NEW YORK – New York Attorney General Letitia James today won another significant victory against the National Rifle Association (NRA), securing a judgment that mandates substantial reforms to the NRA’s governance in order to comply with New York’s not-for-profit laws. This decision follows a jury verdict that found the NRA had mishandled charitable funds and violated state laws, with its former Executive Vice President Wayne LaPierre causing $5.4 million in damages and former Chief Financial Officer Wilson “Woody” Phillips causing $2 million in damages. Based on evidence presented by the Office of the Attorney General (OAG), the court ruled that the NRA must implement more than a dozen reforms to prevent future legal violations.
The judgment requires the NRA to overhaul its board elections, hire an external consultant to advise on compliance with the court’s orders and other governance practices, and improve transparency and communication between leadership and board members. The NRA must also restructure its audit committee by barring anyone who served on it between 2014 and 2022, and future members must be elected by the full board instead of being chosen by the Board President. Additionally, LaPierre is ordered to pay $4.35 million and Phillips must pay the $2 million in damages, plus nine percent annual interest.
“For decades, the NRA allowed self-interested insiders to run the organization without regard for the law,” said Attorney General James. “Thanks to my office’s efforts to stop corruption, the NRA is now forced to clean house. Wayne LaPierre, who resigned from his 30-year tenure at the NRA just before trial, is barred from returning to any fiduciary role with the organization or its affiliates for over a decade. This ruling, alongside the jury’s verdict earlier this year, sends 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 secured the first stage of a two-part trial when a jury found the NRA, LaPierre, Phillips, and former General Counsel John Frazer guilty of violating state laws. The jury determined that the NRA mismanaged charitable funds, failed to protect whistleblowers, made false regulatory filings, and that LaPierre and Phillips caused $7.4 million in financial damage. Before the second trial stage, OAG reached a settlement with Phillips, banning him from serving as a fiduciary for a New York not-for-profit for 10 years. In the second stage, James secured a 10-year ban on LaPierre from serving as an executive at the NRA or its affiliates.
As a result of the jury’s findings, today’s judgment mandates significant changes to the NRA’s 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 reforms and suggest best governance practices.
- Requiring the full board to elect audit committee members, replacing LaPierre’s loyalists who failed to properly oversee the organization’s finances.
- Removing and prohibiting the reappointment of current audit committee members who served between 2014 and 2022.
- Changing how board members are elected to reduce entrenchment among long-serving members.
- Ensuring more transparency and fairness in the board nomination process.
- Requiring the NRA to issue an annual compliance report, covering topics like travel expenses and contract procurements, for at least five years.
- Enhancing the certification process for its annual regulatory filings, including the CHAR500, with certifications from the NRA Executive Vice President and Treasurer for at least five years.
- Implementing protections for the Chief Compliance Officer to ensure they can work without fear of retaliation.
- Providing online access to board members of key governance materials, regulatory filings, and major legal rulings to increase transparency within the NRA.
Attorney General James filed a lawsuit against the NRA and its current and former senior officers in August 2020. In January 2021, the NRA filed for bankruptcy in an attempt to avoid accountability, seeking to reorganize in Texas. However, a federal bankruptcy court in Texas rejected the NRA’s bankruptcy petition in May 2021, ruling that the NRA did not file the petition in good faith.
Just before the first stage of the trial in January 2024, Wayne LaPierre unexpectedly announced his retirement after serving as Executive Vice President and CEO for over 30 years. Additionally, OAG reached a $100,000 settlement with the NRA’s former Executive Director of Operations, Joshua Powell, before the trial started. At the end of the six-week trial, the jury found all defendants liable for violating New York’s not-for-profit laws and determined that LaPierre owed $4.35 million in damages, plus over $1 million he had already repaid, and Phillips owed $2 million, which is unaffected 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 support from attorneys and legal assistants, including Bureau Chief James Sheehan and others in the Charities Bureau. The Charities Bureau is part of the Division for Social Justice, led by Chief Deputy Attorney General Meghan Faux and overseen by First Deputy Attorney General Jennifer Levy.
