NRA Fights to Retain Political Clout While Under Legal Attack

(Bloomberg) -- The scandals engulfing the National Rifle Association threaten to undercut its financial and political power heading into the crucial 2020 U.S. elections.

The organization has long been perceived as a kingmaker, and was in fact the top contributor to Donald Trump’s 2016 election campaign.

Now complaints over lavish spending, internal battles, legal fights and fundraising woes are coming to a head. On Thursday, New York Attorney General Letitia James sued to dissolve the New York-based organization. She accused the NRA’s leader Wayne LaPierre and three others of fleecing it. Meanwhile, Washington D.C. Attorney General Karl Racine filed a separate lawsuit against the NRA’s charitable arm, accusing it of misusing donor funds.

The timing of the lawsuits is inauspicious. With the presidential and congressional elections scheduled for November, the nonprofit faces a variety of challenges to raise money and cover mounting legal expenses. And its longstanding leadership is being attacked by New York State.

The legal battles will hurt the NRA politically in the next three months, said Daniel Kurtz, an attorney at Pryor Cashman LLP who represents non-profit organizations. “It will diminish its direct influence because they’re going to have to be in defense mode,” Kurtz said.

GOP politicians, from Trump to down-ballot candidates, have much to lose, as polls suggest some congressmen and senators are facing surprisingly strong challenges for seats previously considered safe. In past elections, the Republican party has benefited as the NRA energized its base, got people to the polls and funded its campaigns.

The NRA wasted no time pivoting from defense to offense on Thursday. Now its agenda is to mobilize supporters of gun rights by emphasizing that New York wants to destroy it, a rallying cry that may prove effective. The NRA counter-sued James in federal court, accusing her of violating its First Amendment rights. In a statement, the organization also accused her of weaponizing her regulatory and legal power under the guise of protecting state residents. And the NRA noted that while running for office in 2018, James vowed to “target the NRA.”

The NRA also accused James in the lawsuit of colluding with Everytown for Gun Safety. Michael Bloomberg, owner of Bloomberg LP, the parent company of Bloomberg News, founded and helps fund Everytown, a nonprofit that advocates for universal background checks and other gun violence prevention measures.

Carolyn Meadows, the NRA’s president, called James’s suit a baseless, premeditated attack on the Second Amendment that was timed to have maximum impact during the election cycle.

“You could have set your watch by it: the investigation was going to reach its crescendo as we move into the 2020 election cycle,” she said. “It’s a transparent attempt to score political points and attack the leading voice in opposition to the leftist agenda.”

In a statement, LaPierre called James’s lawsuit “an unconstitutional, premeditated attack aiming to dismantle and destroy the NRA.”

For years, the NRA has received millions of dollars annually from the NRA Foundation, whose donors get a tax deduction. In recent months, the Covid-19 pandemic has disrupted the grassroots fund-raisers that have been so successful. In its lawsuit, Racine accused the foundation of making millions of dollars of loans and transfers to the NRA without proper supervision. The tax benefit governs how the money can be used. Unlike donations to the foundation, contributions to the NRA are taxable, and unlike the foundation, the NRA is permitted to engage in political activity.

Aaron Lee Davis, a former fundraiser for the NRA, said that some conservative donors are likely to simply reroute their contributions to Republican causes through party committees or other political organizations like Americans for Prosperity.

But Davis said that about half of the NRA’s big contributions have come from documented wills and estates, which gained favorable tax treatment by donating to the NRA Foundation, a 501c3 organization. The lawsuit by the District of Columbia will impact that source of funding, Davis said. “That money will not be going to Republicans or direct politics, both for tax reasons and the nature of estate giving,” he said.

The latest legal battles are likely to stretch on for months, well past the election. They are a distraction, and now, a staff that’s been decimated by layoffs and distracted by scandals must fight a New York lawsuit that poses an existential threat and could topple LaPierre -- the last man standing among a ruling troika that until last year included Lt. Col. Oliver North and longtime chief lobbyist Christopher Cox.

North claims he was forced out after he raised questions about spending and financial mismanagment at the organization. Cox quit last year after almost 25 years with the organization, without giving a reason for his departure.

The strength of the NRA’s finances and its ability to spend this campaign season are unclear. So far, the group and its political action committee have spent $901,119 on the 2020 federal elections, Center for Responsive Politics data indicates. It has also reserved $3.6 million of advertising time in the coming weeks, according to Advertising Analytics. Those figures compare to $54.4 million in all that the NRA spent on federal elections in 2016, the Center for Responsive Politics says. There wasn’t a ready comparison to this point in the last election cycle.

Harry L. Wilson, a gun rights advocate and professor at Roanoke College, said that although the NRA’s political clout has been on a downward trajectory the last few years, the impact of the lawsuits was far from clear. The secret to the NRA’s success has always been based more on voter mobilization than on fundraising, he said. James’s attempt to decertify the group could win back support from some NRA members who had grown disenchanted by allegations of financial mismanagement.

“The NRA has often energized its members by fighting a perceived enemy. But this is a real one, a tangible one,” said Wilson, author of the book ‘Guns, Gun Control and Elections.’ “So they are going to be reaching out to people and sounding the alarm: ‘The New York AG is trying to put us out of business!’ And that is likely to cause some rallying around the NRA.”

That point was echoed by Adam Winkler, a professor at University of California, Los Angeles, Law School.

“In the short run, if anything, this will help the NRA politically in the upcoming election,” Winkler said. “The NRA has been in dire financial straits and was likely to spend a lot less in the coming election than it did in the 2016 election. But this gives the NRA a political boost.”

Other gun rights groups have said they are preparing to increase political organizing and fundraising for Republicans this fall to fill any void left by the NRA. Michael Hammond, a leader of Gun Owners for America, said that the media has for years given outsize attention to the NRA’s role in the effort to loosen gun laws and overlooked the work of an assortment of smaller groups.

With the NRA in retreat, Hammond said the other organizations are well positioned. Gun Owners for America has an extensive network of supporters across the country and was preparing to deploy them on phone banks and get-out-the-vote operations for Republican candidates from Trump on down the ballot, he said.

“The Second Amendment community is large, it’s varied and it is responsible to the issue rather than any one group,” he said. “After Columbine, after Newtown, and after Sandy Hook, when the NRA was willing to make compromises, groups like ours stood firm and fought against gun control. And we will continue to fight now.”

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