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How the NRA Profits From Divisive Politics

June 13, 2019

An investigation shows how the nonprofit NRA gives lavish gifts and contracts to board members and their families while losing millions of dollars of donor money each year. A deep dive following the money that explores the internal conflict between NRA CEO Wayne LaPierre and former NRA President Oliver North and the role of the incendiary Dana Loesch

An investigation shows how the nonprofit NRA gives lavish gifts and contracts to board members and their families while losing millions of dollars of donor money each year. A deep dive following the money that explores the internal conflict between NRA CEO Wayne LaPierre and former NRA President Oliver North and the role of the incendiary Dana Loesch


How the NRA Profits From Divisive Politics

Story Transcript

TAYA GRAHAM For years the NRA has touted itself as a staunch defender of the Second Amendment. The gun rights organization has been a powerful political roadblock against gun reform across the country. But now a series of revelations have exposed a different side of the group: a cash cow for insiders. Reporting has revealed board members benefiting from lucrative contracts while top executives spent lavishly on high-priced clothes and luxury travel. Meanwhile, millions spent on law firms and PR has left the group on shaky financial footing. All of this comes as New York attorney general Letitia James zeroes in on the group with an investigation into its charitable status.

So what is the NRA, really? And how does a group that purports to be a nonprofit become so profitable for a select few? To help me sort out the details of this developing story is one of the key journalists behind much of the critical reporting. Mike Spies is an investigative reporter at The Trace. He’s currently partnering with The New Yorker on a series covering the NRA finances. He also just won a Newark Press Club award for continuing coverage. Mike, thank you so much for joining us.

MICHAEL SPIES Oh, thanks so much for having me on, Taya.

TAYA GRAHAM Now, from my understanding, the NRA is a non-profit organization. However, they seem to have been people who’ve been able to make a great deal of personal profit from it. Also, the NRA is running at a deficit of around $40 million each year. Can you explain that paradox?

MICHAEL SPIES Well, it seems you’ve gone right to the key question, haven’t you. There isn’t really–I mean, there’s no good explanation for this sort of behavior. So as a non-profit, the NRA is a longtime tax-subsidized organization. Its chief function is supposed to be social welfare, and also education, safety, and training promotion. It is absolutely not, as any non-profit is not supposed to, it is not supposed to serve as a passthrough entity or a vehicle for self-enrichment. And much of what I’ve discovered over the last bunch of months, and also what has come out since then through leaked documents on the internet and elsewhere is that a very small group of senior officials, management, folks close to them, vendors close to them, have made hundreds of millions of dollars off of this non-profit over a period of decades.

TAYA GRAHAM Wow, that’s incredible. Now, the first inkling we had of the conflict inside the NRA was between Oliver North and Wayne LaPierre over money. Can you explain some of the revelations that came from your reporting and what came out during that dispute?

MICHAEL SPIES Yeah, I guess in some ways the first story I did came out in mid-April, and it kind of anticipated that dispute. There had been an ongoing issue between Mr. North, who was appointed president of the NRA’s boards, and Wayne LaPierre, and the legal, or the law firm, rather, that the organization has been using to fight, like, its 20 million legal battles right now, none of which seem to actually have any real purpose other than to just–well, it’s not clear what their purpose is, honestly.

So the dispute which burst out into public display at the NRA’s annual meeting had to do, at least according to what we know, with Oliver North demanding that Wayne LaPierre resign. He and some others were very disturbed by some of the documents that were revealed in my initial report, which touched on, or rather delved into, deeply into, a culture of self-dealing that had been going on for a very long time. And Wayne LaPierre, as the head of the organization since 1991, was very much a part of that, and seemed to be very connected to it in a variety of ways. But what wound up happening, ultimately, was all Oliver North, when he pushed to have Wayne resign, Wayne sort of preempted him by going public with Mr. North’s, I guess you could call his letter, which detailed a number of infractions, including some of the stuff that came out over the last month. You know, lavish European trips, expensive suits, that kind of stuff. And Wayne was, as he has before, was able to rally the board behind him and ultimately push Oliver North out and get him to resign.

I mean, I think Oliver North, for what it’s worth, this wasn’t his first scandal that he’s been connected to. I think for him, you know, he did have his own conflict of interest. He was getting paid by the NRA’s top PR firm. But I think, you know, I can only speak to his actions. For all appearances it seemed like he was trying to do the right thing and that was really his only option, because I don’t think he’s looking for more bad press.

TAYA GRAHAM That’s really interesting. You also mentioned the PR firm that seems to be at the center of the controversy. I think it’s Ackerman McQueen. And they’re responsible for some really explosive videos. What are some of the allegations against this firm?

