NRA plans to incorporate in Texas

National Rifle Association Executive Vice President Wayne LaPierre speaks at the NRA Annual Meeting of Members in Indianapolis, Saturday, April 27, 2019. On Saturday, retired Lt. Col. Oliver North announced that he will not serve a second term as president of the NRA amid inner turmoil in the gun-rights group. (AP Photo/Michael Conroy)

AUSTIN, Texas — The National Rifle Association announced Friday it has filed for bankruptcy protection and will seek to incorporate the nation’s most politically influential gun-rights group in Texas instead of New York, where a state lawsuit is trying to put the organization out of business. The NRA is the nation’s oldest civil rights organization.

The announcement came months after New York Attorney General Letitia James sued the NRA, seeking its dissolution over claims that top executives illegally diverted tens of millions of dollars for lavish personal trips, no-show contracts for associates and other questionable expenditures.

Advertisements

The coronavirus pandemic forced the organization to cancel its national convention and scuttled fundraising. The NRA’s bankruptcy filing listed between $100 million and $500 million in assets and between $100 million and $500 million in liabilities. Still, the NRA claimed in announcing the move that the organization was “in its strongest financial condition in years.”

The NRA filed for Chapter 11 bankruptcy in federal court in Dallas and said it planned to incorporate in Texas, where records show it formed a limited liability corporation, Sea Girt LLC, in November 2020. Sea Girt LLC made a separate bankruptcy filing Friday, listing few assets and fewer than $100,000 in liabilities.

In its filing, the NRA said its longtime leader, Executive Vice President Wayne LaPierre, made the decision to file for bankruptcy protection in consultation with a committee of three NRA officials formed in September to oversee its legal strategies. The NRA board voted Jan. 7 to clarify LaPierre’s employment agreement, giving him the power to “reorganize or restructure the affairs” of the organization.

“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 said in a statement.

In an interview, NRA board member Charles Cotton made clear that the bankruptcy filing was motivated by litigation and regulatory scrutiny in what he called “corrupt New York” — not financial concerns.

“We’ve got to get in a state where we can operate without that kind of undue weaponizing of governmental agencies, and frankly to get all the litigation in a place where we’ve got an even shake,” Cotton told The Associated Press.

Texas Gov. Greg Abbott, a Republican, quickly welcomed the news, tweeting: “Welcome to Texas — a state that safeguards the 2nd Amendment.” The NRA said it has more than 400,000 members in Texas and plans to hold its annual convention in Houston later this year.

Shortly after the announcement, James said she would not allow the NRA to “evade accountability” or oversight. The Democrat’s lawsuit last year highlighted misspending and self-dealing claims that have roiled the NRA and LaPierre in recent years — from hair and makeup for his wife to a $17 million post-employment contract for himself.

“The NRA’s claimed financial status has finally met its moral status: bankrupt,” James said.

Cotton said the allegations in James’ lawsuit will be proven false. He said he expects LaPierre to remain at the helm of the reconstituted NRA, praising his popularity with members and proficiency at raising money for the organization.

“Wayne leaving would be a bigger blow to the organization than was the illness and death of Charlton Heston,” Cotton said.

The gun-rights group boasts about 5 million members. Though headquartered in Virginia, the NRA was chartered as a nonprofit in New York in 1871 and is incorporated in the state. Going forward, the NRA said a committee will study opportunities to relocate segments of its operations to Texas and elsewhere.

In recent years, the NRA’s relationship with New York has increasingly soured.

In 2018, the organization sued Gov. Andrew Cuomo, claiming a “political vendetta” was behind a state financial watchdog’s probe of whether it broke state laws by marketing an insurance program to gun owners. In November, the NRA agreed to pay $2.5 million and accept a five-year ban on marketing insurance in the state.

In response to James’ lawsuit, the NRA countersued with claims her actions were motivated by hostility toward its political advocacy, including comments she made while running for attorney general in 2018 that the NRA is a “terrorist organization.”

The NRA’s largest creditor, owed $1.2 million, is the organization’s former advertising agency, Ackerman McQueen. The NRA sued the company in 2019, alleging overbilling, and said in Friday’s bankruptcy filing that the debt owed is disputed. The lawsuit is pending.