Did A Dallas Judge Just Fire The Shot That Will Kill the NRA?

DALLAS, TX —Did a Texas judge just fire the shot that mortally wounded the National Rifle Association?

In a ruling Tuesday, a Dallas-based federal judge rejected the NRA's attempt to file for bankruptcy, because after 11 days of hearings, he concluded the organization had not represented itself in good faith.

In his finding, U.S. bankruptcy Judge Harlin Hale concluded the NRA's filing was less like a "traditional bankruptcy case" and instead resembled those "in which courts have found bankruptcy was filed to gain an unfair advantage in litigation or to avoid a regulatory scheme." Hale's decision also ascertained that the group was “using this bankruptcy case to address a regulatory enforcement problem, not a financial one.”

The ruling opens the door to legal reckoning for the embattled Second Amendment champions, as it now permits New York Attorney General Letitia James to pursue her fraud lawsuit against the organization. James is an unabashed opponent of the NRA, and believes the anti-gun control group to be “fraught with fraud and abuse.”

Among the revelations over the 11 days of hearings were LaPierre's admission that he kept his free yacht trips a secret, as well as neglecting to inform his inner circle about the bankruptcy filing in January. Those left unaware included the NRA's general counsel, its CFO and the NRA board itself.

Hale's decision dwelled on this point. “Excluding so many people from the process of deciding to file for bankruptcy," he wrote, "including the vast majority of the board of directors, the chief financial officer, and the general counsel, is nothing less than shocking.”

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Now it falls to a judge in New York to rule on the merits of James' suit. Had the NRA gotten a more favorable ruling from the Texas court, it could have taken away her power to dissolve the nonprofit NRA. That in turn would have provided the group with legal leverage it now must do without.

The reversal is one of many the NRA has encountered lately.

Over the past few years, the organization has toppled from ascendance to disarray. The year Donald Trump rose to the presidency in 2016, the NRA spent some $54.4 million to influence federal elections — including $31.2 million to elect Trump. In Texas alone, the NRA claims to have 400,000 members.

By 2020, according to the Center for Responsive Politics, the group's cash outlay fell to $29.4 million. Worse still, a mere 18% of its expenditures elected winners in the last cycle, compared to a formidable 94% in 2016..

Internal warfare threatened to tear the group asunder in 2019, as chief executive Wayne LaPierre was accused of financial mismanagement by the organization's president, conservative firebrand Oliver North. Their power play ended in North's departure and vow to have the NRA's management of money independently investigated. Nothing has come of that — yet.

What's next? Well, the NRA has the option to file again for bankruptcy again in Dallas with Hale. But the judge has already made it clear that should they do so, he might exercise his option to require LaPierre's removal and install a court-appointed trustee to run the operation.

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