NRA could lose tax-exempt status: report

An investigation reveals shady practices, and a complaint is filed by the IRS

By Nicole Karlis

Senior Writer

Published April 19, 2019 9:16PM (EDT)

President Donald Trump speaks during the National Rifle Association-ILA Leadership Forum, Friday, April 28, 2017, in Atlanta. (AP Photo/Mike Stewart)
President Donald Trump speaks during the National Rifle Association-ILA Leadership Forum, Friday, April 28, 2017, in Atlanta. (AP Photo/Mike Stewart)

A report by a collaboration of The Trace and The New Yorker reveals the intricate way in which hundreds of millions of dollars have allegedly been siphoned off to top executives and vendors at the National Rifle Association (NRA).

The story was published on Wednesday and written by reporter Mike Spies, who viewed internal documents and tax filings and found that public relations firm Ackerman McQueen, which helps manage the NRA's image, was paid $40 million in 2017.  Ackerman McQueen has worked with the group since the 1970s.

"The NRA and Ackerman McQueen have become so intertwined that it is difficult to tell where one ends and the other begins," Spies wrote. He continued:

Top officials and staff move freely between the two organizations; Oliver North, the former Iran-Contra operative, who now serves as the NRA’s president, is paid roughly $1 million a year through Ackerman, according to two NRA sources. But this relationship, which in many ways has built the contemporary NRA, seems also to be largely responsible for the NRA’s dire financial state. According to interviews and to documents that I obtained — federal tax forms, charity records, contracts, corporate filings, and internal communications — a small group of NRA executives, contractors, and vendors has extracted hundreds of millions of dollars from the nonprofit’s budget, through gratuitous payments, sweetheart deals, and opaque financial arrangements. Memos created by a senior NRA employee describe a workplace distinguished by secrecy, self-dealing, and greed, whose leaders have encouraged disastrous business ventures and questionable partnerships, and have marginalized those who object. “Management has subordinated its judgment to the vendors,” the documents allege. “Trust in the top has eroded.'

Reportedly, some of the NRA's payments that may constitute a conflict of interest pass through financial channels that intentionally obscure the recipients.

Law experts say this alone could threaten the NRA’s tax-exempt nonprofit status.

On Thursday, gun control activist Shannon Watts of Moms Demand Action said that Everytown, the parent organization of Moms Demand Action, had filed a complaint with the Internal Revenue Service.

"Based on this new article, @Everytown - the parent org of @MomsDemand - just filed a complaint about the @NRA’s tax-exempt status with the IRS, and is calling for federal and state investigations into the NRA’s operation as a charity," Watts said in a tweet.

By Nicole Karlis

Nicole Karlis is a senior writer at Salon, specializing in health and science. Tweet her @nicolekarlis.

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