MICHAEL SPIES Well, you know, it’s interesting. The way this story has morphed is sort of fascinating. Ackerman McQueen has long been controversial within the NRA. And you know, for a number–and grew up with Wayne LaPierre. I mean, really, I mean, you know, Wayne only strengthened that partnership, which brought that firm lots of money. Ackerman McQueen has ultimately been responsible for the NRA’s public face for decades. The messaging, NRA TV ad campaigns, the stuff that people are generally most familiar with, that’s stuff that was produced by Ackerman McQueen. There was always this concern, understandably, that this for-profit firm had a lot of control within the organization; especially over Wayne LaPierre. And now that all ultimately was true and that was that was sort of verified in documents I obtained. But–and this is an important but–it’s not as if it was just like it was doing this with a gun to the NRA’s head. You know, Wayne LaPierre had, you know, for what it seemed like, it ultimately turned the keys over. It was his choice, it was senior management’s choice to continue this relationship. So for it now to sort of turn around and act like it was, sort of had like the, somehow for all these years had the wool pulled over its eyes, or like that the firm was pulling one over on the NRA, just doesn’t really comport with reality. But it’s–well, I mean, I don’t know. It’s tempting to sort of extrapolate and provide informed analysis without being certain of what the reasoning is. But it, you know, it just–it defies credulity, for example, that, you know, that the idea that the organization wasn’t intimately involved with signing off–at least Wayne LaPierre wasn’t involved with signing off on some of those very explosive ads that were being produced by Dana Loesch, I mean, I know for a fact they were.

I know Wayne LaPierre was signing off. That exists in affidavits. And also Oliver North, who we mentioned, had a longtime, longtime Ackerman McQueen contract well before he became president of the organization. That was well-known. And yes, you know, one of the things that we revealed was that Oliver North was getting paid, I don’t know, a million dollars or more by that firm while he was serving as president of the NRA.

TAYA GRAHAM So tell me a little bit about the finances of the NRA right now. I mean, it’s basically broke, right? Because you mentioned the money is supposed to be spent on their core values, which is like gun education, and gun safety. But there’s a ton of money being spent on messaging and advertising, right?

MICHAEL SPIES Yeah. I mean, I think that that point, honestly, needs to continue to be emphasized more and more. The NRA was set up in the 19th century as an organization that was supposed to facilitate education, safety, and training. And it fulfilled that function for, like, almost 100 years, until the ’70s, and then things–there was a drastic shift. But this isn’t–what I’m about to say is is it backed by empirical evidence, by the NRA’s own audits? I’m not just, like, saying it. Its investment in its core mission has been substantially and repeatedly reduced every year for years. It’s spending less than 10 percent of its overall budget on its core mission, but it’s spending increasingly–it has been spending increasingly more and more on various kinds of messaging; much more than that it’s been spending on the core, its core values and mission. And so it calls into question what is the NRA? Is it–is it an education and safety organization? Or is it just a media outlet? And then if it is a media outlet, is it providing education or is it doing something else? It appears to be doing something else. It appears mainly to be stoking the embers of the cultural wars, to the extent–in every conceivable way in order to facilitate fundraising. It’s just like this sort of unstoppable, circular–you know, this wheel. And it just, that’s–that’s its job.

And then when it gets, when it brings in the money, the money gets spent in ways that are very unusual. Specifically, you know, what appear to be very, very lavish pay packages, sweetheart deals to senior management, former management. Again, people closely connected to management. That means, you know, wives, girlfriends, friends, all that stuff. It just, there’s–you know, it seems like everybody has their hand in what appears to be a piggy bank.

TAYA GRAHAM You know, it’s interesting that you mentioned these allegations that board members have gotten lucrative contracts, and not just board members, but also their family members. So how much of an ethical problem is it when board members and family are being awarded moneys in this way?

MICHAEL SPIES Well, it’s interesting. The board members are less of the issue. I mean, I know that recently came up in a Post story. It’s I think more problematic because there is a difference, right. The board is an oversight body. And then there is senior management, which are the executives of the organization. So you know, the work that I’ve done is focused mainly on those people, because those are the people that are making real business decisions that directly affect themselves and the people close to them.

Board members, however, a group of them on and off, have been getting compensated by the NRA for forever. I mean, it’s been going on for decades. And the NRA, to be clear, has always very publicly and openly disclosed that in its 990s; that means its federal tax filings, and its state filings, and also directly to its members every single year at the annual meeting. It’s not–it’s a small world. So there is, as far as the membership payments go, I mean, I don’t think it’s ideal to, obviously, be paying funds to 16, 17 board members. But it is a 76 person board, and a lot of those moneys that at least are being publicly disclosed are pretty nominal. Still, obviously, you know–does it present certain conflicts? Sure. But only if we know exactly what those board members are overseeing. I don’t think any–I know none of them were on the finance or audit committees. It doesn’t mean it should be happening.

