← The New Yorker Radio Hour
The New Yorker Radio Hour
The N.R.A.’s Financial Mess
00:16:45
Last March, Wayne LaPierre sent a fund-raising letter to his members—an urgent plea for money. LaPierre described an attack on the Second Amendment that is unprecedented in the history of the country. But, in reality, what is endangering the N.R.A. isn’t constitutional law; it’s destructive business relationships that have damaged the organization financially, and have put it in legal jeopardy. Searching through N.R.A. tax forms, charity records, contracts, and internal communications, the reporter Mike Spies discovered that “a small group of N.R.A executives, contractors, and venders have extracted hundreds of millions of dollars from the nonprofit’s budget, enriching themselves in the process.” While the organization is quick to lay blame on its political opponents, Spies says, it’s its questionable financial practices that have weakened it from the inside. Central to the story of the N.R.A’s financial problems is an Oklahoma-based P.R. firm called Ackerman McQueen. Ack-Mac didn’...
Loading summary
Transcript30 lines
- [00:01]
Announcer
From one World Trade center in Manhattan. This is the New Yorker Radio Hour, a co production of the New Yorker and WNYC studios.
- [00:10]
David Remnick
Welcome to the New Yorker Radio Hour. I'm David Remnick. Just a few weeks ago, I talked on the show with Mike Spies. Mike is a reporter for the Trace, a website that covers guns and the gun industry, and he contributes to the New Yorker as well. One of the things that Mike talked about was the precarious financial state of the nra. He said that pensions there had been frozen. And one detail that really surprised me, Mike said that the NRA had stopped providing free coffee in the office, which is never a good sign for any business. Over the years, we've come to think of the NRA as practically omnipotent in Washington and in many state capitals as well. But the problems, financial and legal, run very deep. Here's Mike Spies.
- [00:56]
Mike Spies
So back in March last month, Wayne Lapierre, the NRA's top official, sent out a fundraising letter to his members. And it was what I would describe as an urgent plea for money. And what he was telling them specifically was, we're facing an attack that's unprecedented, not just in the history of the nra, but in the entire history of our country. The Second Amendment cannot survive without the nra, and the NRA cannot survive without your help right now. Wayne LaPierre is right. The NRA is troubled. In 2017, the organization had to borrow millions of dollars from its foundation, from its officer's life insurance policies, and it also liquidated several million more dollars from an investment fund. I wanted to find out the root cause of why the NRA is convulsing. One of the people I spoke with was Aaron Davis. Davis started at the NRA in 2005 and worked for a decade in the organization's fundraising department. He grew up with the NRA reading its magazines as a boy. And for him, working at the organization was a kind of dream.
- [02:16]
Aaron Davis
Part of the allure of working at the NRA was you could feel the power. You were intimidated by the power, but you respected it and you looked up to it. And we felt that the folks we were working for were top notch and didn't even think about what did they make. Now, of course, you'd heard, oh, I think this person makes $400,000 a year. And you're like, what? That doesn't make sense. But when you're in your meetings, you're thinking, oh, my gosh, this person is going to change America. We're going to be the best organization there ever was on the face of the planet. And so whatever they cost, that's what they cost.
- [02:54]
Mike Spies
The key to the NRA's problems is what it does with money. I've been searching through tons of documents, federal tax forms, charity records, contracts, corporate filings, and internal communications. And it seems a small group of NRA executives, contractors and vendors have extracted hundreds of millions of dollars from the nonprofit's budget, enriching themselves in the process. Central to this story is a for profit public relations firm called Ackerman McQueen.
- [03:33]
Aaron Davis
So Ackerman McQueen was a very professional for profit organization, a marketing firm, if you will, that had been doing a lot of projects around nra. They weren't NRA members by any stretch.
- [03:46]
Mike Spies
What do you mean by that?
- [03:48]
Aaron Davis
Well, they were just paid to be part of a marketing firm. So they're your typical like New York Austin types, but they weren't your folks who were interested in Second Amendment politics.
