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The National Rifle Association of America has long tapped money from an affiliated foundation to pay for some of its nonpolitical operations. But something shifted last year: The NRA was reimbursed $17 million by the foundation for expenses, nearly three times the amount it received a year earlier.
That surge is notable. The NRA was running a deficit, locked in internal conflict over spending by executives, and raising its dues for the second time since 2016. Little had changed in the financial picture of the affiliated foundation during that time, according to NRA financial disclosures reviewed by Bloomberg News.
As the nation’s largest gun-rights membership organization, the NRA takes part in advocacy and lobbying, so dues and contributions to it aren’t tax deductible. Contributions to the allied NRA Foundation, which describes itself as a public-interest organization devoted to firearm education and training, are generally deductible because the group limits itself to activities like school safety and youth marksmanship that aren’t aimed at swaying policy.
“It looks to me like NRA is under financial pressure and became much more aggressive about how it’s booking expenses for time, space and office equipment,” says Brian Galle, a professor at Georgetown University’s law school and former prosecutor in the Justice Department’s tax division.
Turmoil has engulfed the NRA for months. It’s locked in expensive legal battles with Governor Andrew Cuomo of New York and the group’s former public relations agency, among others. Internal feuding has led to several high-level departures and negative publicity.
Now, the surge in reimbursements could provide fresh terrain for government authorities. The attorneys general of New York and the District Columbia are already reviewing the NRA’s nonprofit status after news reports and legal claims that the NRA’s chief executive officer, Wayne LaPierre, and other senior employees misused funds to underwrite lavish lifestyles. The group and LaPierre have denied wrongdoing.
The NRA didn’t respond to multiple email messages seeking comment.
It’s common for related nonprofits to share employees and facilities as the NRA and NRA Foundation do. When one reimburses another to cover expenses, the payments are supposed to reflect the amount of staff time, office space and other resources devoted to each. The Internal Revenue Service expects the groups to cover expenses based on the share of resources they use and their tax status.
The reimbursement payments to the NRA, totaling $17.4 million, were far higher than in previous years. From 2012 to 2017, they ranged from $6 million to $9.3 million annually, the NRA reported.
The records reviewed by Bloomberg News provided only a partial financial picture. The NRA Foundation has disclosed some financial data from 2018, but its tax documents for the year aren’t yet available to the public. The Form 990 would show how much money the foundation provided to the NRA for educational and training programs, which are separate from the reimbursements for operations and aren’t included in the NRA’s public financial reports.
The abrupt increase in reimbursements for expenses last year would suggest that the NRA Foundation funded dramatically more non-political activities as a share of the groups’ overall work. But the NRA’s disclosures show that its spending on education, training, conferences and other programs was flat or down from the previous year. Also, the NRA Foundation’s finances don’t show a corresponding rise in revenue or overall expenses.
The reimbursements to the NRA amounted to more than half of what the foundation brought in last year from another allied group, Friends of NRA. Little known outside the gun world, the grass-roots group raised $33 million last year at local meeting halls by raffling off pistols, hunting rifles and bullet-link bracelets sporting American flags. The money it raises represents roughly two-thirds of the NRA Foundation’s revenue.
There are indications that the NRA may be struggling financially. After holding dues steady for two decades, it raised its dues twice, starting in 2016. It also appears to be booking an increasing amount of long-term membership revenue in the first year.
To Philip Hackney, a University of Pittsburgh law professor, the increase in the foundation’s reimbursements “raises real questions. The challenge is any kind of notion of a way to trace money.”
Galle, the former federal prosecutor, said he wouldn’t expect the Internal Revenue Service to challenge the NRA’s accounting.
“It would be very difficult to do,” he said. “You’d need a team of lawyers and forensic accountants. There’s no obvious revenue gain to the IRS in doing an audit like this, and there could be huge political blow-back from auditing an organization that knows it can pick up the phone and call the president.”
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— With assistance by David Voreacos
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