The Daily - The Crumbling of the N.R.A.

Episode Date: May 24, 2021

It had long appeared that the National Rifle Association was impervious to anything or anyone.Now, an investigation into financial misconduct accusations led by the New York attorney general’s office imperils the very existence of America’s most powerful gun rights group.We look at how a plan to circumvent this investigation through a bankruptcy filing backfired.Guest: Danny Hakim, an investigative reporter for The New York Times. Sign up here to get The Daily in your inbox each morning. And for an exclusive look at how the biggest stories on our show come together, subscribe to our newsletter. Background reading: The N.R.A. filed for bankruptcy this year to beat regulatory action in New York, but a judge rejected the strategy.How an internal power struggle, a New York State investigation and accusations of fraud and betrayal on all sides left Mr. LaPierre reeling.For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday.

From The New York Times, I'm Michael Barbaro. This is The Daily. For years, the National Rifle Association, America's most powerful gun rights group, has been embroiled in a potentially devastating investigation in New York. Today, my colleague, Danny Hacom, on how the NRA's plan to circumvent that investigation just backfired. It's Monday, May 24th.

spoke to you back in 2019, the Attorney General of New York, Letitia James, had just launched what she described as a major investigation into the National Rifle Association. And a lot of people's reaction was, okay, we'll wait and see, but this is the NRA. Nobody really lays a finger on that organization. It's kind of impervious to anything and anyone. And so there were a lot of questions around whether or not her investigation would really get that far. That's right. I mean, this is now a 150-year-old organization, and this is the first time it's really had a major confrontation with a regulator. And for the last 30 years...

You know, we Americans, we live freer lives than anyone else on the planet. It's been led by Wayne LaPierre. And I'm proud to lead an organization of 5 million patriotic members. Yeah, 5 million. LaPierre was a lobbyist, not really known as a gun enthusiast by his own admission. He came in, bolstered membership in the organization. He raised a ton of money. And he cemented the NRA's place as the face of the gun lobby. Today, more than 40 states have right to carry laws on the books. He so influenced the political world that gun restrictions

haven't passed in years. Yeah, I know. And each one of these was a battle, believe me. Gun control is now an untouchable issue for conservative lawmakers. And President Donald Trump sits in the Oval Office today, standing guard over the same freedoms you and I cherish. And when the attorney general's investigation was announced a few years ago, the NRA had just played a major role in electing Donald Trump. And thanks to the hard work and sacrifice and leadership of millions of NRA members and supporters, Hillary Clinton's political career is over. So in some ways, the NRA and LaPierre were at the peak of their powers.

So what happens to that investigation from the Attorney General of New York? Well, she investigates for more than a year. She issues subpoenas to the National Rifle Association, to some of its contractors. And there's all sorts of allegations that are coming out, allegations of millions of dollars being misspent. And then in August of last year. My office filed a lawsuit against the National Rifle Association. The attorney general files a complaint for years of self-dealing and illegal conduct. The complaint outlined a lot of issues, but many revolved around the lavish lifestyle and perks given to Wayne LaPierre. Mr. LaPierre's already getting compensation from the NRA

of more than $1.8 million a year, according to their most recent filings. On top of that, some of the types of revelations that came out were that he was frequently visiting the Bahamas by private air charter with his family at a cost of more than half a million dollars to the NRA. Wow. He was typically going to a couple of yachts that were owned by an NRA vendor. He and his wife went on an all-expense paid safari to Africa. And they also traveled all over the world to Hungary, to Lake Como.

