Major Corruption And Scandal At The NRA (#GotBitcoin?)
Wayne LaPierre’s dealings with firm being probed by New York attorney general. Major Corruption And Scandal At The NRA (#GotBitcoin?)
National Rifle Association Chief Executive Wayne LaPierre was in discussions to have the group’s then-outside advertising agency help him buy a Dallas mansion last year for more than $5 million, but the deal fell through, according to people familiar with the matter.
The aborted house deal and conflicting explanations for why it fell apart are coming to the fore as the New York attorney general’s office is probing the NRA, including Mr. LaPierre’s dealings with the ad agency. The ad agency, Ackerman McQueen, recently turned over information about the contemplated house purchase to the AG’s office, according to a person familiar with the matter.
The discussions about the house purchase occurred early last year, shortly after the mass shooting at a high school in Parkland, Fla. Mr. LaPierre was concerned about his security and was interested in another residence besides his publicly known address in northern Virginia, according to people familiar with the matter.
An NRA spokesman said the idea to buy the house was proposed by the late Angus McQueen, then co-CEO of the ad firm, as an investment that would be owned by senior Ackerman executives. “The deal was vetoed by the NRA after its full terms—including Ackerman’s intent to spend NRA money—became known to Wayne LaPierre,” said William A. Brewer III, an outside NRA attorney. “Not a cent of NRA money was ultimately spent. Any suggestion to the contrary is untrue.”
That genesis of the discussions is disputed by others familiar with the transaction, who said the purchase was Mr. LaPierre’s idea and was to be funded by the NRA through a structure involving a limited-liability company. Ackerman was going to help manage the property, according to these people.
Mr. LaPierre and his wife, Susan, twice visited the mansion, in an exclusive golf community outside Dallas, according to one of these people, and also toured the golf club.
The LaPierres had the NRA cut a $70,000 check to Ackerman as earnest money for a contemplated offer, according to this person.
It was Mr. McQueen who pulled the plug on the arrangement, this person said, after learning more about the deal, including that Mr. LaPierre wanted a membership at the exclusive Vaquero golf club adjacent to the mansion. That made him doubt that security was the real aim, this person said.
Ackerman McQueen then returned the $70,000, this person said. Mr. McQueen died last month at age 74.
In a statement, Ackerman called the NRA’s allegation that Mr. McQueen was behind the mansion-purchase effort “blatantly false.”
“The truth is that Mr. LaPierre decided to proactively propose his plan to leave his current residence and purchase a new residence,” the agency said. “Acting outside the parties’ Services Agreement, Mr. LaPierre sought the involvement of Ackerman McQueen. Ackerman McQueen refused to proceed with this transaction. In fact, Mr. LaPierre’s actions in this regard led to Ackerman McQueen’s loss of faith in Mr. LaPierre’s decision-making.”
A spokeswoman for the New York AG’s office declined to comment on the real-estate issue.
The NRA’s board already was simmering with internal discontent about earlier revelations of expenses that Ackerman picked up for the NRA chief. According to leaked letters from Ackerman McQueen to the NRA, Mr. LaPierre charged more than $540,000 to the ad firm for clothing from a Beverly Hills, Calif., shop and for travel to Italy, Hungary, the Bahamas and other locales, some of it by private jet.
Mr. LaPierre and the NRA have said the travel and wardrobe costs were justified for NRA business reasons. The NRA reimbursed the ad firm for the travel costs, but not for the clothing.
The NRA’s then-president, Oliver North, left the NRA’s board after trying to get it to investigate the allegations that Mr. LaPierre may have mismanaged the nonprofit organization’s funds. Three other board members resigned last week after trying and failing to get the NRA’s board to launch an external investigation.
The NRA has said its board audit committee has fully vetted the transactions.
Until a falling-out earlier this year, the NRA, based in Fairfax, Va., and Oklahoma City-based Ackerman McQueen had a close relationship dating back more than 30 years. Messrs. LaPierre and McQueen talked almost every day, and sometimes several times a day, according to a 2002 deposition of Mr. McQueen.
