Yesterday, the NY Attorney General filed a second amended complaint, which shifts the focus of her case and makes some new allegations. We’ve only had time to skim it (it’s over 170 pages long). It no longer seeks to dissolve NRA as a corporation. Hurrah! It does set out some new legal theories under the NY law governing trust relationships, which will be bad news for the individual defendants (LaPierre, Frazer, Powell and Phillips), since that allows suit for double damages for misappropriation of assets. It also asks, as a penalty, that they be required to reimburse NRA for all their salaries while they were misappropriating, plus interest. It also asks the appointment of two persons to oversee NRA, one to oversee the finances and another to oversee compliance with laws.
Major notes while skimming (page numbers to start each off):
52: “In early 2018, LaPierre asked the principal of UWS to accompany him on two non- business-related trips to Scottsdale, Arizona. These trips were personal in nature and unrelated to NRA business. On both trips, LaPierre and the UWS principal stayed in suites at a Four Seasons hotel, which the UWS principal charged to his Ackerman McQueen credit card, and which was then billed to the NRA. On the latter trip, in April 2018, LaPierre and the UWS principal took separate private flights on the return leg, LaPierre flying to Dallas TX (at a cost of $27,000) and the UWS principal flying to Savannah GA (at a cost of $35,800). All told, the NRA paid more than $200,000 in travel expenses for these two trips.”
Also 52: “Between 2009 and 2017, LaPierre expensed over a hundred thousand dollars in membership fees for a golf club located in the Washington D.C. area. LaPierre testified that he uses the golf course for both personal and business reasons. In its annual filings with the Attorney General for 2014 to 2018, the NRA asserted that it required substantiation prior to reimbursing these expenses. The Attorney General has not found any evidence that the golf membership fees and related business uses were substantiated prior to reimbursement.”
56-57: The $6 million mansion NRA was going to purchase for LaPierre.
66-67: Vendor McKenna made millions off a “Project Ben-Hur.”
68: Powell diverted $30,000/month to his wife.
76: Millie Hallow, LaPierre’s “right hand,” spent thousands of NRA money on her private matters. One was $1300 for a chauffeured car to drive her son from New York to DC.
83: Ackerman had a “handler” for LaPierre, who would carry thousands in cash to tip people. (Wait till they discover that handlers were also furnished to other NRA top dogs to do the same).
100: Excess compensation.
113: Sets out LaPierre’s pay and bonuses. In 2019, the year all the scandals broke, the board voted him a $455,000 bonus, atop his $1.2 million salary.
130: Audit Committee comes in for a lashing.
137: compliance issues.
143: Vendor MMP.
144: Continued violations of law even after this suit was filed. Supposed reforms are poppycock.
152: Bankruptcy. Rubs in the stupid boasting about how they will escape NY.
14 counts listed at the end. It requests that the individual defendants be barred from ever serving as officers of a NY nonprofit, that they be ordered to pay double damages for everything they misappropriated, and that they repay NRA their salaries over the time they were betraying their trust, plus 9% interest.
If the last wins out, Leticia James should be made an Honorary Life Member, as the greatest fund raiser in NRA’s history, the only person who raised tens of millions for the organization without asking compensation.
Update, a lawyer reader points to paragraphs 701 and 704, new additions to the lawsuit. 704 seeks to bar NRA from fundraising in NY. 701 says “The Attorney General seeks removal for cause of each officer, director, and trustee who violated the whistleblower policy required by N-PCL § 715-b and EPTL § 8-1.9.” That goes beyond removing the four named defendants, and, given what the complain argues, might include the entire Audit Committee, or the entire board. 118 says the board was way late in adopting the required whistleblower provisions. 503 ff criticizes the Audit Committee’s response to whistleblowing. 698 ff criticizes the board and officers for their response, and for allowing retaliation against the whistleblowers.