The National Rifle Association (NRA) settled a lawsuit with the D.C. attorney general’s office on Wednesday, avoiding a trial and ending three-and-a-half years of litigation with a promise to reform the troubled charity sector.
Prosecutors said the NRA Foundation misused more than $10 million in tax-deductible donations and illegally funneled the funds to its parent organization for political activities. The case was scheduled for trial on April 29th.
The settlement comes as the NRA recovers from a disastrous New York corruption trial in which the organization and its executives were fined millions of dollars for misappropriating funds.
The judge found that the NRA’s top executives spent millions of the group’s funds on lavish trips, clothing, dinners and other perks over several decades. Former CEO Wayne LaPierre, who resigned following the trial, was liable for $5.4 million in damages, while former chief financial officer Woody Phillips faced a $2 million judgment.
In the Washington, D.C. case, Attorney General Brian Schwalb argued that NRA charities violated the “sacred public trust” of nonprofits and “allowed the NRA to use nonprofits as unchecked piggy banks.” ” he said.
He continued in the statement, “Bending to pressure from the NRA, the Foundation diverted millions of dollars to the NRA in grants and risky loans that were only repaid after the OAG filed suit.” “It was done,” he said. “Tax-exempt nonprofit organizations are a form of public trust, and abusing that trust like the NRA does violates both the public interest and local law.”
The regulatory commission did not admit any wrongdoing in the settlement agreement.
“This is further evidence of the NRA’s commitment to good governance,” NRA Chairman Charles Cotton said in a statement. “The NRA stood up to this political attack and has proven itself strong, secure, and vindicated through this lawsuit.”
The group also fired back at Schwalb’s depiction of the settlement in a statement to The Hill, with NRA adviser William Brewer calling the settlement “distorted and untrue.”
“DCAG ‘spinned’ today’s settlement by avoiding the facts. DCAG long ago abandoned its claims of wrongdoing against the NRA,” Brewer wrote. “Even by Washington, D.C. standards, this is class political maneuvering, and an after-the-fact rationalization of the officials’ failed lawsuits.”
Brewer went on to argue that many of the claims Schwalb has made against the NRA Foundation are unsubstantiated, noting in particular that the settlement agreement contains no accusations or intimations of wrongdoing by the organization.
“In the face of these facts, DCAG has settled the lawsuit and waived all claims against the NRA and the NRA Foundation,” he wrote.
As part of the settlement agreement, the NRA Foundation agreed to annual nonprofit compliance training for board members and officers, more consistent auditing, and the establishment of a conflict of interest policy.
It also establishes new policies for the foundation to “manage grants, loans, shared services, and other activities with the NRA to ensure transparency, Foundation independence, and compliance with the Foundation’s nonprofit mission.” I’m asking you to.
The proposed settlement does not include a monetary penalty because the district’s nonprofit governance law does not allow for punitive damages. The program will remain in effect until December 2026, according to Schwalb’s office.
The NRA has long struggled with declining membership and rising litigation costs between the New York and Washington, D.C., lawsuits.
association Lost approximately 500,000 members in 2021-22, according to the gun violence news nonprofit The Trace. N.R.A. Raised just $213 million According to the Washington nonprofit Citizens for Responsibility and Ethics, 2022 will reach about half of the 2016 total.
Following an 18-month investigation into the New York incident, Attorney General Letitia James (D) accused the NRA of fostering a “culture of self-handling, mismanagement, and negligent oversight,” charging the organization with $64 million over three years. He said it caused damage. She sought to dissolve the entire organization in a lawsuit, but a state judge dropped that request last year.
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