A judge rejected an attempt by New York's Attorney General to close down the National Rifle Association, but she will let her lawsuit accusing top executives for illegally diverting tens to millions of dollars from this powerful gun advocacy group to proceed.
Joel M. Cohen, Manhattan Judge, stated that NRA officials' allegations of misusing personal trips, no show contracts, and other questionable expenditures could be addressed using other remedies such as fines or restitution and not the "corporate death penalty" Attorney General Letitia Jam had requested.
James' August 2020 lawsuit tells "a dark story of greed and self-dealing" at the NRA's highest ranks. Cohen, however, wrote that it did not allege any financial misconduct or that the NRA was incapable of continuing its legitimate activities for its millions of members in a 42-page decision.
Judge also expressed concern that closing down the NRA could affect the freedom of speech and assembly rights of millions of its members. He said that James' lawsuit against the NRA, its longtime leader Wayne LaPierre and the three men who served as executive officers with the organization can be continued.
James seeks to recover money that was allegedly mispent and to ban LaPierre, as well as the other executives, from leading any non-profit or charity organization in New York. This would effectively remove them all from any involvement in the NRA.
LaPierre, the NRA and another defendant had moved to dismiss the case.
Charles Cotton, President of the NRA, called Wednesday's ruling "a resounding victory for the NRA and its 5 million members as well as all those who believe in this organisation."
Cotton stated in a statement that "the message is loud, clear" "The NRA is strong in its mission to defend constitutional freedom."
James stated that she was heartened by the rejection of NRA's efforts to thwart many of the claims in her case, but that he did not rule against dissolving the group.
James stated in a statement that "we are considering our legal options regarding this ruling." "We will continue to enforce New York law, regardless of the power of any individual or organization."
The lawyers for the other defendants were contacted to provide comment.
LaPierre, who was the CEO of the NRA's day to day operations since 1991 is being accused of spending millions on personal travel and security. He also received expensive gifts from vendors, including African safaris and a yacht measuring 107 feet.
He is also accused in setting up a $17million contract with the NRA to allow him to leave the organization. Additionally, he spent NRA money on travel advisors, luxury car services, private jet flights, and personal aircraft for his family. This included spending more than $500,000 on eight trips the Bahamas over a period of three years.
According to the lawsuit, some of the NRA's excessive spending was kept secret under an agreement with Ackerman McQueen, its former advertising agency. According to the lawsuit, the advertising company would pay for LaPierre's expenses and send a lump sum to the NRA for "out-of pocket expenses."
Although the NRA is based in Virginia, it was chartered in New York as a nonprofit organization in 1871. It is now incorporated in New York. James is the chief law enforcement officer of the state and has regulatory authority over all nonprofit organizations that are incorporated in the state. James's office claimed that closing the organization would be one way to address the alleged misappropriation.
The NRA filed for bankruptcy in January 2021. It tried to change its state of incorporation to Texas. But a judge stopped the move. He said that the bankruptcy filings were not made in good faith. The NRA made it clear that it wanted to avoid New York's regulatory oversight, partly because of the threat to its existence.
Last year, the lawyers representing the group called the lawsuit brought by James, a Democrat "a blatant, malicious retaliation against the NRA" and its constituents based upon her disagreement with their speech content.