NY AG seeks to dissolve NRA

[bolverk 29,721]

This is NOT the thread to discuss the Second Amendment.

This is NOT the thread to discuss the organization's ties to any particular politician or political party.

If you wish to discuss either of the above, there's a thread for that over in the Cloak Room.

This IS the thread for discussing the case and specific allegations in a factual manner against a high profile and influential non-profit organization, as well as those individuals who are accused of fraud.

This thread is worthy on its own, because it is a major news event worthy of discussion among a group of highly regarded (yet highly educated) surly assholes.

 

New York Attorney General Moves To Dissolve The NRA After Fraud Investigation

The Attorney General of New York took action today to dissolve the National Rifle Association, following an 18-month investigation that found evidence the powerful gun rights group is "fraught with fraud and abuse."

Attorney General Letitia James claims in a lawsuit filed Thursday that she found financial misconduct in the millions of dollars, and that it contributed to a loss of more than $64 million over a three year period.

The suit alleges that top NRA executives misused charitable funds for personal gain, awarded contracts to friends and family members, and provided contracts to former employees to ensure loyalty.

Spoiler

 

Seeking to dissolve the NRA is the most aggressive sanction James could have sought against the not-for-profit organization, which James has jurisdiction over because it is registered in New York. James has a wide range of authorities relating to nonprofits in the state, including the authority to force organizations to cease operations or dissolve. The NRA is all but certain to contest it.

NPR has reached out to the NRA for comment, but has not received a response.

"The NRA's influence has been so powerful that the organization went unchecked for decades while top executives funneled millions into their own pockets," James said in a statement. "The NRA is fraught with fraud and abuse, which is why, today, we seek to dissolve the NRA, because no organization is above the law."

James' complaint names the National Rifle Association as a whole, but also names four current and former NRA executives: Executive Vice President Wayne LaPierre, general counsel John Frazer, former CFO Woody Phillips, and former chief of staff Joshua Powell.

It lists dozens of examples of alleged financial malfeasance, including the use of NRA funds for vacations, private jets, and expensive meals. In a statement, her office said that the charitable organization's executives "instituted a culture of self-dealing, mismanagement and negligent oversight" that contributed to "the waste and loss of millions in assets."

The lawsuit seeks to dissolve the NRA in its entirety and asks the court to order LaPierre and other current and former executives to pay back unlawful profits. It also seeks to remove LaPierre and Frazer from the organization's leadership and prevent the four named individuals from ever serving again on the board of a charity in New York.

Allegations against CEO Wayne LaPierre

LaPierre, who also serves as CEO, has held the top position at the organization for nearly 30 years. In the Attorney General's lawsuit he is accused of using charitable funds for personal gain, including a post-employment contract valued at more than $17 million that was not approved by the NRA's board of directors.

The lawsuit also claims that LaPierre received more than $1.2 million in expense reimbursements over four years, including gifts for friends, travel expenses and memberships at golf clubs and hotels.

And it alleges that he spent hundreds of thousands of dollars on private plane trips, including for extended family when he was not present; traveled to Africa with his wife on a safari gifted by an NRA vendor, and spent more than $3.6 million on luxury black car services and travel consultants in the last two years.

Those that attempted to blow the whistle on this behavior, the suit claims, were retaliated against by LaPierre.

Allegations against former CFO Woody Phillips, former chief of staff Joshua Powell and general counsel John Frazer

James' lawsuit alleges that Phillips, whose job it was to manage the financial operations of the charitable organization, lied on financial disclosure forms and set up numerous deals to enrich himself and his girlfriend.

The New York Attorney General claims that Phillips set up a contract for himself just before he retired, and that the package was worth $1.8 million — purportedly for consulting services to the incoming treasurer. But the incoming treasurer told the New York attorney general that he was not aware of this contract. Phillips also directed a deal worth more than $1 million to his girlfriend, the suit alleges.

Meanwhile, James alleges that former NRA chief of staff Joshua Powell's salary more than tripled a little more than two years into his tenure, which began in 2016. While he began at $250,000, Powell's salary rose to $800,000.

