National Rifle Association (NRA)

CharityWatch has issued a "?" rating to the National Rifle Association (NRA) for its fiscal 2021 reporting year due to our concerns related to its governance practices and the NRA's bankruptcy filing that was still pending during a portion of 2021, both of which may impact the reliability of the NRA's financial reporting. CharityWatch has also issued a Governance Exception to the NRA due to the multiple incidents of excess benefit transactions (described in the fiscal 2020 and 2019 IRS Form 990, Schedule L disclosures, as cited separately, below), and due to the pending legal action against the organization by the New York State Attorney General.

Please read Related CharityWatch Articles for additional information.

As previously reported, the Excess Benefit Transactions reported in the NRA 2020 tax filing included:

"The National Rifle Association has identified what it believes are excess benefit transactions in which it engaged in 2019 and in prior calendar years of which it became aware but were not reported on its prior Forms 990. These transactions are explained below. There are other transactions in 2019 and prior calendar years that are still under review by the NRA and/or are currently subject to dispute in [certain] legal proceedings...

"The NRA cannot at the time this Form 990 is filed determine whether these other transactions [subject to the legal proceedings listed] are excess benefit transactions" (IRS Form 990, Schedule L, Part V re: Part I - 1).

The individuals, dollar amounts, and other information the NRA reports in connection with excess benefit transactions includes the following:

1)  Excess Benefit Transactions for "Personal Transportation" involving Wayne R. LaPierre (Officer): 

"It has been determined that in 2013 and 2014, there were six (6) trips on chartered jets that resulted in an excess benefit to Mr. LaPierre. Mr. LaPierre was, during those years, the Executive Vice President and Chief Executive Officer of the NRA... The NRA estimates that its expenses for these trips, which constitute automatic excess benefits to Mr. LaPierre because these amounts were not intended to be compensation, totaled $43,743.83, for which the NRA expects to receive reimbursement from Mr. LaPierre plus interest. The NRA estimates that the total...excise tax on these excess benefit transactions is $10,935.96" (IRS Form 990, Schedule L, Part V re: Part I - 2).

2)  Excess Benefit Transactions for "Personal Transportation" involving Wilson "Woody" Phillips (former Officer): 

"From 2014 through 2018, Mr. Philips was submitting and receiving reimbursements from the NRA for airfare from his home in Dallas, Texas to Washington, D.C. Mr. Phillips served as Treasurer and Chief Financial Officer of the NRA... If these trips constitute commuting (which the NRA is presently investigating), the NRA believes such reimbursement would constitute excess benefit transactions. The total amount reimbursed by the NRA to Mr. Phillips from 2014 through 2018 is estimated to be $74,751.31, which would generate...excise tax due from Mr. Phillips of $18,687.83. The NRA is currently unaware as to whether Mr. Phillips intends to repay the amount of any excess benefit transactions, plus interest" (IRS Form 990, Schedule L, Part V re: Part I - 2).

3)  Excess Benefit Transactions for "Cosmetics" involving Susan LaPierre: 

"The NRA has learned that from 2016 through 2018, the NRA paid for expenses incurred for professional makeup and hair services in connection with the attendance of Mrs. Susan LaPierre at certain NRA functions. Mrs. LaPierre is a disqualified person... Professional makeup and hair services may not be deductible as a trade or business expense if paid by Mrs. LaPierre, and as such, may be excess benefit transactions. The NRA is investigating the circumstances, number of times and cost of professional makeup and hair services for Mrs. LaPierre. The NRA expects to receive reimbursement from Mrs. LaPierre, plus interest, if it is determined that there is an excess benefit" (IRS Form 990, Schedule L, Part V re: Part I - 3)

4)  Excess Benefit Transactions for "Gifts" involving Wayne LaPierre (Officer) and Susan LaPierre:

"The NRA has learned that from 2011 through 2017, Wayne and Susan LaPierre have been reimbursed by the NRA for gifts provided to NRA vendors, donors, and employees, and perhaps others, apparently related to furthering the charitable purpose of the NRA. Because many of the gifts made to non-NRA employees were in excess of the $25 per donee business gift deduction limitation, the NRA believes the excess amount likely constitutes automatic excess benefits to Mr. LaPierre because these amounts were not intended to be compensation. At this time the NRA cannot calculate the exact amount of any such excess benefit. The NRA expects to receive reimbursement from Mr. LaPierre, plus interest, for amounts exceeding $25 per gift, per donee" (IRS Form 990, Schedule L, Part V re: Part I - 4).

