Jury says ex-NRA chief LaPierre mismanaged gun rights group, cost it $5.4 million


By Jonathan Stempel and Jack Queen

NEW YORK, Feb 23 (Reuters) - A New York state jury found that former National Rifle Association chief Wayne LaPierre mismanaged the gun rights group and cost it $5.4 million, ruling in a civil corruption case brought by New York's attorney general.

The jury said that LaPierre had already repaid the NRA a little more than $1 million, and a judge will ultimately decide how much he must pay the group.

John Frazer, the NRA's current secretary and general counsel, did not harm the organization financially, the jury said.

LaPierre - who had also faced possible removal before resigning in January after more than 32 years as chief executive - built the NRA into a political powerhouse that pressed Washington and statehouses to expand gun rights, even as mass shootings mounted nationwide.

But it has struggled in recent years, with revenue down 44% since 2016 and membership dropping by nearly one-third since 2018, according to court papers filed last year.

The lawsuit was filed in 2020 by New York Attorney General Letitia James.

James accused the NRA of letting top executives divert millions of dollars for luxuries, turning the gun rights group into "Wayne's World" as LaPierre enjoyed private jets, expensive trips and a Beverly Hills shopping spree.

James also said the NRA ignored the need for board approval to waive conflicts of interest and approve insider transactions.

Defense lawyers called the lawsuit part of a political "witch hunt" because James, a Democrat, did not like what it stood for and wanted to silence it.

The NRA has since 1871 been a New York-registered nonprofit, meaning its assets must be used to advance charitable needs and serve members.

In her closing argument for the state, Assistant Attorney General Monica Connell said the NRA, as a charity, should have spent money to advance its mission, and was deflecting blame after getting caught with its hands in the cookie jar.

"Saying you're sorry now, saying maybe you'll put back a couple of those cookies, doesn't mean you didn't take the cookies," Connell said.

James originally sought to dissolve the NRA, but the judge in 2022 said she had not shown sufficient public harm to justify a "corporate death penalty."

In testimony last month, LaPierre admitted he should have told the NRA board about vacations he had taken with a Hollywood producer at about the same time the NRA began paying higher fees under a contract with a company the producer owned.

But he maintained that the NRA had undergone a "course correction" to improve accounting in 2018, and James should have been "patting us on the back for the work we had done."

(Reporting by Luc Cohen, Jack Queen and Jonathan Stempel in New York, Editing by Rosalba O'Brien and Noeleen Walder)

((luc.cohen@thomsonreuters.com; +1 646 361 1622; Reuters Messaging: Twitter: @cohenluc))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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