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NRA accused of 'brazen illegality' in lawsuit calling for it to be dissolved

New York's attorney general sued the National Rifle Association on Thursday, seeking to put the powerful gun advocacy organization out of business over allegations that high-ranking executives diverted millions of dollars for lavish personal trips, no-show contracts for associates and other questionable expenditures.

New York, D.C. file lawsuits at gun rights lobbyist, which vows to fight the allegations

Letitia James alleges executives of powerful lobby group diverted millions of dollars for personal benefit. 0:45

New York's attorney general sued the National Rifle Association on Thursday, seeking to put the powerful gun advocacy organization out of business over allegations that high-ranking executives diverted millions of dollars for lavish personal trips, no-show contracts for associates and other questionable expenditures.

Attorney General Letitia James's lawsuit, filed in state court in Manhattan after an 18-month investigation, highlighted misspending and self-dealing allegations that have roiled the NRA and its longtime leader, Wayne LaPierre, in recent years — from hair and makeup for his wife to a $17 million US post-employment contract for himself.

The troubles, which James said were long cloaked by loyal lieutenants and a pass-through payment arrangement with a vendor, started to come to light as the NRA's deficit piled up and it struggled to find its footing after a spate of mass shootings eroded support for its pro-gun agenda.

The organization went from a nearly $28 million US surplus in 2015 to a $36 million US deficit in 2018.

"The NRA's influence has been so powerful that the organization went unchecked for decades while top executives funnelled millions into their own pockets," James said in a statement announcing the lawsuit, which seeks to dissolve the organization.

At a news conference Thursday, James characterized the organization as "a breeding ground for greed, abuse and brazen illegality."

James told reporters she was advocating dissolution because the corruption was so widespread that merely replacing the leadership would not address the systemic corruption.

She said the state will communicate its allegations to the Internal Revenue Service and did not rule out making a referral for criminal charges at a future date.

James, a Democrat, argued that the organization's prominence and cosy political relationships had lulled it into a sense of invincibility and enabled a culture where non-profit rules were routinely flouted and state and federal laws were violated. Even the NRA's own bylaws and employee handbook were ignored, she said.

'Very terrible thing': Trump

Though its headquarters are in Virginia, the NRA was chartered as a non-profit in New York in 1871 and continues to be incorporated in the state.

NRA President Carolyn Meadows said the group was counter-suing the New York attorney general's office, setting the stage for a drawn-out legal battle that could last for years.

"It's a transparent attempt to score political points and attack the leading voice in opposition to the leftist agenda,' Meadows said in a statement.

James is taking aim at the NRA after her office last year dismantled U.S. President Donald Trump's charitable foundation and fined him $2 million US to settle allegations he used donations meant for worthy causes to further his own business and political interests.

Trump, speaking to reporters at the White House before departing for a trip to an Ohio factory, called the developments "very sad."

"I just heard about that. That's a very terrible thing that just happened. I think the NRA should move to Texas and lead a very good and beautiful life."

The attorney general of the District of Columbia announced it, too, would pursue a civil action against the NRA.

"Charitable organizations function as public trusts — and District law requires them to use their funds to benefit the public, not to support political campaigns, lobbying or private interests," Attorney General Karl Racine said in a news release. "With this lawsuit, we aim to recover donated funds that the NRA Foundation wasted."

'Personal piggy bank'

For her part, James named LaPierre and three other current and former executives as defendants: corporate secretary and general counsel John Frazer, retired treasurer and chief financial officer Wilson Phillips, and LaPierre's former chief of staff Joshua Powell.

While the lawsuit accuses all four men of wrongdoing and seeks fines and remuneration, none of them have been charged with a crime.

National Rifle Association CEO Wayne LaPierre speaks on Feb. 29 at the Conservative Political Action Conference in Oxon Hill, Md. In power at the NRA for nearly three decades, LaPierre has been formally accused of spending millions of dollars on personal use and improperly accepting expensive gifts. (Jose Luis Magana/The Associated Press)

James said the executives used the organization as a "personal piggy bank."

LaPierre, who has been in charge of the NRA's day-to-day operations since 1991, is accused of spending millions of dollars on private travel and personal security, accepting expensive gifts such as African safaris and use of a 107-foot yacht from vendors and setting himself up with a $17 million US contract with the NRA, if he were to exit the organization, without board approval.

The lawsuit said LaPierre, 70, spent millions of the NRA's dollars on travel consultants, including luxury black car services, and hundreds of thousands of dollars on private jet flights for himself and his family, including more than $500,000 US on eight trips to the Bahamas over a three-year span.

Some of the NRA's excess spending was kept secret, the lawsuit said, under an arrangement with the organization's former advertising agency, Ackerman McQueen.

The advertising firm would pick up the tab for various expenses for LaPierre and other NRA executives and then send a lump sum bill to the organization for "out-of-pocket expenses," the lawsuit said.

Frazer, the corporate secretary and general counsel, is accused of aiding the alleged misconduct by certifying false or misleading annual regulatory filings, among other accusations.

The lawsuit said Phillips ignored or downplayed whistleblower complaints and made a deal to enrich himself in retirement — a bogus $1.8 million US contract to consult for the incoming treasurer and a deal worth $1 million US for his girlfriend.

LISTEN l The Current April 2019:

The NRA was keeping up appearances at its annual convention this past weekend, but behind closed doors, chaos engulfs the organization. What could the internal conflict mean for the future of the group - and its role in American politics? Our panellists weigh in. 22:52

Powell, the former LaPierre chief of staff, is accused of getting his father a $90,000 US photography gig through an NRA vendor, arranging a $5 million contract for a consulting firm where his wife worked and pocketing $100,000 US more in housing and relocation reimbursements than the organization's rules allowed. He was fired by the organization.

The lawsuits come at a time when the NRA is trying to remain relevant and a force in the 2020 presidential election as it seeks to help Trump secure a second term.

The NRA has traded lawsuits with Ackerman McQueen, which crafted some of its most prominent messages for decades, eventually severing ties with it last year and scrapping its controversial NRA-TV, which aired many of its most controversial messages.

Internal NRA battles reached a fever pitch at its 2019 annual meeting where its then-president, Oliver North, was denied a traditional second term amid a tussle with LaPierre as he sought to independently review the NRA's expenses and operations.

Chris Cox, the NRA's longtime lobbyist who was widely viewed as a likely successor to LaPierre, left after being accused of working behind the scenes with North to undermine LaPierre.

With files from CBC News

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