Journalist Chronicles The 'Power Struggle' Within The NRA

TERRY GROSS, HOST:

This is FRESH AIR. I'm Terry Gross. The NRA, which has, for decades, been regarded as an unstoppable, powerful, political force, is now being torn by internal conflicts. A power struggle at the top of the leadership came to a head last month at the NRA's annual convention. Leaked documents have revealed the CEO's extravagant spending on clothes and travel with the use of NRA money. The NRA is suing its own advertising PR company. Its revenues are falling, and its tax-exempt status is being investigated by the New York state attorney general. My guest is New York Times investigative reporter Danny Hakim, who has been writing about these and other issues regarding the NRA.

Danny Hakim, welcome to FRESH AIR. So last month at the NRA convention, a kind of civil war broke out. Paint a picture for us. What went on?

DANNY HAKIM: Well, a day or two before the convention started, Oliver North, who was the president of the NRA at the time, called an aide to Wayne LaPierre, who was the CEO - who is the CEO of the NRA, and said that LaPierre needed to resign. And if he didn't resign, a damaging letter was going to be sent to the NRA's board. It was going to expose LaPierre's spending practices - his spending of hundreds of thousands of dollars on clothing, on travel expenses, things of that nature. And if LaPierre did resign, North said he would make sure he had a comfortable retirement package.

LaPierre felt like he was being threatened. He felt like he was, basically, being extorted. And he told the board that he had no intention of resigning. This started to play out as the group's annual convention began, as President Trump was addressing the convention. And a few days of infighting followed. And Mr. LaPierre, who is a - you know, has been running the NRA for many years who's a veteran sort of infighter, prevailed. And Oliver North was ousted by the end of the convention.

GROSS: So Oliver North threatened to expose financial misspending within the NRA. And soon after, leaked documents exposing just that kind of thing were published on a website. So what were the documents revealing? What are some of the most telling things that were revealed?

HAKIM: Well, Mr. LaPierre spent about $275,000 at a clothing boutique in Beverly Hills.

GROSS: This is of NRA money, not of his personal money.

HAKIM: Well, it was billed to a contractor of the NRA, which is then, ultimately, paid by the NRA. He also spent about $260,000 on personal expenses, including air and limo charges for travel to the Bahamas, to Palm Beach, to LA, Budapest, Italy - places like that.

GROSS: And again, this was NRA-related money not his personal money.

HAKIM: Yes, that's right. That's right. You know, it was paid by the NRA contractor. But ultimately, you know, it's on the NRA's dime. So that - you know, those are the kinds of details that came out.

GROSS: And there's also questions about money that the NRA has given to executives.

HAKIM: That's right. Yeah, some of the other details were money that went to board members and high-ranking officials. So, you know, Marion Hammer, who's a board member, who's been a lobbyist for the NRA in Florida, got about 270,000 in consulting fees last year. Even, you know, Ted Nugent, the rock musician who's a board member, the NRA paid about $60,000 to advertise a hunting program that he's featured on. And then, you know, another NRA official made his shooting range available for a competition. The NRA spent more than $70,000 on that.

GROSS: So meanwhile, Oliver North threatened to expose the NRA's finances if Wayne LaPierre didn't step down. But there are questions surrounding how Oliver North was paid when he was president of the NRA. So let's talk about that for a minute because the president position was typically a ceremonial position where there wasn't any pay. And how much was Oliver North getting while he was president?

HAKIM: Well, LaPierre has said that he was making millions of dollars - that North was making millions of dollars a year from a contractor - Ackerman McQueen - to host a web show called American - I believe it was called "American Heroes." And LaPierre also said that even though he was being paid all this money, he didn't even deliver the shows he was supposed to. He was - the NRA only had three of the I think it was dozen shows he was supposed to appear in. But, yes, the contract was said to pay millions of dollars.

GROSS: Wayne LaPierre is making a very hefty salary, and it's increased a lot over the past few years. Can you tell us about his salary?

