The National Rifle Association (NRA) has averted facing another civil trial after reaching a settlement with Washington, D.C., Attorney General Brian Schwalb, who criticized the group's charitable branch as an "unchecked piggy bank."
Schwalb's office sued the NRA and its charity, the NRA Foundation, for allegedly misusing millions of tax-deductible donations to compensate for the organization's waning funds. Trial for the suit was scheduled to begin on April 29, roughly two months after a New York jury found the NRA and its former CEO liable for financial misconduct in a separate civil case.
"Donors are entitled to know that their charitable contributions will be used in furtherance of a nonprofit organization's stated charitable mission," Schwalb, a Democrat, said in a statement following Wednesday's settlement.
"The NRA Foundation—the charitable arm of the NRA—violated this sacred public trust, allowing the NRA to use them as an unchecked piggy bank," the attorney general continued. "Caving to pressure from the NRA, the Foundation diverted millions of dollars to the NRA in grants and risky loans that were repaid only after [the attorney general's office] filed its lawsuit."
Former NRA chief executive Wayne LaPierre was found liable of misspending millions of the organization's money in February after facing a lawsuit from New York Attorney General Letitia James. Prosecutors accused LaPierre of using the money for expensive vacations and lavish travel means.
The jury in the case also found that the NRA had failed to properly manage its assets and that it had misrepresented information in tax filings. The gun rights group was also found liable for violating whistleblower protections.
LaPierre was ordered to pay $5.4 million in damages in connection to the case. The NRA faces $4.4 million in penalties.
The settlement on Wednesday requires a thorough oversight of the NRA Foundation's operations and extensive changes within the group to "ensure that the Foundation operates independently from the NRA and fully complies" with D.C. nonprofit laws, according to Schwalb's office.
In a statement to the New York Times on Wednesday, the NRA characterized its settlement as a victory, claiming that it had proven that all of the funds taken from its foundation "were applied exclusively in furtherance of its charitable programs and that there was no misuse."
NRA President Charles Cotton also called Schwalb's lawsuit a "political attack." Newsweek reached out viaemail to the organization's press office for more information late Wednesday evening.
Conditions of the settlement require the NRA Foundation to conduct annual nonprofit compliance training and establish an audit committee "to ensure Foundation's financial affairs are in order and work with an external auditor," read Schwalb's release. Under D.C. law, violations of the district's nonprofit statute do not authorize the collection of penalties.
"Tax-exempt nonprofits are a form of public trust—abusing that trust as the NRA did violates both the public interest and District law," the district attorney continued in his statement. "Today's outcome builds on our longstanding commitment to safeguarding nonprofit donors' money and ensuring that all nonprofits operating in the District of Columbia follow the law."
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Kaitlin Lewis is a Newsweek reporter on the Night Team based in Boston, Massachusetts. Her focus is reporting on national ... Read more
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