Attorney General James Secures Court Victory Against NRA

NEW YORK – New York Attorney General Letitia James today secured another victory against the National Rifle Association (NRA) with a judgment requiring the NRA to significantly reform its governance to abide by New York’s not-for-profit laws. This judgment follows a jury verdict which found that the NRA failed to properly administer charitable funds and violated state laws, its former Executive-Vice President Wayne LaPierre caused the NRA $5.4 million in damages, and its former Chief Financial Officer Wilson “Woody” Phillips caused the NRA $2 million in damages. Based upon the trial evidence presented by the Office of the Attorney General (OAG), the court found that the NRA must enact more than a dozen reforms to its governance to prevent future violations of law. 

The judgment requires the NRA to change how it conducts its board elections, hire an outside consultant to advise on the NRA’s compliance with the court’s directives and other governance practices, and increase leadership’s transparency and communication with board members. The NRA is also ordered to change its audit committee, by permanently barring anyone who served on the committee between 2014 and 2022 from continuing to serve on the committee and requiring future members to be elected by the full board, not hand-picked by the Board President. The judgment also requires LaPierre to pay the $4.35 million and Phillips to pay the $2 million ordered by the jury plus nine percent interest per year.

“For decades, the NRA let self-interested and self-dealing insiders run the organization with complete disregard for the rule of law,” said Attorney General James. “As a result of my office’s efforts to stop corruption at the NRA, the NRA has been forced to clean house. Wayne LaPierre, who resigned from his 30-year tenure at the NRA on the eve of trial, is barred from returning to the organization or its affiliates in any fiduciary role for over a decade. This decision requiring the NRA to significantly reform its governance, and the jury’s verdict earlier this year, should send a clear message that we will hold not-for-profits and their leaders accountable when they violate our laws.”

In February 2024, Attorney General James won the first stage of a two-part trial when a jury found the NRA, LaPierre, Phillips, and former General Counsel and current Corporate Secretary John Frazer violated state laws. The jury found that the NRA failed to properly administer charitable funds and protect whistleblowers, that the NRA and Frazer made false regulatory filings, and that LaPierre and Phillips, together, caused the organization $7.4 million in monetary harm. Ahead of the second stage of the trial, OAG reached a settlement with Phillips in which Phillips agreed to a 10-year ban from serving as a fiduciary of a not-for-profit in New York. In the second phase of the trial, Attorney General James secured a 10-year ban on LaPierre from serving as an executive at the NRA and its affiliates.

As a result of the jury’s findings, today’s judgment requires the NRA to make significant changes to its governance, structure, and bylaws, including:

• Hiring a compliance consultant, subject to OAG review and court approval, to work with the NRA’s Chief Compliance Officer to implement court-ordered remedies and recommend best governance practices;
• Requiring the full board to elect members of the audit committee, which was previously comprised of loyalists to LaPierre who failed to exercise proper oversight of the organization’s finances;
• Requiring the NRA to remove and not reappoint current members of the audit committee who served on that committee at any time from 2014 through 2022;
• Changing how board members are elected to reduce entrenchment among longtime board members;
• Requiring more transparency and fairness in the board nomination process;
• Issuing to its members an annual compliance report by the Chief Compliance Officer of travel expenses, contract procurements, and other topics, for a minimum of five years;
• Enhancing the certification process for its annual regulatory filings, including its CHAR500, with OAG by requiring certifications from the NRA Executive Vice President and Treasurer, for a minimum of five years;
• Implementing protections for the Chief Compliance Officer so that he may do his job free from fear of retaliation; and
• Providing online access to board members of board governance materials, regulatory filings, and substantial legal rulings, increasing transparency within the NRA.

Attorney General James filed a lawsuit against the NRA and the other current and former senior officers in August 2020. In January 2021, the NRA filed for bankruptcy in an attempt to avoid accountability by trying to reorganize in Texas. In May 2021, a federal bankruptcy court in Texas rejected the NRA's bankruptcy petition, stating, “that the NRA did not file the bankruptcy petition in good faith.”

On the eve of the first stage of the trial in January 2024, Wayne LaPierre abruptly announced his retirement as Executive Vice President and CEO of the NRA, a role he held for more than 30 years. In addition, OAG reached a $100,000 settlement with the NRA’s former Executive Director of Operations and Chief of Staff Joshua Powell before the trial’s beginning. At the conclusion of the six-week trial, the jury found all the defendants liable for violating New York not-for-profit laws and determined the damages due to the NRA from LaPierre are $4.35 million, in addition to the more than $1 million he had already repaid, and $2 million from Phillips, which is not affected by his settlement with OAG.  

The OAG’s litigation and trial team was led by Assistant Attorney General and Special Counsel Monica Connell and Chief of the Enforcement Section Emily Stern, with a team of attorneys and legal assistants, including Bureau Chief James Sheehan, Assistant Attorneys General Jonathan Conley, Erin Kandel, Jonathan Lester, Alexander Mendelson, Steve Shiffman, Daniel Sugarman, Stephen Thompson, and William Wang, and legal assistant Nyna Sargent — all of the Charities Bureau. Additional assistance was provided by Sophia Friedman, Kenny Ip, Luz Ceballos-Lopez, Amanda Oh, Imani Saddler, and Jacqueline Sanchez. The Charities Bureau is part of the Division for Social Justice, which is led by Chief Deputy Attorney General Meghan Faux and overseen by First Deputy Attorney General Jennifer Levy.