HAKIM: Sure. He makes around $1.4 million a year. In 2015, his total pay went over $5 million because of an early retirement payout. You know, and I think - you know, part of the question there is this is a tax-exempt group. And it has - it does have a - you know, for - as tax-exempt groups go, it has a fairly high cost structure. I compared it to, say - you know, if you look at the American Red Cross, which is another tax-exempt group, eight of the top officials at the NRA are paid more than the American Red Cross's chief executive. And the American Red Cross is something like 10 times the revenue of the NRA. So as the NRA comes under financial pressure - and it's clearly been under some amount of financial pressure - I think questions, you know, are natural to be raised about its cost structure.

GROSS: Well, the NRA's tax-exempt status is being challenged right now in New York. The NRA was chartered in New York, so the New York state attorney general has some power here. What is she, Letitia James, investigating regarding its tax-exempt status?

HAKIM: Well, I think there's a few principal areas of inquiry. One will be any potential benefits that executives like Mr. LaPierre or any other high-ranking executives might be getting from contractors or from any kind of other sort of transactions - outside transactions that might benefit them.

You know, one of those transactions that we reported on was, you know, one of the NRA's top officials had a stake in a production company that was paid millions of dollars by the NRA to produce a TV show. There's specific rules about - tax rules about key officials - decision-making officials at tax-exempt groups and the fact that they're not supposed to be getting benefits for the decisions they make. So, you know, any time you have a top official of a tax-exempt group getting benefits - personal benefits from transactions of that tax-exempt group, that's going to attract attention from investigators.

GROSS: But there's also the question of, is the NRA improperly transferring money from its charitable arm to its political arm? Tell us about that.

HAKIM: Sure. So the attorney general of New York is also looking at the charitable foundation. They sort of - they sent separate letters to the NRA and the foundation. Now, what - you know, what I've found in some of my reporting is that the charitable foundation has transferred or moved about $206 million to the NRA since 2010, which is a fair amount of money. Now, the way the charitable foundation is set up, you can make tax-deductible donations to the charitable foundation. You cannot make tax-deductible donations to the NRA itself because the NRA engages in lobbying and political activity. That's the way our tax laws are set up.

So a lot of groups - the tax exempt groups that undertake political activity have an affiliated charity, but you have to be very careful about how you move money between one and the other. And so what I found in my reporting is that the amount of money moving from the charity to the NRA itself has gone up pretty sharply over the years. And especially, you know, in the last few years, the NRA has seemed to be relying more on that charity for financial support.

GROSS: How is the money moving from the charitable arm to the NRA?

HAKIM: Well, I found at least four ways that that's happening. And, again, there could be more. It's not always - you know, it's not always clear. But there are outright transfers of - for charitable purposes. So someone will make a charitable donation to the foundation, and then it will be transferred to the NRA ostensibly to run a charitable program. The size of those transfers has really gone up sharply. It's now about $19 million a year moving from the foundation to the NRA for those purposes. Now, a second way money is moving is that when the NRA originally set up the foundation, it said it wouldn't charge the foundation for office space or staffing. Well, over the last several years, it has started charging for office space and staffing - now charges more than $6 million a year for that. So that's a second way the money's moving.

A third way is in 2017, when the NRA had nearly tapped out a $25 million line of credit, they just took out a $5 million loan from the foundation. And then there's also some kind of endowment that's been built up at the foundation that the NRA also draws from. So those are at least four different ways I've found that the money is moving between the two.

GROSS: So is the NRA's tax-exempt status at risk because of this New York state attorney general investigation?

HAKIM: That's hard to answer. I mean, I think the attorney general in New York can take any number of steps - remedies - seek any number of remedies in court when it investigates a tax-exempt group. Certainly, revoking the tax-exempt status could be one. You know, in the case of the Foundation of Donald Trump, it took an even more - you know, an even tougher step. That foundation is being shut down. It can also go to court to seek changes in management, changes to the board. So the attorney general in New York dealing with a tax-exempt group set up in New York really has a wide range of potential remedies that the office can see.

GROSS: But if they lost their tax-exempt status, how punishing would that be?

HAKIM: Well, that would be very punishing. I mean, that would really constrain the group's financial resources. Obviously, if you have to start paying taxes, that changes your whole financial profile.

GROSS: If you're just joining us, my guest is New York Times investigative reporter Danny Hakim. We'll talk more about the NRA after we take a short break. This is FRESH AIR.

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GROSS: This is FRESH AIR. We're talking about the NRA and a kind of civil war within it with Danny Hakim, who's an investigative reporter for The New York Times.