He spent millions on travel consultants. And it's important to understand that the NRA is a nonprofit organization chartered in New York, which means that the New York Attorney General has special jurisdiction over them. So, you know, all these extravagant expenses would raise questions, even at a normal company, but at a nonprofit group, they're going to especially raise questions about how members' money and how donations are being spent. And Attorney General James announces,

are being spent. And Attorney General James announces. We are seeking to remove Mr. LaPierre from the NRA's leadership. That she's seeking to remove Mr. LaPierre as CEO. To make full restitution for funds they unlawfully profited. To claw back millions of dollars from him and three other current or former executives. And also... We are seeking an order to dissolve the NRA in its entirety. The most surprising thing is she's actually trying to shut down the NRA. Hmm. Literally just close the NRA down. That's correct. So the NRA,. That's correct. So the NRA, they know the seriousness of this matter.

So their response a few months later in January of this year is to file for bankruptcy. How about that? The National Rifle Association, so influential in this country for so many years, seeking bankruptcy protection. Why bankruptcy, of all things? Well, it was a major surprise. It shocked everyone. In its court filing in Dallas, it reported between $100 million and $500 million in assets. Because typically, companies or non-profit groups file for bankruptcy because they're in financial distress. Right, so because they're in financial distress.

Right, so are they actually in financial distress? No, they're really not. But sometimes bankruptcy can be used by organizations to reorganize when they're facing some other non-financial kind of distress. It's not the norm, but it can be used that way. NRA president says, this was a baseless,

premeditated attack on our organization. They believe the attorney general's investigation was simply a political attack aimed at putting them out of business. And they've said that they fixed many of the problems that the attorney general has raised. The gun rights advocacy group announced it's part of a larger plan to restructure in Texas. And through this bankruptcy filing, they said they were going to move their charter from New York and reorganize in Texas, a state that is far friendlier to gun rights and ownership, which got everyone wondering,

is this simply an end run to try to get out of the jurisdiction of the New York attorney general? Hmm. Basically, no longer operate in New York, no longer be subject to the investigatory powers of New York's attorney general. Exactly. Look, this is a pretty unconventional use of bankruptcy law. There's not much precedent for something like this being tried before. And it led Tish James, the New York Attorney General, to file a motion to dismiss the bankruptcy case soon after it was filed. Good morning. This is a bankruptcy court in Dallas, Texas. Good morning. This is a bankruptcy court in Dallas, Texas.

And that led in April to a trial that included the attorney general's office, the NRA, and a number of creditors and other interested parties in bankruptcy court to see if this bankruptcy filing would continue. And a lot of this trial was focused on one key question. Are the allegations that the New York attorney general is raising, do they have teeth or are they simply politically motivated? So Danny, take us through this trial. What stood out to you? Well, let me start, Michael, by talking through the case that the Attorney General's side presented. And I should just make clear, when I say the Attorney General's side, I'm also including one of the NRA's largest creditors who argued alongside the Attorney General's office. Got it. Do you solemnly swear or affirm that what you're about to say will be the truth? Yes, I do.

The attorney general's side began calling a number of witnesses. Can you please state your full name for the record? Philip B. Journey. And one of the witnesses who really stood out to me was Philip Journey. He's one of the board members of the NRA. Are you familiar with the New York attorney general's petition? Yes, I read it the day it was filed. The attorney general's side asked him about the lawsuit that the attorney general's office filed against the NRA last year.

And it took me a while to read it because about 40 pages in, I physically got sick. I was so distraught by what I read. What he said is when he read this complaint, he felt sick to his stomach. I can say that I reacted with shock and essentially had an epiphany. What epiphany did you have? Could you go into more detail about that? That depositions had already been taken, documents had already been provided as a result of civil process and discovery,

that interviews had occurred by staff of the New York Attorney General, and that there were significant allegations and there appeared to be some documentary and evidentiary support for those allegations. He realized through reading this that not only were the allegations shocking, but that the attorney general's office had done significant work to back them up. That there actually was a lot of evidence, a lot of time had been spent on this complaint. It was a professional document and there were real reasons for concern. So the attorney general's side is showing through this testimony that an NRA board member, someone presumably close to the leadership with the best interest of the organization in mind, is saying that these allegations are real, that they're not simply politically motivated,

and that there seems to be real evidence behind them. That's right. And they brought up another witness who showed that not only did board members think these allegations were serious and that the attorney general may have the ammunition to back them up, but that LaPierre himself knew this too, and that he was scared. How do you know Mr. LaPierre himself knew this too, and that he was scared. How do you know Mr. LaPierre?

