NRA Legal Bills Raise ‘All Sorts of Red Flags’
“One hundred thousand dollars a day? That’s just off the charts.”
That’s how Deborah Rhode, a legal ethics expert from Stanford Law School, put it after reviewing a memo from ex-NRA president Oliver North. In the document, North laid out allegations against the embattled gun rights group’s outside law firm, claiming the firm has billed the association about $24 million since last March and $8.8 million in the first three months of 2019—averaging to more than $97,000 per day. Meanwhile, the NRA’s latest financial disclosures forms show its revenue has slumped under the gun-friendly Trump administration.
North’s memo—which NRA top brass dispute—raises new questions about the association’s finances at an extraordinarily fraught moment for the grassroots gun-rights powerhouse. On the one hand, it finds its most powerful ally ever in President Trump. But at the same time, it faces acute challenges from inside and out: an increasingly organized, media-savvy movement calling for tighter gun laws, a belligerent foe in the New York governor’s mansion, and internal turmoil that has left its members’ heads spinning. Plus, there’s the whole money problem.
Now North claims the group’s legal bills are a new, huge strain on its finances—which have contracted.
“The Brewer invoices are draining NRA cash at mindboggling speed,” reads the memo, referring to the legal bills, and adding that they “pose an existential threat to the financial stability of the NRA.”
North’s memo, along with other internal NRA documents, leaked online late Friday night and circulated through a quickly deleted Facebook page. The Daily Beast first reported on the memo, where North and fellow NRA official Richard Childress raised concerns that Brewer Attorneys & Counselors may have engaged in unsavory billing practices. Attorney Bill Brewer has defended his bills, and the chairman of the NRA’s audit committee defended them as well. The firm represents the association on multiple matters, including litigation with the governor of New York and on congressional investigations into the group’s interactions with Maria Butina, who later admitted to conspiring to act as a covert Russian agent. Charles Cotton, who heads the association’s audit committee, disputed the memo’s claims in a statement shortly after it leaked. “It reflects a misinformed view of the firm, its billings, and its advocacy for the NRA,” he said.
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Meanwhile, numerous legal ethics experts who reviewed the memo told The Daily Beast they found it astonishing, especially for a nonprofit—and the kind of thing that could draw attention from the IRS.
“Even granting that the NRA has a pile of legal problems, the context of this case should send red flags up everywhere,” Rhode said. “Creative accounting is shockingly common, even among elite firms. And what deters it is a client who’s willing to provide some oversight, which doesn’t seem to have happened in this case.”
North and Childress allege in the leaked memo that multiple senior NRA officials, including CEO Wayne LaPierre, refused to entertain the idea of conducting an outside audit of Brewer’s bills. They wrote that LaPierre shot down multiple requests for an audit and that the association’s audit committee ignored another request. North’s lawyers have not responded to comment requests, and Childress has declined to comment on internal NRA matters.
But senior NRA officials have defended Brewer’s work for the firm, which involves some of its most pressing legal threats. And North is not necessarily a reliable narrator. While serving as the association’s president, he also allegedly took a salary and worked on contract for its longtime advertising firm Ackerman McQueen. That firm faces a host of ethical and legal questions in the wake of multiple stories about unsavory financial relationships between its executives and top NRA officials. The NRA sued the firm last month, demanding internal documents about its work for the gun rights group. And it updated the suit, just days before its members’ big annual meeting, to allege that North hid the true nature of his relationship with the company from the association.
His claims still raise eyebrows.
“Ninety-seven thousand dollars a day for seven days a week of relatively undefined legal services seems awfully questionable,” said Brendan Fischer, an attorney at the Campaign Legal Center who focuses on the ethics of money in politics. “And based on the memo, the legal representation started with one relatively defined purpose and has apparently exceeded the scope of the original representation.”
“There’s all sorts of red flags here,” he added. “It’s the kind of thing that the IRS could potentially scrutinize, but in recent years it’s more likely that state attorneys general are going to review the activities of nonprofits under state law.”
At least one attorney general is already investigating the NRA. A spokesperson for New York Attorney General Letitia James said on April 27 that her office is scrutinizing the group. That announcement came in the middle of the tumultuous member meeting in Indianapolis, which had commenced with a metaphorical knife-fight between LaPierre and North. The allegations—some public, others not—aired so much internal turmoil that the group practically seemed to beg law enforcement to notice.
Marcus Owens, an attorney at Loeb & Loeb who previously ran the IRS’s Exempt Organizations Division, told The Daily Beast that bills like this one would have raised his eyebrows when he was a regulator.
“The IRS would definitely be interested in it,” he said.
“These legal bills are huge, and it’s the kind of legal bill that you would expect to see in something like the tobacco litigation, where state attorney generals were suing the tobacco industry,” continued Owens, who now represents the March for Our Lives nonprofit, which calls for tighter gun laws. “These are huge bills, in my view. It just feels like there’s a real potential for more going on here than just lawyers’ fees.”
Andrew Arulanandam, the NRA’s longtime public affairs chief, defended the expenses in a statement to The Daily Beast.
“Clearly, these ‘sources’ have no insight into the relationship between the Brewer firm and the NRA, or the scope of the firm’s work,” he said. “The firm represents the NRA on many different matters—working to protect our legal, regulatory and reputational interests. As we’ve repeatedly stated, centralizing these services allows the NRA to gain strategic advantages, recognize cost savings, and improve our advocacy—in a way that works in the best interests of our members.”
The NRA may need all the cost savings it can get. As LaPierre has hinted, the association’s legal struggles have taken a financial toll. In an early March fundraising letter, he asked for donations “to keep us in operation while we fight in the courts to prevent a total NRA shutdown.”
The group’s fight with New York Gov. Andrew Cuomo explains some of Brewer’s fees. Cuomo has called the NRA an “extremist organization” and vaguely threatened banks and insurers that do business with it. In response, the association sued Cuomo in federal court. That litigation, which Brewer helms, is ongoing. Civil litigation is expensive. But, some experts caution, it can’t be that expensive.
“This is why people hate lawyers,” Rhode said. “Something like four-fifths of Americans think they charge too much. Duh! These are the kind of cases that make people think that.”
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