NRPLUS MEMBER ARTICLE W ayne LaPierre is not the first nonprofit high-roller.
One of the scandals of the 1990s that never quite got off the ground the way Democrats had hoped had to do with how much the Red Cross paid its CEO, at the time Elizabeth Dole, who had been labor secretary in the George H. W. Bush administration and was wife to then-Senator Bob, soon thereafter the 1996 Republican presidential nominee. The Red Cross paid Mrs. Dole $200,000 a year, or about $380,000 in 2020 dollars, a $15,000 bump over what it had paid her predecessor. She donated her first year’s salary as a goodwill gesture.
There was never any serious argument that there was anything improper about Mrs. Dole’s salary. But that kind of a paycheck just feels unseemly to certain people — mostly those who do not themselves make a lot of money and believe that they really should. In reality, nonprofits and charities compete in the same labor market as any other institution, and high-end executives cost a lot of money. The highest-paid nonprofit CEOs of 2017 (the most recent year for which the Economic Research Institute has reported data) were mostly (but not exclusively) executives in health-care systems, and they were paid salaries similar to what they would expect to earn as executives in for-profit health-care systems or banks: $21.6 million for the president and CEO of Banner Health, $12 million for the head of Carilion, $11.9 million for the head of Money Management International, a nonprofit credit-counseling operation funded by institutions that want debtors to pay their debts. (“Nonprofit” does not imply the absence of self-interest.) The CEOs of large ($1 billion or more in assets) nonprofit credit unions make on average about a million and a half bucks a year, and the best-paid of them (again as of 2017) took home $12.5 million in total compensation. As with their colleagues in for-profit banking, credit-union CEOs usually draw a relatively small salary but can earn a great deal of money in performance-based pay by achieving certain business goals.
Against that background, it is important to understand that there are at least three things going on with the New York attorney general’s attempt to have the National Rifle Association legally dissolved: The first of those things is a political jihad that may or may not end with the NRA’s having its charter revoked but that certainly will subject it to ruinous litigation costs and disruption, a transparent effort to sideline it before the November election; the second is a longer-term effort to discredit the NRA by appealing to the same kind of envy-based politics that were deployed against Mrs. Dole all those years ago; the third, currently being treated almost as an afterthought, is a legitimate investigation into potential financial wrongdoing at the NRA, of which there is more than a whiff.
NRA insiders have long complained about a culture of self-dealing and financial shenanigans at the organization, and there is much that looks fishy. If it is true that LaPierre, the NRA’s CEO, did in fact use another company to pass on personal expenses to the NRA while camouflaging that compensation from the organization and the IRS, then he would be very likely to be found guilty of a number of state and federal felonies. That is a real charge.
The allegations involve the NRA’s relationship with Ackerman McQueen, an advertising agency that long functioned as an effective subsidiary of the group — until the two had a bitter falling-out and the NRA accused Ackerman McQueen of fraud. According to the New York lawsuit:
A practice decades-old between LaPierre and Ackerman McQueen’s co-founder — that would continue until the two companies severed ties in 2019—ensured that Ackerman McQueen would pay for a variety of non-contractual, out-of-pocket expenses for LaPierre and other NRA executives and pass those expenses through to the NRA. The NRA leadership regularly used this pass-through arrangement—where expenses would be paid for by the NRA without written approvals, receipts, or supporting business purpose documentation—to conceal private travel and other costs that were largely personal in nature. Ackerman McQueen would aggregate the expenses into a lump sum amount and provide no details on the nature or purpose of the expenses when billing the NRA for them. The invoices only typically included a one-line description that read “out-of-pocket expenses” and included an invoice total amount. The expenses billed to the NRA for out-of-pocket expenses did not comply with IRS requirements, and, as a result, all such expenses should have been included by the NRA in taxable personal income for LaPierre and other recipients.
Some of the other accusations are a good deal less convincing: For example, LaPierre apparently spent a lot of money on car services and private security, but there isn’t anything inherently wrong with that. (Indeed, the private security seems prudent.) If the NRA wants to provide its executives with those services, then that is between the NRA, its board, and its membership. Unless there is some aggravating circumstance, that simply is not a matter for the New York attorney general.
The NRA is, among other things, a victim of its own ambitions and of mission creep. For years, it was a sportsmen’s club with a modest sideline in advocacy. Eventually, it discovered that there was a lot more juice in gun politics than in gun-safety classes, and it transformed itself into a political powerhouse — arguably the most effective organization of its kind. In spite of the maliciously propagated myth to the contrary, the NRA has never been a particularly big political spender: In the hotly contested 2016 election cycle, it was not even among the top 500 political contributors, and its total contributions amounted to barely $1 million. The American Federation of Teachers makes $16 in contributions for every $1 contributed by the NRA, and its twin, the National Education Association, makes another $11 in contributions for every $1 contributed by the NRA. The NRA’s power comes — and always has come — from its membership.