Powell is also accused of directing charitable funds to be used for the benefit of his family members. The New York Attorney General said that Powell approved of a $5 million consulting contract with the firm McKenna & Associates. That firm, in turn, hired Powell's wife and passed her $30,000 monthly consulting fee through the NRA. Powell also arranged for an NRA vendor to hire his father as a paid photographer, leading to $90,000 in fees for his father — funds that were ultimately billed to the NRA.

The New York Attorney General did not allege that NRA general counsel John Frazer committed financial misconduct, but said that he failed to comply with board governance procedures, failed to ensure the NRA was in compliance with whistleblower laws and repeatedly certified false or misleading annual statements by the NRA.

The NRA's already precarious financial situation

James' lawsuit is sure to be contested in court by the National Rifle Association.

But even before this move, the NRA was in dire financial straits. A secret recording of an NRA board meeting obtained by NPR in April showed LaPierre telling the audience that the NRA's legal troubles have cost the organization $100 million.

"The cost that we bore was probably about a hundred-million-dollar hit in lost revenue and real cost to this association in 2018 and 2019," LaPierre said, according to a tape recorded by a source in the room. "I mean, that's huge."

Much of this has to do with its legal troubles. Facing Congressional inquiries and investigations by multiple state attorneys general, as well as internal whistleblower complaints, the NRA's finances have sagged under the burden of legal costs. In the ongoing litigation between the NRA and Ackerman McQueen, its former public relations firm, a brief filed by the firm on April 15 indicates its belief that the NRA has paid its outside legal counsel "over $54 million" in the last two years.

The turmoil at the NRA also could have political ramifications ahead of the 2020 elections. The NRA spent tens of millions of dollars in 2016 to support then-candidate Donald Trump — a role it appears it will be unlikely to be able to repeat given its current financial condition.

 

 

[tx 3 putt 77,428]

LaPierre and his wife need to be in prison 

[Anastasis 23,483]

Didn't LaPierre use NRA funds to put his side piece up in an apartment?

[Orale 1,087]

3 minutes ago, Anastasis said:

Didn't LaPierre use NRA funds to put his side piece up in an apartment?

Was that wrong?

[Anastasis 23,483]

1 minute ago, Orale said:

Was that wrong?

I report, you decide.

[bolverk 29,721]

3 minutes ago, tx 3 putt said:

LaPierre and his wife need to be in prison 

I've never worked in the non-profit world and, therefore, don't entirely understand how contracts are approved. The story says there was a "post-employment contract" with him that was not approved by the Board. How exactly does that type of thing happen? Are non-profit boards typically that lax and hands off? Aren't they supposed to review contracts as part of their obligation?

Quote

 

"LaPierre, who also serves as CEO, has held the top position at the organization for nearly 30 years. In the Attorney General's lawsuit he is accused of using charitable funds for personal gain, including a post-employment contract valued at more than $17 million that was not approved by the NRA's board of directors.

The lawsuit also claims that LaPierre received more than $1.2 million in expense reimbursements over four years, including gifts for friends, travel expenses and memberships at golf clubs and hotels.

And it alleges that he spent hundreds of thousands of dollars on private plane trips, including for extended family when he was not present; traveled to Africa with his wife on a safari gifted by an NRA vendor, and spent more than $3.6 million on luxury black car services and travel consultants in the last two years.

Those that attempted to blow the whistle on this behavior, the suit claims, were retaliated against by LaPierre."

 

 

[crash_davis 23,115]

And here i was thinking LaPierre was an idiot. From the pic of his sidepiece, seems like he has his priorities straight.

Edited August 6, 2020 by crash_davis

[bolverk 29,721]

It seems that this firm could also end up in hot water.

Quote

The New York Attorney General said that Powell approved of a $5 million consulting contract with the firm McKenna & Associates. That firm, in turn, hired Powell's wife and passed her $30,000 monthly consulting fee through the NRA.

 

[Pato del Muerto 52,601]

Why go after the entire organization instead of just the individuals who committed fraud?  Or is my answer in the other thread?

