A rancorous, but previously behind-the-scenes battle has finally made its very public debut. Now, there’s been plenty of speculation about the NRA’s recently-filed lawsuit against Ackerman-McQueen, its longtime marketing agency.
The lawsuit and ensuing media coverage couldn’t have come at a worse time for the NRA- the eve of the 2019 NRA Annual Meetings and Exhibits
Not that there’s ever a good time to have it publicly disclosed- in excruciating detail- that you’re having a serious beef with your largest, longest, service provider. Especially if the
“serious beef” concerns the most toxic of all subjects- billing. Or more specifically, questionable billing practices.
The National Rifle Association is a 501(c)4 non-profit organization and governed by very strict guidelines, especially when it comes to how you pay service providers- and monitor costs. If you believe the media reports, rules for fiscal oversight would appear to have have either been overlooked, or ignored - for years.
The NRA’s lawsuit has opened its books for some in-dept investigation. It will be excruciating because it will undoubtedly portray some senior leadership in a “less-than-positive” light. It will be unfriendly on two fronts.
First, Ackerman McQueen is battling to defend its reputation, if not its very existence. Having a client sue over billing is a serious concern. But when you’re talking hundreds of millions of dollars (or more) in question, it’s a life-or-death battle.
Secondly, and likely more significantly, the New York State Attorney General’s office is promising to look - closely- at the NRA and it’s 501c4 status. Since the National Rifle Association was chartered in New York state, anti-gun governor Andrew Cuomo and “activist” Attorney General Letitia James have an opening to pull back the curtain and question the NRA’s entire tax structure.
“Inurement” is a term apparently being bandied about the AG office in Albany. I’m no expert, New York is likely to take the position the NRA doesn’t qualify for its 501c4 status. The 501c4 designation is reserved for “social welfare” organizations. If, like Cuomo and James, you consider guns a menace- and make the reach that “gun violence” is a public health and societal issue- it’s not difficult to see that the NRA’s legal team will likely find itself defending not only challenges to its operations, but to its very charter as having anything to do with “social welfare”.
And the relationships between gun companies, their ownership and the NRA will also be held up to scrutiny.
It’s long been said that Ackerman’s billings have historically been, for lack of a better term, significant. A longstanding concern regarding appropriate oversight of those billings has also been the subject of debate among the NRA administration, Board and membership. Twenty years ago, the “Knox Rebellion” against NRA leadership focused on a lack of fiscal controls.
Today, former - and current- NRA Board Members tell me Ackerman still exerts “an inordinate amount of control” over the organization, primarily via the NRA’s “faces”.
There’s also a nasty fight between pro-Ackerman/LaPierre NRA Board Members and others who, putting it candidly, want Ackerman supporters on the board- and in the Virginia headquarters- gone. Otherwise, they warn, there’s major trouble ahead for the NRA with regulators.
Based on what I’ve heard from sources in Albany, New York, a housecleaning, needed or not, might not be enough to head off the challenge to the organization by activist politicians there.
Unfortunately, neither a court fight with Ackerman or a challenge to the organizations not-for-profit status won’t be limited to the $40 million billed by Ackerman in 2018. Look for more than three decades of billing to be scrutinized at some point.
Some damage has already been done. There’s surprise among the NRA’s five-point-two million members by the revelation that a majority of the NRA’s public “faces” are, in fact, Ackerman employees. “The NRA doesn’t even own NRA TV,” an incredulous friend and Life NRA member told me, “the NRA people like Dana Loesch and Colin Noir work for that agency, not the NRA.”
That’s true, but by itself not indicative of any impropriety. Ackerman provides similar services to other clients, not just the NRA. In exchange for building and maintaining the infrastructure, paying operating costs and employees, Ackerman charges a markup for said goods and services.
But the vines entangle even more in this situation. The lead NRA counsel in the lawsuit is related to a pair of Ackerman’s top officials. They’re not distant cousins, they’re in-laws.
In fact, the initial Wall Street Journal report on the lawsuit stated Ackerman told the NRA that the family connection meant the NRA counsel had an “irreconcilable conflict of interest” and that he had “demonstrated in words and deeds, his animus” for the company and his family members. It won’t be the last time we’ll hear “conflict of interest” in regards to this matter.
It’s one of those stories that all gun owners could do without.
It calls into question the motivations -and top management - of the largest organization championing the interests of all lawful gun owners, not just their five-million plus members.
Not all gun owners are NRA members, or approve of their sometimes ham-fisted, all lawful gun owners benefit from continued efforts to prevent passage of progressively more restrictive regulations on guns and legal gun ownership.
I’ve openly disagreed with them at times, but on the they’ve managed to protect gun rights, sometimes against apparently insurmountable odds.
And don’t be fooled, that continued success is the primary reason what would be otherwise treated as a private disagreement between client and service provider is getting mainstream attention.
The organization that is the National Rifle Association is under attack by anti-gun groups. Now it seems that goings-on inside the organization may create the opening anti-gun groups have been seeking -unsuccessfully - for years.
Are there real problems? Apparently.
But few organizations with five-million plus members and operating budgets in excess of three hundred million dollars per year are without schisms, factions and political machinations. Someone’s always looking to get ahead. That’s why oversight isn’t just important, it’s mandated by law. Without it, there are problems.
Is the National Rifle Association on the ropes? Don’t bet on it, although I wouldn’t bet against significant changes coming sooner than later.
But the groups looking to destroy the NRA mistakenly perceive the strength of the National Rifle Association as the management.
It’s not. It’s the membership. If the members decide enough is enough, things will change. If they also decide they’ve had enough of politicians trying to wipe out “their” organization, they’ll mobilize themselves. And five million plus motivated voters are enough to give any politician pause.
Will something calamatous happen during this week’s Annual Meetings & Exhibits?
Probably not. But don’t discount the potential for far more fireworks than usual, because emotions - on both sides- are running high. It’s not unrealistic to expect fireworks during the membership sessions. The people who attend the Annual Meetings and Exhibitions are the most ardent supporters of the organization- and the Second Amendment.
They’re not going to take any threat lightly.
Regardless of what happens, we’ll keep you posted.
—Jim Shepherd