N.R.A. Chief Takes the Stand, With Cracks in His Armor

Mr. LaPierre is seeking to use bankruptcy to help reincorporate the N.R.A. in the more gun-friendly state of Texas, and has already repaid the N.R.A. about $300,000 as he seeks to hold on to his job. Asked if he was disciplined for misspending the money, he said, “Yes, I was disciplined, I paid it back,” suggesting that at the N.R.A., discipline sometimes amounts to paying back money after you are caught.

Whether his bankruptcy gambit will work remains to be seen. To persuade Judge Hale that the N.R.A.’s petition should be rejected during a trial that started last week, lawyers for the attorney general, Letitia James, and for a major creditor — the N.R.A.’s former advertising firm, Ackerman McQueen — presented evidence that they said showed that Mr. LaPierre had sought bankruptcy protection in bad faith.

Proving that a filing was made in bad faith can be difficult because it means showing intent. But Monica Connell, an assistant attorney general, argued that Mr. LaPierre lacked the authority to take the N.R.A. into bankruptcy on his own and had used a “convoluted” ploy to get its board of directors to unwittingly grant the necessary authorization.

Rather than putting a bankruptcy resolution before the board, Ms. Connell said, Mr. LaPierre’s team asked the board to vote on a new employment contract for him. It looked like a reform measure, since it reduced his golden parachute.

But the contract contained an inconspicuous provision giving Mr. LaPierre authority “without limitation” to “reorganize or restructure the affairs of the Association for purposes of cost-minimization, regulatory compliance or otherwise.”

The new contract was first presented to a committee of the N.R.A. board in a closed session on Jan. 7. There weren’t enough copies to go around, and no one could leave with a copy. N.R.A. officials said board members had ample time for review.

By that time, Mr. LaPierre’s main outside counsel, the law firm of William A. Brewer III, had spent months planning the bankruptcy, racking up millions of dollars in legal fees. But no one told the board about that. After the committee emerged from its closed session, the board approved the contract, with little inkling that they had conferred bankruptcy authority on Mr. LaPierre.

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N.R.A. Chief Kept Bankruptcy Filing Secret From Deputies

But the organization remains a potent lobbying force that has reshaped the political landscape around guns. Its enduring influence was on display in the aftermath of two recent mass shootings, in Atlanta and Boulder, Colo., when calls for gun control ran up against stout Republican opposition and the realities of the Senate filibuster.

The bankruptcy, however, is a risky gambit for the N.R.A. and a sign of its desperation. Mr. LaPierre and his outside lawyer, William A. Brewer III, an architect of the filing, could lose control over the organization. One possible outcome, if the case is not dismissed outright, is that the judge, Harlin D. Hale, will appoint a trustee to take over the N.R.A.’s day-to-day operations, displacing the current management. The use of a trustee is rare in large company bankruptcies and usually happens only in cases of fraud, incompetence or gross mismanagement.

Gregory E. Garman, an N.R.A. lawyer, argued in court against such an outcome this week, saying “a trustee is in fact a death sentence.”

“The argument that a trustee assures the future of the N.R.A. beguiles our purpose and our role,” Mr. Garman said. “We don’t sell widgets.”

The N.R.A. has used the trial to argue that the group has reformed after making some modest blunders in oversight. “Compliance has become a way of life at the National Rifle Association,” Mr. Garman said, while acknowledging that there would be “moderately cringe-worthy” moments in the trial.

But those moments undercut claims of reform. Among the issues that have come up in the proceedings is that Mr. LaPierre’s longtime assistant, Millie Hallow, was kept on even after she diverted $40,000 from the N.R.A. for her personal use, including to help pay for her son’s wedding. (Before she was hired by the N.R.A., Ms. Hallow pleaded guilty to a felony related to the theft of money from an arts agency she ran.)

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