In a Friday afternoon news dump, the NRA announced it was filing for Chapter 11 bankruptcy and attempting to reincorporate in Texas. The move comes as the NRA faces steep financial consequences and potential dissolution stemming from a New York Attorney General lawsuit, which alleged years of illegal self dealing and fraud by the NRA and its top executives. The news broke in the week after the attempted coup at the Capitol, which was fueled by decades of fear-mongering from the NRA.
Here’s what people are saying about the news:
NYT: “Seeking an end-run around an investigation by the New York attorney general, the National Rifle Association said Friday that it was declaring bankruptcy and would reincorporate in Texas… Long the nation’s most powerful gun lobby, the N.R.A. played a diminished role in the 2020 election, hampered by financial woes and a host of legal challenges.”
Washington Post: The NRA is “fleeing ongoing litigation brought against it by the New York State attorney general, who has sought to dissolve the organization for violating its nonprofit status.”
USA Today: “Chapter 11 bankruptcy is designed to allow companies or organizations to restructure their operations, shed debt, delay lawsuits and emerge as a sustainable enterprise. But it can lead to dissolution or liquidation.”
ABC: “The National Rifle Association announced that it intends to restructure as a nonprofit based in Texas and has filed for Chapter 11 bankruptcy protections.”
NBC: “The planned actions, including a Chapter 11 bankruptcy filing in Texas, come five months after New York state Attorney General Letitia James filed a civil suit that seeks to dissolve the association for and accused executives of using millions of NRA dollars for personal uses, including private-jet travel, trips to places including the Bahamas and pricey meals.”
CBS: “The National Rifle Association said Friday that it has filed for bankruptcy and is moving to Texas, where the organization says it has 400,000 members. The NRA is currently based out of New York, where state Attorney General Letitia James has filed a lawsuit alleging financial crimes by its top officials and is seeking to disband the organization.”
New York Daily News: “NRA seeks cover from NY lawsuit by filing for bankruptcy in Texas; AG Letitia James says state is ‘undeterred’”
John Feinblatt, president of Everytown for Gun Safety: “Let’s be clear about what’s happening here: The NRA — which is losing power and hemorrhaging money — is now filing for bankruptcy in an attempt to escape legal culpability for years of financial mismanagement and illegal self dealing. This desperate maneuver is a de facto admission of guilt.”
Shannon Watts, founder of Moms Demand Action: “The NRA can try to run from its years of deception, decadence, and self-dealing, but it can’t hide. The NRA has become a front group for gun manufacturers and a personal piggy bank for its leadership – all while endangering millions of lives. They’ve been out of touch with the American people for decades, and now they’re out of money, too.”
New York Attorney General Letitia James: “The NRA’s claimed financial status has finally met its moral status: bankrupt. While we review this filing, we will not allow the NRA to use this or any other tactic to evade accountability and my office’s oversight.”
The NRA’s decision comes at a time when it is already mired in immense financial, legal, political, and internal turmoil:
- Legal: Late last year, the NRA settled with the New York Department of Financial Services after being charged for acting as an unlicensed insurance provider and deceiving its members with misleading marketing practices. Additionally, New York Attorney General Letitia James filed suit last year seeking to dissolve the NRA for allegedly violating New York charities law. On the same day, DC Attorney General Karl Racine sued the NRA for allegedly exerting undue influence over the NRA Foundation. Additionally, the NRA was hit with a class action lawsuit and it was already locked in various lawsuits with former business partner Ackerman McQueen. The Trace reported allegations that, as a result of these legal troubles, the NRA paid its top lawyer an estimated “$54 million” in the last two years alone –– and leaked documents show that the line item in the NRA’s financials that accounts for legal costs rose by 41% in 2019, after a nearly 400% increase in 2018.
- Financial: In 2019, the NRA was $57 million in debt and its revenue from member dues declined by 34% while its “legal, audit, and tax costs” increased by 39%. It recently reportedly laid off and furloughed over 200 employees. Additionally, earlier this year, NRA CEO Wayne LaPierre said that the NRA suffered “about a $100 million hit” in 2018 and 2019, and that for the NRA “to survive,” he took “about $80 million” out of the budget. This follows years of alleged financial mismanagement, during which NRA executive pay has skyrocketed, money flowed to “unpaid” board members, and the NRA’s own board members and accountants called into question lavish, legally suspect personal spending by its leadership.
- Political: The NRA is struggling mightily politically after betting big on and losing the Presidential election, and also losing control of the Senate. Additionally, a recent New York Times analysis of the NRA’s grades found that the NRA “continues to lose ground in Congress, with the last remnants of its Democratic support vanishing and its still-high Republican support eroding slightly.”
- Internal: Experts believe that Wayne LaPierre’s removal is “a foregone conclusion” due to the NRA’s legal troubles. Additionally, according to The Guardian, the NRA’s “drop in revenues accelerated in 2019 when several large NRA donors began a drive to oust LaPierre over allegations of mismanagement and self-dealing, and to promote reforms.” These donors have boasted that “$165 million in donations and planned gifts had been withheld.”
A detailed history of the NRA’s finances and litigation can be found on NRAWatch.org.