DC Attorney General Sues The NRA Foundation

WASHINGTON, DC—Attorney General Karl A. Racine filed a lawsuit Thursday against the NRA Foundation and the National Rifle Association for "misusing charitable funds to support wasteful spending by the NRA and its executives."

In the lawsuit, the Office of the Attorney General alleges that the NRA Foundation violated District laws by allowing charitable funds to be used for non-charitable purposes, failing to operate independently, and placing the NRA’s interests ahead of its own charitable purposes.

The OAG also claims that the foundation’s board of directors was controlled by the NRA and allowed the NRA to exploit it through risky multi-million dollar loans—including a $5 million loan that the NRA has never repaid.

Additionally, the foundation reportedly agreed to pay the NRA millions of dollars in fees without documentation of the work the NRA was performing or how it supported the foundation’s charitable purposes.

With this lawsuit, the OAG is seeking to return the charitable funds that it claims were "improperly wasted on the NRA" to the foundation and a court order imposing changes to the foundation to ensure it is operated independently and fulfills its charitable purposes.

“Charitable organizations function as public trusts—and District law requires them to use their funds to benefit the public, not to support political campaigns, lobbying, or private interests,” said AG Racine. “With this lawsuit, we aim to recover donated funds that the NRA Foundation wasted. District nonprofits should be on notice that the Office of the Attorney General will file suit if we find evidence of illegal behavior.”

The NRA Foundation is a 501(c)(3) charitable organization incorporated in the District of Columbia. While the foundation is affiliated with the NRA, it operates independently. The foundation collects tax-deductible contributions to be used for charitable, educational, and scientific purposes related to firearms, firearm safety, hunting safety, firearm history, and marksmanship, and it provides grants and sponsorships to organizations across the country related to these purposes.

While the foundation can provide financial support to the NRA, it can only fund NRA activities consistent with its own charitable purposes. The NRA is a 501(c)(4) social welfare organization incorporated in New York and registered to do business in the District. As a social welfare organization, the NRA can engage in political campaign activity, and donations to the NRA are not tax-deductible.

Office of Attorney General investigation

According to the OAG, in recent years, low membership and lavish spending left the NRA with financial problems. OAG’s investigation found that as the NRA struggled to pay its bills, it attempted to exploit the foundation. Because the foundation’s board of trustees and executives were controlled by the NRA, they ignored their obligations to the Foundation and prioritized the NRA’s interests, the department claims.

In 2017, OAG officials said the NRA Foundation’s board approved a $5 million loan request from the NRA, despite awareness of the NRA’s financial problems. In 2018, the NRA requested a second $5 million loan, which the foundation’s board also approved.

Later, the OAG said the board also granted repeated requests to extend and modify loan terms in ways that benefited the NRA and harmed the foundation—including a change that allowed the NRA to repay other debt before it repaid the foundation. As of August 2020, the NRA still owes the foundation $5 million, the OAG claims.

A copy of the lawsuit can be found at this link.

The NRA Responds

The same day that DC Attorney General Karl A. Racine announced his lawsuit against the NRA, New York's attorney general said she, too, was suing the National Rifle Association. Attorney General Letitia James alleges that high-ranking NRA executives diverted millions of dollars for lavish personal trips, no-show contracts for associates and other questionable expenditures.

While the NRA has not responded to the DC lawsuit, the organization took to Twitter to address the allegations made by New York's attorney general:

This was a baseless, premeditated attack on our organization and the Second Amendment freedoms it fights to defend. You could have set your watch by it: the investigation was going to reach its crescendo as we move into the 2020 election cycle.

It’s a transparent attempt to score political points and attack the leading voice in opposition to the leftist agenda. This has been a power grab by a political opportunist – a desperate move that is part of a rank political vendetta.

Our members won’t be intimidated or bullied in their defense of political and constitutional freedom. As evidenced by the lawsuit filed by the NRA today against the NY AG, we not only will not shrink from this fight – we will confront it and prevail. - NRA President Carolyn D. Meadows