New York Court’s Findings of Fault Within NRA: Reformers vs. the Old Guard

Opinion

Tombstone, Arizona – The single clearest contrast between the “Old Guard” faction of the NRA Board of Directors and the so-called “Reformers” is what the court says regarding findings of fault in the ‘State of New York v. The National Rifle Association of America, Inc., Wayne LaPierre, Wilson Phillips, John Frazer, and Joshua Powell‘ and the board’s own culpability in those matters.

Reformers (NRA 2.0) recognize that the jury rightly found fault with the NRA – meaning the people who acted for NRA, both its Board of Directors and its paid executive staff.

Old Guard Directors insist that the jury found no fault with the NRA or the Board of Directors and place all blame on the paid executives while sidestepping any blame for their own failure to notice the corruption going on under their noses. Whether the Old Guard Board members were corrupt or just naive matters little. They had a sworn duty, and they failed.

The jury was asked to answer a series of questions regarding findings of fault (meaning liability) at the conclusion of the trial. These questions and the jury’s answers are referred to as the Verdict Sheet. [you can read the complete Verdict Sheet embedded below] Some of the questions specifically named individual defendants, LaPierre, Phillips, and Frazer, while other questions specifically referred to NRA (again, meaning the Board and staff working under the direction of the Board), either alone or in concert with one or more of the named individual defendants.

Here are the key questions regarding the NRA itself, beginning with the very first the jury was asked to decide on.

PROPER ADMINISTRATION OF THE NRA’S CHARITABLE ASSETS UNDER EPTL (Estates, Powers, and Trust Law) § 8-1.4

QUESTION 1: Did the Plaintiff (NY) prove by a preponderance of the evidence that the NRA [Board and management] failed to properly administer the organization and its assets at any time between March 20, 2014 and May 2, 2022?

Answer: YES (emphasis added)

That sure seems like a finding of fault against the people acting for the NRA – the Board of Directors and its subordinates.

Questions 2 through 4 concerned the individual defendants, LaPierre, Phillips, and Frazer, all of whom the jury found to have failed in their duty to the Association, with LaPierre and Phillips ordered to repay substantial sums to the NRA.

Though these verdicts were directly related to the individually named defendants, they also reflect on the people who held a sworn fiduciary duty to detect and prevent exactly these sorts of issues from occurring, specifically the Board of Directors and, more specifically, members of the Audit Committee and the Finance Committee.

Next, we come to Questions 5 and 6, which deal with “related party transactions.” Related party transactions are similar to conflicts of interest. They are transactions in which the recipient of a benefit has an oversight interest in the entity giving the benefit.

Question 5 asked whether Wayne LaPierre’s 2018 post-employment contract, which basically guaranteed him his full salary in perpetuity after his departure from NRA, was a related party transaction. The jury concluded that it was, but also concluded that the NRA Board had authorized it.

Note: LaPierre’s contract was revised and he got no payout or ongoing payments from NRA when, or after, he left. And he has repaid over $4 million to the NRA.

Question 6 asked the same questions about Woody Phillips’ post employment contract, and the jury again concluded that the contract constituted a related party transaction, but this time they said that the contract was not properly approved by the Board.

I don’t know which is worse: The Board approving LaPierre’s outrageous contract, or the Board NOT knowing about Phillips’ outrageous contract.

Question 7 continues on related party transactions, asking about payments for Susan LaPierre’s hair and makeup expenses, paying Director Dave Butz for personal appearances, paying Directors Sandy Froman and David Keene for speeches, paying Director Marion Hammer for consulting services, paying LaPierre’s deputy Josh Powell’s wife and father for services, and the pass-through payments to Director Oliver North for his contract with Ackerman McQueen, the NRA’s PR firm.

The jury determined that all of these instances were related party transactions, concluding that all of them, with the exception of the payments for Susan LaPierre’s hair and makeup, and the payments to Director David Keene, were properly approved by the Board.

Again, I’m not sure which is worse, the Board knowing and approving some of these payments, or the Board claiming not to have know about them and allowing them to be paid anyway.

