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NRA Bankruptcy Case Dismissed By Judge, Heightens Risk For Group's Dissolution

NOEL KING, HOST:

A federal judge has ruled that the National Rifle Association cannot pursue bankruptcy. The NRA tried to use the bankruptcy process as a way to dodge New York officials who want to shut it down for alleged fraud and for misspending nonprofit funds. The court ruled that the NRA had not filed bankruptcy in good faith. NPR's Tim Mak has covered the NRA for years. He's on this one. Hey, Tim.

TIM MAK, BYLINE: Hey there.

KING: This sounds like trouble for the NRA. Is it?

MAK: I think it is. I mean, the National Rifle Association is facing the prospect of being shut down entirely. So last year, the New York attorney general sought a court's approval to shut down the nonprofit after an investigation found that the NRA had committed alleged financial misconduct in the tens of millions of dollars, often to the personal benefit of executives like its CEO, Wayne LaPierre. So to avoid that, the NRA tried to declare bankruptcy and move to Texas. The bankruptcy trial aired a lot of the NRA's dirty laundry and put into the record evidence of exotic trips, private jets and wedding expenses paid for by the gun rights group. And the federal judge ultimately decided that bankruptcy wasn't an appropriate way for the NRA to proceed forward. Here's what Attorney General Letitia James said following the bankruptcy judge's decision.

(SOUNDBITE OF ARCHIVED RECORDING)

LETITIA JAMES: The rot runs deep, which is why we will now return to New York courts and continue our case. No one is above the law, not even one of the most powerful lobbying organizations in the country.

MAK: So James said she anticipated a trial on that matter in 2022, where she'll be seeking penalties, restitution and even the dissolution of the NRA.

KING: OK. And so what is the NRA saying?

MAK: Well, the NRA put out a statement following the ruling saying that the group had taken steps to improve internal financial controls and they would continue to be a force in gun rights advocacy. Wayne LaPierre said that, quote, "although we are disappointed in some aspects of the decision, there is no change in the overall direction of our association." And he also added that, quote, "the NRA will keep fighting, as we've done for 150 years."

KING: Look, this is a group with a lot of adversaries, as you know. What are they saying about this ruling?

MAK: Well, gun control advocates who oppose the NRA looked upon the ruling as good news and a sign that the NRA won't be as effective in the future. Here's Everytown For Gun Safety President John Feinblatt talking about the bankruptcy.

JOHN FEINBLATT: The NRA has nothing to show for it but more lawyers bills, more embarrassing news clips and more reasons for their members to jump ship.

KING: And so as you've been digging into this, do you get the sense that Wayne LaPierre is going to keep his job as head of the NRA?

MAK: Well, it's really interesting. LaPierre has been the head of the NRA for nearly 30 years, and he remains really popular among many senior officials there. But he's lost some people, like Judge Phillip Journey. Journey is a NRA board member who's become a dissident. He explained during the bankruptcy trial how the NRA is run.

(SOUNDBITE OF ARCHIVED RECORDING)

PHILLIP JOURNEY: It essentially operated as a kingdom rather than a corporation.

MAK: Now, Journey goes on to say there that it operated specifically as Wayne LaPierre's kingdom. So the question is, given the centrality of LaPierre to some of these scandals, can the NRA emerge from their troubles without jettisoning him at some point?

KING: And I guess another question would be, how much does this weaken them in the near term?

MAK: One thing that's become pretty clear in this process, this very chaotic process, is that it's not the NRA as a group that is powerful when it comes to the gun control debate. It's the millions of members they represent. So even while the NRA has been in chaos, the debate over gun reform in Congress hasn't really moved. A lot of lawmakers remain terrified of crossing the NRA or its members. And so gun control legislation passed in the House is now stalled in the Senate. As for a replacement for the NRA, there's not really a clear successor if the NRA continues to struggle. Other gun rights groups in America are generally considered more hardline than the NRA, and their organizations are just a fraction of the size. What is clear is that the NRA is likely to be embroiled in controversy for a great deal longer.

KING: And you'll be covering it. And we appreciate it. NPR's Tim Mak. Thanks, Tim.

MAK: Thanks a lot. Transcript provided by NPR, Copyright NPR.