NRA Legal Bills Raise All Sorts of Red Flags

One hundred thousand dollars a day? Thats just off the charts.

Thats how Deborah Rhode, a legal ethics expert from Stanford Law School, put it after reviewing a memo from ex-NRA president Oliver North. In the document, North laid out allegations against the embattled gun rights groups outside law firm, claiming the firm has billed the association about $24 million since last March and $8.8 million in the first three months of 2019averaging to more than $97,000 per day. Meanwhile, the NRAs latest financial disclosures forms show its revenue has slumped under the gun-friendly Trump administration.

Norths memowhich NRA top brass disputeraises new questions about the associations finances at an extraordinarily fraught moment for the grassroots gun-rights powerhouse. On the one hand, it finds its most powerful ally ever in President Trump. But at the same time, it faces acute challenges from inside and out: an increasingly organized, media-savvy movement calling for tighter gun laws, a belligerent foe in the New York governors mansion, and internal turmoil that has left its members heads spinning. Plus, theres the whole money problem.

Now North claims the groups legal bills are a new, huge strain on its financeswhich have contracted.

The Brewer invoices are draining NRA cash at mindboggling speed, reads the memo, referring to the legal bills, and adding that they pose an existential threat to the financial stability of the NRA.

Norths memo, along with other internal NRA documents, leaked online late Friday night and circulated through a quickly deleted Facebook page. The Daily Beast first reported on the memo, where North and fellow NRA official Richard Childress raised concerns that Brewer Attorneys & Counselors may have engaged in unsavory billing practices. Attorney Bill Brewer has defended his bills, and the chairman of the NRAs audit committee defended them as well. The firm represents the association on multiple matters, including litigation with the governor of New York and on congressional investigations into the groups interactions with Maria Butina, who later admitted to conspiring to act as a covert Russian agent. Charles Cotton, who heads the associations audit committee, disputed the memos claims in a statement shortly after it leaked. It reflects a misinformed view of the firm, its billings, and its advocacy for the NRA, he said.

Meanwhile, numerous legal ethics experts who reviewed the memo told The Daily Beast they found it astonishing, especially for a nonprofitand the kind of thing that could draw attention from the IRS.

Even granting that the NRA has a pile of legal problems, the context of this case should send red flags up everywhere, Rhode said. Creative accounting is shockingly common, even among elite firms. And what deters it is a client whos willing to provide some oversight, which doesnt seem to have happened in this case.

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North and Childress allege in the leaked memo that multiple senior NRA officials, including CEO Wayne LaPierre, refused to entertain the idea of conducting an outside audit of Brewers bills. They wrote that LaPierre shot down multiple requests for an audit and that the associations audit committee ignored another request. Norths lawyers have not responded to comment requests, and Childress has declined to comment on internal NRA matters.

But senior NRA officials have defended Brewers work for the firm, which involves some of its most pressing legal threats. And North is not necessarily a reliable narrator. While serving as the associations president, he also allegedly took a salary and worked on contract for its longtime advertising firm Ackerman McQueen. That firm faces a host of ethical and legal questions in the wake of multiple stories about unsavory financial relationships between its executives and top NRA officials. The NRA sued the firm last month, demanding internal documents about its work for the gun rights group. And it updated the suit, just days before its members big annual meeting, to allege that North hid the true nature of his relationship with the company from the association.

His claims still raise eyebrows.

Ninety-seven thousand dollars a day for seven days a week of relatively undefined legal services seems awfully questionable, said Brendan Fischer, an attorney at the Campaign Legal Center who focuses on the ethics of money in politics. And based on the memo, the legal representation started with one relatively defined purpose and has apparently exceeded the scope of the original representation.

Theres all sorts of red flags here, he added. Its the kind of thing that the IRS could potentially scrutinize, but in recent years its more likely that state attorneys general are going to review the activities of nonprofits under state law.

At least one attorney general is already investigating the NRA. A spokesperson for New York Attorney General Letitia James said on April 27 that her office is scrutinizing the group. That announcement came in the middle of the tumultuous member meeting in Indianapolis, which had commenced with a metaphorical knife-fight between LaPierre and North. The allegationssome public, others notaired so much internal turmoil that the group practically seemed to beg law enforcement to notice.

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Marcus Owens, an attorney at Loeb & Loeb who previously ran the IRSs Exempt Organizations Division, told The Daily Beast that bills like this one would have raised his eyebrows when he was a regulator.

The IRS would definitely be interested in it, he said.

This is why people hate lawyers. Something like four-fifths of Americans think they charge too much. Duh! These are the kind of cases that make people think that.
Deborah Rhode, legal ethics expert at Stanford Law School

These legal bills are huge, and its the kind of legal bill that you would expect to see in something like the tobacco litigation, where state attorney generals were suing the tobacco industry, continued Owens, who now represents the March for Our Lives nonprofit, which calls for tighter gun laws. These are huge bills, in my view. It just feels like theres a real potential for more going on here than just lawyers fees.

Andrew Arulanandam, the NRAs longtime public affairs chief, defended the expenses in a statement to The Daily Beast.

Clearly, these sources have no insight into the relationship between the Brewer firm and the NRA, or the scope of the firms work, he said. The firm represents the NRA on many different mattersworking to protect our legal, regulatory and reputational interests. As weve repeatedly stated, centralizing these services allows the NRA to gain strategic advantages, recognize cost savings, and improve our advocacyin a way that works in the best interests of our members.

The NRA may need all the cost savings it can get. As LaPierre has hinted, the associations legal struggles have taken a financial toll. In an early March fundraising letter, he asked for donations to keep us in operation while we fight in the courts to prevent a total NRA shutdown.

The groups fight with New York Gov. Andrew Cuomo explains some of Brewers fees. Cuomo has called the NRA an extremist organization and vaguely threatened banks and insurers that do business with it. In response, the association sued Cuomo in federal court. That litigation, which Brewer helms, is ongoing. Civil litigation is expensive. But, some experts caution, it cant be that expensive.

This is why people hate lawyers, Rhode said. Something like four-fifths of Americans think they charge too much. Duh! These are the kind of cases that make people think that.

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