I don’t begin to know or understand all the internal politics and machinations at the National Rifle Association. I do know that advertising firm Ackerman McQueen and their PR subsidiary Mercury Group have long been considered the power behind the throne. If reports are to be believed, they are the ones who orchestrated the ascension of Wayne LaPierre and the eventual departure of the late Neal Knox. Having heard the story from multiple sources, I give them a lot of credence.
Thus, it was quite surprising to read in yesterday’s Wall Street Journal that the NRA was suing Ackerman McQueen and Mercury Group. The story has since been picked up by the New York Times, Fox News, the Washington Post, and a number of other media outlets.
The lawsuit was filed on Friday, April 12, 2019, in the Circuit Court for the City of Alexandria (Virginia). The lawsuit accuses Ackerman McQueen of impeding efforts by the NRA to inspect book and records including contracts related to the existing services agreement. This inspection is essential for the NRA Board to fulfill its fiduciary duty and to comply with New York non-for-profit law which governs the NRA’s activities since it is incorporated in that state.
The specific concerns that the NRA sought to investigate include:
- Out of pocket expenses that lacked documentation as required by the Services Agreement
- Lack of transparency regarding annual budgets as well as adherence to the budgets by Ackerman McQueen
- Lack of transparency regarding “fair market value” determinations for services
- Concerns that the NRA was being invoiced for the full salaries of NRA-Dedicated Personnel despite these people spending time on non-NRA clients
- Refusal to provide data in writing on number of visitors, viewership numbers, and other performance metrics related to NRATV
A footnote also said that many of NRA’s stakeholders were concerned “that NRATV’s messaging – on topics far afield of the Second Amendment – deviated from the NRA’s core mission and values.” I know many of my friends in the Second Amendment community shared this concern.
I should note at this point that NRATV is owned by Ackerman McQueen and that personalities such as Cam Edwards and Ginny Simone are actually Ack-Mc employees. This, in turn, is the heart of the other major aspect of this lawsuit – the role of Oliver North with Ackerman McQueen and to whom he owes his allegiance.
The lawsuit alleges that Audit Committee of the Board of Directors sought to review the full contract between Ackerman McQueen and Col. North but was rebuffed. Moreover, North’s attorneys indicated he would only “disclose a copy of the contract to the NRA subject to AMc’s consent.”
The NRA’s General Counsel was finally allowed to see the contract but was not allowed to have a copy. This review by the General Counsel led to many questions. These included a) was North a 3rd-party contractor or an employee of Ack-Mc with a duty of loyalty to them; b) whether previously disclosed costs borne by the NRA for the “North Contract” were accurate; and c) “whether the contract imposed obligations on Col. North that prevent him from communicating fully and honestly with other NRA fiduciaries about AMc.” Thus, the NRA says it became determined to resolve these issues.
The suit asks that Ackerman McQueen be found in breach of contract, that they be required to furnish the NRA copies of all AMc-Third Party NRA Contracts, that they be ordered to furnish the NRA with copies of annual budgets for the period 2016-2018, a list of all NRA-Dedicated personnel and the amount of time they devote to the NRA account, and copies of all records that would show the costs to the NRA or the NRA Foundation (from Jan 1, 2018 through April 1, 2019) incurred by North’s American Heroes series, from compensation to Col. North, from office space rented for Col. North or related staff, and whether each item was billed specifically to the NRA, the Foundation, or both.
Ackman McQueen contends this lawsuit is the work of the NRA’s outside counsel William Brewer III who is the in-law of their co-CEOs Revan and Angus McQueen. However, the lawsuit is brought by the Virginia law firm of Briglia Hundley not by Mr. Brewer’s firm. Todd Rathner, NRA Board Member, speculates that the attack on Mr. Brewer is the work of the pro-AckMc faction of the Board in an effort to undermine Wayne LaPierre.
Board members Todd Rathner and Joel Friedman are on the record about the lawsuit with the New York Times.
The suit culminates the fracturing of a more than three-decade relationship between Ackerman and the N.R.A., going back to the shaping of such memorable lines as Charlton Heston’s proclaiming that his gun would have to be pried “from my cold, dead hands.” Wayne LaPierre, the longtime chief executive of the N.R.A., had previously been a steadfast champion of the Ackerman relationship.
“I think it says something about Wayne’s character, even though he’s had a long-term working business relationship with a vendor, he’s willing to do what is right and necessary for the N.R.A. and its members,” said Todd Rathner, a board member of the rifle association.
Joel Friedman, another board member, said he was dismayed that the documents had not been turned over.
“It leaves you questioning, and you can come up with all these potential different scenarios as to why, but none of them are good,” he said.
“My mind goes to: Are they overcharging us? That’s one,” he added. “Two, are there things charged to us that were not part of the contract? Then, No. 3, has there been a misallocation of personnel?”
It will be interesting to hear the discussion, if any, of this case at the NRA Annual Meeting which starts in little more than a week. As for me, the fact that Board members are finally questioning the costs as well as the role of Ackerman McQueen is good news. In a saner world, with a smaller board that held actual power, the Ackerman McQueen contract would have been put up for bid multiple times over the years. That it hasn’t is a disgrace.
So you can read the entire complaint, it is embedded below.
NRA v Ackerman McQueen by on Scribd
UPDATE: Sebastian at Shall Not Be Questioned had this to say, in part, about the lawsuit.
This is a struggle that needs to happen. Bitter and I are not as anti-Ack-Mac as some folks. We think there’s merit to some of their work, and they do some things do well. But we also believe their relationship with NRA is unhealthy, and there probably is not be any fixing it. Sometimes you’re just better off pulling the tooth, rather than trying to save it. This is probably one of those cases.
I had a call out of the blue late this afternoon from a person on the NRA Board. It was off the record and not for attribution. This person thinks that the lawsuit might be a smokescreen to protect the NRA from New York State. It gives the impression that they are taking their fiduciary and financial duties seriously. As both the lawsuit notes and I mentioned above, the State of New York revised their statutes to require not-for-profits to do more due diligence and to pay more attention to where members and donors money is being spent.
The rationale behind this being a smokescreen to protect the NRA is that, according to this person, the NRA had not been requiring any sort of invoices or other detailed record-keeping for services rendered in years gone by. In other words, Ack Mc said here is how much we want and please send us a check. God forbid that they were that slack but I believe it.