- [04:01]
Mike Spies
For more than three decades, Ackerman has shaped the NRA's public identity, helping to build it from a niche activist organization into a ubiquitous presence in American culture. Ackerman has produced and devised the NRA's most successful and divisive ad campaigns. In fact, when you're hearing from the NRA, most of the time you're really hearing from Ackerman McQueen. The only way we save our country and our freedom is to fight this violence of lies with the clenched fist of truth. I'm the National Rifle association of America and I'm freedom's safest place. The NRA and Ackerman have become so intertwined that it's often difficult to tell where one ends and the other begins. In Aaron's fundraising department, they were going after big money donors with highly produced marketing materials that cost a lot of money to make. In 2008, Aaron's boss was a guy named Ben Case, who had been at the organization for several years.
- [05:09]
Aaron Davis
Ben hired what I still perceive to be the guru, and I'm not going to say his name, but the guru of major guest fundraising in all the nation. He hires him to come in and give us a day long training to raise more money. And we say, we're having trouble, we're not raising what we think. And so he holds up one of our marketing materials that Ackerman had produced and he goes, this actually will hurt you from raising big money. Donors don't want to see that you're spending so much money when they give a large gift. The best types of fundraising materials are black and white, with a couple of color photos. And there was an argument right there between some of our, especially one of our directors and this fundraising guru saying, no, that's not true. And so it was. I always had that in my mind, like, well, if this is more effective, why are we doing it this way?
- [06:06]
Mike Spies
Two years after this seminar, Ben Case was removed from his position, and a former Ackerman McQueen executive, Tyler Schrupp, was installed in his place. Tyler, unlike Ben, had limited fundraising experience. And as soon as he took over, most of the fundraising team's outside business was sent to Ackerman McQueen.
- [06:31]
Aaron Davis
They were so close to us. They were always in our offices. Their account executive was always in our offices, and he was doing projects with us. And our budget was increasing. We were doing more of that sort of thing. But in my 10 years of fundraising there, I saw that fundraising at NRA was very difficult. We had, I'd say, at least 80% of our fundraisers didn't raise as much as they cost. It was not an easy place to raise big dollars for.
- [06:58]
Mike Spies
After Tyler came in. Do you have a sense overall of how much of the total expenses being generated by the advancement team were ultimately being steered into Ackerman McQueen's coffers?
- [07:14]
Aaron Davis
I don't. That was kept under wraps. I only saw my budget and. But overall, I did not know where all the money went, so. And it just rubbed a lot of people the wrong way. I kind of want to make that point that it. This is not something that, oh, Aaron, feels like something's being done wrong. It was the entire department, from what I could tell, felt the same way. We all felt that there was too much of this, like, insider baseball type thing. It was not. It did not seem above the bar. And we felt bad about it. A lot of us felt bad about it.
- [07:50]
Mike Spies
Which is interesting, right, because you would think that those expenses would have to be justified in some sense. There'd have to be some clear return on the big investment.
- [08:02]
Aaron Davis
Absolutely. And a lot of board members kind of knew that.
- [08:10]
Mike Spies
In 2017, the NRA paid Akarim McQueen and its affiliates almost $41 million. That number accounted for 12% of the organization's total expenses that year. So you've got a company that is sucking up a huge amount of the NRA's budget and is also exerting an incredible amount of control over the organization.
- [08:40]
Aaron Davis
They're a for profit organization trying to make money, trying to do things that would bring more money to them. So they have completely different intentions than a nonprofit should have, which is for the common Good for the better. Good. And so those lines were just so blurry. But as you read and you learn the laws and you see what the IRS is writing, you get to this kind of push and pull. And it even made me question anything I was saying in donor meetings when I was pushing gifts. Is this okay? Can I have this meeting with this congressperson? Is that okay? You know, am I supposed to be even doing an event with Rob Portman? I don't know.
- [09:19]
Mike Spies
Right, right. There's almost like an inherent conflict of interest.
- [09:26]
Aaron Davis
I think so. I think they. I think there is an inherent conflict of interest. It just. And it just doesn't seem. And I think one of the reasons I'm willing to come forward is it just doesn't seem like NRA leadership is all that concerned about this.
