NY AG Files Suit to Dissolve NRA After Fraud Investigation

Lyv

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

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.


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.

The article has a great deal of detail.

I fervently hope AG James has good security around her. I am afraid for her safety.
 

Introversion

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I suspect AG James isn’t thinking about the timing of this; a crime’s a crime. But I wonder if this will have political blowback on Democrats this year? It may fire up disaffected Republican voters who were thinking of sitting home in November.
 

MaeZe

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I suspect AG James isn’t thinking about the timing of this; a crime’s a crime. But I wonder if this will have political blowback on Democrats this year? It may fire up disaffected Republican voters who were thinking of sitting home in November.

Yeahno. There's another gun organization they can turn to and this is about the top of the NRA siphoning millions from their donations.

Also, it's civil, not criminal.

But there's a lot of dirt here not yet digested by the news media. Cohen is spilling a lot, like Trump exaggerating his wealth when applying for a loan with Deutsche Bank.

NYT: D.A. Is Investigating Trump and His Company Over Fraud, Filing Suggests
The suggestion that the investigation, which has gone on for nearly two years, was broader than Mr. Vance’s office had previously acknowledged could raise the stakes for Mr. Trump, his company and its executives, if the inquiry were ever to lead to charges of bank or insurance fraud, which are felonies.
 

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I suspect AG James isn’t thinking about the timing of this; a crime’s a crime. But I wonder if this will have political blowback on Democrats this year? It may fire up disaffected Republican voters who were thinking of sitting home in November.

Possibly, but I suspect the next 3 months will be contentious and even more polarizing than what we've already seen. Bases from both sides should be pretty heavily galvanized already. There's a lot at stake.
 

Gregg

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This will help the Trump campaign. An attempt to dissolve the NRA will fire up the base.
 

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I suspect AG James isn’t thinking about the timing of this; a crime’s a crime. But I wonder if this will have political blowback on Democrats this year? It may fire up disaffected Republican voters who were thinking of sitting home in November.

I had this thought as well. I saw the headline and cringed, thinking about all those people who voted against Clinton because "she is going to take our guns." I hadn't heard much (at least not yet) about the same fear for Biden, for whatever reason, but this may bring the talking point up again.

It doesn't matter to some people that the NRA is not being investigated because of corruption or that there are other places to go. They will see "Democrats want to take our guns, and here is proof."
 
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Gregg

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No. It's one thing to punish the organization and/or its leaders if they broke the law. Fine the organization or throw the people who broke the law in jail. Fine with me.
But it's altogether another thing to dissolve the entire organization. What happens to the assets? Who decides what to do with the NRA funds? Millions of people support the NRA and they haven't broken laws covering foundation governance. Should they be indirectly punished?
 

cbenoi1

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Fine the organization or throw the people who broke the law in jail.

This is a non-profit organization with US$64 millions that vanished out of thin air. Fines and lawyer fees are not going to improve the situation (if either one gets paid, that is). This is a slowly sinking ship.

-cb
 

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Isn't the NRA considered a political non profit, not charitable? Donations to charitable non-profit organizations can be written off on one's taxes, while donations to political organizations (which engage in lobbying) can't be written off. I know the rules regarding tax exempt status are complex at times, but an example of an organization that is considered political, not charitable, is Planned Parenthood. They lobby for reproductive rights, so even though they also run clinics and provide health care to low income people, they are considered political.

Please tell me the NRA does not count as charitable any more than Planned Parenthood does. If it is charitable, why would it get this status when they are all about political lobbying? That seems rather a fiasco.

Charitable or political, though, their internal corruption is pretty shameful. Does a state have the power to disband a non-profit organization, even if it is headquartered in that state? Isn't it more a matter of revoking tax-exempt status or no longer recognizing them in some sense?
 
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MaeZe

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Wiki says this:
A 501(c)(4) organization is a social welfare organization, such as a civic organization or a neighborhood association. An organization is considered by the IRS to be operated exclusively for the promotion of social welfare if it is primarily engaged in promoting the common good and general welfare of the people of the community.[36][37] Net earnings must be exclusively used for charitable, educational, or recreational purposes.[38] ...

