did WLP refuse to let President North see Brewer’s billings? We will want a forensic audit of his billings, and to interview Brewer employees who allegedly quit over unethical billings.
G. For investigation: kickbacks. These may explain some otherwise inexplicable transactions, e.g., $2 million to fundraising “consultants” when NRA already had two professional fundraising firms. It might be explained if part of that $2 million came back to HQ officials as kickbacks. Who decided to hire these consultants, and why? Was AM giving kickbacks? Check out rumor that AM gave Wilson a new BMW.
II. Employment of Suspicious Personnel.
Wilson Phillips was hired as Treasurer after his prior employer fired him for embezzling nearly a million dollars. Did anyone check him out before hiring him to administer a $300 million cash flow? Why was he chosen, who chose him?
It seems unlikely that he changed his ways after NRA hired him – use the forensic audit to find out what was taken over his 20+ year term, and how easy it was to take it.
Millie Hallow was hired to run HQ staff despite conviction for embezzlement. Same questions. Years ago, the Board began receiving anonymous letters claiming she was using NRA credit cards to buy expensive clothes and shoes. True or false, did the Board investigate? Why not? Do they dare not investigate officials?
III. Using Our Discoveries to Destroy the NRA.
This is of course the critical issue, the pay-off. We can ask a court, a New York court, to (1) appoint a receiver to manage the NRA finances (at its expense) or (2) remove chosen directors and officers or (3) most dramatically, dissolve the NRA as a charitable corporation, since it was being operated for private gain.
The key here is to move the court from (1) to (2) or best of all to (3). We might anticipate that a court would be reluctant (even a NY court with the NRA as the target) to order the corporation dissolved, unless it were shown that the corporation’s leadership was so corrupted or dominated by the corrupt that nothing else could be done. The NRA’s most likely defense will be “we have cleaned up our act, it won’t happen again.”
Fortunately, NRA’s leadership has handed us all that we need to shred that defense. Consider:
What did the Board do to the people who were lining their pockets with the corporation’s money? It protected and rewarded them. It unanimously re-elected WLP. All others are still in their positions, except for those who have already left with lucrative golden parachutes. None are being investigated for civil liability or for criminal conduct. (Note for investigation: get all contracts or NRA money now flowing to Phillips and Sheets and other retired officials. Determine if the Board approved these. If it didn’t, it shows negligent oversight. If it did, the Board is implicated in rewarding corruption).
What did the Board do to directors and officers who called for an investigation? Quite a contrast! President North and Vice President Richard Childress were told the Board would not re-elect them. (Note for investigation: who made those decisions? Was it the entire Board? Or is someone dictating orders to them? What role did WLP play?) Directors who objected were removed from all committee assignments, and seven (a tenth of the Board) have resigned. Hart, the Board attorney, was fired, and not by vote of his client, the Board, showing that the Board are pawns fearful to assert their most basic powers.
Facing evidence that the corporation was being fleeced, the Board chose to protect those responsible and to punish its members who spoke out. This will certainly look corrupt to the court (we can in argument analogize this to a corrupt police department), and it will implicate the entire Board and officers. This could be used to argue that removal of some directors or officers is not enough, the entire Board is complicit and is tolerating the fleecing.
Beyond this, we have been gifted by the statements of NRA officials themselves, which will do much to convince a court that its claims of “reforms” are deceptive.
Director Marion Hammer has sent an open letter, suggesting that director stripped of committee assignments should re-think their call for an audit. “The NRA finds itself under attack. Some within our ranks—members of the NRA Board of Directors—have joined in these attacks. Those who didn’t get an assignment might want to consider whether or not they want to help us save the Second Amendment or continue on a course detrimental to NRA and our mission.”
Portray this to the court as telling directors that requests for an investigation are anti-NRA, and thus as identifying NRA itself with the dishonesty. These are not isolated acts, but the corporation’s way of life.
President Meadows and other officers have sent public letters stating that the Board knew all about the alleged misconduct. Portray this to the court as showing the Board had actual knowledge of the misconduct, and wrote it off as something of no concern. Portray any fine parsing of words as deception of members.
David Dell’Aquila, who describes himself as a major NRA donor (NB: check out his credibility) asserts that he asked NRA president Meadows if she had any problems with an employee receiving kickbacks, or directing business to a firm the employee owned, and she responded no, “That’s how it’s done in D.C. Everyone does it.” If he proves credible, this could be very useful evidence that NRA to this day, and at its highest level, regards self-dealing (i.e., exploitation of a charity for private gain) and extracting kickbacks as acceptable behavior.
For several shady transactions, NRA has stated that its Audit Committee “vetted and approved” them. We should focus upon the worst of those transactions, to convince the court that, even after NRA’s “reforms,” the Board is still a fiscal rubber-stamp for shady deals. Did counsel ask them to approve, retroactively?
IV. NRA’s Probable Responses
All human perceptions of reality are filtered through past experiences. Historically, NRA’s defense has been to hunker down, remain silent, claim everything is a lie, and ride out the storm. Whether the storm is media criticism or legislative attack, this has generally been successful. The media loses interest in a week or two, the Congress in a month or two. NRA will react to this as it has to short-lived storms. They will not adapt to the fact that our office does not lose interest, that we have the subpoena and grand jury powers, that we have hard, written evidence, and cooperating insider witnesses (North, AM, and others, driven by vengeance or fear) to tell us where to look.
After solid preparation, we should strike a rapid succession of legal and public relations blows, coming so rapidly that while NRA is trying to meet one, two more have been struck, with us continuously repeating that. NRA’s decision-making cycle is already too long; under this pressure it may simply collapse. Further, its current legal expenses appear unsustainable, and suddenly expanding them by a factor of 500% or 1,000% may create an independent cause for collapse.
The high point of the litigation will be a vigorous cross-examination of NRA leaders, such as WLP and Ms. Meadows, on video. Directors can also be questioned about their decisions, private conversations, who gave them orders, etc. So can former treasurer Phillips, and his staff. Video is essential since skillful questioning will result in pleading the 5th Amendment; we can release the video to shatter NRA’s image.
The NRA is wide open to attack, even only with what we already know. Investigation should turn up much more, e.g., kickbacks, shady transactions. NRA is falling into a trap: its leadership is searching for excuses, without asking whether those excuses will persuade or, worse yet, will alienate a New York court and jury.
We should not aim for appointment of a receiver or removal of officers and directors, instead aim for destruction of the NRA itself, with lesser measures as fallbacks.
To the extent that NRA tries to justify many of these transactions ($247,000 for clothes, $6 million for a mansion in Texas to be hidden as an “NRA investment,” hair dressers flown in from Nashville for WLP and Mrs. WLP, “golden parachutes” for retiring officials (often corrupt ones – investigate whether the pay-offs were “hush money”), high management double-dipping), it will convince the court that NRA’s ostensible reforms are meaningless; the same attitude remains, that any thin excuse justifies its officers and directors exploiting the charity for their private gain and luxury. NRA will be done in by its own justifications.
 We will have many targets here. The Wall Street Journal quotes an NRA spokesman: ““As we have said repeatedly, neither Mr. LaPierre nor the Board ever formally considered, much less approved, an investment in the house in question.” But AM has produced the $70,000 NRA check to the LLC, signed and cashed. We must find out who authorized that check, and use that to illustrate that things are out of control. A $6 million deal can be made, and $70,000 earnest money delivered, with even WLP not knowing or authorizing it? Who controls the signature machine for the checks? Was Treasurer Phillips free to blow millions of the nonprofit’s money with no one noticing? Or the board caring?