More Subpoenas Served On The NRA

Danny Hakim in the New York Times is reporting that New York Attorney General Letitia James and her office have served a subpoena on the NRA seeking financial records from over 90 current and former members of the Board of Directors. The subpoena was served yesterday evening.

The subpoena is an escalation of a continuing investigation into the tax-exempt status of the N.R.A., which is chartered in New York, and engulfs the organization’s board of directors in the inquiry. The subpoena seeks financial records and other documents that would shed light on spending decisions made by the board.

While James' office is not commenting on the subpoena, the NRA's outside counsel William Brewer III had this to say.

William A. Brewer III, the N.R.A.’s outside counsel, said in a statement: “As we understand it, counsel to the N.R.A. board accepted service of a subpoena to the board that relates to the production of documents and information.”

He added: “Such a request was expected and, as we have said many times, the N.R.A. will cooperate with any reasonable, good faith request for information given the organization’s commitment to good governance.”

This is making the decision by Tim Knight, Sean Maloney, and Esther Schneider to resign from the board and the decision by Adam Kraut to turn down an appointment to the board seem all that much more wiser.

I've heard numerous reports that the NRA's Directors and Officers liability insurance was either dropped by their current carrier due to its issues or that the premium was so high that it was decided it wasn't economically feasible. This has been denied. I tend to agree with what Dan Zimmerman of TTAG had to say about it.

The Times report says the NRA denied that their D&O coverage has been cancelled. That’s what the NRA’s Andrew Arulanandam told TTAG over the weekend, too. With the latest news of the NY AG’s widening fishing expedition, that coverage is more important than ever.

I would not be surprised to see a number of resignations by the celebrities - singers, actors, former athletes - from the board on the advice of their personal attorneys. They have deep pockets and if there is any suggestion of the absence of D&O liability insurance it would be risk management 101 to head for the doors.

Interesting Times

David Codrea published the following tweet earlier today. As he was out of town and wouldn't be available to respond, he said he wouldn't name names. If it turns out to be false, he said it would be on him. That said, remember he was one of the people who broke open Project Gunwalker aka Operation Fast and Furious.

I am away from internet and unable to verify but this is important if it pans out. A credible Source says a highly placed NRA exec has been offered immunity by the New York AG. @aarmark

— dcodrea (@dcodrea) July 31, 2019

This will be very interesting so I plan to keep checking Twitter and doing Google searches over the next few days.

A Heavy Artillery Salvo Has Been Fired On The NRA

Much of what has been said by politicians about the NRA and everything negative that has appeared recently in the media of any sort should be considered the equivalent of sniping. It might take out one or two people but not the whole organization. That was then.

The office of New York Attorney General Letitia James (D-NY) has now fired what I would consider the preparatory barrage in the effort to dissolve the NRA. As someone noted to me, James is under pressure to act and she did on Friday.

From NPR reporting on the NRA Annual Meeting:

Even as the NRA struggled to handle its internal divisions, an external threat emerged this weekend in the form of a new investigation by New York Attorney General Letitia James.

"The Office of New York State Attorney General Letitia James has launched an investigation related to the National Rifle Association (NRA)," a spokesperson for the attorney general told NPR. "As part of this investigation, the Attorney General has issued subpoenas. We will not have further comment at this time."

The NRA has received a document preservation notice in connection with the investigation being undertaken by the New York attorney general, according to a source familiar with the matter.

The NRA responded to the announcement of the investigation by pledging its cooperation.

"The NRA will fully cooperate with any inquiry into its finances," said William A. Brewer III, an outside lawyer for the NRA. "The NRA is prepared for this, and has full confidence in its accounting practices and commitment to good governance."

 This is serious.

It is even more serious because as evidenced by the NRA Meeting of the Members today too many people think just ignoring it will make it go away. The matter is NOT going away.

Compounding this is the NRA's outside counsel who has a checkered past in terms of legal ethics. He was sanctioned in Texas and his appeal of it was upheld by the Texas Appeals Court last year.

If the NRA is going to use an outside counsel, I might suggest getting the very best - and cleanest - New York non-profit law specialist and let him or her handle it. However, given Brewer's apparent hold on the attention of certain NRA executives, I doubt this will happen.