Another area in which the NRA is embattled right now is the NRA is suing the PR and advertising company that it's used for decades, Ackerman McQueen. And the NRA's saying Ackerman McQueen has refused the NRA's request to turn over financial records pertaining to its work with the NRA. Tell us more about the relationship between the NRA and Ackerman McQueen. What has Ackerman McQueen done for the NRA over the years?

HAKIM: These two organizations have really been intertwined. The Ackerman has given the NRA its voice for decades, going back to the I'm the NRA campaign of the 1980s. They also worked a lot with Charlton Heston, who was the, you know, the NRA's celebrity president of the era. And the two organizations have just worked very closely together. Wayne LaPierre's wife has worked for Ackerman. A lot of employees have gone back and forth. It's just a very sort of central organization to - the NRA's whole messaging.

GROSS: And Ackerman created NRATV, which is a streaming channel on the web - very controversial, very, very far right. Tell us some of the more extreme things that have been said or shown on that channel.

HAKIM: Well, yeah, and Ackerman not only created, they operate NRATV. But, you know, the kinds of things that appear on there, you know, they'll go, you know, far beyond sort of gun issues. They've attacked sort of black lives matter. They've, you know, attacked President Obama. He was called a fresh-faced flower child president on there. They've called for a march on the FBI. I think the most notorious episode was a - there was one show that depicted the trains from the kids program "Thomas & Friends" in KKK hoods. And that was even too much for some of the NRA board members.

GROSS: Why were the "Thomas" trains in KKK hoods?

HAKIM: I think they had some kind of problem with the show trying to diversify some of the trains. So I guess they were trying to be funny or something. And so that's what led to that. I guess I don't want to try to diagnose it too much more than that. But, you know, I even had some board members going on the record, you know, months ago expressing outrage about that.

GROSS: So the NRA is suing Ackerman because Ackerman won't turn over related financial records - financial records related to the NRA. Why wouldn't they turn it over?

HAKIM: Well, the fear, you know, among some NRA officials is that they've been getting overbilled. Otherwise, why wouldn't Ackerman just turn over its financial records of, you know, its - you know, one of its most important clients? That's the only thing they can figure. Ackerman has disputed that their - you know, they say they have turned over key records. But that's what the NRA is really worried about - that they've been getting overbilled.

GROSS: One of the things that the NRA wanted from Ackerman was the metrics to see, like, how many people are actually watching NRATV? Ackerman didn't turn over the metrics, but you tried to find out what the metrics were. What did you learn?

HAKIM: Right. I mean, I went to Comscore, which is a company - a well-known company that tracks web traffic. And what I found is that the NRA's TV traffic is really very small. In January, they had just 49,000 unique visitors, which is a very small number. And that - I mean, I think the NRA has had some sense that the numbers weren't good. And so the kind of terms I hear from them are, you know, what's our return on investment? You know, we are spending - you know, $40 million a year is being sent to Ackerman McQueen. A lot of that's going to fund this NRATV operation. Is this really a good investment of our money?

GROSS: So if the NRA is in conflict now and is, in fact, suing its own marketing advertising PR company, what's the larger significance of that in terms of the future of the NRA?

HAKIM: Well, a few things. First of all, it looks like the, you know, the relationship between the two organizations is probably untenable at this point, which means that the future of NRATV, which has really become the voice of the NRA, is in some doubt. And, you know, I can't say what that future is or isn't. But it's hard to see Ackerman, which operates NRATV, continuing to do so for much longer. But beyond that, this whole feud between these two organizations has really opened up the NRA to a lot of exposure at a time when they're under investigation in New York. And they probably don't want, you know, a lot of these details coming to the surface, so it holds potential threats for the NRA in this investigation into their tax-exempt status. And, obviously, being tax-exempt is quite an advantage for any organization, so that's something they'll want to protect.

GROSS: I think there's bound to be leadership changes at the NRA. Wayne LaPierre - I don't know how old he is, but he's been the CEO for decades. And, you know, his leadership was threatened by Oliver North. Wayne LaPierre won. but still, things are so in conflict now within the NRA, and he's bound to retire sometime soon. Any sense of what direction the NRA might head post-Wayne LaPierre?

