Posts Tagged ‘William Brewer III’

Still More On NRA Troubles

Wednesday, July 3rd, 2019

This anonymous piece from a longtime lawyer and NRA watcher covers some of the same ground as my previous NRA pieces, but with a lot more background.

It’s been an open secret for more than 20 years (since at least the 1990s) that an outside public relations firm, Ackerman McQueen Inc. (around NRA headquarters, commonly called “Ack-Mac”) enjoyed a favored and protected, if not inviolate, relationship with NRA. The owners of Ack-Mac were close friends and associates of NRA Executive Vice President Wayne LaPierre. He handed them major roles formulating, directing and performing many NRA operations for which Ack-Mac and its associated companies bill NRA millions of dollars annually — in 2017 alone, over $40 million. To ensure their position by enhancing his, Ack-Mac created a persona for LaPierre as NRA’s public face; his strident, increasingly right-wing rhetoric espoused in NRA’s name was shaped and scripted by Ack-Mac. In turn he fended off sporadic calls to reduce Ack-Mac’s penetration of NRA. LaPierre and Ack-Mac became practically indistinguishable.

This special relationship and its financial intertwining were largely opaque, fully appreciated only within inner circles of the 76-member Board of Directors. Though payments to Ack-Mac accounted for a large chunk of NRA’s budget until recently Ack-Mac was unmentioned in annual reports or minutes of the Board’s meetings, it was as if Ack-Mac didn’t exist. The full extent of Ack-Mac’s influence, participation, and responsibility for NRA’s high-level management decisions remains, to this day, obscure.

I knew Ack-Mac had been working for the NRA for quite a while, but I didn’t realize for how long, and how mention of Ack-Mac had been kept out of annual reports.

As Executive VP, LaPierre’s annual salary is $1.4 million. It’s hard to identify the value a non-profit association receives for that kind of money. The President of the United States is paid less than one-third of that; the Secretary of Defense gets only $210,700, and the base salary of a U.S. Senator is $172,000.

Also still on the NRA’s payroll is Joshua Powell, recently removed as director of General Operations (drawing nearly $800K) after being exposed in national media as a serial deadbeat. The most cursory vetting before he was hired would have disclosed his trail of failed businesses and bad debts. The architect of the crashed Carry Guard program and the spark that lit the legal fuse with New York sate, Powell is now a “senior strategist” and still LaPierre’s “chief of staff.”

More information gleaned from the NRA’s IRS Form 990:

This 100-page document, released by NRA only last November, was unusual; it contains unprecedented disclosures of where the money categorized as expenditures for “fund-raising” and “public relations” actually went. For example, it was revealed for the first time the Mercury Group, an Ack-Mac subsidiary run by LaPierre’s closest confidant, Tony Makris, received $5.8 million from NRA in that year; another Makris-run company, Under Wild Skies, got $2.6 million. Meanwhile, NRA has nearly exhausted its $25 million credit line (secured by a mortgage on its headquarters building), liquidated $2 million from an investment fund, borrowed close to $4 million from its officers’ life insurance policy and extracted about $5 million in office rent and overhead from the NRA Foundation.

This, in the same year that NRA’s 10 highest-paid executives received compensation aggregating over $8 million.

Snip.

If indeed, as [current NRA President a LaPierre backer Carolyn Meadows] claims, “the entire board is fully aware of these issues,” the issue of managerial dereliction takes on a new dimension. To claim that these controversial contracts, transactions, and expenses were “reviewed, vetted and approved” by the board is to ratify and accept liability for them.

It begs the next question: Is the Board doing anything to stop the financial hemorrhage? Does it even have a coherent plan? So far the membership has heard nothing but bland reassurances suggesting that “everything is on track”, coupled with whining about leaks to the press.

Can directors with a fiduciary duty to a non-profit membership association justify sports-star salaries, uncontrolled and unaccountable vendors and $100,000-a-day lawyers? The membership deserves credible explanations and plain answers. If these are not forthcoming, who could blame it for throwing out the entire board and starting over?

The author is particularly critical of William Brewer III’s legal briefs. “In over 50 years as a practicing attorney, I have never encountered a lawyer, or even an entire firm, whose services were worth $1.8 million in a single month — much less for ten consecutive months.”