TAYA GRAHAM It’s another complication in the NRA’s organization. Now, I was curious, one of the issues or reasons people say the NRA is in trouble is because donations are down since President Trump has been elected. But the NRA has what, maybe five, six million members. Can you explain this dynamic? Why is the NRA losing money now?

MICHAEL SPIES Well, it was losing–I mean, this has always been the history of the NRA. It’s just–it is an ebb and flow organization. It flows when there is a Democratic president, and it ebbs when there is a Republican president. So there was–it’s just , you know, it’s much easier to fundraise against a perceived antagonist than it is against a supporter. It’s hard to rally people when you have someone who’s in your corner. But when you can say, like, President Obama is going to take all of our guns away, you know, whole–it’s a whole different ballgame.

That said, while there was a steep dropoff after Trump was elected–this is fairly disturbing, what I’m about to say–there was a steep incline after Parkland that that enabled the new round of fundraising.

TAYA GRAHAM Wow. That is disturbing.

MICHAEL SPIES Yeah. I mean, it’s–which also, honestly, is not an anomaly. I mean, every time there’s a mass shooting that captures the public’s attention, there seems to be a fundraising rally that follows it.

As far as the NRA’s money problems go, you know, revenue is one thing. The main problem, which has been the main problem, again, for decades, is like, just gross overspending, overborrowing, being overly leveraged. It wasn’t as if these money problems just started after Trump took office. They long predated his tenure. And even its behaviors as far back as 2017. It almost maxed out its $25 million credit limit. It had to borrow millions of dollars from its foundation. It had to borrow millions of dollars from its officers’ life insurance policies. It had to–it also had to liquidate investment funds. And this is just like–this is not the behavior of a healthy organization. And that was, by the way, like I said, 2017.

TAYA GRAHAM It sounds like the NRA is hemorrhaging money. But you know, you mentioned a detail that was incredibly disturbing; that after the mass shootings of children, that the NRA not only pushes to do more fundraising, but actually succeeds. That’s an incredibly disturbing detail. I want to direct you towards the new New York Attorney General Letitia James. She’s started investigating the NRA’s nonprofit status, as it was founded in New York. What kind of impact do you think this attorney general could have on the NRA?

MICHAEL SPIES I mean, she’s the–that office has the potential to have the most impact over the organization. I mean, the NRA is chartered here, which means that it falls under the purview of the New York AG. And in that capacity, the AG can sanction board members, remove board members, dissolve the entire board, petition to get executives or some other officers removed. It can also go to court to ultimately roll up the entire organization if it’s, you know, if it’s deemed too far gone, if the problems are too endemic that they can’t be rectified.

So you know, it’s–it is it is a very bad thing for the organization that the New York AG has opened this investigation. And I suspect that quite a lot of resources are being put into carrying out this investigation, because it’s very high profile.

TAYA GRAHAM Now, you mentioned NRA TV earlier, and Dana Loesch. And I’ve been watching a lot of NRA TV recently.

MICHAEL SPIES Oh dear.

TAYA GRAHAM I know. There seems to be a lot of focus on illegal immigration, civil protests, and identity politics. So I’m quickly going to show a video clip that samples some of the NRA TV content.

[Clip]

So, Mike, is there a connection here? What do you think their strategy is with this kind of messaging? And is there any conflict between the NRA and NRA TV?

MICHAEL SPIES I think the strategy, again, is to place the NRA at the vanguard of the culture wars, which has been, was, Ackerman McQueen’s strategy from very early on. And it was, I mean, if you remove your ideological leanings or your sense of decency from it, it was–it’s been in many ways effective for them.

TAYA GRAHAM Oh, absolutely.

MICHAEL SPIES You know, it’s the organization is obviously–you know, it’s very polarizing. You either revile it or you revere it. But the narrative that’s been put out, and in some places pushed forward by certain media outlets, that–that the issue was that there was some kind of internal discomfort between, like, the leadership and what was appearing on NRA TV, I just–just mean that that just feels ridiculous to me.

I mean, you mentioned the–I mean, we’re talking about the clenched fist of truth ad. For example, I know, because it came out in sworn affidavits, that–I mean, Wayne LaPierre approved, literally approved of that video, I believe. I feel almost certain. I have to–I mean, I feel 99 percent sure of that. I have to–I guess I’ll have to double check. But the point is is that there is no–it’s not as if the messaging just suddenly got like that. You know what I mean? It’s not like this is, I mean, you’re trying to make a distinction between, like, is that worse than what happened after Newtown, when when Ackerman McQueen produced a video that attacked President Obama’s children for having secret security or secret service?

