Extensive Violations of Fundamental Not-for-Profit Law
Attorney General James alleges in her complaint that the NRA violated multiple laws, including the laws governing the NRA’s charitable status, false reporting on annual filings with the IRS and with the OAG’s Charities Bureau, improper expense documentation, improper wage reporting, improper income tax withholding, failure to make required excise tax reporting and payments, payments in excess of reasonable compensation to disqualified persons, and waste of NRA assets; in direct violation of New York’s Estates, Powers & Trusts Laws; New York’s Not-for-Profit Corporation Law; the New York Prudent Management of Institutional Funds Act; and New York’s Executive Law. The illegal nature of the four individual defendants’ action also violated multiple rules of the NRA’s bylaws, the NRA’s employee handbook, and the NRA’s policy manual.
The failure of the NRA to comply with multiple fiduciary responsibilities and state and federal laws resulted in the NRA seeing substantial losses on its balance sheet: going from a surplus of $27,802,714 in 2015 to a net deficit of $36,276,779 in 2018 — contributing to a total loss of more than $64 million in just three years.
