NRA reports alleged misspending by current and former executives to IRS
By Beth Reinhard and Carol D. Leonnig
November 25, 2020 at 2:09 p.m. EST
After years of denying allegations of lax financial oversight, the National Rifle Association has made a stunning declaration in a new tax filing: Current and former executives used the nonprofit group’s money for personal benefit and enrichment.
The NRA said in the filing that it continues to review the alleged abuse of funds, as the tax-exempt organization curtails services and runs up multimillion-dollar legal bills. The assertion of impropriety comes four months after the attorney general of New York state filed a lawsuit accusing NRA chief executive Wayne LaPierre and other top officials of using NRA funds for decades to provide inflated salaries and expense accounts.
The tax return, which The Washington Post obtained from the organization, says the NRA “became aware during 2019 of a significant diversion of its assets.” The 2019 filing states that LaPierre and five former officials received “excess benefits,” a term the IRS uses when officials have enriched themselves at the expense of a nonprofit entity.
The disclosures in the tax return suggest that the organization is standing by its 71-year-old chief executive while continuing to pursue former executives who left the group. The filing says that LaPierre “corrected” his financial lapses with a repayment and contends that former executives “improperly” used NRA funds or charged the nonprofit for expenses that were “not appropriate.”
LaPierre has reimbursed the organization nearly $300,000 in travel expenses covering 2015 to 2019, according to the tax return, which does not explain how that amount was determined or when LaPierre paid it.
NRA spokesman Andrew Arulanandam said in a statement this week that “the vast majority of Mr. LaPierre’s travel was undertaken in strict compliance with NRA policy.”
In response to questions from The Post, NRA officials said the organization is financially strong and closely adhering to nonprofit law. “As its tax filing demonstrates, the NRA is committed to strict compliance with its accounting controls and good-governance practices,” said Charles Cotton, an NRA vice president and audit committee chair.
The tax filing acknowledges that there are disputes over the alleged financial abuses the NRA blames on the departed officers, including former board president Oliver North and former chief lobbyist Chris Cox.
Some of those executives parted ways with LaPierre over his leadership and are cooperating with the New York attorney general’s investigation, according to two people familiar with the matter who spoke on the condition of anonymity because of the sensitive nature of the ongoing investigation.
In another disclosure in the tax return, the NRA said it is investigating unnamed board members for flying first class without authorization.
Three tax and accounting experts who reviewed the 2019 tax return for The Post said the disclosures show the organization and LaPierre trying to take responsibility and avoid further legal jeopardy.
“This is the type of cleanup I would expect to see after a history of gross violations of nonprofit law,” said Philip Hackney, an associate professor of law at the University of Pittsburgh who worked at the IRS for five years until 2011 providing legal oversight of tax-exempt organizations.
LaPierre personally signed the 2019 tax return; such a document is customarily signed by the organization’s treasurer. “He is putting himself on the line, under penalties of perjury, which is what you do if you are trying to get in someone’s good graces,” Hackney said.
New York lawyer and expert on nonprofits Daniel Kurtz said, “It’s a smart move by the NRA instead of digging in their heels, though who knows how they came up with the numbers. It’s an admission of wrongdoing, for sure.”
In her lawsuit, New York Attorney General Letitia James, a Democrat, alleged a much larger misappropriation of funds, seeking to shut down the nation’s largest gun rights organization and oust LaPierre.
“For years, Wayne LaPierre and his lieutenants skirted the law and pocketed millions from NRA coffers to fund lavish lifestyles that included private jets, pricey vacations, expensive meals, and no-show contracts,” James said this week. “Mr. LaPierre’s reimbursement of just a fraction of the millions he personally profited from indicates how the NRA went unchecked under his leadership.”
LaPierre has called the lawsuit unconstitutional, casting James as a liberal anti-gun activist who has long sought to destroy the gun lobby.
The New York suit alleges that LaPierre funneled personal expenses through the NRA’s former public relations and advertising firm, Ackerman McQueen, and failed to report hundreds of thousands of dollars of personal income. Executives at Ackerman McQueen have said that all of their financial arrangements were approved by LaPierre.
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