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NRA Plan To Bankruptcy Its Way Out Of New York Backfires Bigly

Gotta watch out for the recoil!

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Wayne LaPierre is a crap shot. The NRA CEO’s lousy aim is the second worst kept secret at the gun charity — the first is the alleged rampant self-dealing — and his latest effort to use the bankruptcy court in Dallas to parachute the organization out of New York appears to have missed the mark spectacularly.

LaPierre has made no bones about the ploy, writing on the NRA’s website that that the charity is in its “strongest financial condition in years” and is only filing for bankruptcy to escape “the unhinged and political attack against the NRA by the New York Attorney General.”

But he was probably not banking on having to testify publicly about the details of his plan. To wit, that he’d executed it without approval or knowledge of the board members, who only found out after the fact that LaPierre secretly established Sea Girt LLC as a beachhead in Texas from which to declare Chapter 11. Or that he’d moved $5 million to finance the maneuver to an attorney’s escrow account, the better to disburse it without oversight.

Or that LaPierre’s authority to do all of that rests on a provision inserted in his latest employment contract granting him “corporate authority” to “reorganize or restructure the affairs of the Association.” Wichita judge Phil Journey, himself an NRA board member, referred to the maneuver as a “fraud perpetrated on the court,” a description echoed by attorney Gerrit Pronske, representing the NYAG.

“There is no question that the NRA board was tricked into attempting to delegate authority to file bankruptcy, and that’s not just fraud on the board, that’s a fraud on this court,” he said.

And LaPierre was certainly not banking on the Justice Department popping into the case to tell Judge Harlin D. Hale that he ought to reject the NRA’s bankruptcy petition and dismiss the case.

Assistant U.S. Trustee Lisa Lambert appeared yesterday to remind the court of several bookkeeping oopsies at the gun charity — from LaPierre’s secretary using $40,000 of NRA money to pay for her son’s wedding (what’s the big deal, she gave the money back!), to the $13.5 million for Wayne LaPierre’s private travel consultant between 2014 and 2020, to LaPierre’s testimony that he had no idea the association’s former treasurer was given a $360,000/year “consulting contract” after leaving under a cloud.

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Safe to say Lambert isn’t buying NRA lawyer Greg Garman’s promise that the charity turned the corner in 2019 and will go forth and sin no more. Ditto for Garman’s assertion that the bankruptcy is a heroic act, something “very, very hard” and “very, very brave.” in filing for bankruptcy.

And the feeling is mutual!

“I’m disappointed that I hear for the first time in closing arguments that the United States Trustee has now taken a position for which I’m expected to respond in real time, but that is what it is,” Garman grumbled yesterday. “Your honor, we have natural enemies. This Department of Justice may not see eye to eye with the National Rifle Association, but so be it, we have done the right thing.”

This came at the end of a trial in which Garman insinuated that judges in New York could not be trusted to impartially adjudicate the “politically motivated” suit brought by NYAG Letitia James. So … points for consistency?

Arguments wrapped yesterday, and Judge Hale promised to issue a written opinion next week. It’s a stressful time for LaPierre, who won’t even be able to blow off steam on a vendor’s yacht or shoot an endangered elephant while he waits. Thoughts and prayers!

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N.R.A. Leadership and Bankruptcy Assailed by U.S. Trustee [NYT]

Elizabeth Dye lives in Baltimore where she writes about law and politics.

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