Finally, there’s the revelation that Woody Phillips, the NRA’s just-retired Treasurer for 26 years, broadened the now-all-too-familiar profile of NRA’s salaried executives. The prior norm seemed to be enrichment through extraordinary salaries, conflicts of interest, double-dipping, sweetheart deals, and extravagant retirement schemes. Woody has added the word “embezzlement.” According to a June 19 article on The New Yorker website, his former employer asserts that before Woody came to NRA, he was caught stealing more than a million dollars by generating and paying fake invoices. Unless this story is a complete fabrication, the evidence seems incontrovertible: when he was confronted, the story discloses, Woody immediately returned $500,000 of it and started paying interest on the balance. This comes on the heels of separate reports of questionable payments made by NRA to Woody’s “significant other.” Was his earlier modus operandi revived with a slight twist?

The author ends, as I did, with a call for a forensic audit.

The more we find out about how the NRA has been run, the worse it seems. The crisis started out looking like a case of lax management, but the deeper you dig the more it looks like a case of systematic looting. The more I read about the NRA, the more convinced I am that the current leadership has to go.

(Hat tip: No lawyers – only guns and money. )

More NRA Troubles: Wayne LaPierre And The Iron Law of Bureaucracy

Wednesday, June 26th, 2019

Lots more NRA turmoil has bubbled up since my previous piece, including the NRA filing two lawsuits against PR firm Ackerman McQueen and leaks of internal NRA letters expressing alarm over profligate spending. In addition to spending by Ackerman McQueen, a great deal of concern has been expressed over NRA’s outside attorney record Brewer Attorneys & Counselors, headed by William Brewer III. Then this week, NRA-ILA head Chris Cox was suspended and put on administrative leave and NRA-TV shut down production on new content.

Lets tackle these in chronological order.

As he was being shoved out the door, now-Ex NRA President Oliver North and NRA First Vice President Richard Childress penned a letter expressing deep concern about how much of NRA’s money was going to Mr. Brewer:

As indicated in previous correspondence, we and others continue to be deeply concerned about the extraordinary legal fees the NRA has incurred with Brewer Attorneys & Counselors. The amount appears to be approximately $24 million over a 13-month period, $5 million of which apparently has been reimbursed in connection with the Lockton settlement.

The Lockton settlement was the Lockton insurance company reaching an out-of-court settlement to the NRA over breaching a contract to underwrite the ill-fated Carry Guard program discussed last post.

North and Childress complained about “lax management” of Brewer invoices in the past, and pushed for “an independent, outside expert to review the Brewer invoices immediately.”

From April 2018 through February 2019, Brewer was billing the NRA $1 million to $2 million a month. North and Childress stated that “Invoices of this size for 12 months of work appear to be excessive and pose an existential threat to the financial stability of the NRA.”

John Richardson of No Lawyers – Only Guns and Money suggests that Brewer was attempting to become a one-stop shop featuring legal services, public relations and communications, all in one big, expensive, billable bundle. One wonders whether the NRA authorized him to do anything beyond the legal work and, if so, why were they paying him to do some of the tasks they were already paying Ackerman McQueen so handsomely to perform. Richardson also wonders what the attorney of record for the NRA is doing sending political donations to such notable “pro-gun” luminaries as Beto O’Rourke, Patrick Kennedy and Hillary Clinton.

North and Childress aren’t the only ones dissatisfied with NRA leadership. Boards member Lt. Col. Allen West has called on LaPierre to resign. Says West:

I do not support Wayne LaPierre continuing as the EVP/CEO of the NRA. The vote in Indianapolis was by acclamation, not roll call vote. There is a cabal of cronyism operating within the NRA and that exists within the Board of Directors. It must cease, and I do not care if I draw their angst. My duty and responsibility is to the Members of the National Rifle Association, and my oath, since July 31, 1982, has been to the Constitution of the United States, not to any political party, person, or cabal.

The NRA Board of 76 is too large and needs to be reduced to 30 or less. We need term limits of four (4) terms on the Board. We need to focus the NRA, the nation’s oldest civil rights organization on its original charter, mission, training and education in marksmanship, shooting sports, and the defense of the Second Amendment.

I will dedicate all my efforts to the reformation of the National Rifle Association and its members, of whom I am proud to serve.

Rangemaster and attorney Tiffany Johnson’s letter to the board.

