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

Wayne LaPierre, the contested executive director of the National Rifle Association, said Wednesday that he had kept his organization’s bankruptcy filing secret from almost all high-ranking officials, including the general counsel, chief financial officer and the top lobbyist. Nor did he brief most of the NRA’s board of directors.

Mr. LaPierre made the comments after practically appearing in a lawsuit in federal bankruptcy court in Dallas. Despite being solvent, the NRA filed for bankruptcy protection in January to bypass regulators in New York, where the NRA has been chartered for a century and a half.

Attorney General Letitia James sued the association in August and tried to close it down for mismanagement and corruption. She is also looking for tens of millions of dollars in missing funds from Mr. LaPierre and three other current and former NRA leaders.

The nonprofit has been embroiled in a scandal over the past two years, and the NRA and its contractors exposed lavish spending – for zegna suits and luxury travel, Mr. LaPierre went to places like Lake Como in Italy and the Atlantis Resort in the Bahamas. Other perks included chartered jets for him and his family, as well as vacationing on a contractor’s yachts known as Illusions and Grand Illusions.

The bankruptcy case is the latest referendum on Mr LaPierre’s 30-year tenure with the gun rights group, which has recently been hit by disputes over how to turn the battle with the New York Attorney General into a battle for free speech, not free perks transform.

“We filed this bankruptcy in order to look for fair legal conditions under which the NRA can thrive and grow in a fair environment, contrary to what we believe to be a toxic, armed, politicized government in New York State,” said LaPierre in his testimony.

The association intends to use the bankruptcy for reintegration in Texas. Mr LaPierre kept the file secret because he feared leaks would jeopardize the scheme.

However, the Attorney General and the NRA’s largest creditor, their former advertising firm Ackerman McQueen, want the case dismissed, claiming that the filing, and in particular the lack of notification to the board, was highly inappropriate.

“The process that Mr. LaPierre followed to file this bankruptcy case is a masterclass in malice and dishonest conduct in itself,” said Monica Connell, an assistant attorney general.

The process that was part of the bankruptcy began Monday to see if the case would continue.

During the two years of turmoil leading up to the trial, the NRA had become unusually quiet, closed its fire-breathing media outlet, NRATV, and separated from its former spokeswoman, Dana Loesch. It was also largely silent during the 2020 presidential election, having played a major role in Donald J. Trump’s election in 2016.

But the organization remains a powerful lobbying force that has transformed the political landscape around arms. His continued influence was evident after two mass shootings in Atlanta and Boulder, Colorado, when gun control demands clashed with strong Republican opposition and the realities of the Senate filibuster.

However, bankruptcy is a risky game for the NRA and a sign of their desperation. Mr. LaPierre and his outside attorney, William A. Brewer III, an architect of the files, could lose control of the organization. In a potential case, if the case is not immediately dismissed, Judge Harlin D. Hale could oust the current management by appointing a trustee to take over the day-to-day business of the NRA. The use of a trustee is rare in large corporate bankruptcies and typically only occurs in cases of fraud, incompetence, or gross mismanagement.

Gregory E. Garman, an attorney for the NRA, argued against such a finding in court this week, saying, “A trustee is indeed a death sentence.”

“The argument that a trustee will secure the future of the NRA is misleading our purpose and role,” said Garman.

The NRA has used the process to argue that the group reformed after making some modest mistakes by mistake. “Compliance has become a lifestyle at the National Rifle Association,” Garman said, admitting that there would be “moderately convulsive” moments in the process.

But these moments undermined the reform claims. Issues that have emerged in the process include that Mr. LaPierre’s longtime assistant Millie Hallow, even after diverting $ 40,000 from the NRA for her personal use, including paying for her son’s wedding, was still busy. (Before being hired by the NRA, Ms. Hallow pleaded guilty to a crime related to stealing money from an art agency she ran.)

The role of John Frazer, the General Counsel of the NRA, was also considered when it was revealed that he had no experience in such a role and only had two years of private practice. He has been left in the dark on important legal decisions, despite being the organization’s chief attorney, and was not given advance notice by Mr LaPierre that the NRA would file for bankruptcy. According to a former aide, Mr LaPierre once said that he would not use Mr Frazer “for my parking tickets”. In a pre-trial filing, Mr. LaPierre admitted that he may have made the comment as “sometime joking”.

Mr LaPierre himself admitted to making mistakes, including failing to report his use of the luxury yachts.

“I now believe it should have been disclosed,” he said.

His testimony is expected to continue on Thursday.

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