A major event in the beginning of the controversy over internal corruption came when NRA Treasurer “Woody” Phillips left suddenly in 2017, and the inexplicable decision was made to hire an honest Treasurer, Craig Spray. Several employees who were deeply concerned about what was going on wrote a “Top Concerns” memo for the Audit Committee, which was presented at an emergency meeting in July, 2018. Note this is nearly a year before the scandals burst into the open (April-May 2019). The Committee’s response? Its chair, Charles Cotton, left the room before the memo was presented. Its Vice Chair, who then served as chair, never gave Cotton the memo (obviously he knew Cotton didn’t want to hear of it). The committee (which is entrusted by the board with keeping everything honest) made no mention of the event to the board. Officially, nothing happened that day in July.
We found a copy of the Top Concerns Memo online, an exhibit in the bankruptcy disaster case, and here it is.
It is comprehensive. Conflicts of interest, payments to girlfriends and family, board members being paid without disclosure, management ordering overrides of internal financial controls, “vague and deceptive billing” by vendors, including $1.8 million for a house rental.
Carry Guard insurance (which became a disaster) issues, board being misled, employees threatened if they objected. Board being misinformed as to its real cost. Staff being given leased cars without authority, sometimes custom vehicles. $70,000 payment to a very fishy LLC for LaPierre’s mansion. So the Audit Committee knew about the $6 million mansion a year before it became public knowledge, and kept it a secret from the rest of the board.
Director Lance Olson getting firearms (must be from NRA Museum inventory) without proper invoices. A real shocker about the Museum guns: “Purchase of firearms that remain on the books starting in 2005 where we have no indication of where the firearms are located (over $1M in assets). Lance Olson referenced above is a recent example.” Over a million in firearms missing? Some missing since 2005? See our previous post about reports that the museum is probably being looted right now. The National Firearms Museum must be an FFL, and FFLs are expected to be able to account for their inventory, and acquisitions and dispositions.
To think that all this was known, nearly a year before the scandals started breaking, and two years before the New York AG filed suit (August, 2020). There would have been lots of time to clean house. But the Audit Committee just closed its eyes. It was too terrible to think about. That’s what the entire board has done for the following years. Close their eyes, make believe it will go away. Nothing bad will happen. Our attorneys will save us. We can even be defiant! Re-elect LaPierre, make the chair of Audit Committee our president, that’ll show the AG who’s boss here!
Update: We’ve been trying to “decode” some of the memo, which was written for insiders who would understand the abbreviations. We’ve spoken with NRA insiders with a lot of institutional memory, and had some luck.
“Grassroots Behavioral Services — B. O’Leary payments of AR relating to PM Consulting, payments continued after contract end.” AR may be accounts receivable. Brad O’Leary owned PM consulting, which was a big NRA vendor and rival to Ackerman McQueen. Shortly after the 1998 annual meeting, Ackerman McQueen became THE NRA vendor superpower, and NRA terminated PM Consulting. The shocker here is O’Leary and PM Consulting were still being paid, probably large sums, a full 20 years after they were terminated as a vendor. Hush money for 20 years suggests that knew a lot of things better kept secret. The name Grassroots Behavioral Services cannot be explained, but the Virginia Secretary of State’s records show a “Behavioral Projects, Inc.” whose president was Wayne LaPierre until he terminated it in 2013.
“Associated TV” is an NRA vendor owned by David McKenzie, who gave the LaPierres the vacations in the Bahamas. His output was a TV series starring LaPierre, a series that no one ever saw and which was released 1998-2001; what he is doing billing in 2018 or so is not apparent. $1.8 million refers to the breathtaking sum that NRA paid to rent one of McKenzie’s houses to serve as a backdrop for the filming.
MMP billings are billings to NRA by that company, which is owned in whole or in part by McKenzie.