According to The Washington Post, 501(c)4 organizations:[39]

...are allowed to participate in politics, so long as politics do not become their primary focus. What that means in practice is that they must spend less than 50 percent of their money on politics. So long as they don't run afoul of that threshold, the groups can influence elections, which they typically do through advertising.

Allowed activities:
... The income tax exemption for 501(c)4 organizations applies to most of their operations, but income spent on political activities—generally the advocacy of a particular candidate in an election—is taxable.[43] An "action" organization generally qualifies as a 501(c)4 organization.[44] An "action" organization is one whose activities substantially include, or are exclusively,[45] direct or grassroots lobbying related to advocacy for or against legislation or proposing, supporting, or opposing legislation that is related to its purpose.[46]

A 501(c)4 organization may directly or indirectly support or oppose a candidate for public office as long as such activities are not a substantial amount of its activities.[36][47]

The applicable law re dissolution of the corporation
Section 1101
Attorney-general's action for judicial dissolution
Not-for-Profit Corporation (NPC)

Attorney-general's action for judicial dissolution.

(a) The attorney-general may bring an action for the dissolution of a corporation upon one or more of the following grounds:

(1) That the corporation procured its formation through fraudulent misrepresentation or concealment of a material fact.

(2) That the corporation has exceeded the authority conferred upon it by law, or has violated any provision of law whereby it has forfeited its charter, or carried on, conducted or transacted its business in a persistently fraudulent or illegal manner, or by the abuse of its powers contrary to public policy of the state has become liable to be dissolved.

(b) An action under this section is triable by jury as a matter or right.

(c) The enumeration in paragraph (a) of grounds for dissolution shall not exlude actions or special proceedings by the attorney-general or other state officials for the annulment or dissolution of a corporation for other causes as provided in this chapter or in any other statute of this state.
 

Roxxsmom

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Thanks for looking all that up, MaeZe.

I'm still confused as to how the state of NY can disband the NRA. According to Wikipedia, their location is Fairfax County, VA, though they were first chartered in NY in 1871. Any case, couldn't another state re-charter them. Not sure why they'd want to set their citizens up to be fleeced by La Pierre and company, but conservatives have a deep emotional attachment to this organization and some hope it can be salvaged.
 

Gregg

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This is a non-profit organization with US$64 millions that vanished out of thin air.

-cb
ALLEGED. The NRA is innocent until proven guilty in a court of law. Apparently thy have filed a countersuit against the state. This thing will drag on for a long long time.
 

shakeysix

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Remember Maria Butina, the Russian NRA supporter and the Russian "contributions" to the NRA? Think we are going to be hearing a lot more about money laundering and campaign funds.
 

frimble3

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ALLEGED. The NRA is innocent until proven guilty in a court of law. Apparently thy have filed a countersuit against the state. This thing will drag on for a long long time.
As is right and proper. Drag everything out into the open so that the people can see it, and the courts can make a considered judgement.
 

cbenoi1

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ALLEGED. The NRA is innocent until proven guilty in a court of law.

Of course. But here is the actual list of accusations.

Attorney General James Files Lawsuit to Dissolve NRA
https://ag.ny.gov/press-release/2020/attorney-general-james-files-lawsuit-dissolve-nra

I'm going to pick and choose the most relevant quote because the list of grievances is waaaaay too long.

The failure of the NRA to comply with multiple fiduciary responsibilities and state and federal laws resulted in the NRA seeing substantial losses on its balance sheet: going from a surplus of $27,802,714 in 2015 to a net deficit of $36,276,779 in 2018 — contributing to a total loss of more than $64 million in just three years.

We're talking about a jump from a cliff that's US$64M high. In three years. Two of which the GOP controlled both the WH and Congress, no less. So how the NRA came about needing to spend that amount of money when it didn't have to is baffling at best.


Apparently thy have filed a countersuit against the state.

Of course. Plenty of money where it came from.


-cb
 

Gregg

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Regardless of the merits of the case, I think this was a poor move from a political standpoint. I don't think NRA members would be too upset if the case was just against La Pierre and his cronies, but when it threatens the existence of the organization they will rise up and object. I expect they will come out and vote in bigger numbers in the November election.