Is the NRA REALLY bankrupt? Pro-gun group files for Chapter-11, looks to shut shop in New York and go to Texas
Going by its statement, the NRA's bankruptcy filing is simply utilizing a loophole so that the organization can dissolve its assets and restart in Texas
In a statement on its website, the National Rifle Association announced its plans to "exit New York to pursue opportunity, growth and progress in Texas". Part of this exit plan involves filing for bankruptcy and reincorporate as a non-profit in Texas. TV host and political commentator Piers Morgan tweeted about the development with the words, "BREAKING: The @NRA files for bankruptcy. Least distressing news of the pandemic".
In its statement, NRA said it would "restructure the Association as a Texas nonprofit to exit what it believes is a corrupt political and regulatory environment in New York. The move will enable long-term, sustainable growth and ensure the NRA’s continued success as the nation’s leading advocate for constitutional freedom — free from the toxic political environment of New York. The NRA plan, which involves utilizing the protection of the bankruptcy court, has the Association dumping New York and organizing its legal and regulatory matters in an efficient forum. The move comes at a time when the NRA is in its strongest financial condition in years."
The pro-gun rights advocacy organization was set up in New York after the Civil War. Letitia James, the New York attorney general who is a Democrat, has been trying to dissolve the NRA by conducting an investigation into corruption at the gun group since 2019. The NRA was sued in August 2019 by James, who accused senior leaders of self-dealing and mismanagement, and said the group’s activities violated state laws governing nonprofits. James said NRA officials diverted millions of dollars to fund luxury lifestyles, including vacations and private jets, and to buy the silence and loyalty of former employees, costing the group $64 million over three years. In her lawsuit, James said the NRA’s incorporation as a nonprofit in New York gave her authority to seek its dissolution.
After the NRA released their statement, her official handle tweeted: "The @NRA's claimed financial status has finally met its moral status: bankrupt. While we review its bankruptcy filing, we will not allow the @NRA to use this or any other tactic to evade accountability and my office’s oversight."
The @NRA's claimed financial status has finally met its moral status: bankrupt.— NY AG James (@NewYorkStateAG) January 15, 2021
While we review its bankruptcy filing, we will not allow the @NRA to use this or any other tactic to evade accountability and my office’s oversight.
Is the NRA really bankrupt?
Going by its statement, the NRA is not broke and the bankruptcy filing is simply a loophole the organization is utilizing to dissolve its assets and restart in Texas. Wayne LaPierre, the executive vice president (EVP) of the National Rifle Association (NRA) since 1991, posted a letter in which he explicitly explained why the NRA was filing for bankruptcy.
According to him, to "facilitate the strategic plan and restructuring, the NRA and one of its subsidiaries have filed voluntary chapter 11 petitions in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division. As you may know, chapter 11 proceedings are often utilized by businesses, nonprofits and organizations of all kinds to streamline legal and financial affairs... No major changes are expected to the NRA’s operations or workforce.... The plan aims to streamline costs and expenses, proceed with pending litigation in a coordinated and structured manner, and realize many financial and strategic advantages. You know that our opponents will try to seize upon this news and distort the truth. Don’t believe what you read from our enemies. The NRA is not 'bankrupt' or 'going out of business'. The NRA is not insolvent. We are as financially strong as we have been in years.... Subject to court approval, the NRA is pursuing plans to reincorporate in the State of Texas."
Will NRA be able to avoid investigations by moving to Texas?
In his letter, Wayne LaPierre put the blame for having to move on NY Attorney General Letitia James. "We are leaving the state of an attorney general who, just a few months ago, vowed to put us out of business through an abuse of legal and regulatory power. In fact, the gross overreach of the New York Attorney General and New York Governor has been resoundingly criticized by powerful national groups like the ACLU and a host of prominent legal scholars," he said in his statement.
But leaving New York under James' watch might not be so simple. Back in August 2020, the Attorney General's office had posted a press statement in which Letitia James said: "While President Trump and others have suggested that the NRA should simply pick up and leave New York in an effort to evade responsibility, I’d remind them that we shut down the president’s own foundation, recouped millions in diverted funds after unearthing the illegal use of charitable funds, and directed those funds to lawful organizations for legitimate charitable purposes. We intend to do the same with the NRA."
She added: "To be clear, no charity registered in New York state, including the NRA, can dissolve and relocate to another state without approval of my office or of the Supreme Court of New York. As long as our lawsuit continues, the NRA must stay right where it is and answer for their deep-rooted fraud. The facts speak for themselves and our lawsuit will continue undeterred.”
Shannon Watts, founder of Moms Demand Action that advocates against counter gun violence, tweeted about the bankruptcy filings, which showed the "estimated liabilities" of the pro-gun group to be between $100 million and $500 million saying, "They're allegedly a nonprofit. How can any lawmakers, donors, members still support them with a straight face?" She also tweeted that: "The NRA can try to run from its years of deception, decadence, and self-dealing, but it can’t hide — not from the law, and not from the majority of Americans who have rejected their agenda. The NRA has been out of touch for decades, and now they’re out of money, too."
From the NRA’s bankruptcy filing. They’re allegedly a nonprofit. How can any lawmakers, donors, members still support them with a straight face??? pic.twitter.com/tadjvGnSJt— Shannon Watts (@shannonrwatts) January 15, 2021
The NRA can try to run from its years of deception, decadence, and self-dealing, but it can’t hide — not from the law, and not from the majority of Americans who have rejected their agenda.— Shannon Watts (@shannonrwatts) January 15, 2021
The NRA has been out of touch for decades, and now they’re out of money, too.