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NRA settles DC lawsuit alleging its charity misused funds

The National Rifle Association is promising to reform how its charitable arm distributes money in a settlement with D.C. Attorney General Brian L. Schwalb (D), allowing the beleaguered organization to avoid another potentially embarrassing and expensive trial.

The announcement comes nearly two months after a New York jury found the top NRA leadership liable for financial misconduct and corruption, following a six-week trial that exposed how the nonprofit’s officials spent millions on luxury travel, designer clothes and other extravagant perks. Former NRA CEO Wayne LaPierre was found liable for $5.4 million in damages, while former CFO Wilson “Woody” Phillips was ordered to pay $2 million in damages.

A trial was scheduled to begin April 29 in the D.C. case, which accused the NRA Foundation of funneling millions of dollars without proper oversight to the organization to compensate for its reckless spending.

The foundation “violated this sacred public trust, allowing the NRA to use them as an unchecked piggy bank,” Schwalb said in a statement. “Abusing that trust as the NRA did violates both the public interest and District law.”

The NRA did not acknowledge any wrongdoing in the settlement, and previously denied the lawsuit’s claims in court filings. NRA officials have repeatedly portrayed the lawsuits in D.C. and New York as politically motivated attacks by Democratic law enforcement officials, and a press release from the organization described the new settlement as a “victory.”

“This is further proof of the NRA’s commitment to good governance,” said NRA President Charles Cotton in a statement. “The NRA confronted this political attack — and emerges from this lawsuit strong, secure, and vindicated.”

The conclusion of the two cases caps one of the most tumultuous chapters in the history of the nation’s largest gun group. Since 2019, political infighting and accusations of lavish spending have tarnished the NRA’s reputation and drained its coffers. Fundraising has plunged, while legal fees soared, leaving the gun lobby poorly positioned to influence the high-stakes 2024 election.

Under the District’s laws, prosecutors can’t collect financial penalties from wayward nonprofits. The settlement requires the NRA Foundation to form an audit committee and to establish new policies on avoiding conflicts of interest and making grants and loans to the NRA. Board members will have to undergo annual nonprofit compliance training through 2026.

The NRA Foundation’s tax-deductible contributions are supposed to fund charitable, educational and scientific purposes related to firearms. It is allowed to provide financial support to the NRA only for activities consistent with those purposes.

But the complaint filed in District of Columbia Superior Court in 2020 said the foundation put the NRA’s financial demands ahead of its own charitable mission. It said the foundation paid fees to the NRA that were used for expensive consulting agreements and approved multimillion-dollar loans to the NRA without any apparent charitable benefits. The NRA also abruptly boosted the fees it charged the foundation by millions of dollars without providing proper documentation, according to the lawsuit.

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