New York AG files lawsuit to disband National Rifle Association

Yahoo Finance’s Alexis Keenan joins Zack Guzman to discuss how New York Attorney General Letitia James is aiming to disband the NRA as President Trump suggests that the organization could move to Texas following the lawsuit.

Video Transcript

ZACK GUZMAN: Meantime, we got some breaking news earlier today, the update there out of New York Attorney General Tish James announcing that the state was looking to go after the NRA in a lawsuit, really targeting the leadership of that nonprofit, saying that it misused and misspent a lot of the money coming in there for personal use. And for more on what's going on there, I want to bring on Yahoo Finance's Alexis Keenan, who has the details. Alexis?

ALEXIS KEENAN: Hey, Zack. So this is actually a civil lawsuit. It sounds like a criminal one. But under the New York AG's authority, she has the ability to regulate nonprofit activity and how they stay in keeping with the laws that surround their filings.

Now, this is a civil fraud allegation here. This is the NRA, a not-for-profit, with the attorney general saying that the nonprofit violated both state and federal law in the way that they have spent their money. It's really a financial misconduct allegation.

And Letitia James, the AG in New York, she is actually seeking to dissolve the NRA in its entirety by this action. She says that the company, or that the nonprofit, rather, the organization, diverted millions of dollars away to personal expenditures, really, both by CEO and Executive Vice-President-- longtime CEO, Wayne LaPierre, and four of its former executives, saying that they spent money on things like private jets, trips to the Bahamas, on personal security, on luxury hotels, luxury dining, and that more than $64 million over a three-year period was diverted to those personal expenditures that should have gone to the organization.

Now, we did hear back from the NRA in a statement. The president, Carolyn Meadows, she called the lawsuit really politically motivated, saying that it was baseless, premeditated, an attack on both the organization as well as on the Second Amendment. She said that, look, you could have set your time clock by this allegation, that it comes at its crescendo, really, as we're moving into the 2020 presidential election. She calls it a power grab by a political opportunist. And I guess there, she is meaning AG Letitia James. President Trump also reacted to the lawsuit, calling it a terrible thing.

And Zack, if we look at the NRA and its 5 million members recently, in its most recent filing for its revenues, it reported $352 million. So it does, of course, have a lot of influence in both presidential elections as well as elections across the country.

ZACK GUZMAN: Yeah, no, for sure. And we've seen these battles play out before. Obviously, Tish James had previously likened the NRA to a terrorist group. And we've seen these squabbles. It's been in New York, chartered in New York since 1871, so it's been around for a while there in the state.

But very interesting to see this, I guess, very detailed look at how it's spending its money. Of course, there are a few nonprofits out there you could probably do the same.

ALEXIS KEENAN: Allegedly.

ZACK GUZMAN: Allegedly, according to the suit. Alexis Keenan, appreciate you bringing us that update there.