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Congressman Brad Schneider

Representing the 10th District of Illinois

Schneider Requests Documents from NRA on Allegations of Wrongdoing

June 27, 2019
Press Release
Follows previous letter urging IRS to investigate whether NRA’s self-dealing invalidates organization’s tax-exempt status

Today, Congressman Brad Schneider (IL-10), a member of the Democratic majority on the House Ways & Means Committee, requested the National Rifle Association of America (NRA) make public documents related to allegations of wrongdoing at the NRA to determine if the organization’s tax-exempt status should be revoked.

 

In a letter to NRA Chief Executive and Executive Vice President Wayne LaPierre, Schneider requests the group make public documents on eight topics. These include allegations of potential conflicts of interest, vendor arrangements, outside income, and excessive compensation among leadership. The letter also requests correspondence and documents related to LaPierre’s assertion that former Board President Lt. Col. Oliver North and Board Member Dan Boren acted like “extortionists” seeking to force his resignation and secure preferential treatment for the NRA’s largest vendor.

 

“Near daily we seem to learn of new allegations of serious wrongdoing at the highest levels of the NRA,” said Schneider. “If the NRA is abusing its tax-exempt status to enrich its leadership, the American taxpayer should not be on the hook to subsidize their scheme. Congress has a fundamental oversight role over our nation’s federal tax laws, and I hope the NRA will cooperate with this request to determine if the organization is operating according to its intended social welfare purpose.”

 

Previously in May 2019, Schneider urged the Internal Revenue Service (IRS) to investigate the tax-exempt status of the NRA in a letter to IRS Commissioner Charles P. Rettig.


In addition, Schneider questioned the Treasury Inspector General for Tax Administration J. Russell George on this topic at a hearing of the Ways and Means Committee. When presented with hypothetical situations mirroring the allegations against the NRA, George called them “concerning,” saying they would “raise questions” and warrant further investigation.

 

A copy of the letter is available online.

 

Letter Text:

 

June 26, 2019

 

Wayne LaPierre

Chief Executive and Executive Vice President

National Rifle Association of America

11250 Waples Mill Road

Fairfax, VA 22030

 

Dear Mr. LaPierre,

 

As a member of the House of Representatives Committee on Ways and Means, I take very seriously the Committee’s oversight role of our nation’s federal tax laws and my responsibility in this process. It is with this duty in mind that I am requesting the National Rifle Association of America (NRA) make public documents that can help determine if wrongdoing by the NRA has occurred and whether these activities warrant reconsideration of the NRA’s tax-exempt status as an organization described in section 501(c)(4) of the Internal Revenue Code (IRC).

 

As I am sure you are aware, the allegations against the NRA reported in The New Yorker on April 17, 2019, include instances of egregious self-dealing, deceptive billing practices, and preferences in contracting.[1] Additional reporting by The Wall Street Journal paints a disturbing picture of the internal struggle between NRA leadership, as well as its dispute with Ackerman McQueen Inc., and refers to various documents detailing possible improper operating practices. [2] And just two weeks ago, The Washington Post published an investigatory piece outlining questionable business dealings between NRA Board members and the NRA, which suggests the possibility of private inurement, which as you know, violates Section 501(c)(4) of the IRC.[3]

 

The American public deserves to know whether your tax-exempt organization is operating according to its intended social welfare purpose. Therefore, I respectfully request you provide my office the following information by Tuesday, July 9, 2019:

 

  1. Clarify the details around the “Crisis Management Committee” announced by former Board President Lt. Col. North, including if/when this Committee met, its membership, any documents it produced, or the reason(s) this committee did not perform any work.[4]

 

  1. Any correspondence from Lt. Col. North from 2019 in which he raised issues surrounding potential conflicts of interest, vendor arrangements, outside income, allegations of excessive compensation, or any issues related to the NRA Audit Committee.

