Tell the IRS to Revoke the NRA’s Tax-exempt Status
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(October 17, 2019) — A new Senate report makes it clear: The NRA is not just a toxic and deadly force in American politics, it is also a corrupt organization that doesn’t deserve IRS tax-exempt status. [1]
The report found that the NRA paid for a trip to Moscow to solicit private business opportunities for some of its leaders. Using organizational funds for personal gain like this is a clear violation of the rules governing nonprofit organizations. So not only is the NRA trying to partner with the Kremlin to pervert American democracy, it is breaking the law to do so.
This is not the first time the NRA has faced questions about its tax-exempt status – but it should be the last. Democratic senators are calling on the IRS to investigate, and we need to demand that the IRS revoke the NRA’s tax-exempt status.
The NRA is a den of self-dealing and corruption. One past investigation found that the NRA was so intertwined with its for-profit public relations firm that it was hard to figure out where one stopped and the other began. Former NRA President Oliver North and other top leaders received millions in payouts from the ad firm. The organization is rife with sweetheart deals, shady financial arrangements and misuse of funds. One former IRS official said, the “litany of red flags is just extraordinary.” [2]
On top of it all, Russia may have used the NRA to funnel foreign money into US elections. The NRA spent at least $55 million in the 2016 election cycle to advance not only its “guns everywhere” agenda, but right-wing Republican extremism more broadly, including at least $30 million that was directly focused on electing racist, misogynistic and xenophobic Trump. There is some evidence that Russian funds made up some of that record NRA spending. [3]
Senate Democrats recently released a report detailing the ties between the NRA and Moscow. It confirms what we already knew: the NRA, working with Russian agents Maria Butina and Alexander Torshin, helped the Kremlin extend its influence over far-right conservative circles in the United States. But it also shows that NRA officials traveled to Moscow to boost their private gun businesses and used nonprofit funds to do it. [4]
The NRA has a long history of racism and reactionary, xenophobic and violent rhetoric. There is more and more evidence that it is corrupt and violates nonprofit laws, as well. It’s long past time for the IRS to step in, investigate and revoke the NRA’s nonprofit status.
ACTION: Tell the IRS: Revoke the NRA’s tax-exempt status.
Thank you for speaking out.
References:
[1] Catherine Kim, “A new Senate report is the latest threat to NRA’s tax-exempt status — and maybe its survival,” Vox, Sept. 28, 2019.
[2] Sebastian Murdoch, “NRA Could Lose Tax-Exempt Status Over Shady Business Practices, Report Says,” HuffPost, April 19, 2019.
[3] Peter Stone and Greg Gordon, “FBI investigating whether Russian money went to NRA to help Trump,” McClatchy DC Bureau, Jan. 18, 2018.
[4] Kim, “A new Senate report is the latest threat to NRA’s tax-exempt status — and maybe its survival.”
FBI Investigating Whether Russian Money Went to NRA to Help Trump
Peter Stone and Greg Gordon / McClatchy News
WASHINGTON (January 18, 2019) — The FBI is investigating whether a top Russian banker with ties to the Kremlin illegally funneled money to the National Rifle Association to help Donald Trump win the presidency, two sources familiar with the matter have told McClatchy.
FBI counterintelligence investigators have focused on the activities of Alexander Torshin, the deputy governor of Russia’s central bank who is known for his close relationships with both Russian President Vladimir Putin and the NRA, the sources said.
It is illegal to use foreign money to influence federal elections.
It’s unclear how long the Torshin inquiry has been ongoing, but the news comes as Justice Department Special Counsel Robert Mueller’s sweeping investigation of Russian meddling in the 2016 election, including whether the Kremlin colluded with Trump’s campaign, has been heating up.
All of the sources spoke on condition of anonymity because Mueller’s investigation is confidential and mostly involves classified information.
A spokesman for Mueller’s office declined comment.