I attended the NRA Annual Meeting of Members on Saturday morning, and I am writing about a contentious resolution that came to the floor. The resolution decried recent reports of fiscal mismanagement centered around one of the NRA’s primary vendors, Ackerman McQueen. Among other things, the resolution called for the resignation of members of the Audit Committee as well as the NRA’s Executive Vice President, Mr. Wayne LaPierre. In light of the pending litigation between Ackerman McQueen and the NRA, Secretary Frazer successfully moved that the resolution be referred to the Board of Directors for consideration in consultation with legal counsel.

As a practicing attorney, I fully understand the NRA’s interest in limiting public discussion of sensitive matters that are currently being litigated. I agree that the Association is best served by addressing the resolution internally rather than in the public sphere. However, I also understand the arguments raised against referring the motion to the Board. The resolution cited allegations of financial misconduct, self-dealing, and conflicts of interest within the Board of Directors, the Audit Committee, and other parts of the NRA’s leadership team, based on their alleged mishandling of vendor contracts and other business relationships with Ackerman McQueen. In other words, referring the resolution to the Board would be, in effect, asking the Board to adjudicate allegations against itself.

I want the National Rifle Association to succeed. At Saturday morning’s meeting, Mr. LaPierre himself warned of the mounting existential threats we now face, both in the courtroom and in the court of public opinion. Given the intensified scrutiny facing the Association right now, I fear that yet another maneuver of impropriety (whether real or perceived) could be a proverbial death knell. It would serve as perfect fodder for the media to publish yet another scathing exposé that paints the NRA as roiled in unsavory scandal. It would also incite even more resentment from within the organization and sow more division among our ranks. Although Mr. Frazer’s motion to refer the resolution did ultimately succeed, the fierce opposition voiced by many in attendance shows that members want this issue to be addressed in a more transparent fashion.

I have a humble suggestion to help avoid public airing of private business while also quelling further cries of impropriety. When the Board addresses this resolution, I request that any Board member, officer, or staff member who has a personal, financial, or fiduciary interest in, or fidelity to, Ackerman McQueen (or its subsidiary and affiliate companies) — as an employee, contractor, paid consultant, vendor, client, etc. — be required to recuse himself/herself from discussing and voting on this resolution. That way, regardless of how the Board ultimately disposes of the resolution, at least the result will be less vulnerable to accusations of ethically dubious entanglements.

Fast forwarding to the present, the removal of Chris Cox from NRA-ILA was quite unexpected, at least by me. ILA is generally considered not only among the most effective of NRA’s programs, but one of the most effective (if not the most effective) lobbying groups on Capitol Hill.

The news yesterday regarding the National Rifle Association was headlined by a story in the New York Times that said Chris Cox, head of the NRA-ILA, was suspended and put on administrative leave. This followed a late Wednesday filing in New York Supreme Court (the trial level courts in that state) in which the NRA sought a declaratory judgment that Ollie North was not entitled to his legal expenses as a director of the NRA. Also suspended was Scott Christman who served as Cox’s deputy chief of staff at the NRA-ILA.

Both Cox and Christman are accused along with NRA Board member and former Congressman Dan Boren of participating in a failed “coup” attempt orchestrated by Ackerman McQueen and Ollie North. Cox vehemently denies this.

“The allegations against me are offensive and patently false,” Cox said. “For over 24 years I have been a loyal and effective leader in this organization. My efforts have always been focused on serving the members of the National Rifle Association, and I will continue to focus all of my energy on carrying out our core mission of defending the Second Amendment.”

PA Gun blog wonders just just who can suspend Cox, since he reports directly to the NRA board of directors. Say Uncle wonders if LaPierre even has a plan. “Is this some sort of scorched-earth move?”

Stopping production on NRA-TV is much less of a surprise, given that was yet another thing run out of Ackerman McQueen. I asked NRA-TV personalities Dana Loesch and Colion Noir on Twitter if they had been informed of the moves and have not received a reply. According to LaPierre the issue was one of “focus”:

“Many members expressed concern about the messaging on NRATV becoming too far removed from our core mission: defending the Second Amendment,” Wayne LaPierre, the N.R.A.’s longtime chief executive, wrote in a message to members that was expected to be sent out by Wednesday. “So, after careful consideration, I am announcing that starting today, we are undergoing a significant change in our communications strategy. We are no longer airing ‘live TV’ programming.”