Question 8 asked the jury whether the evidence supported removal from office of Wayne LaPierre and John Frazer, to which the jury responded YES regarding LaPierre and NO regarding Frazer.

The next questions for the jury involved Violations of Whistleblower Protections. All of these directly apply to failure on the part of the Board of Directors, again specifically the Audit Committee.

Question 9(a) asked the jury whether the NRA [Board of Directors] violated New York law by failing to adopt an appropriate Whistleblower Policy.

The jury concluded YES, they had.

Question 9(b) asked whether the NRA violated NY Law by failing to protect whistleblowers from harassment or retaliation, naming seven former Directors and the former Treasurer as whistleblowers.

The jury answered YES in all 8 instances, finding the NRA [Board of Directors] at fault in every case.

The final questions dealt with whether Mr. Frazer had knowingly filed or allowed the filing of false information on NRA’s IRS and NY State tax and reporting forms, with the jury finding he had.

While these questions were about Mr. Frazer’s actions, again, these actions reflect directly on the Board of Directors, whose sworn duty was to oversee Mr. Frazer and to verify those reports.
President Barr, Director King, and especially former President Cotton (who also happened to be Chair of the Audit Committee throughout this debacle), and others on the Board have repeatedly insisted that the jury found no fault with the NRA or the Board of Directors. I disagree.

While it’s true that the court and the jury issued no monetary penalties on the NRA itself, it appears to me that jury verdicts finding that the NRA, in the persons of its Board and its executive management “failed to properly administer the association and its assets,” that the NRA and the Board allowed, either willfully or by gross negligence, multiple questionable related-party transactions, including payments to Directors for advice and activities most Directors consider part of their voluntary duty as Directors, and that the NRA and the Board failed to listen to, or institute policies to protect whistleblowers who tried to tell them about the problems within the organization.

The same problems they now say they didn’t know about.

Those all seem to be findings of fault to me, but let me know what you think.

It strikes me as particularly ironic that some “Old Guard” Directors have the gall to claim they were blindsided by the exposure of the corruption when those same Directors were actively participating in the silencing and discrediting of whistleblowers and others who tried to inform them about the problems, even going so far as to write reply articles here on AmmoLand News arguing against articles I had written calling out these very problems.

I’ve attached the full court transcript of the jury reporting its verdicts below for anyone who would like to read it. Thankfully, it is only 13 pages out of an almost 5,000-page transcript.

The election for NRA Directors is going on now.

If you’re an Annual Member with at least 5 consecutive years of membership, or a Life Member at any level, there should have been a ballot in your most recent (February) magazine. In that issue there will be ads from both identified factions of the Board. These ads will provide you with a very good idea of who to vote for and who to avoid giving your vote. The ad led by President Bob Barr is the handiest, as refusing to vote for him and the other long-time Directors included in it, is the best voting guide available. Every other candidate on the ballot is a better pick than those folks. But that’s just my opinion (more of which can be found here).

It’s your NRA, so vote for whoever you think will do the best job. I believe the organization has turned the corner and is now on a very good path, with the Board and staff working together for the best interests of the membership. Getting more new, enthusiastic, and untainted Directors elected will help accelerate the Association down this better path. It’s in your hands.

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About Jeff Knox:

Jeff Knox is a dedicated political activist and the director of The Firearms Coalition, following in the footsteps of his father, Neal Knox. In 2024, Jeff was elected to the NRA Board of Directors, underscoring his lifelong commitment to protecting the Second Amendment. The Knox family has played a pivotal role in the ongoing struggle for gun rights, a legacy documented in the book Neal Knox – The Gun Rights War, authored by Jeff’s brother, Chris Knox.

Founded by Neal Knox in 1984, The Firearms Coalition is a network of individual Second Amendment activists, clubs, and civil rights organizations. The Coalition supports grassroots efforts by providing education, analysis of current issues, and a historical perspective on the gun rights movement. For more information, visit www.FirearmsCoalition.org.