The NRA sued Ackerman in April, claiming the ad firm was refusing to comply with demands to produce documentation backing up its bills to the NRA. The ad firm denied that allegation. The NRA has since terminated its contract with Ackerman and the two sides are locked in litigation.
Andrew Arulanandam, managing director of NRA public affairs, said in a statement that the allegation that the NRA was planning to fund the mansion purchase “is yet another example of Ackerman twisting the truth to promote a false narrative.”
The 10,000-square-foot mansion, in a Dallas suburb called Westlake, was priced at $6.2 million around the time the LaPierres were looking. It is a “French Country Estate” on a lake and has four bedrooms and nine baths—including “his and hers master baths”—according to the listing. It’s still on the market for $5.25 million.
The listing broker for the house, Jeff Watson, said that a couple from out of state looked at the house early last year, but he didn’t know their names and said they never put in a formal offer.
Check for Dallas Mansion Raises New Questions About NRA Plans
NRA payment for $70,000 is most-direct evidence showing the flow of money in an aborted deal to buy CEO Wayne LaPierre a $6 million home.
In May 2018, the National Rifle Association sent a $70,000 check to an obscure Delaware entity called WBB Investments LLC, which had been incorporated a week earlier.
The check, a copy of which was obtained by The Wall Street Journal, raises new questions about the NRA’s attempts to explain a tangled transaction involving its then-outside advertising agency and an abortive plan to purchase a $6 million Dallas mansion for NRA CEO Wayne LaPierre.
The advertising agency, Ackerman McQueen, recently turned over documents to the proposed house purchase to the New York attorney general’s office, which is probing Mr. LaPierre’s dealings with the agency as part of a broad investigation of the NRA.
When the Journal broke the story last week, the NRA initially said the plan to buy the mansion was hatched by Angus McQueen, the ad agency’s late co-CEO, as a kind of safe house for Mr. LaPierre. The NRA chief had concerns about his security in the wake of the February 2018 mass shooting at a high school in Parkland, Fla.
The NRA said the house was to be purchased by a company owned by senior Ackerman executives, and Mr. LaPierre shut down the transaction after discovering that the ad company intended to use NRA funds for the deal. “Not a cent of NRA money was ultimately spent,” the NRA said.
Ackerman, for its part, says Mr. LaPierre had wanted the mansion, which it said was to be paid for by the NRA. According to Ackerman’s version of events, Mr. LaPierre had asked Ackerman to help facilitate the deal, and an Ackerman lawyer set up WBB Investments to buy the house so the LaPierre connection wouldn’t become public.
Mr. LaPierre and his wife, Susan, twice visited the house—a 10,000-square-foot residence in a gated golf community—and were preparing to put down $70,000 in earnest money to make an offer, according to people familiar with this version of the transaction.
Enter the check, dated May 25, 2018, and drawn on an NRA account at Wells Fargo . It is the most-direct evidence of the flow of money in the aborted deal to have emerged.
“If there’s a check from the NRA to an LLC, that doesn’t seem consistent with a story that Ackerman was going to pay for it,” said Elizabeth Kingsley, a Washington lawyer who specializes in nonprofit law. “Even if it’s just earnest money, the money is on the line and the check shows NRA money, not Ackerman funds.”
Asked about the check, an NRA spokesman, Andrew Arulanandam, said: “During the formative stages of an arrangement being driven by Ackerman McQueen, the NRA made a nominal payment to help facilitate the process for a real estate transaction that was supposedly being undertaken by Ackerman McQueen following the Parkland tragedy.”
A spokeswoman for the attorney general’s office in New York declined to comment on the $70,000 check.
Both sides agree that the deal quickly fell apart. WBB Investments returned the money to the NRA, via a check dated June 14, 2018.
NRA board members have rallied around Mr. LaPierre in the proposed mansion transaction. Mr. LaPierre previously fended off boardroom dissent over earlier revelations about more than $540,000 of clothing and travel expenses that Ackerman picked up for Mr. LaPierre. The NRA has said the costs were justified for business reasons.
Ms. Kingsley, the nonprofit attorney, said both explanations for how the mansion purchase was to be funded look “screamingly bad” for the NRA and Mr. LaPierre.