The NRA was extraordinarily successful as an advocacy organization in part because it was singularly focused and, as a consequence, genuinely bipartisan. Harry Reid, who got more left-wing by the minute as the Democrats’ leader in the Senate, was solid on the Second Amendment, and the NRA treated him as a valued ally. But as American politics grew more tribal after the turn of the century and new forms of communication arose, politics became less a matter of choosing from a basket of policies and more a matter of community and identity. It is very difficult to imagine a contemporary Democrat rising to a senior leadership position while remaining a nonconformist on the Second Amendment or abortion. Over time, the Second Amendment was transformed from a largely but not exclusively Republican issue into a line in the sand.
The NRA responded to that emerging reality by doing its damnedest to make things worse. It embraced its role as Republican kingmaker and was an early supporter of Donald Trump’s despite the newly minted Republican’s long history of endorsing firearms regulations the NRA opposes. At the same time, it attempted to transform itself into a right-wing media company. The aforementioned Ackerman McQueen was instrumental in creating the now-defunct NRATV, and the NRA later filed a fraud complaint against the agency as part of an ongoing lawsuit. Some NRA members and many leaders were embarrassed by NRATV’s “dystopian” programming, which they found both “distasteful and racist” according to the complaint. Though “racist” may be a step too far, it certainly was at its worst a shameful clown show of unintentional self-parody.
But mendacity, stupidity, and bad taste are not illegal.
If there is a fraud case or a tax case to be made against Wayne LaPierre or other NRA members, then New York State and the feds should indict them and present such a case as they have in accordance with the high evidentiary standards of a court of criminal justice. But that is not what is happening. LaPierre has been charged with no crime, and there is no indication at this moment that he is on the verge of being charged with a crime.
Instead, New York attorney general Letitia James is attempting to have the NRA legally dissolved as an organization. This is in accordance with her campaign promises to ruin the organization through legal means — a clear abuse of prosecutorial power in the service of a political vendetta. This is part of a nationwide Democratic campaign. As National Review’s editorial put it:
In San Francisco, they declared the NRA a “terrorist organization”; New York Governor Andrew Cuomo attempted to use financial regulators to deprive the NRA of access to banking services and insurance, thereby ending its ability to engage in organized public advocacy; in Los Angeles, the city demanded that any NRA member doing business with the city identify himself, an attack on the First Amendment that was almost immediately shut down by a federal judge acknowledging the “overwhelming” evidence that the purpose of this was “to suppress the message of the NRA.”
Because we live in stupid and dishonest times, it will be very difficult for the public to sort out what actually is going on here and to understand that while there may indeed be a legitimate case against LaPierre and others, James’s action simply takes that as a pretext to pursue a longstanding campaign of legal harassment against an organization and legally liquidate it based on its political views. This is an obvious and undeniable abuse of power, one that would justify removing James from office.
This action against the NRA is not happening in isolation. New York made an effort (rejected by the courts) to prosecute ExxonMobil on fraud charges for taking a dissenting line on global warming, and it dragged think tanks and advocacy groups into the proceedings in order to terrorize their donors and supporters; a Democratic lawyer with connections to the Obama administration and to Andrew Cuomo was at the center of a massive racketeering scam — falsifying evidence, bribing judges — to extort billions of dollars from Chevron as part of a green (dollar-green) crusade, one in which former Cuomo aide and sometime Politico contributor Karen Hinton had a personal financial interest, as did big-hearted activists such as musician Roger Waters; Democratic officials in cities ranging from San Antonio to Buffalo sought to use the power of the state to punish Chick-fil-A for the political and religious views of its owners; left-wing activists have made a recent crusade of depriving private citizens of ordinary employment if they hold the wrong political views; it is virtually impossible to hold a corporate job or attend a university today without being forced to attend political-indoctrination sessions; New York Times-reading progressives are convinced that having nonconforming political ideas is a psychiatric disorder, part of a longstanding effort to pathologize dissent when it cannot be easily criminalized; the IRS under Barack Obama used its powers to harass and disadvantage conservative political groups and was forced to pay a settlement to the National Organization for Marriage for illegally leaking its private tax filings; Kamala Harris, as attorney general of California, illegally attempted to bully conservative political groups into disclosing their donors and members so that they could be subjected to harassment and retaliation; Democrat-leaning media outlets such as CNN and the Washington Post defame children suspected of harboring unapproved political tendencies; Democrat-aligned leaders in Hollywood and in the universities call for blacklisting those with the wrong political opinions; Senator Elizabeth Warren proposes forcing all major corporations to obtain a federal charter for permission to operate their businesses and seeks to give politicians the power to dictate to private companies the compositions of their boards; Harry Reid, friend of the Second Amendment, attempted to repeal the First Amendment in order to subject political debate to political discipline, and every single Democrat in the Senate voted in support of the effort. The list goes on.
What is going on in New York State is not about Wayne LaPierre’s bar tab or who pays for him to get from point a to point b in rock-star style. It is totalitarianism on the subscription plan, the slow emergence of a distributed police state whose headquarters is nowhere and whose jurisdiction is everywhere.