National Rifle Association and Former PR Firm Have Tumultuous Weekend as Financial Scandal Widens

Gun Enthusiasts Attend NRA Annual Meeting In Indianapolis
Wayne LaPierre, NRA vice president and CEO, attends the NRA annual meeting of members at the 148th NRA Annual Meetings & Exhibits on April 27, 2019 in Indianapolis, Indiana. Scott Olson/Getty

The National Rifle Association and its estranged, former PR firm Ackerman McQueen have experienced one of the most contentious periods in their already fraught relationship, with a series of new legal filings, recriminations and diatribes loosing into the public square in recent days.

This latest period of turmoil began late Friday night, when the NRA—through its outside counsel Brewer, Attorneys & Counselors—filed an amended complaint in the group's ongoing lawsuit against Ackerman in federal court in Dallas. The new filing sought $40 million in damages for what the NRA portrayed as a campaign to conceal the alleged failure of its flagship streaming channel, NRATV.

The NRA accused Ackerman of repeatedly misleading it about NRATV's allegedly dismal metrics. These allegedly false representations formed the basis of the NRA's confidence and renewed investment in the program, which at one point topped $20 million annually.

Ackerman responded in a statement Monday, accusing NRA CEO Wayne LaPierre of stymieing a full audit of the channel's metrics. The firm says it "demanded that an outside firm audit NRATV performance," only to be met with refusal from LaPierre.

The NRA has already sued Ackerman multiple times in Virginia state court, alleging that the firm is failing to provide transparency in its bookkeeping and accusing it of fomenting a coup against NRA leadership. Ackerman has contended that many of the supporting documents the NRA is seeking—to justify invoices—first require underlying receipts from NRA executives who were the beneficiaries of such spending through Ackerman.

Ackerman alleges that this relationship was exploited by LaPierre to conceal invoices that he did not want to bill directly to the NRA, which risked greater public exposure and scrutiny.

The Dallas lawsuit was originally filed by the NRA in August to stop Ackerman from using its logos and NRA-branded content on their website as samples of client work. The complaint alleged that the NRA owns the intellectual property rights to such imagery and does not approve of Ackerman using it as a portfolio item.

The amended complaint now accuses Ackerman of violating the Lanham Act by improperly associating itself with the NRA through its public portfolio, which, according the NRA, falsely implies that they have a congenial relationship.

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A photo of former National Rife Association spokesperson Dana Loesch decorates a wall at the Kay Bailey Hutchison Convention Center during the NRA's annual convention May 6, 2018 in Dallas, Texas. LOREN ELLIOTT/Getty

The NRA's new claims widen the pair's disagreements about the performance of NRATV, which NRA leaders "found distasteful and racist," according to Friday's filing. One particularly notorious segment, cited by the NRA, depicted anthropomorphic trains from the children's TV show Thomas & Friends wearing Ku Klux Klan hoods.

Ackerman responded with vigor, issuing a rebuke that, like many of the barbs each side has lobbed against the other, invoke the wider maelstrom of scandal and character criticism that has defined the two groups' relationship since late last year.

"If the NRA wants to conduct a public conversation about distasteful and racist, they should consider their systemic behavior," a statement released by Ackerman on Tuesday reads. "This is the same executive leadership team and Board of Directors that refused to address the Philando Castile tragedy."

In a counterclaim first made weeks ago, Ackerman contended that LaPierre had not only expressed his enthusiasm for the performance of NRATV, but that he indicated he would continue to support the channel as chief of the NRA, even as he knew the non-profit would begin to unwind its relationship with Ackerman.

Ackerman's early-October filing sought $80 million from the NRA over allegations of fraud that it says caused the firm to incur expenses on the NRA's behalf, in addition to claims of defamation resulting from the NRA's continued use of the word "extortion" to describe Ackerman's behavior.

