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Why the NRA is facing new scrutiny of its financial affairs

The NRA, a powerful voice in the U.S. political battle over guns, is facing scrutiny of its financial affairs. Amid reports of lavish personal spending by CEO Wayne LaPierre, a new investigation finds significant payments and favors granted to members of the NRA's board of directors. John Yang talks to The Washington Post's Carol Leonnig about potential legal implications and member fallout.

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  • John Yang:

    The powerful National Rifle Association is facing new scrutiny on multiple fronts.

    Today, The Washington Post reported that nearly a quarter of the NRA's board of directors collected payments from the group in recent years, sometimes totaling hundreds of thousands of dollars. This is on top of disclosures of lavish spending by NRA chief executive Wayne LaPierre, a New York attorney general's inquiry into the lobbying group, and calls by Democratic senators for an investigation.

    Carol Leonnig is one of The Washington Post investigative reporters looking into the NRA.

    Carol, thanks so much for joining us.

    You looked at a lot of tax records, state charitable reports, and other documents. What did you find? Tell us about this spending being directed toward members of the board.

  • Carol Leonnig:

    What we have found was that a large number, quite a large number, 18 out of 76 board members, were engaged in some sort of side deal, a financial transaction, an agreement, that they were benefiting financially from an agreement that the NRA made, maybe with a vendor, maybe with a commission, maybe with a payment for lobbying services.

    Some of these payments were not that much. Some of them were quite considerable. And it was striking us to because we wanted to understand how good the NRA board is in governing this charity, which has, you know, a special tax status.

    In looking at their corporate governance, this question arose, if so many of them are receiving payments or financial benefits via the NRA, how well are they really looking after the NRA's spending, which is what the board's purpose is?

  • John Yang:

    We asked the NRA about this, and they gave us a statement. They said: "We believe the peace provides a distorted view of the NRA's arrangements relating to our board members or the companies they represent. That said, The Washington Post does concede that independent experts didn't see any violations of the law, and they note that the NRA properly disclosed any payments that were made."

    Borrowing from the NRA statement here, that said, you also talked to a number of lawyers who raised some questions about these payments.

  • Carol Leonnig:

    Yes.

    So, lawyers who look particularly at charity law, the law that governs these kinds of groups that don't have to pay taxes, they said they had never seen anything like this before, for this volume or this pattern of board members to have this kind of financial stake, essentially, in the NRA's spending and business.

    What's important about this at this moment, John, is that, as you know, and as I'm sure many of your viewers know, the NRA is in the middle of a horrific family feud. The leadership, now run by Wayne LaPierre, and has been really run by Wayne LaPierre for at least a couple of decades, is under scrutiny for lavish personal spending.

    The question becomes, is the board really exercising control over that kind of spending for suits, for travel, for highfalutin, you know, private jets to the Bahamas, to Budapest? Is the board looking out for the members who are paying the dues, or is it really doing things that benefit specific individuals and their lifestyle?

  • John Yang:

    The New York attorney general's office is looking into a lot of things, some of the things that you report this morning, the other spending that you just mentioned.

    What are some of the possible outcomes of that investigation?

  • Carol Leonnig:

    The New York attorney general's investigation is rightly and squarely focused, at the moment anyway, on whether or not this entity is — really deserves its tax-exempt status.

    As you know, the New York attorney general famously ran, campaigned on the promise that she would look into the NRA's tax status and whether they were rightfully a charity, as defined by the law.

    What could happen is that the investigators determine that the best interests of the members are not being served by this charity. We are told by sources that there is a lot of concern about whether or not these financial transactions were allowed for years to go on, undocumented, unreported to the rest of the board, and whether that was legal then, and whether or not it was legal to have many of these agreements sort of retroactively approved in recent months, which is something that we have heard the NRA has been doing, in anticipation of this investigation.

  • John Yang:

    You talk about serving the interests of the NRA members. You spoke to some of them. What was — what were their reactions to the things that you found?

  • Carol Leonnig:

    That is such an interesting moment for us.

    I have interviewed many NRA board members and just regular dues-paying members in the past, and, usually, they are in shared defense of their organization, almost like they're constantly at war with anybody who critiques or questions the NRA's motives and goals.

    But something is changing in the ground right now, because those members are telling us they are worried about cronyism, about misspending, about, you know, buying a $50 Friends of the NRA raffle ticket to help support the cause of the Second Amendment, and learning that Wayne LaPierre had suits that were $3,000 and $4,000 apiece, trips on private jets with his family, an expense account that paid for hairdressing and stylists.

    These members are very concerned about what's behind the curtain. And I'm struck by how much that has changed, how much that tone is a shift from prior years.

  • John Yang:

    Carol Leonnig of The Washington Post, thank you very much.

  • Carol Leonnig:

    Of course.

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