Disclosure of the Torshin investigation signals a new dimension in the 18-month-old FBI probe of Russia’s interference. McClatchy reported a year ago that a multi-agency US law enforcement and counterintelligence investigation into Russia’s intervention, begun even before the start of the 2016 general election campaign, initially included a focus on whether the Kremlin secretly helped fund efforts to boost Trump, but little has been said about that possibility in recent months.
The extent to which the FBI has evidence of money flowing from Torshin to the NRA, or of the NRA’s participation in the transfer of funds, could not be learned.
However, the NRA reported spending a record $55 million on the 2016 elections, including $30 million to support Trump – triple what the group devoted to backing Republican Mitt Romney in the 2012 presidential race. Most of that was money was spent by an arm of the NRA that is not required to disclose its donors.
Two people with close connections to the powerful gun lobby said its total election spending actually approached or exceeded $70 million. The reporting gap could be explained by the fact that independent groups are not required to reveal how much they spend on Internet ads or field operations, including get-out-the-vote efforts.
During the campaign, Trump was an outspoken advocate of the Second Amendment right to bear arms, at one point drawing a hail of criticism by suggesting that, if Clinton were elected, gun rights advocates could stop her from winning confirmation of liberal Supreme Court justices who support gun control laws.
“If she gets to pick her judges, nothing you can do folks,” Trump said at a rally in August 2016. “Although the Second Amendment people, maybe there is, I don’t know.”
SPANISH AUTHORITIES TAG TORSHIN FOR MONEY LAUNDERING
Torshin, a leading figure in Putin’s party, has been implicated in money laundering by judicial authorities in Spain, as Bloomberg News first revealed in 2016. Spanish investigators alleged in an almost 500-page internal report that Torshin, who was then a senator, capitalized on his government role to assist mobsters laundering funds through Spanish properties and banks, Bloomberg reported
A summary obtained by McClatchy of the still-secret report links Torshin to Russian money laundering and describes him as a godfather in a major Russian criminal organization called Taganskaya.
Investigators for three congressional committees probing Russia’s 2016 operations also have shown interest in Torshin, a lifetime NRA member who has attended several of its annual conventions. At the group’s meeting in Kentucky in May 2016, Torshin spoke to Donald Trump Jr. during a gala event at the group’s national gathering in Kentucky in May 2016, when his father won an earlier-than-usual NRA presidential endorsement.
An FBI spokesman declined to comment on the investigation.
“We have not been contacted by the FBI about anything related to Russia,” said Steven Hart, an outside attorney for the NRA, in a statement provided to McClatchy five days after publication of this story.
Torshin could not be reached for comment, and emails to the Russian central bank seeking comment from Torshin and the bank elicited no response.
Mueller’s investigation has been edging closer to Trump’s inner circle. This week, The New York Times reported that Mueller had negotiated an agreement under which Steve Bannon, who was recently ousted from his post as a senior White House adviser, would fully respond to questions about the Trump campaign. Bannon headed the campaign over its final weeks.
Since taking over the investigation last May, Mueller has secured guilty pleas from two former Trump aides, former National Security Adviser Michael Flynn and former campaign foreign policy adviser George Papadopoulos, both of whom agreed to cooperate with prosecutors; and criminal charges against two other top campaign figures, former campaign Chairman Paul Manafort and his deputy, Rick Gates.
A year ago, three US intelligence agencies signed off on a joint assessment that was the basis for the expulsion of 35 Russian diplomats and other sanctions against the Kremlin. The intelligence agencies concluded that what began as a sophisticated Russian operation to undermine Americans’ faith in democracy morphed into a drive to help Trump win.
Torshin is among a phalanx of Putin proxies to draw the close attention of US investigators, who also have tracked the activities of several Russian billionaires and pro-Russian Ukrainian oligarchs that have come in contact with Trump or his surrogates.
Torshin was a senior member of the Russian Senate and in recent years helped set up a Moscow gun rights group called Right to Bear Arms. He not only spoke with Trump Jr. at the NRA convention, but he also tried unsuccessfully to broker a meeting between Putin and the presidential candidate in 2016, according to the Times. He further sought to meet privately with the candidate himself near the 2016 NRA convention.