[South Austin 52,606]

12 minutes ago, Anastasis said:

I report, you decide.

Take that shit to . . . never mind.  Keep it here.  And more, please.

[crash_davis 23,115]

Megan Allen. Aren't many pics of her on the interwebs. 

[bolverk 29,721]

A year-old story:

An Internal Memo Raises New Questions About Self-Dealing at the N.R.A.
By Mike Spies

May 7, 2019

In July of 2018, as the National Rifle Association was in the throes of a financial crisis, a half-dozen of the organization’s accountants produced a document detailing what they believed to be the most egregious issues that needed to be addressed by its audit committee—a small group of N.R.A. board members tasked with conducting fiscal oversight.

The accountants’ one-and-a-half-page memo, titled “List of Top Concerns for the Audit Committee,” details a range of questionable transactions and business arrangements involving several top N.R.A. venders and executives. It offers new details on the financial mismanagement occurring inside the organization, which had been laid out in an earlier, handwritten memo, dated to July 12th and compiled by Emily Cummins, who was then the N.R.A.’s managing director of tax and risk management.

Last month, The Trace and The New Yorker reported on the July 12th memo’s damaging contents, along with a broad array of other revelations culled from public and internal records. Since then, Letitia James, the attorney general of New York, where the N.R.A. is chartered, has opened an investigation into the organization’s tax-exempt status.

Spoiler

 

As the depths of the gun group’s fiscal problems have become public, its leadership has attempted to blame Democratic politicians and overzealous regulators for throwing it into a dire financial state. Last month, the N.R.A. also blamed Ackerman McQueen, a public-relations firm that, for almost four decades, has meticulously crafted the organization’s identity and placed the N.R.A. at the vanguard of the culture wars. The N.R.A. filed a lawsuit accusing Ackerman—historically the gun group’s most expensive vender—of engaging in deceptive business practices. (Ackerman has disputed the lawsuit’s allegations, contending that it was transparent in providing the N.R.A. with “every single piece of information” that the organization requested.)

The N.R.A.’s relationship with Ackerman seems to be the most prominent example of an organizational culture that is marked by secrecy, self-dealing, and greed, and has cost the N.R.A. hundreds of millions of dollars through bloated payments, lavish deals, and opaque financial arrangements. The memo to the audit committee appears to show that the N.R.A.’s troubles stretch beyond its dealings with Ackerman. It suggests new examples of unexplained spending, weak oversight, mismanagement, and conflicts of interest among members of the N.R.A.’s senior management.

“As previously stated, the N.R.A. has serious concerns about the accuracy of this reporting and The New Yorker’s sources,” William A. Brewer III, a lawyer who represents the N.R.A., wrote. “Of course, we cannot comment on privileged communications or personnel matters—especially in response to out-of-context assertions.” He added, “This ‘report’ is obsolete and misleading. The N.R.A. has a conflict-of-interest policy, and the audit committee reviews all related-party transactions, when appropriate.” The organization, he said, “strives to comply with all applicable regulations.”

One of the senior N.R.A. executives mentioned in the audit-committee memo is Woody Phillips, who served as the organization’s treasurer and chief financial officer for twenty-six years before retiring, in 2018. The document states, without explanation, that the N.R.A. had made “payments” to Phillips’s “significant other.” Brewer challenged the accuracy of the assertion. “Payments were not made to any ‘significant other’ of the N.R.A.’s former C.F.O.,” Brewer wrote. “The N.R.A. hired an I.T. consulting firm with links to a social friend of Mr. Phillips. That firm was interviewed and vetted by the N.R. A.’s I.T. department, and its engagement was reviewed and approved by the audit committee.”

The accountants described invoices submitted by several venders and paid by the N.R.A. as “vague and deceptive.” One questionable arrangement involved Associated Television International, a television-production company. From 1998 to 2014, A.T.I. produced a crime-reënactment show called “Crime Strike,” which featured the N.R.A.’s executive vice-president and C.E.O., Wayne LaPierre. According to the accountants, the N.R.A. paid A.T.I. “$1.8M for rental of a house” belonging to David McKenzie, A.T.I.’s president. The accountants do not say who rented the home, why the N.R.A. covered the rental at such an enormous cost, nor what, if anything, was “deceptive” about the bill.