5)  Excess Benefit Transactions for "Auto Leases" involving John Frazer (Officer), Wilson Phillips (former Officer), and Wayne LaPierre (Officer): 

"The NRA has learned that in 2019 and prior years, certain employees obtained an economic benefit indirectly from the NRA when they purchased vehicles that had previously been leased to the NRA from a third-party commercial leasing company at prices that were less than their fair market value. Some of the employees who purchased the previously leased vehicles were disqualified persons. At the termination of a vehicle lease, the NRA had the opportunity to sell the vehicles at auction, pay the leasing company the contracted termination value, and retain any excess proceeds. The NRA did not own the vehicles itself, and it did not sell the vehicles to the employees directly; therefore, the vehicle purchases were not direct excess benefit transactions. The NRA believes that following disqualified persons may have engaged in indirect excess benefit transactions when they availed themselves of (or allowed a relative) the opportunity to purchase previously leased vehicles from the leasing company at prices that were less than their respective fair market values:

1.  John Frazer; year of transaction: 2018; excess benefit: $13,118; estimated excise tax: $3,279.50. 
2.  Wilson Phillips; year of transaction: 2019; excess benefit: $10,208; estimated excise tax: $2,552. 
3.  Wayne LaPierre; year of transaction: 2019; excess benefit: $3,653; estimated excise tax: $913.25. 

"Mr. Frazer has repaid this excess benefit to NRA, plus interest and therefore the excess benefit has been corrected. The NRA expects to receive reimbursement from Mr. LaPierre, plus interest. The NRA is currently unaware as to whether Mr. Phillips intends to repay the amount of any excess benefit transactions, plus interest" (IRS Form 990, Schedule L, Part V re: Part I - 5).

6)  Excess Benefit Transactions involving Joseph P. DeBergalis, Jr. [updated from 2019 reporting]:

"On Schedule L of its 2019 Form 990, the NRA reported that Mr. DeBergalis, a former NRA Director who has been an NRA employee and, later, Officer from January 25, 2107 to the present, may have used business class travel paid for by the NRA without authorization, which may have constituted excess benefit transactions. After further review of NRA records, it appears that Mr. DeBergalis had, in fact, received the appropriate approval in September 2018... Therefore, no excess benefit transactions occurred with respect to Mr. DeBergalis" (IRS Form 990, Schedule L, Part V re: Part I - 6).

7)  Excess Benefit Transactions involving First Class Travel and Entertainment:

"On its Form 990 for 2019, the NRA reported that it was reviewing NRA board members' use of first class or business class travel in 2019 or earlier years. Based on review of available records to date, the NRA believes that such travel was for legitimate business purposes and did not constitute excess benefit transactions. In 2021, the NRA adopted comprehensively revised travel policies and procedures to prevent unauthorized upgrades" (IRS Form 990, Schedule L, Part V re: Part I - 7).

As previously reported, the Excess Benefit Transactions reported in the NRA 2019 tax filing included:

1)  Joshua Powell, from 2016 through January 30, 2020 served the NRA as Executive Director of General Operations, Chief of Staff, and Senior Strategist: "...The aggregate excess benefit determined to be provided to Mr. Powell from 2016 through 2019 was $54,904.45. ... The NRA has rejected the check [tendered by Powell to the NRA for $40,760.20, in purported full settlement], so correction of the excess benefit has not yet been made. ... The amount of excise tax due...by Mr. Powell is determined to be $13,726.11. In addition, the New York State Office of the Attorney General has challenged, as unreasonable, compensation paid to Mr. Powell during the period from 2016 through 2019" (IRS Form 990, Schedule L, Part V re: Part I, line 1 - 1b).

2)  Christopher Cox, from 2002 through June 26, 2019 served as Executive Director of the NRA's Institute for Legislative Action (ILA) and was also an officer of the NRA: "...To date, the aggregate excess benefit from 2015 to June 26, 2019, determined to be provided to Mr. Cox is in excess of $1 million, which the NRA is seeking to recover. This is being disputed by Mr. Cox... The NRA believes that the amount of excise tax due...by Mr. Cox would be approximately $328,001.50" (IRS Form 990, Schedule L, Part V re: Part I, line 1 - 2).

