It’s difficult to know exactly what’s going on inside the NRA these days. News reports and the small amount of information that manages to find its way into public view is contradictory.
On the one side, you have people like NRA president Carolyn Meadows and board members such as Todd Rathner, Joel Friedman and Scott Bach. They’ve issued statements assuring anyone who will listen that everything’s fine with the NRA’s finances and operations. The say all the media reports are nothing more than Bloomberg-financed attacks on America’s most effective voice for gun rights.
FACT: According to the NRA’s chief financial officer, we are on budget in 2019. The NRA is meeting all banking and supplier financial obligations and we continue to aggressively manage our cost structure to offset the orchestrated and calculated attacks against NRA’s finances in 2018. Put another way, our financial house is in order – we aren’t going away.
We have full confidence in the NRA’s accounting practices and commitment to good governance.
From Bach:
Ironically, some of those same transparency measures that may protect NRA from hostile public officials were spun by the anti-gun media to fuel a false narrative about NRA’s financial health and spending habits. The media painted a fake portrait of a sputtering organization in decline, led by selfish executives lavishly spending member monies. That the media should present such a false narrative is not surprising. The surprising part is that some gun owners actually believed them.
On the other side are board members like Allen West, Esther Schneider, Tim Knight, Sean Maloney and Col. Robert Brown who have asked for independent investigations into allegations of financial and managerial misconduct as well as the appropriateness of huge legal fees being paid to outside counsel William Brewer.
From West:
I am in my second term as a Board member, and I am deeply concerned about the actions and statements being made. The recent statements by Charles Cotton and Carolyn Meadows that are appearing in the Wall Street Journal, and now other news outlets, are outright lies. I have never been told, advised, informed or consulted about any of these details mentioned in the WSJ, and who knows how much more despicable spending of members’ money.
From a resignation letter signed by Schneider, Knight and Maloney:
We had expected – or at least hoped – that the executive leadership team would recognize the seriousness of these allegations and work with us in a constructive and transparent manner to address our concerns and minimize any further harm to the Association. Instead, we have been stonewalled, accused of disloyalty, stripped of committee assignments and denied effective counsel necessary to properly discharge our responsibilities as Board members.
In short, finding out what’s actually happening within the NRA’s Fairfax headquarters is difficult at best. But TTAG has spoken to sources both within the NRA board as well as individuals who are in a position to have relevant information about the Association’s operations. What we’ve been told, if accurate, indicates that the situation there is even more serious than has been portrayed.
According to sources who are in a position to know, we were told that as of August 2, neither NRA officers nor the Association’s 76 board members have director and officer insurance coverage. D&O coverage is standard in any large public corporation or non-profit. It’s designed to protect senior management and board members against claims of negligence or inadequate work.
According to this source, the insurance carrier declined to renew the Association’s policy based on extensive media reports of mismanagement and financial irregularities.
TTAG contacted the NRA to try to confirm this. According to Andrew Arulanandam, the NRA’s managing director of public affairs, “that is a false assertion. The NRA has D&O coverage in place,” he wrote. When asked which insurer issued the coverage, Arulanandam said that by policy, the NRA doesn’t disclose vendor/contractor information.
So…what’s the truth? On the one hand, we’ve spoken to a trusted source who is unquestionably in a position to know about the Association’s directors and officers coverage. On the other, the NRA’s primary spokesman assured us that the coverage is in place.
If the claim is, this comes at a critical time for the Association’s directors and officers. The NRA is the subject of two investigations, one by the state of New York and another by the District of Columbia.
If malfeasance is found on the part of senior management, or a lack of oversight by board members, D&O coverage may protect them against the expense of defending themselves against any charges that might be brought.
Without that coverage, any individuals charged in connection with those investigations would have to fund their defense themselves, expenses that could easily run into the hundreds of thousands of dollars.
In an attempt to get more information about where the truth lies here, TTAG spoke to David Dell’Aquila whose grassroots group is currently trying to engineer a change in NRA management. While he clearly has a dog in this fight, he also has an extensive network of sources within the Association and on the board who might be able to shed light on what the reality is regarding the insurance coverage.
Dell’Aquila told us . . .
I’ve heard the same thing from multiple sources. This is a serious situation. This is the modern-day Titanic with its doomed captain and his officers, as well as board members with potential liability abandoning the sinking ship.
We understand that the New York Attorney General has issued subpoenas to both officers and board members as part of her investigation. Given the conflicting reports about the D&O insurance, those involved will no doubt want to confirm, with all possible speed, whether or not that coverage remains in place.