HAKIM: Well, Chris Cox, the number two is, you know, is sort of part of a younger generation of leadership. And I think he's - he would be anticipated to take over whenever LaPierre does eventually step down. You know, the question is, you know, do they continue to push beyond Second Amendment issues? I think there's clearly been some discomfort within the organization about doing that - you know, sort of effectively creating their own sort of web version of Breitbart. Is that really the direction they want to go? So, you know, I think there's a chance they could pull back on that. Do I see them becoming less assertive or less aggressive on gun issues? No. I really don't see, you know, much change on their core issues.

GROSS: My guest is New York Times investigative reporter Danny Hakim. We'll talk more about the NRA after a break. TV critic David Bianculli will look ahead to tonight's live broadcast recreating episodes of two vintage Norman Lear sitcoms - "All In The Family" and "The Jeffersons." And Kevin Whitehead will review Branford Marsalis' new album. I'm Terry Gross, and this is FRESH AIR.

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GROSS: This is FRESH AIR. I'm Terry Gross. Let's get back to my interview with New York Times investigative reporter Danny Hakim about the turmoil in the NRA. A power struggle at the top led to last month's ouster of the organization's president, Oliver North, and the reelection of its longtime CEO, Wayne LaPierre. Leaked documents have revealed LaPierre's extravagant spending on clothes and travel with the use of NRA money. The NRA is suing its own advertising PR company. The NRA's revenues are falling. And its tax exempt - status is being investigated by the New York state attorney general.

Was it LaPierre who took the NRA from being basically, like, a sporting - you know, a sporting group and gun education group to becoming this big political force?

HAKIM: Well, yeah. He's been a central figure in that. I wouldn't say he's the only one. But in the late '70s, you know, one of the last sort of battles like this the NRA had - you know, there was actually - there was a movement within the NRA, within the leadership, to just sort of pull back from Washington fighting and become, you know, a really different kind of organization that wasn't nearly so political. That led to a, you know, another civil war within the group, and the end result of that was the direction we've seen since then, since the late '70s, where the NRA has become a very political organization.

GROSS: Do you have any idea how aware the NRA membership, the dues-paying membership, how aware they are of these battles happening within the NRA and the investigations into the NRA, from - you know, from New York State? And if they are aware of it, do you have any idea of how it's affecting the morale of the membership?

HAKIM: You know, I think that's a little hard to tell. You know, I was out at the convention. There - you know, I - there were a lot of members. You know, I went to a members meeting, and you know, there were strong feelings on various sides. You know, and then a lot of other people were there just to see the guns. I mean, there were, you know, 15 acres of guns, you know (laughter), on the display floor there. So it's a little hard to tell. I mean, there are - you know, there are a lot of sort of loud voices within the NRA on the various sides. It does seem like LaPierre had a fair bit of support. I mean, he's really - he's been there for a long time.

The NRA has - you know, they've accomplished a lot for - you know, to protect what a lot of its members see as critical gun rights. So I do think he has a fair bit of support. Obviously, you know, when these revelations come out about his, you know, spending, you know, 270-some thousand dollars at a Beverly Hills boutique, I don't - you know, I don't get the sense that that's necessarily in line with what a lot of sort of the rank-and-file members might think is appropriate. But it seems like a ways from him being threatened at the moment.

GROSS: NPR recently reported that staff members within the NRA are complaining about low wages, pension problems and a culture of fear within the NRA, and that the organization treats ordinary staff very differently than its leadership. Have you noticed anything like that? Have you been reporting on that yourself?

HAKIM: The pension fund is underfunded. They've been sort of making all sorts of cuts to the other staff, other sort of lower-level staffers at the agency, at the NRA. You know, and even - there's even been reports about, like, cutbacks to, like, coffee, you know (laughter), and things that small. So I think there is definitely - and I've talked to lower-level staffers that have been - that are rankled by, you know, and angry about the spending practices at the top.

GROSS: So one of the issues that Oliver North raised when he was still president of the NRA was that the NRA had spent $24 million in legal bills, in legal fees paid to its outside attorney. So that's - that was an exorbitant amount of money. So what - have you investigated that, like, what looks possibly suspicious about that?