3)  David Lehman, from 2002 through September 13, 2019 served as Deputy Executive Director: "...Upon information and belief, from 2015 to September 13, 2019, Mr. Lehman caused the NRA to pay for personal travel, club, and meal expenses in the aggregate amount of at least $87,595.83. The NRA has not yet completed its investigation of the extent to which Mr. Lehman may have received improper benefits, but if such expenses are substantiated, they were likely not approved nor intended to be compensated to Mr. Lehman by the NRA, and would thus likely constitute automatic excess benefits..." (IRS Form 990, Schedule L, Part V re: Part I, line 1 - 3).

4)  Wayne LaPierre, Executive Vice President and Chief Executive Officer of the NRA: "...From 2015 through 2019, the NRA estimates that it paid on behalf of Mr. LaPierre, directly or indirectly, travel expenses...in the aggregate amount of $299,778.78. The NRA has determined to treat the payments as automatic excess benefits... Mr. LaPierre has repaid this excess benefit to National Rifle Association, plus interest, and therefore the excess benefit has been corrected. The amount of excise tax due...by Mr. LaPierre has been estimated to be $74,944.70. In addition, the New York State Office of the Attorney General has challenged, as unreasonable, compensation paid to Mr. LaPierre during his tenure" (IRS Form 990, Schedule L, Part V re: Part I, line 1 - 4).

5)  Wilson Phillips, from 1993 through September 13, 2018 served as Treasurer and Chief Financial Officer of the NRA: "...The New York State Office of the Attorney General has alleged that compensation paid to Mr. Phillips during and after...his tenure was unreasonable" (IRS Form 990, Schedule L, Part V re: Part I, line 1 - 5).

6)  John Frazer, from 2015 through the present served as Secretary and General Counsel of the NRA: "...The New York State Office of the Attorney General has alleged that compensation paid to Mr. Frazer has been unreasonable" (IRS Form 990, Schedule L, Part V re: Part I, line 1 - 6).

7)  Oliver North, served as President of the NRA at times in 2018 and 2019; within the five prior years, he was also a voting member of its Board of Directors: "...Upon information and belief, during certain times in 2018 and 2019, Mr. North was employed by Ackerman McQueen, Inc. ('AM'), a third-party vendor of the National Rifle Association, to host a television show produced by AM. During the same period, AM invoiced the NRA for a variety of expenses which are now the subject of litigation, but are believed to have included salary, benefits, and related perquisites furnished by AM to North in connection with North's employment by AM. NRA paid all of these invoices to AM. Such payments may constitute an indirect benefit from National Rifle Association to Mr. North. ... The NRA has reason to believe that North failed to perform the services for which he had been contracted by AM, and for which he may have been indirectly compensated by the NRA. If that is true, then all or part of North's compensation by AM, paid indirectly by the NRA, would constitute an excess benefit..." (IRS Form 990, Schedule L, Part V re: Part I, line 1 - 7).

8)  Joseph P. DeBergalis, Jr., from 2015 through early 2017 was an NRA Director; from January 25, 2017 to the present, has served as an NRA Executive and Officer, including as Executive Director of General Operations: "...The NRA is currently reviewing whether Mr. DeBergalis may have used business class travel without authorization required under the NRA's travel policy. At the time of filing, the NRA is unable to estimate the amount of excess costs incurred, if any. If such expenses are substantiated, they were likely not approved nor intended to be compensated to Mr. DeBergalis by the NRA, and would thus likely constitute automatic excess benefits..." (IRS Form 990, Schedule L, Part V re: Part I, line 1 - 8).

9)  Board Member Travel: "The NRA is currently reviewing whether in 2019 and prior years, various board members may have used first class or business class travel without authorization required under the NRA's travel policy. At the time of filing, the NRA is unable to estimate the amount of excess costs incurred, if any. ... If such excess costs are substantiated, they would thus likely constitute excess benefits..." (IRS Form 990, Schedule L, Part V re: Part I, line 1 - 9).