If Ackerman was indeed going to pay, she said, it “would represent a massive undisclosed conflict of interest” for the CEO to take such a gift from a major vendor. If the NRA decided Mr. LaPierre’s security issues were so severe the group needed to buy him a new residence, she added, even an initial payment for such an unusual transaction should have been approved by the board.
The $70,000 house payment, ProPublica reported last week, was flagged by NRA accountants in July 2018 as violating NRA procedures and an example of “senior management override of internal controls.”
The NRA didn’t respond to requests for comment on ProPublica’s report of the accountants’ internal memo or the critiques of the proposed transaction.
The NRA ended its contract with Ackerman earlier this year and the two organizations are embroiled in litigation. Mr. McQueen died last month at age 74.
NRA Acknowledges Improper Executive Benefits In New Tax Filing
Gun-rights organization says CEO Wayne LaPierre has repaid $300,000 related to travel expenses.
The National Rifle Association disclosed that current and former top executives received at least $1.4 million in improper or excessive benefits from the organization in violation of nonprofit rules, the first time the group has publicly admitted the lapses.
The NRA, in its tax filing covering 2019, also reported a $12.2 million deficit and a 34% decline in member dues in 2019, as the gun-rights organization grappled with internal turmoil and external legal probes related to alleged expense abuses by its top officials.
Wayne LaPierre, the NRA’s chief executive, repaid the NRA $300,000 related to travel expenses from 2015 to 2019 that the nonprofit group originally paid for him but has now determined to be an “excess benefit” under tax rules, according to the filing. Mr. LaPierre is estimated to owe a special excise tax of about $75,000 on the extra income, the NRA said.
“The vast majority of Mr. LaPierre’s travel was undertaken in strict compliance with NRA policy,” an NRA spokesman said in a statement Wednesday. “To the extent there were any questions about certain travel expenditures, Mr. LaPierre reimbursed the NRA.”
A lawyer for Mr. LaPierre didn’t respond to requests for comment.
The NRA also said in its filing that Christopher Cox, its former No. 2 official who left the group last year, improperly used NRA funds to pay personal expenses charged on his personal credit card and allegedly used NRA funds for unapproved expenses such as first-class travel, hotel costs and sporting-event tickets. The NRA said it was seeking to recover more than $1 million from Mr. Cox. This is being disputed by Mr. Cox, the filing said.
Mr. Cox didn’t respond to a request for comment.
New York Attorney General Letitia James in August charged the NRA, Mr. LaPierre and three other former or top officials with violating the state’s nonprofit laws by illegally diverting tens of millions of dollars from the group through excessive expenses and contracts that benefited relatives or close associates. Mr. Cox wasn’t among those named in the complaint.
The civil suit from Ms. James alleged that Mr. LaPierre personally received millions of dollars of undisclosed compensation from the NRA and its vendors, in the form of free yacht trips, private jet flights for his family, safaris and other benefits.
The NRA claimed, at the time of the court filing, that the lawsuit was baseless and politically motivated, while Mr. LaPierre has defended the group as well governed.
William A. Brewer III, a lawyer for the NRA, said the new filing shows the organization’s commitment to good governance, adding that the NRA “moved decisively and thoroughly in its self-evaluation, and voluntarily pursued any required actions long before it became a party to a politically-motivated lawsuit.”
The Internal Revenue Service separately is investigating Mr. LaPierre for possible criminal tax fraud related to his personal taxes, The Wall Street Journal reported last month, citing people familiar with the matter. A lawyer for Mr. LaPierre said at the time that he wasn’t aware of any such investigation.
Mr. LaPierre was paid $1.9 million in 2019, including a $455,000 bonus, the new filing said. That compares with total compensation of $2.2 million in 2018, which included a $366,000 payout from a retirement plan.
Total NRA revenue fell 17% to $291 million, according to the filing. The group cut expenses and employees during the year, the filing showed.
The NRA’s largest vendor in 2019 was a Dallas-based law firm that is representing the organization in the attorney-general probe and other litigation. The NRA reported it paid the firm, Brewer Attorneys and Counselors, $24.8 million in 2019, compared with $13.8 million the previous year.