Unlike some of LaPierre’s other flailing moves, this one can largely be written off as a straight-forward cost-saving measure and an inevitably byproduct of the Ackerman McQueen lawsuit. There’s also probably some truth to the “focus” angle as well, though from a self-interested “free blogging content good” perspective, I liked a good deal of what they were doing, such as Noir’s look at the astounding rate of homeless crime in Seattle.

Ammoland is not impressed with the moves:

Enough is enough. The National Rifle Association’s Board of Directors needs to act to get things under control and to focus the organization’s energy and activities against major threats to our right to keep and bear arms instead of internal squabbles. The current legal fight and internal chaos have to be resolved immediately.

Virginia-specific paragraphs snipped.

I have already been on record as suggesting that Wayne LaPierre leaves as Executive Vice President after the 2020 election. But recent developments, including the suspension of NRA-ILA Executive Director Chris Cox, now make some changes more necessary than ever. While LaPierre and Cox have past successes, the current drama, and the failure to see the new threats from corporations and social stigmatization that were part of the other side’s long game, including Andrew Cuomo’s abuses of power rank as significant failures on their part, and in combination with the internal drama, and Wayne’s lack of proper basic business management all warrant their replacement.

Who should replace Cox, who obviously no longer has the complete confidence of his superiors at NRA? Whoever it is should not be a lobbyist, but instead should probably have close ties to grassroots activists. With Cuomo’s attacks tying up financial resources, having the activists on the ground will be more important than ever.

LaPierre’s replacement will also need to come sooner, rather than later.

At this point, this replacement should come from outside the NRA so as to have no connection with the current drama.

Richardson agrees: “Wayne LaPierre’s scorched earth approach to maintaining power may be good for Wayne but is horrible for the NRA as an organization. I acknowledge there are many good people on the Board of Directors. Some want Wayne gone and some still support him.”

I have to concur. The Ackerman McQueen separation and lawsuit was a necessary corrective given a large vendor whose financial drain endangered the organization. The NRA-TV move is quite defensible as a necessary cost-cutting measure. But the Cox suspension, absent any additional information about why the move had to be made, reeks of circling the wagons and sheer vindictiveness on LaPierre’s part. Ironically, it is his out-sized overreaction to an alleged “coup” that proves why a move against LaPierre is both justified and, at this point, probably sadly necessary.

Jerry Pournelle’s Iron Law of Bureaucracy states that in any bureaucratic organization there are two kinds of people: Those devoted to the goals of the organization, and those dedicated to the organization itself. “The Iron Law states that in every case the second group will gain and keep control of the organization. It will write the rules, and control promotions within the organization.” LaPierre’s NRA is clearly been captured by the second group. Or to put it another way: “Every great cause begins as a movement, becomes a business, and eventually degenerates into a racket.” LaPierre’s NRA has become a racket. The NRA exists to serve its members and protect the Second Amendment, not to serve and protect Wayne LaPierre.

As I said about the NRA previously:

There are some that claim cleaning up the NRA would offer too much succor to the gun-grabbers. But the organizational dysfunction and self-dealing is already out in the open, and is already hurting the NRA’s effectiveness (and has been for several years). If not now, when? Better to do it now, the year before a Presidential election, with Republicans holding the White House and the Senate able to block gun-grabbing initiatives, than during it.

Other than being a member, I am very far indeed from the center of NRA power. For all the grumbling over the NRA caving over bump-stocks, there’s no other organization with the size, scope and political power of the NRA to protect Second Amendment rights in America. But to do that, the NRA has to be on solid organizational and financial footing, and right now it does not appear to be on either. The NRA has to get its own house in order, this year, or expect forces hostile to it and its goals to do it for them.

At this point, getting the NRA’s house in order necessitates Wayne LaPierre’s exit as Executive Vice President. This is not going to be easy, as (to quote Archer) “He’s dug in there like a tick!”

But enough is enough.

Update: Chris Cox has resigned. There’s also mention of NRA-ILA making a “substaintial” loan to the NRA, and refusing to do it again, followed immediately by Cox and Christman’s suspension. This is probably a good time to reiterate my call for a forensic audit of NRA finances…