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Federal Judge Rules NRA Bankruptcy Effort A Sham

Score one for New York Attorney General Letitia James! Judge Harlin Hale ruled that the bankruptcy filing was an effort to escape regulation rather than a financial decision.
Federal Judge Rules NRA Bankruptcy Effort A Sham
Image from: Gage Skidmore

A federal judge saw right through the National Rifle Association's bankruptcy scam, denying the gun organization bankruptcy protection.

In a 37-page ruling, Judge Harlin Hale minced no words. "The Court finds, based on the totality of the circumstances, that the NRA’s bankruptcy petition was not filed in good faith," the judge wrote, "But instead was filed as an effort to gain an unfair litigation advantage in the NYAG Enforcement Action and as an effort to avoid a regulatory scheme.”

In other words, the whole effort to move the NRA to Texas and declare bankruptcy in New York was nothing more than a big scam meant to escape accountability for the way the non-profit organization has used donor dollars for Wayne LaPierre's expensive suits, profligate spending, and of course, political meddling in many, many elections.

New York Attorney General Letitia James wasted no time hailing the ruling:

Wayne LaPierre filed this bankruptcy ruling with the sole aim to escape James' scrutiny of his organization, which is incorporated and based in New York. Along the way, he failed to advise the board of directors of his plan to file the bankruptcy petition or the subsequent relocation to Texas, a fact that bothered the judge.

It boggles my mind that the NRA board not only hasn't sued LaPierre for breach of his fiduciary duty, they've not even fired him. From the Washington Post:

During the last day of the trial, the NRA submitted a formal plan of reorganization that had been approved only the day before at a special board meeting. The new plan called for adding a top compliance officer to the organization but otherwise kept the current management — including LaPierre — in place.

LaPierre testified twice during the trial, which was conducted via Webex video conference. He acknowledged that he should have disclosed some of the lavish benefits he received and that he clashed with many former executives and associates, including the leaders of Ackerman McQueen, the NRA’s longtime public relations firm, which claims the NRA owes it more than $1 million. But he said past financial and management abuses had been corrected.

Here's the thing: The NRA isn't the only nonprofit political organization to be this corrupt. The reporting and disclosure requirement for nonprofits are so loose and so oblique that all kinds of abuses are hidden behind the doors of their disclosures. Until we get some nonprofit reform and real-time reporting, assume there's a lot of corrupt organizations out there living it up on the taxpayers' dime.

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