Michael Donaldson, A.T.I.’s outside counsel, confirmed that the company sent the N.R.A. “seven invoices” concerning the house, which added up to “almost $1.8 million.” He went on, “The invoices in question were all for refurbishing episodes after completion of the original episodes of ‘Crime Strike,’ ” adding, “the invoiced amounts include not only the house but also various production-related items such as lights, props, and some crew.” Donaldson told me that A.T.I. has “stopped rendering services for the N.R.A. for some time.” “In fact,” he said, “they are now focussed on working on an independent documentary called ‘Inside the N.R.A.’ ”

Brewer, the lawyer representing the N.R.A., said that the audit committee is “addressing those issues” and that the N.R.A.’s “long relationship with A.T.I.” has “resulted in significant benefits for the Association and its members.” Brewer added, “As is true of all such relationships, it is a subject of ongoing review by the N.R.A.”

Other payments questioned in the memo involved Membership Marketing Partners, a fund-raising contractor. In 2017, the N.R.A. paid the firm nearly twelve million dollars. The Trace and The New Yorker previously reported that, in the same year, the N.R.A. paid almost eight hundred thousand dollars for “fundraising counsel” to a firm called Allegiance Creative Group. According to North Carolina state filings, at least ten of Allegiance’s fifteen employees and executives also work at Membership Marketing Partners; one such executive is Gurney Sloan, who serves as the president and C.E.O. of both companies. According to the accounting memo, “MMP bills violate contract stipulations,” though it does not specify which stipulations.

In addition, the memo drew attention to “senior management override of internal controls,” which led to violations of “accounts payable procedures” and “HR policy,” including “hiring of staff without HR knowledge.” It names four executives who, at the time, were receiving “reimbursement of expenses relating to apartments and living expenses beyond HR Policy Manual stipulations and on a permanent basis.” The N.R.A.’s accountants added that there was “no contract to support the reimbursement request,” which the four individuals continued to claim as a “relocation expense.” The executives named include Doug Hamlin, the N.R.A.’s executive director of publications; Eric Frohardt, the director of education and training; Joe DeBergalis, the executive director of general operations; and Josh Powell, LaPierre’s chief of staff.

Andrew Arulanandam, the N.R.A.’s managing director of public affairs, said that the organization “has, at times, made such accommodations for employees who travel extensively for their jobs.” He added, “The practice of providing such accommodations is approved by N.R.A. leadership and is not uncommon for an organization the size of the N.R.A.”

James Fishman, an expert on nonprofit law and a co-author of “New York Nonprofit Law and Practice: With Tax Analysis,” said that the housing payments, along with the other arrangements described in the memo, suggested “that senior people at the N.R.A. are using the organization for their own private benefit.” He said, “That is against the law. The nonprofit is supposed to serve a public purpose, not a private purpose.”

The N.R.A. hired Powell in 2016, after he ran two high-end clothing catalogues that catered to wealthy outdoorsmen. Businesses that had worked with Powell sued him on at least twenty occasions, alleging unpaid bills totalling more than four hundred thousand dollars. Powell served as the N.R.A.’s executive director of general operations for roughly two years, until this past December. The organization’s 2017 tax filings revealed that Powell had racked up more than a hundred thousand dollars in personal expenses—including a housing allowance—paid by the N.R.A. In December, 2018, Powell, who is not an attorney, was promoted to “senior strategist” on the N.R.A. legal team that sued Governor Andrew Cuomo and the New York Department of Financial Services that spring.

The memo to the audit committee cites Powell’s multiple conflicts of interest, including N.R.A. payments to his father, a photographer, and the fact that, in late 2017, his wife, Colleen Gallagher, was hired by one of the N.R.A.’s top fund-raising venders, McKenna & Associates.