 

  1. Any correspondence, or other documentation, relating to your allegation that Lt. Col. North and NRA Board member Dan Boren approached you, as you described, “styled, in the parlance of extortionists”, seeking to force your resignation and for preferential treatment for the NRA’s vendor Ackerman McQueen.[5] This request would include, but is not limited to, any documents or text messages to/from Christopher Cox.[6] Additionally, I ask that you confirm whether you reported this purported extortion attempt to any local, state, or federal law enforcement authority.

 

  1. Any documents, including correspondence, memorandums or reports, created from June-September 2018 for the NRA Audit Committee, NRA management, or any agent of the NRA relating to potential conflicts of interest, vendor arrangements, outside income, allegations of excessive compensation, or any issues to be discussed by the NRA Audit Committee.[7]

 

  1. For the period 2016 to present, any minutes, notes, or resolutions from Board of Directors meetings, including the Audit Committee, where related-party transactions or potential conflicts of interest were discussed.

 

  1. Any audits, investigations, or reviews conducted by the NRA, or its agents, relating to potential conflicts of interest, vendor arrangements, outside income, or allegations of excessive compensation, including any supporting or conclusory materials related to the aforementioned documents.[8]

 

  1. Explain how invoices from Ackerman McQueen were received, processed, verified, and, if applicable, audited from 2016 to present. If there was a change to that process during this time period, please explain the nature of that change. In addition, please provide a copy of the Services Agreement between Ackerman McQueen and the NRA.

 

  1. Explain the process in place for how the NRA Foundation decides to make transfers to the NRA, including the process for determining the amount of such grants or transfers. For the period 2016 to present, please provide any minutes, notes, or resolutions from the NRA Foundation where such grants or transfers were discussed.

 

I appreciate your timely consideration of my request and look forward to your response.

 

Sincerely,

 

 

 

Bradley S. Schneider

MEMBER OF CONGRESS

 

[1] Mike Spies, “Secrecy, Self-Dealing, and Greed at the NRA,” The New Yorker, April 17, 2019.

[2] Mark Maremont, “NRA’s Wayne LaPierre Says He is Being Extorted, Pressured to Resign,” The Wall Street Journal, April 26, 2019.

[3] Beth Reinhard et al, “NRA Money Flowed to Board Members,” The Washington Post, June 9, 2019.

[4] My understanding is that the NRA Bylaws permit the NRA Board President to form board committees. On April 25, 2019, then-president Oliver North wrote a memo (currently in the public domain) to the NRA Executive Committee entitled “Formation of a Crisis Management Committee.”

[5] Apr. 25, 2019 Letter from Wayne LaPierre to the NRA Board, available at https://www.wsj.com/public/resources/documents/LaPierreletter042519.pdf?mod=article_inline. For example, your letter indicates your employee Millie Hallow “took notes” of some of the phone calls in question.

[6] On June 20, 2019, the NRA filed a lawsuit against Lt. Col. Oliver North in New York State Supreme Court alleging, among other things, that Mr. Cox was an “errant NRA fiduciary” and that he “participated in the Ackerman/North/Boren conspiracy.” See Complaint, NY State Supreme Court, New York County, at para. 48. Given Mr. Cox’s seniority at the NRA and his substantial control over the allocation of funds at the NRA, the possibility of this additional senior member of the non-profit organization being involved in wrongdoing is especially troubling.

[7] It has been publicly reported that the NRA Audit Committee held a meeting on July 30, 2018 in Fairfax, Virginia, and that this meeting included a discussion on related-party transactions, among other items. Reporting also indicated the NRA’s accounting staff, including the Managing Director of Tax and Risk Management, drafted several documents ahead of this meeting, including one entitled “List of Top Concerns for the Audit Committee.” In addition, the NRA’s own lawsuit against Ackerman McQueen references a September 2018 meeting of the NRA Audit Committee where the committee considered Lt. Col. North’s contract with Ackerman McQueen, among other items. See, NRA v. Ackerman McQueen, Amended Complaint, para. 24.

[8] The NRA has publicly stated “the NRA retained a third-party forensic accounting firm….” See, NRA v Ackerman McQueen, Amended Complaint, para, 20.