The office of New York Attorney General Letitia James has won a $6.35 million award against former leaders of the National Rifle Association (NRA).
The judgment also requires the NRA to reform its governance to abide by New York’s not-for-profit laws, according to the AG’s office.
The judgment follows a jury verdict that the NRA failed to properly administer charitable funds and violated state laws, that former executive-vice president Wayne LaPierre caused the NRA $5.4 million in damages, and its former chief financial officer Wilson Phillips caused the NRA $2 million in damages.
The court found that the NRA must enact more than a dozen reforms to its governance to prevent future violations of law, according to the AG’s office.
The judgment requires the NRA to change how board members are elected, hire an outside consultant to advise the NRA on compliance with the court’s directives and other practices, and increase transparency and communication with board members.
The NRA also is ordered to change the audit committee by barring anyone who served on the committee between 2014 and 2022 and requiring future members to be elected by the full board.
The judgment also requires LaPierre to pay $4.35 million and Phillips to pay $2 million, plus 9% nine interest per year.
“For decades, the NRA let self-interested and self-dealing insiders run the organization with complete disregard for the rule of law. As a result of my office’s efforts to stop corruption at the NRA, the NRA has been forced to clean house,” James wrote in a news release.
LaPierre, who resigned from the NRA, is barred from returning to the organization or its affiliates in any fiduciary role for more than a decade.
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In February 2024, the AG won the first stage of a two-part trial where a jury found the NRA, LaPierre, Phillips, and former general counsel and current corporate secretary John Frazer violated state laws.
The jury found that the NRA failed to properly administer charitable funds and protect whistleblowers, that the NRA and Frazer made false regulatory filings, and that LaPierre and Phillips, together, caused the organization $7.4 million in monetary harm.
Before the second stage of the trial, the AG reached a settlement with Phillips in which Phillips agreed to a 10-year ban from serving as a fiduciary of a not-for-profit in New York.
In the second phase of the trial, the AG won a 10-year ban on LaPierre from serving as an executive at the NRA and its affiliates.
The judgment requires the NRA to make significant changes to its governance, structure, and bylaws, including:
• Hiring a compliance consultant to work with the NRA to implement court-ordered remedies and recommend best governance practices
• Requiring the full board to elect members of the audit committee
• Requiring the NRA to remove and not reappoint current members of the audit committee who served on the committee from 2014 through 2022
• Changing how board members are elected
• Issuing to members an annual compliance report on travel expenses, contract procurements, and other topics, for a minimum of five years
• Implementing protections for the chief compliance officer so they can do their job without fear of retaliation
• Providing online access to board members of board governance materials, regulatory filings, and substantial legal rulings
The AG filed a lawsuit against the NRA and current and former senior officers in August 2020. In January 2021, the NRA filed for bankruptcy in an attempt to avoid accountability by trying to reorganize in Texas, according to the AG.
In May 2021, a federal bankruptcy court in Texas rejected the NRA’s bankruptcy petition, stating, “that the NRA did not file the bankruptcy petition in good faith,” according to the AG.
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