Arulanandam, the N.R.A. spokesperson, said that the audit committee was “aware of the relationship and approved the consulting arrangement with McKenna.” The company, he said, “has for years been a trusted advisor to the association in the area of business consulting, development, and strategic planning.” Toby Merchant, a lawyer representing McKenna, told me that Gallagher was “actively recruited by McKenna” and that she was “hired on the merits of her skills and talents.”

The memo alleges that McKenna provided “vague project names,” failed to “attach support” for invoices, and operated with “no contract for current work.” Brewer, the N.R.A. lawyer, said there was nothing unusual about shrouding work in secrecy: “As is customary in finance, consulting, and other industries, N.R.A. vendors have occasionally used code names for transactions or projects. This does not mean the N.R.A. lacked knowledge regarding the services rendered. For example, work performed by McKenna & Associates was reviewed, vetted, and approved.”

Merchant, McKenna’s attorney, said that “Senior leadership and the audit committee were well aware of the services and deliverables being provided by McKenna & Associates.” He added that the N.R.A.’s “accounting department” would “not have had access to the confidential details of the McKenna & Associates engagement.” He said that McKenna’s work for the N.R.A. was neither ‘vague’ nor ‘unsupported.’” Any assertion to the contrary, he asserted, “is demonstrably false.”

Though it’s not mentioned in the memo, around the time that Powell became LaPierre’s chief of staff, the organization brought in Dan Winders, the chief operating officer of one of Powell’s catalogues. Winders told me, in a text message, that the N.R.A. had given him a “one-day consultation with their promotional-products team to evaluate their business processes and inventory management.”

The N.R.A.’s accountants completed their memo in mid-July. Around this period, the N.R.A.’s new C.F.O., Craig Spray, had to temporarily step away from his role at the organization to deal with a health matter. Someone would need to take his place as the organization’s chief manager of financial activities. According to an internal N.R.A. communication, in July, 2018, Powell was appointed acting C.F.O. for about three weeks, placing him in charge of the accountants who documented his conflicts of interest.

“This is norm-breaking across the lines—deeply problematic and definitely not best practices,” Philip Hackney, who worked for five years as an attorney in the Internal Revenue Service’s chief counsel’s office, said. “If all of these allegations are true, you’re talking about nonprofit governance gone bad, with choices resulting in possible theft, which is not in anyone’s interest.”

 

 

[TwiceHorn 31,536]

19 minutes ago, bolverk said:

I've never worked in the non-profit world and, therefore, don't entirely understand how contracts are approved. The story says there was a "post-employment contract" with him that was not approved by the Board. How exactly does that type of thing happen? Are non-profit boards typically that lax and hands off? Aren't they supposed to review contracts as part of their obligation?

 

As a general matter of corporate governance (not non-profit-specific), the Board of Directors is the real governing body of the corporation.  Some of its powers it delegates to officers, such as the CEO, that it appoints.  For example, it might grant the CEO power to enter into transactions with a value under X in the ordinary course of business, or similar.

Ordinarily, every aspect of CEO compensation is handled by the Board of Directors.  I suppose they could delegate CEO compensation to the CFO, or to the CEO him/herself, but that would likely be a breach of fiduciary duty all by itself.

tl;dr hell no it's not normal for any corporation to give the CEO power to fix his own compensation.

Edited August 6, 2020 by TwiceHorn

[Redpuma 146]

25 minutes ago, Anastasis said:

Didn't LaPierre use NRA funds to put his side piece up in an apartment?

That was legitimate intern fringe benefits, sir! 

[TwiceHorn 31,536]

9 minutes ago, Pato del Muerto said:

Why go after the entire organization instead of just the individuals who committed fraud?  Or is my answer in the other thread?

I think it's symbolic only.  Which basically means theatrical, ie grandstanding.

NRA can just incorporate somewhere else.

Pursuing the individuals and the tax exemption (at least for NY state purposes) is far more meaningful.

