It appears that Wayne LaPierre’s scheme to avoid consequences for his seven-figure looting of the NRA may result in the organization being morally but not legally bankrupt:
The National Rifle Association’s hopes of end-running a legal challenge in New York were dealt a serious blow on Monday when a Justice Department official rebuked its leadership and called for the dismissal of its bankruptcy filing or the appointment of an outside monitor to oversee its finances.
Lisa L. Lambert, a lawyer in the United States Trustee’s office, which is part of the Justice Department, said the “evidentiary record clearly and convincingly establishes” that Wayne LaPierre, the longtime N.R.A. chief executive, “has failed to provide the proper oversight.” For a number of years, she added, “the record is unrefuted that Wayne LaPierre’s personal expenses were made to look like business expenses.”
Mr. LaPierre and the N.R.A. had filed for bankruptcy not because of any financial distress, but as a strategy to avoid litigation in New York, where the attorney general, Letitia James, is seeking to shut down the organization and claw back millions of dollars in allegedly misspent funds from Mr. LaPierre and three other current or former executives.
Bankruptcy experts said the U.S. Trustee’s move was a rare one.
“The N.R.A. is in real trouble,” said Adam J. Levitin, a professor specializing in bankruptcy at Georgetown University. “The U.S. Trustee rarely gets involved in this sort of motion, much less urges dismissal, a trustee or an examiner. I cannot see an outcome where the N.R.A. comes out unscathed. I think the real issue is what remedy the judge grants.”
John Pottow, who teaches bankruptcy at the University of Michigan Law School, called the trustee’s intervention “a glaring signal of profound dysfunction” at the N.R.A., adding that such an intervention by the trustee “doesn’t happen very often.”
The trial has underscored concerns about Mr. LaPierre’s oversight. Mr. LaPierre testified that he took the N.R.A. into bankruptcy without telling even his top lieutenants or most of his board. He testified that he didn’t know his former chief financial officer had received a $360,000-a-year consulting contract after leaving under a cloud, or that his personal travel agent, hired by the N.R.A., was charging a 10 percent booking fee for charter flights on top of a retainer that could reach $26,000 a month.
It’s all one con.