I met Mr. LaPierre in my office in 1980 when I was running it. This witness is Tony Makris, who worked at the NRA's publicity firm. Mr. Makris, have you ever heard Mr. LaPierre refer to you as his brother? Yes. And he was a close confidant of LaPierre refer to you as his brother? Yes. And he was a close confidant of LaPierre for decades. Were you involved with the decision of the NRA to retain Mr. Brewer and his law firm in early 2018? I wasn't involved in the selection.

Mackress is asked about a lawyer named Bill Brewer. And who is Bill Brewer? Brewer is a lawyer that LaPierre hired when the NRA started to have problems in New York a few years ago. And Brewer conducts an audit of the NRA to understand what damaging information there might be at the organization and to get ahead of it. And Macris says Brewer told LaPierre there is some real dirt here. Brewer says you guys are in a lot of trouble. I mean, this is criminal. You're going to be raided by the authorities in the state of New York.

Your office is going to be raided by the FBI. You're going to be brought up on RICO charges. And you could potentially be criminally charged for it. And throughout the many months of the audit process, Brewer convinces LaPierre to get rid of pretty much all the prominent lawyers who had been working with the NRA for many years. And I said, I don't understand what has you so scared that you're going to forsake everybody that has helped you for 38 years, turn your back on us all, and you're turning everything over to him. What has you so scared? What was Mr. LaPierre's response to that?

He said, Bill Brewer is the only one that can keep me out of jail. Macris said that LaPierre was convinced that Brewer was the only person who could keep him out of jail. Hmm. He said he'd only want to stand between me and the guys with handcuffs, or me in an orange jumpsuit. Danny, why does this moment and why does this testimony matter for the Attorney General's side? What are they getting at? So it further supports the notion that there are real allegations here. And that LaPierre knows it.

And in testimony, we hear that LaPierre decided to then file for bankruptcy on his own without telling other top executives at the NRA. When did management inform the Board of Directors that the NRA was seeking Chapter 11 protection? Subsequent to the filing of the petition. The far majority of the board was not told. The chief financial officer said he was not told. So the decision was made to file for bankruptcy without asking the general counsel of the association. Is that right? Yes. The NRA's general counsel, the top lawyer at the organization, testified that he was not told in advance about the bankruptcy. This is just highly unusual, and it gets at the question of LaPierre's intention in putting the

NRA into bankruptcy. Was it to protect the organization, or was it to protect himself? or was it to protect himself? And if it was to protect himself, that really undermines the NRA's claim that the filing was an appropriate use of the bankruptcy system. So this is all starting to look pretty bad for Wayne LaPierre and for the NRA. Yeah, it is.

And the one person most qualified to defend the NRA and Wayne LaPierre was Wayne LaPierre himself. We were calling Mr. Wayne LaPierre this morning. And it really was his testimony that everyone was waiting to hear in this trial. Maybe just take five minutes for everybody to get their act together and then we'll swear Mr. Rappierian. Thank you. We'll be right back.

Mr. Rappierian, can you hear me? I can. Would you raise your right hand? So Danny, describe this long-awaited moment when the man at the center of this entire saga, Wayne LaPierre, takes the stand. moment because for so long, Wayne LaPierre has been the implacable, fiery, aggrieved voice of the gun lobby. You really only see him in the speeches he gives either at CPAC or at the NRA convention. And the image he's had is of the unshakable, unyielding gun rights advocate. But the real Wayne LaPierre is really much different. And that's what came across as soon as he took the stand. Good afternoon, Mr. LaPierre.