[bolverk 29,721]

2 minutes ago, TwiceHorn said:

As a general matter of corporate governance (not non-profit-specific), the Board of Directors is the real governing body of the corporation.  Some of its powers it delegates to officers, such as the CEO, that it appoints.  For example, it might grant the CEO power to enter into transactions with a value under X in the ordinary course of business, or similar.

Ordinarily, every aspect of CEO compensation is handled by the Board of Directors.  I suppose they could delegate CEO compensation to the CFO, or to the CEO him/herself, but that would likely be a breach of fiduciary duty all by itself.

Thanks. When I first read the article, the statement about a "post-employment contract" with La Pierre made me think he was retired. But there's also the issue of him still being CEO. What's up with that?

[Surly Bevo 25,153]

Taking the politics and this particular org out of the equation it does seem like it would be more appropriate to pursue individuals rather than an org.  That said if you are going to pursue ending an org with some deeper motive to rid it of its power you better be pretty mindful of the notion of "better the devil you know"

[Neonmoon 38,130]

I'm here for the mistress pics

[bolverk 29,721]

3 minutes ago, Redpuma said:

That was legitimate intern fringe French benefits, sir! 

Fixed it for Surly.

[crash_davis 23,115]

https://washingtonbabylon.com/exclusive-did-the-head-of-the-nra-have-an-intimate-relationship-with-a-russian-spy-and-have-his-group-pay-her-apartment-rent/

 

 “Megan is a 21 year old from Berryville, VA. She is a senior at Radford University and is studying communications with a concentration in public relations, a minor in psychology and a second minor in political science. She is also a member of the Delta Zeta sorority, Public Relations Student Society of America (PRSSA), and the 1902 Society. While home from school she works at Costco Wholesale and interns for the gun lobby.”

[bolverk 29,721]

1 minute ago, Surly Bevo said:

Taking the politics and this particular org out of the equation it does seem like it would be more appropriate to pursue individuals rather than an org.  That said if you are going to pursue ending an org with some deeper motive to rid it of its power you better be pretty mindful of the notion of "better the devil you know"

I'm almost wholly ignorant on the matter of dissolving entire non-profits in cases of fraudulent activity, so I don't know how common that is. But it obviously jumps out to me, which was the primary purpose of creating this thread.

[TwiceHorn 31,536]

1 minute ago, bolverk said:

I'm almost wholly ignorant on the matter of dissolving entire non-profits in cases of fraudulent activity, so I don't know how common that is. But it obviously jumps out to me, which was the primary purpose of creating this thread.

Should probably separate the corporate entity from the tax exemption, as they are legally separate.

Any corporation (or other similar legal entity such as a limited liability company/LLC) first obtains a charter from the state in which it wishes to incorporate.  Then it independently seeks tax exempt status from the IRS and any state tax entities where it is subject to taxation.

The corporation can be dissolved independently of the tax exemption and the tax exemption can be revoked independently of the corporation's existence.

It is the tax exemption that makes it a "non-profit," nothing in particular about the state of or form of corporation.  Tax exempt status does require that the corporation operate in certain ways not applicable to "for profit" corporations. https://www.irs.gov/charities-non-profits/charitable-organizations/exemption-requirements-501c3-organizations

[bolverk 29,721]

3 minutes ago, TwiceHorn said:

Should probably separate the corporate entity from the tax exemption, as they are legally separate.

Any corporation (or other similar legal entity such as a limited liability company/LLC) first obtains a charter from the state in which it wishes to incorporate.  Then it independently seeks tax exempt status from the IRS and any state tax entities where it is subject to taxation.

The corporation can be dissolved independently of the tax exemption and the tax exemption can be revoked independently of the corporation's existence.

It is the tax exemption that makes it a "non-profit," nothing in particular about the state of or form of corporation.  Tax exempt status does require that the corporation operate in certain ways not applicable to "for profit" corporations. https://www.irs.gov/charities-non-profits/charitable-organizations/exemption-requirements-501c3-organizations

Does the NRA being a 501(c)4 instead of a (c)3 change any of that? Or does that not matter in terms of internal operations?

