The Corner

Law & the Courts

When Should the Government Dissolve Nonprofits?

National Rifle Association executive vice president and CEO Wayne LaPierre speaks at the NRA annual meeting in Indianapolis, Ind., April 26, 2019. (Lucas Jackson/Reuters)

At Lawfare, Alan Z. Rozenshtein argues that the National Rifle Association should be reformed, not dissolved. But as he notes, there are serious allegations of financial impropriety against the organization’s leadership — and in such cases, the state of New York (where the NRA is registered) grants its attorney general wide discretion to seek dissolution rather than other remedies, such as replacing the board or placing the organization into receivership.

As a result, his argument rests on norms, not laws:

The law under which [the state attorney general] is operating is immensely broad, and permits the attorney general to seek to dissolve a nonprofit if it “has exceeded the authority conferred upon it by law, or has violated any provision of law whereby it has forfeited its charter, or carried on, conducted or transacted its business in a persistently fraudulent or illegal manner, or by the abuse of its powers contrary to public policy of the state has become liable to be dissolved.”

But the very breadth of the law is what underscores the need for the norm — which is, after all, an unwritten rule of conduct for government officials — of prosecutorial discretion. As written, the statute permits the attorney general to seek dissolution any time a nonprofit’s leaders engage in serious fraud. But seeking such a radical remedy every time that occurs would clearly go beyond what the legislature intended, and what good public policy countenances. The breadth of the law only makes sense if paired with discretion on the part of those who enforce it.

I’m not sure the breadth of the law makes sense at all. If there’s one thing that the past five years or so have taught us, it’s that mere norms erode in the face of political incentives. The only thing that matters is what the law actually allows officials to do. New York and other states should spell out more specific criteria for when a nonprofit must be dissolved rather than reformed.

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