Cash-Strapped NRA Discloses Spending on Foreign Fundraising For First Time

Guest Post December 17, 2019

https://citizentruth.org/cash-strapped-nra-discloses-spending-on-foreign-fundraising-for-first-time/

The NRA’s tax records show its involvement abroad, expanding to a longer list of regions from the Middle East and Asia to Europe and sub-saharan Africa.

(By Anna Massoglia, Center for Responsive Politics) The National Rifle Association disclosed spending on foreign fundraising for the first time in the gun rights group’s history as it faced a multimillion-dollar shortfall for a third consecutive year, new tax returns reveal.

Despite that foreign fundraising, federal government grants and millions of dollars siphoned from its charities, the NRA spent more than it brought in last year. The tax filing unearths details of the NRA’s finances amid mounting scandals during the first election cycle in recent history where gun control groups outspent their pro-gun counterpart.

While the NRA’s disclosed spending on foreign fundraising makes up only a small slice of the operation’s total 2018 outlay, the actual amount of money brought in by that fundraising is unknown. The NRA is not allowed to use foreign funds to influence elections. But as a 501(c)(4) nonprofit, it can continue to spend millions of dollars on political activity without revealing its funders, how much foreign money it takes in or what that money was spent on.

Some funding information can be extracted from the NRA’s sponsorship program memberships and other public records. Many of the NRA’s biggest disclosed allies and corporate funders stem from outside the U.S.

Austria’s Glock, Italy’s Beretta and Germany’s SIG Sauer have all received membership in the NRA’s Golden Ring of Freedom, which is composed of individuals or corporations that donate $1 million or more to the NRA and its affiliates.

The NRA’s top disclosed ally in the gun industry is a foreign firearms manufacturer, Taurus, which is based in Brazil and has a beachhead in Miami targeting U.S. markets. The exact amount the NRA receives from Taurus is not public, but the Brazilian gun manufacturer advertises that it buys an NRA membership for every gun sale to a U.S. customer.

Last year may have been the first time the NRA disclosed spending on foreign fundraising but the group has been building ties with foreign gun manufacturers for years. It has a long history of quietly pushing against gun regulation outside the U.S. in places like Brazil, where Taurus’ headquarters is based.

Prior to reporting $92,000 on foreign program expenses and $24,000 spending on foreign fundraising in 2018, the NRA’s previously disclosed overseas activities were limited to offshore investments in Central America and the Carribean along with occasional trainings or events in that region and Europe.

A September 2019 report by Senate Finance Committee Democrats found that the NRA acted as a “foreign asset” for Russia in the leadup to Trump’s 2016 election. In the heat of congressional inquiries probing the NRA’s ties to Russian actors, the NRA also admitted to taking Russian money. The organization said the cash wasn’t used for political purposes.

Gun Lobby Goes Global

The NRA’s tax records show its involvement abroad, expanding to a longer list of regions from the Middle East and Asia to Europe and sub-saharan Africa.

The NRA has been public about some of its activities in sub-saharan Africa, where it has found an ally in the safari hunting expedition industry.

NRA-supported foreign hunts have recently attracted controversy, such as an elephant-hunting expedition in Zimbabwe that coincided with the Trump administration overturning an Obama-era ban on importing hunted elephant carcasses.

Donald Trump Jr. also came under fire after ProPublica reported he killed an endangered argali sheep during a hunting trip to Mongolia purchased at an NRA charity auction. The Mongolian government retroactively granted the younger Trump permits after the killing took place. His spokesperson said the trip was a purely personal expedition, though it was supported by U.S. government and Mongolian government resources, including security details.

The NRA’s website and publications feature multiple posts describing the lures of argali hunting.  One post from the same month as Trump Jr.’s Mongolian hunting trip touts “the primary reasons sportsmen and women travel to the Gobi are to hunt Gobi ibex and argali.”

The NRA’s 2018 auction catalog includes a Mongolian safari through the same company. An auction catalog from Dallas Safari Club, a nonprofit that promotes hunting and works closely with the NRA, explicitly mentioned that the Mongolian expeditions may be upgraded to include hunting the endangered sheep. Shortly after Donald Trump Jr. reportedly bought the Mongolian hunting trip in 2015, he was a guest speaker at a Dallas Safari Club fundraiser.

NRA Drains Charities, Pays For PAC

For the NRA, charity begins at home. The NRA, which is set up as 501(c)(4) social welfare nonprofit, rakes in money from its charitable affiliates while footing bills for its PAC with no sign of reimbursement. Although affiliated charities reimburse the NRA millions of dollars for various expenses, federal campaign finance records for the NRA’s Political Victory Committee show no sign of reimbursements to the NRA.

The NRA has disclosed reimbursements and other money from its charitable affiliates, draining more than $320 million from its charities over the past decade.

The NRA Foundation, the NRA Special Contribution Fund, the NRA Civil Rights Defense Fund and the NRA Freedom Action Foundation directed more than $31 million to the NRA in 2018 alone. The NRA raked in more money from its charitable affiliates in 2018 than any year other than 2016 in at least a decade.

NRA Foundation payments to the NRA’s main lobbying arm labeled as reimbursements jumped to more than $17.4 million in 2018, the largest in at least a decade and nearly three times the $6 million reported in reimbursements the prior year.

The NRA paid off one $5 million loan from the NRA Foundation in early 2018 but secured another $5 million loan from the foundation shortly thereafter, on top of a $13.5 million grant and more than $17.4 million in reimbursements from the foundation.