- [09:44]
Mike Spies
The Ackerman relationship is just one example of a host of opaque, sketchy arrangements that the NRA leadership has forged over a number of years. It goes beyond just the NRA's inflammatory rhetoric. It's a systemic problem that infects the entire organization. I actually got copies of internal handwritten memos. They were created by Emily Cummins, who until November was the NRA's managing director of Tax and Risk Management. So I'm looking at one of the pages now, and you can see that Emily has flagged a list of top concerns. The memos assert that the NRA pays over billed deceptive, vague invoices to preferred vendors and contractors. Staff is told to process payments without documentation. And the memos also say, and this is perhaps maybe the worst thing that the board hasn't been told of what's embarrassing, and that's the part that rubs up against nonprofit law. If a business arrangement poses an obvious conflict of interest, the board has a responsibility to not only know about the arrangement, but it also has to provide a reasonable justification for okaying it. And if they don't, then that's a major red flag. And the nra, as it turns out, has a number of red flags. Now, nonprofit law is fairly murky. So I spoke with the former head of the IRS's nonprofit division, and he told me that if these red flags are in fact violations of the law, that the New York Attorney General could take a number of actions. The Attorney General could sanction board members or disband the board or go to court in ultimately argue that the organization is so far gone that it could be disbanded entirely. Developing right now, the National Rifle association.
- [12:02]
Announcer
Is suing one of its longtime ad partners.
- [12:04]
Mike Spies
We're talking about Ackerman McQueen advertising agency. In a surprising twist, the NRA has now turned on its longtime collaborator. Earlier this month, the NRA filed a lawsuit against Akarim McQueen over concerns about Ackerman's activities and accounting practices, suggesting that the NRA doesn't actually know the details of its most significant business arrangement. Conflict of interest. But we will see what the court does next. In the news, from Grant Herm's Oklahoma Zone News 9. And yet all this financial stuff doesn't completely explain why Aaron Davis, who had been so proud to work for the nra, is taking the rare step of blowing the whistle. Aaron, like many of his co workers, believed wholeheartedly in the mission of the nra. But the NRA as a big institution doesn't welcome dissent. People who have spoken out have been marginalized or even shunned. So for Aaron, the best way forward in the end was just to quit.
- [13:10]
Aaron Davis
In a way, Mike, it kind of feels like you're drinking the Kool Aid. And while some of what NRA says is right, I mean, it is an American organization that loves America. I don't know if they love Americans. I don't know if they love people that don't look like them, because it's all about politics and winning. And that especially came to a head as Sandy Hook after that happened. And in the office, as I was sitting in the office and we actually had the lights out in the office, we weren't allowed to send emails. That period of time between when the shooting happened to when Wayne lapierre actually spoke, which I think was like seven or nine days, we weren't even allowed to really do work. But we started coming to the office and we were scared. The staff was scared, we're going to lose our jobs. The NRA is over. And the message that came from Wayne, we didn't hear until he came on tv.
- [14:08]
Mike Spies
The only thing that stops a bad guy with a gun is a good guy with a gun. Would you rather have your 911 call bring a good guy with a gun?
- [14:26]
Aaron Davis
And after the television interview, which I thought didn't go well, it wasn't empathetic at all. Everyone in the office was just like, oh, my gosh, we won. And I don't know how you win something like that. I don't know how. And, you know, everyone felt better after that. And except for maybe there was my manager at the time. She was scared for her children's life, right? That was like, the extent of it. But it's like, let's move on. We won that battle. That political battle. Let's go on.
- [14:53]
Mike Spies
Right.
- [14:53]
Aaron Davis
And it just, that's not okay. I mean, that's not who we are as humans. Right. We have to be more cognizant. You know, you can have a belief in the Second Amendment and, and you could believe that it's an individual right and Supreme Court this and that, but you have to care about people that are citizens of this country. I just feel like there's a sickness of the heart within interray leadership.
- [15:20]
David Remnick
That's Aaron Davis speaking with reporter Mike Spies. Davis worked for the NRA from 2005 to 2015. You can find Mike Spies's reporting on the NRA at newyorker.com I'm David Remnick and thanks for joining us. See you next time.
- [15:47]
Announcer
The New Yorker Radio Hour is a co production of WNYC Studios and the New Yorker. Our theme music was composed, composed and performed by Meryl Garbus of Toon Yards with additional music by Alexis Quadrado. Our team includes Alex Barron, Emily Botin, Ave Carrillo, Rhiannon Corby, Jill Duboff, Karen Frillman, Kalalea, David Krasnow, Louis Mitchell, Sarah Nix and Steven Valentino, with help from Emily Mann and Jessica Henderson. The New Yorker Radio Hour is supported in part by the Tsarina Endowment Fund, SA.