Good afternoon, Mr. Chan. You're the executive vice president, aren't you, of the National Rifle Association? Yes, I am. And you've held that position since 1991, correct? Yes, I have. He'd actually just had eye surgery. Are you able to see the exhibit machine? Yes, I am. I'll switch glasses, too, when I do it.

So he was kind of squinting and having some trouble. In terms of how you do your business on a day-to-day basis, is it true that you send no emails? That's correct. Is it true that you send no texts? That's correct. He doesn't use computers at all. You know, we're in 2021. That's not something you hear very often. So the Wayne LaPierre who was on the stand was, you know, a much different person than the image of him that has built up over the last 30 years.

So how does LaPierre start to answer all these allegations that have come up in the trial? What does he say to those claims? So in response to some of the allegations of financial misdeeds, he defends himself by saying these expenses were necessary to do his job, to recruit celebrities, to raise money for the NRA. You know, when it came to the issue of the safari to Africa, for instance. You also receive free hunting trips, including all expenses paid for by Under Wild Skies, an NRA vendor. Isn't that true? Yes, that was all work.

You received an elephant hunting trip in Africa with your spouse in 2014, correct? As part of the work for NRA, yes. He said he did take that trip and all expenses were paid for him and his wife. And your water buffalo hunt in Botswana, was that a free hunting trip as well? We were filming the television show

Under Wild Skies for NRA. And did your spouse or company you on that water buffalo hunt? Yes, she did. As part of projecting her image for the NRA. But it was for NRA business. They were filming a TV show, a hunting show at the time to promote the NRA. So it was a legitimate business expense. And does he have a point there? Well, I think in this case, he might have had a legitimate point.

But as his testimony goes on, there is just more and more instances of spending that raises questions about what he's doing and what the organization is doing. Mr. LaFierre, can you identify the ship which is shown in Exhibit 95? Yes, that looks like the boat illusions. That's the boat illusions. One of the most striking was his use of luxury yachts. He's asked during the testimony about a trip he took on one of these yachts to the Bahamas in 2013. And you started staying on the Yacht Illusions in the Bahamas for a week at a time in 2013, correct? For security, as a security retreat. And he says he went for security reasons.

This 2013 trip was right after the Sandy Hook Massacre. He claimed that he was taking it because of threats he was getting in the wake of that massacre. He's arguing he would be most safe on a yacht in the Caribbean. In the Bahamas, yes. That was one of many instances where his defense of having a legitimate work purpose felt a little strained. He also had another defense for many of these allegations of financial misconduct. Isn't it correct also that the NRA paid for tens of thousands of dollars for a hairstylist to provide makeup services to your spouse? I don't know what NRA paid for. Those were all... Which is that he didn't know about it. For example, the tens of thousands of dollars

spent on hairstyling for his wife. I don't know the answer to that. I never saw the invoices. His defense in that instance, like it is in so many, is that he just didn't know about it. Hmm. So LaPierre's defense essentially consists of saying either these very expensive things that I did and that others paid for, they were work expenses, or I didn't really know about these expenses, so I can't be held responsible for them. But in any case, it feels like this testimony is proving New York Attorney General Letitia James' point that this is a somewhat strangely run organization and not at all an organization run

in a traditional nonprofit manner. Yes, that's right. And Danny, how does LaPierre respond to witnesses' testimonies that he was afraid he was going to go to prison and filed for bankruptcy without consulting top leaders of the NRA? So LaPierre was never asked directly about whether he was afraid of going to prison. That didn't come up. But he was asked why he made the decision to file for bankruptcy without telling other NRA leaders. And he said that his employment contract gave him the authority to restructure the organization. Why did you not go back to the NRA board before actually pulling the trigger on the pilot?