[TwiceHorn 31,536]

Also, I suppose we should make a distinction between "corporate dissolution" and "revocation of a charter."

A dissolution is usually (at least in Texas and most places) a voluntary ending of the corporation.  The debts of the corporation must be satisfied and the remaining assets distributed among the shareholders and proof of same delivered to the Secretary of State or equivalent, at which time the charter is revoked by dissolution.

The charter of a corporation can be revoked by the state (Secretary of State) involuntarily for a number of reasons, most notably failure to pay "franchise taxes."  When that happens, the debts of the corporation become personal debts of the directors and the shareholders pound sand, but have a lawsuit against the directors.

I assume that the NY AG is attempting to revoke the charter of the NRA, with whatever effects NY law specifies for that, as opposed to seeking some kind of compelled dissolution.

Edited August 6, 2020 by TwiceHorn

[clapclapclap 9,000]

LaPierre Delicto?

Edited August 6, 2020 by clapclapclap
Flagrante

[TwiceHorn 31,536]

3 minutes ago, bolverk said:

Does the NRA being a 501(c)4 instead of a (c)3 change any of that? Or does that not matter in terms of internal operations?

I believe 501(c)(4) is a "special case" of (c)(3) that applies to organizations heavily involved in politics.  Has different rules, but the corporation and its tax exemption are still separate matters.

[atomheartbevo 89,799]

48 minutes ago, crash_davis said:

And here i was thinking LaPierre was an idiot. From the pic of his sidepiece, seems like he has his priorities straight.

He's made tens of millions of dollars off of a "non-profit" that was an easy gig.  Not an idiot at all.

 

[TwiceHorn 31,536]

16 minutes ago, TwiceHorn said:

Also, I suppose we should make a distinction between "corporate dissolution" and "revocation of a charter."

A dissolution is usually (at least in Texas and most places) a voluntary ending of the corporation.  The debts of the corporation must be satisfied and the remaining assets distributed among the shareholders and proof of same delivered to the Secretary of State or equivalent, at which time the charter is revoked by dissolution.

The charter of a corporation can be revoked by the state (Secretary of State) involuntarily for a number of reasons, most notably failure to pay "franchise taxes."  When that happens, the debts of the corporation become personal debts of the directors and the shareholders pound sand, but have a lawsuit against the directors.

I assume that the NY AG is attempting to revoke the charter of the NRA, with whatever effects NY law specifies for that, as opposed to seeking some kind of compelled dissolution.

Further to this, NY state calls both voluntary and involuntary procedures to end a corporation "dissolution."  This appears to be the relevant provision for the AG. https://www.nysenate.gov/legislation/laws/BSC/1101

Texas calls voluntary ending "winding up," and involuntary ending "termination."

[tx 3 putt 77,428]

51 minutes ago, Pato del Muerto said:

Why go after the entire organization instead of just the individuals who committed fraud?  Or is my answer in the other thread?

The board is just as guilty 

[4th and 5 4,915]

Sounds to me like all these French benefits should be taxable as income to LaPierre, et al

PS I'd like to give Miss Megan some ball ammo if you know what I'm sayin

[Shoxthemonkey 1,983]

At my age it's ball powder, nomsayn?

[bolverk 29,721]

4 minutes ago, 4th and 5 said:

Sounds to me like all these French benefits should be taxable as income to LaPierre, et al

PS I'd like to give Miss Megan some ball ammo if you know what I'm sayin

[kevwun 15,899]

Non-profits really shouldn't be giving out 17 million dollar retirement gifts to their ceo.

[Underdog 28,773]

1 hour ago, Anastasis said:

I report, you decide.

Quite the pistol for a sidepiece. 

[Cheeseweasel 26,438]

1 hour ago, crash_davis said:

And here i was thinking LaPierre was an idiot. From the pic of his sidepiece, seems like he has his priorities straight.

Yeah, I'm happy to have him work for my non-profit. He seems like a real go-getter with upper management written all over him.

[HornOnTheBayou 8,946]

1 hour ago, South Austin said:

Take that shit to . . . never mind.  Keep it here.  And more, please.

