The U.S. Trustee’s office is calling for the dismissal of the National Rifle Association’s (NRA) bankruptcy filing or for the appointment of an outside monitor, a further hit to the gun rights organization amid scrutiny into its financial practices.
Attorney Lisa Lambert from the U.S. Trustee’s office, the division of the Department of Justice responsible for overseeing and participating in bankruptcy cases, said in federal court Monday that the “evidentiary record clearly and convincingly establishes” that longtime NRA executive Wayne LaPierre “has failed to provide the proper oversight” over the organization’s finances, according to The New York Times.
Lambert added in her argument that “the record is unrefuted that Wayne LaPierre’s personal expenses were made to look like business expenses.”
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The recommendation came on the final day of a trial against the NRA, spurred by a lawsuit filed last year from New York Attorney General Letitia James (D).
James is seeking to dissolve the New York-based organization over arguments that it illegally “funneled millions” of dollars from the organization to pay for the personal expenses of top executives.
Gerrit Pronske, an attorney with James’s office, argued Monday that the bankruptcy filing from the NRA is a “poster child of bankruptcy filed in bad faith.”
“The NRA clearly and undisputedly had no financial reason to file bankruptcy,” Pronske said during a virtual hearing before a Dallas federal court. “The NRA is vastly solvent and filing bankruptcy is an abuse of this court’s jurisdiction.”
The NRA, which filed for bankruptcy in Dallas in January and is seeking to move its charter to Texas, has pushed back on James’s efforts to dissolve the organization, accusing her of advancing a political agenda.
NRA lawyer Greg Garman said in court on Monday that the analysis from the U.S. Trustee’s office showed that the gun rights group had “natural enemies.”
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“This Department of Justice may not see eye to eye with the National Rifle Association, but so be it, we have done the right thing,” Garman argued, according to The Washington Post.
He went on to assert that the NRA’s bankruptcy filing was essential for the survival of the organization, which he called “irreplaceable.”
“There is no one who stands in the breach to defend the Second Amendment other than the NRA,” Garman argued in court.
The NRA on Monday submitted a reorganization plan that includes an outline for paying outstanding debts, as well as keeping in place the current makeup of executives, including LaPierre, the Post reported.
The Hill has reached out to the NRA and the U.S. Trustee’s office for comment.
Federal Judge Harlin Hale, who is overseeing the court case, has said that he expects to issue a decision on whether to dismiss the bankruptcy filing or appoint an examiner to monitor the NRA in roughly one week.