Well, there was tremendous concern about leaks. He says he was afraid that the information would be leaked. And the fact that a leak on this with the clear intent of General James to dissolve the National Rifle Association, in what we believe, as I've said numerous times, an improper use of government authority, times an improper use of government authority, that she would, if leaked, she would immediately attempt to put the NRA into receivership, which would in effect destroy the organization. He basically said he was scared, but not for himself. He was concerned for the health of the organization and its future. And he was reiterating the whole thrust of the NRA's argument was that the attorney general's office was out to destroy their organization. left to the judge to decide, after all the testimony he heard, whether the NRA's bankruptcy filing was a legitimate use of the courts or not. So Danny, what ends up happening? What is the outcome? So in mid-May, the judge rules against the NRA and he throws their case out of bankruptcy court. And what he says in his ruling is that, quote,

the question the court is faced with is whether the existential threat facing the NRA is the type of threat that bankruptcy code is meant to protect against. The court believes it is not. So we went into this trial with this question, which is, are the attorney general's allegations against LaPierre and the NRA legitimate? Or are they simply politically motivated?

And the judge here seems to suggest that, yes, they are credible allegations and that the bankruptcy code cannot be used to shield the NRA from those allegations. That's right. And it was really a devastating ruling for the NRA. So, Danny, what happens now? Could the NRA end up being, as New York's attorney general wishes, dissolved? Well, I think most people think that's unlikely to happen. I mean, the way these things play out, the attorney general can't just unilaterally make a decision, even though she has jurisdiction over nonprofit groups

that are registered in New York. It has to play out in the court system. So the case now is in the court system. She's seeking to have it dissolved. I think the expectation is there will be lesser sanctions. What is likely, however, is that Mr. LaPierre's tenure at the NRA is in real trouble. Most people I've talked to, most of the experts who have followed the case, And most people I've talked to, most of the experts who have followed the case, think that the attorney general will be able to remove him from his leadership position as this plays out in the New York court system.

But there may be a big irony to this whole saga that even without LaPierre at its head, that the NRA may wind up in a better position once this is all over. How could that possibly be? So I would say an NRA without LaPierre could actually be a leaner NRA that doesn't have these excessive legal bills, that doesn't have all these questionable spending practices, that doesn't have all these questionable spending practices, that doesn't have all these investigations. And even though LaPierre has been, you know, over the 30 years of his tenure has been incredibly effective, I think there's even a lot of insiders now that believe that in the last few years, he's become more of an impediment to the organization than an asset. And so the NRA, at the end of this process,

or I should say on the other side of this battle with the Attorney General's office, could potentially come out of it as an organization that's more focused on what its actual mission is, which is protecting gun owners and fighting against any effort to challenge them. Thank you, Danny. We appreciate it. Thank you, Danny. We appreciate it. Thank you, Michael. We'll be right back.

Here's what else you need to know today. Today we faced an unprecedented event when flying a passenger plane from Athens to Vilnius by Ryanair company was forcibly landed in Minsk. In an incident that sparked international outrage, the authoritarian president of Belarus, Alexander Lukashenko, dispatched a fighter jet to intercept a commercial airliner traveling through his country's airspace in order to arrest a journalist critical of his government.

a journalist critical of his government. Evidently, Belarusian KGB is behind the incident. Lukashenko appears to have targeted the journalist, Roman Protasevich, who lives in Lithuania, because he runs a popular online outlet for opponents of Lukashenko. Lukashenko, widely seen as a dictatorial and repressive leader, had already inflamed European and U.S. leaders last year by cracking down on protests against him. Sunday's incident provoked a new round of condemnations, with the foreign minister of Greece accusing Lukashenko of carrying out a, quote, state hijacking.

And Lithuanian officials calling on Lukashenko to release Protasevich and allow him to safely return to their country. President of Lithuania demands that the Belarusian regime immediately release all the passengers, including Roman Protasevich, and allow them to travel to Vilnius. Today's episode was produced by Austin Mitchell, Stella Tan, Alexandra Lee Young, and Sidney Harper. It was edited by M.J. Davis-Lynn and Lisa Chow, and engineered by Chris Wood. That's it for The Daily.

I'm Michael Barbaro. See you tomorrow.