HAKIM: I mean, he - I think that - you know, one of the figures that he put out there to the board was that the - you know, the NRA's spending something like almost $100,000 a day, over a year, on its law firm, on this outside law firm. He wanted a review of all the firm's billing practices. Now, again, this is the law firm that has led the lawsuit, the NRA's lawsuit, against the contractor that he works for. So, you know, from the NRA's...

GROSS: That Oliver North works for.

HAKIM: That Oliver North works for. So from the NRA's side, they see this as just, you know, he's sort of doing the bidding of this contractor that he works for. You know, Mr. North says, you know - the way he portrayed is, this is a lot of money for anybody (laughter) to be spending on an outside law firm.

GROSS: It all seems so incestuous, you know. So, like, Oliver North, who was president, had a contract (laughter) with the PR advertising company. The lawyer is the son-in-law of the CEO of the advertising company, the lawyer who's - (laughter) who's representing the NRA.

HAKIM: He's the brother-in-law of the CEO and the son-in-law of the co-founder, I think (laughter).

GROSS: Right. And so meanwhile, he's representing the NRA against (laughter) the advertising company. So they're all - they all have these, like, strange, interconnecting conflicts of interest here. And I guess what seemed like what was going to be really good for them, to have these interconnecting ties - really, (unintelligible) - has coming up to kind of bite them in the behind.

HAKIM: "Game Of Thrones" situation.

GROSS: (Laughter).

HAKIM: Yeah. I mean, it gets - yeah, I mean, it could work well, but - you know, but then if you start fighting with each other, then the problem is everybody knows everybody else's secrets. So it's - yeah, it's become a very ugly situation.

GROSS: So let's sum up here. I mean, the NRA is kind of involved in messes on - like, from every angle. So to sum up, we've got - there was the New York State Department of Financial Services investigation; the New York state attorney general investigation, which is ongoing; you had the fight between the president and the CEO of the NRA, a fight between the NRA and its own advertising firm, a fight between that advertising firm and the NRA's outside lawyer. Its tax-exempt status is at stake right now. That's - there's a lot going on that's really kind of not good for the NRA.

HAKIM: That's right. And there's another problem on top of that, which is Donald Trump. Now, you'd think there's probably been very few presidents that are stauncher supporters of the NRA than Donald Trump, but the NRA has always operated in this odd situation where when a Republican or, you know, a firm gun supporter occupies the White House, its membership can get somewhat complacent. And its dues right after Trump was elected fell to their lowest level in half a decade. So that's an additional financial pressure they have, that even as Donald Trump is, you know, putting in place Supreme Court justices and other judges that they like, their membership dues have been on the decline. And their revenue has been falling. So that's an additional financial stress that they're facing.

GROSS: Why is the NRA's membership revenue declining?

HAKIM: I think for a lot of members, they feel less threatened now that Trump is in office. Part of the NRA's marketing savvy over the years has been to find an enemy and sort of use an enemy, like, whether it's Hillary Clinton or Barack Obama, to rally against. And they - you know, I think a lot of NRA insiders have told me that, you know, Hillary Clinton - obviously, they did not support Hillary Clinton in any way, but had she won, she would have been a boon in some ways to the NRA because they could have - they felt like they could have raised a lot of money if she had been president.

GROSS: What about the role of anti-gun violence groups who have become very active and have been very successful in fundraising? You say that some of them are - if you add them up, they're outspending the NRA. So what impact is that having on the NRA?

HAKIM: Well, that's just putting a new kind of pressure on the group that really hasn't existed to this extent before. And, you know, in the midterms, those groups outspent the NRA. And there's different ways you can count. But even the NRA didn't dispute that, that they were outspent in the midterms. And that just doesn't happen really. So that's really putting a lot of pressure on the NRA, particularly at the state level where a lot of these fights are happening now. So, I mean, obviously, the NRA is still getting wins in red states on gun policy issues. And, you know, the gun control groups are getting wins in blue states. But, you know, there's more battles being fought now in some of the - you know, in some of the purple states, in the battleground states, both on policy issues and in political campaigns. And those are much more even battles than they have been in the past.

GROSS: Danny Hakim, thank you so much for talking with us.

HAKIM: Thank you, Terry. Thank you for having me on.

GROSS: Danny Hakim as an investigative reporter for The New York Times. After we take a short break, jazz critic Kevin Whitehead will review the new Branford Marsalis album. This is FRESH AIR.

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