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Guns and money: Calls mount to probe NRA finances

Alan Berlow for Yahoo News
April 29, 2015


A leading national gun safety group, joined by members of Congress, is calling for investigations of the National Rifle Association’s fundraising practices and finances in response to a Yahoo News investigation published last week.

The Coalition to Stop Gun Violence (CSGV) has launched a nationwide petition campaign asking the Federal Election Commission and the Internal Revenue Service to investigate “violations of federal law” by the National Rifle Association.

The petition drive cites the Yahoo News report which disclosed that the NRA had violated multiple provisions of the Federal Election Campaign Act, failed to report its political expenditures to the IRS for six consecutive years, and appears to have avoided paying federal taxes.

CSGV spokesman Ladd Everitt called the NRA violations “hugely significant.” Everitt said his goal was to press the two federal agencies responsible for enforcement of tax and election laws to “launch investigations into the NRA’s fraudulent activities immediately.” The CSGV is made up of 48 organizations, among them religious, social justice, political and child welfare groups.

Yahoo News reported that the NRA misled prospective donors by telling them that money was being raised to support the tax-exempt operations of the organization when the money was, in fact, deposited to the account of its political action committee. Federal law — as well as multiple state laws — requires that fundraisers explicitly inform donors who the beneficiary of a contribution will be.

“If donations have been used to support candidates or causes with deception to the donors, there is a likely violation of law,” said Sen. Richard Blumenthal, D-Conn., a former Connecticut attorney general. “NRA donors deserve to know where their donations are going without any misinformation, and the solicitations described by Yahoo News merit scrutiny.”

Federal law also bars organizations like the NRA from raising funds for their political action committees (PACs) from the general public, and from using publicly accessible websites to finance their PACs. Tax-exempt corporations like the NRA are only allowed to solicit from their members. The NRA violated all of these provisions of the Federal Election Campaign Act in soliciting contributions during the 2014 elections.

Responding to the Yahoo News report and the CSGV petition drive, Rep. Mike Thompson, D-Calif., said, “Everyone needs to play by the same set of rules. If the evidence reported is true, the FEC and IRS should conduct a full and thorough investigation into its [the NRA’s] fundraising and reporting activities.” Thompson, the chairman of the House Gun Violence Prevention Task Force, said, “Many Second Amendment supporters and responsible gun owners contribute to the NRA because of the work it does to promote gun safety and support the hunting community. They have a right to know whether their money is going to these causes or to Beltway-NRA political efforts that undermine common-sense laws designed to keep criminals, domestic abusers and the dangerously mentally ill from getting guns.”

Thompson was referring indirectly to the NRA’s support for candidates who backed its successful 2013 campaign to thwart expanded background checks for gun purchases. The measure died in the U.S. Senate.

The CSGV’s petition notes that NRA executives — including Chris Cox, who heads both the NRA lobbying arm, which solicited the donations, and the NRA political action committee, which deposited the funds to its account — had yet to comment on the findings in the Yahoo News report. “They apparently believe they are above the law. They are not, and it’s time to hold them accountable.”

The NRA also failed to respond to a request for comment on the CSGV petition.

Rep. Elizabeth Esty, D-Conn., whose district includes the Sandy Hook Elementary School where 26 children and adults were shot to death in 2012, said her office had heard from advocacy groups about the issues raised in the Yahoo News report. “I join with gun safety advocates in calling for an immediate and thorough investigation,” she said. “The NRA is not above the law.”

The NRA has twice been challenged by the FEC for illegally moving corporate funds to its PAC. In 1983, the NRA signed a consent decree declaring that it would “no longer spend corporate funds in connection with any federal election” and would limit its “partisan communications” to members. Eight years later, in 1991, U.S. District Court Judge Stanley Sporkin held that a $415,000 payment by corporate NRA to the PVF was an “illegal contribution” in violation of the Federal Election Campaign Act. But an appeals court ruled that the FEC as then constituted lacked authority to enforce the law.

Although gun control groups have scored a number of significant victories in the states in recent years, at the national level they are largely playing defense. But representatives of these groups say the campaign finance and tax law violations reported by Yahoo News may provide an opening to rein in the nation’s most powerful gun lobby. Beyond the call for two separate federal investigations, these groups are exploring the possibility of filing complaints with state attorneys general and state election boards. CSGV’s Everitt suggested that individuals and smaller local organizations could play an important role in pressuring state agencies to investigate the NRA. He cited the 2014 case of Sam Bell, a 24-year-old Brown University graduate student who singlehandedly shut down the Rhode Island division of the NRA for several months by filing a complaint with the state Board of Elections. The board eventually imposed a $63,000 fine on the NRA, which admitted it had improperly funneled money to its Rhode Island PAC and filed inaccurate reports with the Rhode Island board.

State election and campaign finance laws vary widely from one state to another, making it difficult to say whether the NRA violations reported at the federal level would provide any cause of action before state election boards. But the NRA’s online fundraising appears to have violated a variety of state laws designed to protect consumers from fraudulent fundraising. In California, to cite just one example, the law declares that a charitable organization “shall not misrepresent … the nature or purpose or beneficiary of a solicitation,” and requires that contributions be deposited to an account “that is solely in the name of the charitable organization on whose behalf the contribution was solicited.” Those procedures were not followed in the cases of solicitations Yahoo News reported. Many legal experts believe that state attorney generals are in the best position to probe the NRA’s fundraising — so more investigations may lie ahead.


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