Dive Brief:
- The National Rifle Association’s long-time general counsel and corporate secretary John Frazer got off relatively easy last week in the closely watched civil corruption trial against the gun-rights group, but he still faces a possible penalty that could impact his standing in New York state.
- In its ruling, the jury hearing the NRA case said Frazer breached his fiduciary duty and made false statements in regulatory filings, but he can stay in his position and doesn’t have to pay damages for his role in the misuse of the charitable funds of the 501(c)(4) organization.
- The potential penalty Frazer faces applies to his ability to handle funds on behalf of any charity operating in New York. Judge Joel Cohen of the Manhattan Supreme Court, who has been presiding over the case, will hold a hearing to see if Frazer’s mishandling of funds for the NRA means his days soliciting and collecting donations are over, among other matters.
Dive Insight:
Frazer was one of three NRA executives personally charged in the case. New York State Attorney General Letitia James in 2020 accused the organization and the executives — Frazer, former executive vice president and CEO Wayne LaPierre and former CFO Wilson Phllips — of financial misconduct and corruption.
“Senior leaders at the NRA blatantly abused their positions and broke the law,” James said after the jury returned the verdict, handing the AG wins on most of the charges she brought.
Among other things, LaPierre and Phillips were banned from working at NRA and ordered to repay the organization millions of dollars. LaPierre was penalized particularly hard to help the organization recoup some of the money he took.
“For years, Wayne LaPierre used charitable dollars to fund his lavish lifestyle, spending millions on luxury travel, expensive clothes, insider contracts, and other perks for himself and his family,” James said.
Although the jury verdict was relatively lenient toward him, Frazer was nevertheless found liable for failing to uphold his duties as a nonprofit executive and making false statements on the NRA’s regulatory filings.
“Frazer permitted the NRA to secretly pay millions of dollars to several board members through consulting arrangements that were neither disclosed to, nor approved by, the NRA board,” James said in the complaint.
During the trial, James portrayed Frazer as someone LaPierre hired for his loyalty rather than his legal expertise. He was “a chief legal officer … largely out of the loop on big legal decisions,” said NRA Watch, an anti-gun group.
Frazer started at NRA in 1993 as an information specialist and a year later was LaPierre’s executive assistant. He held a number of other roles while attending law school. After earning his law degree in 2013, he went into private practice, with NRA as his client, and then returned to the organization in 2015 as its general counsel.
In his testimony, Frazer said LaPierre made some of the organization’s most consequential legal decisions without consulting him even though he was the top legal officer at the time. These include a 2019 decision to sue Ackerman McQueen, NRA’s long-time ad agency, for its role in a messy internal leadership fight, and a 2021 decision to have the organization file for bankruptcy as a way to shield its assets from James after she came after the group.
Both matters ended up being expensive losses for the organization; NRA was forced to settle a counterclaim to the Ackerman lawsuit for $12 million and the bankruptcy filing was denied in an opinion that accused NRA of acting in bad faith.
Meanwhile, NRA was spending tens of millions of dollars a year on outside legal work, much of it to Brewer, Attorneys & Counselors. That firm earned some $100 million from the group between 2018 and 2022.
On the stand, Frazer said he didn’t track how much NRA was spending on legal matters but he did know they began rising sharply with the Ackerman lawsuit and the James complaint, and that much of it was going to the one law firm.
“I’ve never calculated that,” he said in his testimony when asked if the $100 million the Brewer firm received was true, ABA Journal reported.
He also said he considered LaPierre’s self-dealing wrong. “I’d have to say probably yes,” he said when asked if it was a breach of trust, according to NRA Watch.