TAYA GRAHAM Oh, that’s a good point.

MICHAEL SPIES The messaging has always, always been like this. It’s getting more attention now because I think Dana, you know, over the–especially post-Trump, which is just, you know, the whole context has changed. And Dana Loesch in particular is sort of just, like, a lightning rod for attention. But you know, what is there to say about that? I mean, Dana Loesch, as I reported, is, you know, at least one year–I assume it was every year she’s been in this position–was getting paid out some nearly a million dollars through Ackerman McQueen, making her is highly paid as any of the other NRA executives. And it’s not like the NRA–I mean, it’s not like anything she has said has gotten more incendiary. And the NRA has deliberately promoted her as the face of the organization right alongside Wayne LaPierre and Chris Cox, the NRA’s top lobbyist. If you go to an NRA annual meeting, as I’ve reported, when they roll out those big banners on the trade floor, there is Wayne LaPierre, there’s Chris Cox, and there’s Dana Loesch. And then there’s also another NRA TV personality named Colion Noir, who also is paid through Ackerman McQueen.

TAYA GRAHAM As if they just discovered what Ackerman McQueen was doing, as if they didn’t know this whole time.

MICHAEL SPIES Right. As if they were–right. As if they’d somehow been blindfolded, and someone ripped off the blindfold. It just, it’s kind of a, it’s–you know, I mean, I’m not, I’m not in the position as a journalist to defend anybody, but it is, it is very much like that the firm is now being scapegoated. And it’s not as if, again, didn’t engage in its own–It’s not as if there weren’t plenty of issues there. There were. But it was–it was representative of the NRA’s institutional problems. It wasn’t like, as if, like, this was like this isolated thing, and they just are chopping it off now.

TAYA GRAHAM So if you don’t mind, I would also like to touch on the culture of the NRA and its defense of good guys with guns. It seems they don’t promote, support, or defend black people who assert their right to bear arms, likPhilando Castile. He was a legal gun owner and had a permit to carry. And although he did exactly what the NRA says to do, which is to inform an officer that you have a gun and have the right to legally carry it, he was shot anyway, and the proof of this is on video. And there also was no defense of the black Army vet Emantic Bradford Jr, who also had a carry permit. He was literally a good guy with a gun, and ran to people’s aid during a shooting in a mall in Alabama last year. He went to defend people, and he himself was shot by police in the process. So do you have any theories as to why this organization does not seem to publicly support the right of black people to legally bear arms?

MICHAEL SPIES Well.

TAYA GRAHAM I know that’s a tough question to throw at you, but I’d really like your thoughts on it.

MICHAEL SPIES No, I mean, it’s a great–it’s an important question, and it’s a great question. Again, I’m only in a position to provide informed speculation, and I suppose I have to be a little careful about what I say. But what I can tell you, which is maybe fairly obvious, is that the NRA is a profoundly white organization. I mean, if you’ve ever been–they don’t release information on its membership demographics. But if you’ve ever been to an annual meeting, it is, you know, 99 percent white. I mean, actually, they do provide statistics about the demographics of who attends the annual meeting, which is usually like 90,000 people. So assume that’s a representative sample. You know, the vast, vast, vast, vast, vast majority of those folks are white.

So they are–the organization, and where it’s power is–power maybe is actually the wrong word, because that gives it more, that plays into the myth. ut where its influence lies or where its membership base lies are in, you know, outstate rural communities, and sometimes the suburbs. But profoundly white areas. They’ve got no–maybe except for some very minor exceptions.

TAYA GRAHAM You know, it’s interesting, because the NRA TV, and Dana Loesch in particular, excoriate what they consider mainstream media. It’ll be interesting to see if your reporting and investigations like that actually impact how your everyday NRA member views the board, and how they look at how their money and donations are being spent. It’ll be interesting to see if that has any impact on their membership rolls.

MICHAEL SPIES Well, it–I mean, look. As I’ve reported, the NRA is not very good at cultivating single big donors. So the vast, vast majority of its revenue is coming from its, you know, 5.5-6 million members. So the money that whatever it–you know, I would imagine that at some point there would be some kind of outrage on their behalf, since they’re subsidizing the organization, and the money that they’re giving to the NRA is going into places that they would probably not want it to.

TAYA GRAHAM Right. So, Mike, I just want to thank you for your in-depth investigation and for your time today. Thank you so much, Mike.

MICHAEL SPIES Oh, you’re welcome. And thank you so much for having me on. I really appreciate it.

TAYA GRAHAM My name is Taya Graham, and I want to thank you for joining me at The Real News Network.