The NRA’s audited financial statements, first flagged by Citizens for Responsibility and Ethics in Washington, show the NRA’s reliance on and control over its foundation. They include admissions that “the NRA is able to influence the Foundation’s operating and financial decisions as well as the NRA having ongoing economic interest in the net assets of the Foundation.”

The NRA, its foundation and other charitable arms take money from funders whose identities are kept hidden from the public under IRS rules. That makes it difficult to parse who is bankrolling the NRA’s activities, how much they are giving and even the true nature of the group’s financial state going into the 2020 election cycle.

Unlike the NRA’s main 501(c)(4) arm, however, its affiliated charities allow donors to get a tax break in exchange for contributions. Thus they are subject to more restrictions on political activity.

The NRA Foundation fills its own coffers with fundraisers such as auctioning guns in schools and Friends of the NRA sponsorship programs. The top reported corporate sponsor is tactical rifle manufacturer Daniel Defense. Other big corporate sponsors include firearms manufacturers Henry Repeating Arms, Mossberg, Inter Ordnance and Ruger, as well as international hunting safari service providers Bayete, Rivers South Safaris, Ibamba Safari and Otis Safari Specialty Importers.

The NRA reported covering more than $5.1 million in administrative and fundraising expenses for its PAC arm, the NRA Political Victory Committee, last year alone — shelling out roughly $90 million over the last decade, according to an OpenSecrets’ analysis of audited financial statements.

Federal campaign finance records for the NRA’s Political Victory Committee show no sign of reimbursements to the NRA, and an NRA spokesperson did not respond to requests for comment.

NRA Under Scrutiny

The NRA has incentives to preserve its reputation as a political juggernaut.

If spending on activities such as politics or lobbying exceeds a certain percentage of the organization’s overall budget, the organization may be subject to additional disclosure requirements or even be at risk of losing tax-exempt status.

Nonprofits like the NRA may spend millions of dollars in elections without ever disclosing donors but are not allowed to have politics as their “primary purpose.” The generally accepted rule is that less than half of a 501(c)(4) nonprofit’s operations can be devoted to influencing elections.

This percentage threshold still allows large organizations like the NRA to spend tens of millions of dollars on elections without disclosing donors –– so long as their budget is big enough to counter that spending with a little dark money alchemy. This means the NRA can spend millions of dollars on elections simply because it also reported spending a similar amount on activities is says are apolitical.

But that doesn’t mean the NRA is avoiding scrutiny. New York’s state attorney general recently issued a new subpoena to the NRA covering a range of campaign finance and tax issues, according to the New York Times. The request reportedly included records related to transfers among the NRA’s affiliates and charitable arms.

Since the NRA is chartered in New York, it is subject to oversight of the state’s attorney general as well as federal authorities. The same attorney general’s office brought a case that led to the dissolution of the Trump Foundation and a hefty $2 million fine.

The NRA’s Little-Known Federal Funding

Despite its limited-government rhetoric, the NRA experienced a resurgence of funding from another unlikely source in 2018: the U.S. government.

In April 2018, the Department of Defense awarded the NRA $11,900 for firearms instructor development. That August, the Justice Department’s Drug Enforcement Agency spent more than $10,000 buying NRA tactical waterproof blankets for students attending a prep course for “overseas assignments.” The U.S. Border Patrol awarded the NRA another $10,000 for a government contract classified as “public relations” services in the form of a “recruiting sponsorship” the following month.

In July 2019, the Department of Energy offered the NRA a potential award up to $24,653 for use of a “specialized training venue” with access to “other facilities that support training such as classrooms and restrooms.”

Days later, on Aug. 1, the Interior Department awarded the NRA a $50,000 grant. The grant was intended to help the Fish and Wildlife Service “identify, protect, conserve, manage, enhance or restore habitat or species on both public and private lands” under the Recovery Act, which provided for funding awarded as part of the federal stimulus package to promote economic growth.

While the new government contracts are hardly the first instance in which the NRA got U.S. federal government support, they follow a lull since 2015 and mark the NRA’s first government contracts under the Trump Administration.

Secretive LLCs Tied to NRA

The NRA’s tax return identifies related entities tied to recent scandals and mysterious LLCs with all the trappings of shell companies that were not previously listed in tax returns filed by the gun rights group.

Previously unreported entities tied to the NRA include Wingate Church Insurance Services and Lexington Concord Holdings LLC. Both entities share the NRA’s address and are described as being in the “development phase,” according to its tax return. Delaware incorporation records and tax documents obtained by OpenSecrets show both entities are directed by J. Steven Hart, the NRA board’s longtime outside counsel who may be best known as the lobbyist whose wife rented EPA administrator Scott Pruitt a Capitol Hill condo for $50 per night.

The NRA reported paying $88,410 to Lexington Concord Holdings LLC, which was incorporated in August 2018, over the course of that year.

The NRA’s tax returns list it as the direct controlling entity and 99 percent owner of WBB Investments LLC, a limited-liability company tied to facilitating the purchase of a 10,000-square-foot Texas mansion for LaPierre. The LLC was first identified by ProPublica as the recipient of a $70,000 payment flagged by NRA accountants in a “List of Top Concerns for the Audit Committee.”

NRA accountants said the payment was not properly documented, and asked the audit committee to examine it due to suspicions such as the “vague description,” noting the “company didn’t exist” and the business address matched the home of an officer of the NRA’s longtime public relations firm, Ackerman McQueen.

Ackerman McQueen was the NRA’s highest paid vendor in 2018. Raking in at least $38.3 million from the NRA last year alone, Ackerman McQueen’s ongoing legal battle with the NRA has fueled scrutiny of the gun rights group’s finances and activities.

An NRA spokesperson did not respond to questions from OpenSecrets.