Oh, there's another board where discussion (and of course, pictures) of this young lass should go.

[Cheeseweasel 26,438]

9 minutes ago, BurntEyes said:

If at 70 I'm fucking that side piece, making millions and you want to toss me in club fed for a year for doing so... 

I'm in.

Worth it.

[clapclapclap 9,000]

1 hour ago, Underdog said:

Quite the pistol for a sidepiece. 

*Holster

[The Ace of Aces 5,194]

Thoughts and prayers to the NRA.

[BabaYaga 15,320]

2 hours ago, Pato del Muerto said:

Why go after the entire organization instead of just the individuals who committed fraud?  Or is my answer in the other thread?

LOL, you know why.  

[kevwun 15,899]

Non-profits that exist mainly to enrich their leaders should lose their non-profit status.  The NRA is hemorrhaging money and in the red, but it was still going to give LaPierre 17 million dollars as a retirement gift.  That's well beyond "a few bad apples".

[Guadaloopy 11,014]

43 minutes ago, Cheeseweasel said:

Worth it.

 

[BabaYaga 15,320]

1 minute ago, kevwun said:

Non-profits that exist mainly to enrich their leaders should lose their non-profit status.  The NRA is hemorrhaging money and in the red, but it was still going to give LaPierre 17 million dollars as a retirement gift.  That's well beyond "a few bad apples".

And they most likely will (misleading headline is misleading).  They would just strip them of their 501c(3) status. The irony here is getting rid of the extravagant fools that are using people's  money to enrich themselves rather than stay on mission may actually end up making the NRA stronger as a lobbying force than it is now.

[bolverk 29,721]

1 hour ago, BabaYaga said:

And they most likely will (misleading headline is misleading).  They would just strip them of their 501c(3) status. The irony here is getting rid of the extravagant fools that are using people's  money to enrich themselves rather than stay on mission may actually end up making the NRA stronger as a lobbying force than it is now.

What's misleading about the headline?

Direct quote:

Quote

"The NRA's influence has been so powerful that the organization went unchecked for decades while top executives funneled millions into their own pockets," James said in a statement. "The NRA is fraught with fraud and abuse, which is why, today, we seek to dissolve the NRA, because no organization is above the law."

 

[DanRydell 799]

4 hours ago, TwiceHorn said:

I think it's symbolic only.  Which basically means theatrical, ie grandstanding.

NRA can just incorporate somewhere else.

Pursuing the individuals and the tax exemption (at least for NY state purposes) is far more meaningful.

 

[TwiceHorn 31,536]

10 minutes ago, DanRydell said:

 

No doubt "winding up" the NRA as a NY corporation is going to be a pain in the ass for the NRA.  And probably harmful to some of its creditors and some innocent people.  The dissolution process is going to force the winding up of the operations of the NY corporation, assuming that remedy is granted.

But, don't kid yourself.  The NRA can form another corporation wherever (outside NY anyway) it wants, whenever it wants.  Assuming that it can survive the ignominy here and get capitalized again.

They won't immediately "disappear" as a NY corporation, but they can most certainly re-charter in another state and commence operations otherwise unrelated to the dissolving NY corporation.

Edited August 6, 2020 by TwiceHorn

[Guest]

If this starts the move to dissolve any organization ripe with corruption, then fucking great!!!

Don't stop there.

[Hank Scorpio 17,731]

Somehow this is all Bill Brewer’s fault. 

[TwiceHorn 31,536]

2 minutes ago, slorch said:

If this starts the move to dissolve any organization ripe with corruption, then fucking great!!!

Don't stop there.

Most corporations laws in most states have some sort of provision for this, but it's un- or under-used.  Probably because it's ultimately kind of a clumsy, and possibly extremely unfair to innocent parties, way of punishing wrongdoers.

[luke duke 6,414]

New York Attorney General Moves To Dissolve The NRA After Fraud Investigation

This country would have been much better off if they had stuck to their original mission of hunter education, gun safety classes and wildlife conservation.