Jury says NRA ex-chief LaPierre liable for mismanaging gun rights group

[February 24, 2024]  By Jonathan Stempel and Jack Queen

NEW YORK (Reuters) - Former longtime National Rifle Association chief Wayne LaPierre mismanaged the gun rights group and cost it millions of dollars through wasteful spending to support a lavish lifestyle, a jury found on Friday, recommending that he repay $4.35 million.

In a civil corruption case brought by New York Attorney General Letitia James, the six-person jury in Manhattan also recommended that former NRA treasurer and chief financial officer Wilson Phillips repay the group $2 million for his own mismanagement.

Another defendant, NRA current secretary and general counsel John Frazer, did not harm the group financially, the jury found.

In a 2020 lawsuit, James accused the NRA of letting top executives divert millions of dollars for luxuries, turning the group into "Wayne's World" as LaPierre enjoyed private jets, expensive trips and a Beverly Hills shopping spree.

James also said the NRA ignored the need for board approval to waive conflicts of interest and approve insider transactions.

"Today, after years of rampant corruption and self-dealing, Wayne LaPierre and the NRA are finally being held accountable," James said in a statement.

Jurors found that LaPierre caused $5.4 million of damage to the NRA, but had repaid $1.05 million.

Lawyers for the individual defendants did not immediately respond to requests for comment.

Defense lawyers had called the lawsuit part of a political "witch hunt" because James, a Democrat, did not like what the NRA stood for and wanted to silence it.

Manhattan Judge Joel Cohen, who oversaw the trial, will have the final say on remedies.

NRA STRUGGLES

LaPierre, 74, faced possible removal before resigning in January after more than 32 years as chief executive.

He built the NRA into a political powerhouse, often allied with Republicans, that pressed Washington and statehouses to expand gun rights, even as mass shootings mounted nationwide.

Wayne LaPierre, former CEO of the National Rifle Association (NRA), arrives at New York State Supreme Court for the NRA trial in New York City, U.S., February 23, 2024. REUTERS/Brendan McDermid

But the group he once led has struggled in recent years, with revenue down 44% since 2016 and membership down by nearly a third since 2018, according to court papers filed last year.

In a statement, the NRA said Friday's verdict confirmed that the group had been "victimized by certain former vendors and 'insiders' who abused the trust" it had placed in them.

The jury began deliberating on Feb. 16 and needed five days to issue its recommendations.

The NRA since 1871 has been a New York-registered nonprofit organization, meaning its assets must be used to advance charitable needs and serve members.

In her closing argument for the state, Assistant Attorney General Monica Connell said the NRA, as a charity, should have spent money to advance its mission, and was deflecting blame after getting caught with its hands in the cookie jar.

"Saying you're sorry now, saying maybe you'll put back a couple of those cookies, doesn't mean you didn't take the cookies," Connell said.

James originally sought to dissolve the NRA, but Cohen ruled in 2022 that she had not shown sufficient public harm to justify a "corporate death penalty."

In testimony last month, LaPierre admitted he should have told the NRA board about vacations he had taken with a Hollywood producer at about the same time the NRA began paying higher fees under a contract with a company the producer owned.

But LaPierre maintained that the NRA had undergone a "course correction" to improve accounting in 2018, and that James should have been "patting us on the back for the work we had done."

(Reporting by Luc Cohen, Jack Queen and Jonathan Stempel in New York, Editing by Will Dunhan, Rosalba O'Brien and Noeleen Walder)

[© 2024 Thomson Reuters. All rights reserved.]This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.