While both parties have continually sparred over who benefits from increased transparency—apparently seeking to show the court that they have engaged in no wrongdoing because they have nothing to hide—the NRA has specifically expressed concerns about what damage new revelations could do upon the group's reputation.

If Ackerman "continues to maliciously disseminate its confidential information, the NRA will be irreparably harmed," the NRA said in its amended complaint.

Ackerman's original counterclaim also brought to light new allegations about LaPierre's politics that it says provide insight into his decision-making and stewardship of the NRA. The filing says he "bristled" at the notion of backing then-candidate Donald Trump during the campaign, just ahead of the NRA's annual convention in 2016.

LaPierre was further described as expressing "cynicism" about Trump during the course of the campaign, allegedly planning counterprogramming to a Hillary Clinton administration. LaPierre allegedly called Trump's presidency, after the inauguration, a "Trump slump" on multiple occasions.

One of the odder facets of the two groups' falling-out—William A. Brewer III, the namesake of the NRA's outside counsel, is the son-in-law of now-deceased Ackerman co-CEO Angus McQueen and the brother-in-law of Ackerman CEO Revan McQueen.

Dana Loesch NRATV
Former NRA spokesperson Dana Loesch participates in a controversial NRATV segment which depicts characters from the children's TV show "Thomas & Friends" in KKK hoods. Screenshot

Ackerman, the firm, alleges Brewer was retained by the NRA to dismantle their longstanding relationship, which spans decades and has helped to define the gun-rights group as the nation's most vociferous (and often outspoken) embodiment of the Second Amendment.

Quoting a leaked memo written by former NRA President Lt. Col. Oliver North, a high-profile figure in the dispute over whom both parties have tussled, the Ackerman filing says that Brewer was brought on board "in connection with litigation... arising from the termination, or potential termination, of key corporate relationships." Ackerman interprets this language as a premonition about their business relationship.

Ackerman is the NRA's biggest vendor, earning more than $40 million from the gun-rights group in 2017. Part of their dispute over North involves his engagement as a host for NRATV. The NRA says it was duped over the nature of North's business relationship with Ackerman, presuming he was just a contractor. As an employee, he would have greater financial obligations towards Ackerman, potentially conflicting with his duties as an NRA officer. The NRA says it only learned that North was simultaneously an employee of Ackerman after months of wrangling over his contract.

However, Ackerman alleges that LaPierre himself was involved in negotiating North's contract, rebutting claims that the NRA wouldn't have been aware of his (potentially) dual loyalties.

"The NRA believes Ackerman McQueen breached its fiduciary duties, engaged in fraudulent billing, and failed to maintain adequate books and records—all in an effort to enrich itself at the expense of the NRA and its members," Michael J. Collins, partner at the Brewer firm, said in a statement. "The allegations reveal a pattern of corruption that included NRATV, a failed media enterprise the agency proposed, managed and sustained through misleading accounts of viewership and promised commercial viability."

Ackerman refused to concede that NRATV was a forlorn venture, saying the channel has been "anything but." In its statement on Monday, the firm accused the NRA of "pouring tens of millions of non-profit funds into lawyers and lawsuits to cover up the abject failure of executive and board leadership."

"They continue to contrive allegations that they are not currently proving and will continue to not be able to prove in any legal setting," Ackerman added. "Instead they grovel at the feet of the media they used to decry, hoping to create some spin for Wayne LaPierre."

The latest skirmish in the groups' dispute mirrors a similar debacle that unfolded in New York State Supreme Court earlier this month. The NRA and North had sued each other over a disagreement about whether the NRA was legally obligated to pay his attorneys' fees. Even though the lawsuits were narrowly tailored around New York's not-for-profit corporation law, the scene inside the courtroom quickly unfolded into a raucous debate about the wider scandal that has engulfed both parties: allegations of fraud, extortion, coups and deception.

National Rifle Association and Former PR Firm Have Tumultuous Weekend as Financial Scandal Widens | U.S.