Torshin’s ties with the NRA have flourished in recent years. In late 2015, he hosted two dinners for a high-level NRA delegation during its week-long visit to Moscow that included meetings with influential Russian government and business figures.
In their internal report, Spanish prosecutors revealed a web of covert financial and money-laundering dealings between Torshin and Alexander Romanov, a Russian who pleaded guilty to money-laundering charges in 2016 and was sentenced to nearly four years in prison.
The prosecutors’ evidence included 33 audio recordings of phone conversations from mid-2012 to mid-2013 between Torshin and Romanov, who allegedly laundered funds to buy a hotel on the ritzy island of Mallorca. Torshin had an 80 percent stake in the venture, the Spanish report said.
In the phone conversations, Romanov referred to Torshin as the “godfather” or “boss.” Torshin has denied any links to organized crime and said his dealings with Romanov were purely “social.”
The Madrid-based newspaper El Pais last year reported that Spanish police were on the verge of arresting Torshin in the summer of 2013, when he had planned to attend a birthday party for Romanov, but a Russian prosecutor tipped the banker to plans to nab him if he set foot in Spain, and Torshin canceled his trip.
CONGRESS LOOKING AT TORSHIN, TOO
The House and Senate Intelligence Committees and Democrats on the Senate Judiciary Committee also have taken an interest in Torshin as part of their parallel inquiries into Russia’s interference in the 2016 elections.
In questioning Donald Trump Jr. at a closed-door hearing in mid-December, investigators for the Senate Intelligence Committee asked about his encounter with Torshin at the NRA convention, according to a source familiar with the hearing.
Alan Futerfas, a lawyer for Trump Jr., said his client and Torshin talked only briefly when they were introduced during a meal.
“It was all gun-related small talk,” Futerfas told McClatchy.
California Sen. Dianne Feinstein, the ranking Democrat on the Senate Judiciary Committee, sent letters in November to two senior Trump foreign policy aides, J.D. Gordon and Sam Clovis, seeking copies of any communications they had with or related to Torshin; the NRA; veteran conservative operative Paul Erickson; Maria Butina, a Torshin protegewho ran the Russian pro-gun group he helped launch, and others linked to Torshin.
Erickson has raised funds for the NRA and is a friend of Butina’s. Shortly before the NRA’s May 2016 convention, he emailed Trump campaign aide Rick Dearborn about the possibility of setting up a meeting between Putin and Trump during the campaign, according to the Times.
Erickson’s email to Dearborn bore the subject line “Kremlin Connection.” In it, Erickson solicited advice from Dearborn and his boss, Sen. Jeff Sessions of Alabama, a top foreign policy adviser to Trump’s campaign, about the best way to connect Putin and Trump.
Both Dearborn and Butina, who has been enrolled as a graduate student at American University since mid 2016, have been asked to appear before the Judiciary Committee, but so far Erickson has not, sources familiar with the matter said.
Bridges LLC, a company that Erickson and Butina established in February 2016 in Erickson’s home state of South Dakota, also is expected to draw scrutiny. Public records don’t reveal any financial transactions involving Bridges. In a phone interview last year, Erickson said the firm was established in case Butina needed any monetary assistance for her graduate studies — an unusual way to use an LLC.
Erickson said he met Butina and Torshin when he and David Keene, a former NRA president, attended a meeting of Right to Bear Arms a few years ago in Moscow. Erickson described the links between Right to Bear Arms and the NRA as a “moral support operation both ways.”
Torshin’s contacts with the NRA and the Trump campaign last year also came to the attention of Jared Kushner, Trump’s son-in-law and key adviser. When Torshin tried to arrange a personal meeting with Trump near the NRA convention site last May, Kushner scotched the idea, according to emails forwarded to Kushner.
On top of Torshin’s efforts to cozy up to the Trump campaign, the Moscow banker has forged ties with powerful conservatives, including Republican Rep. Dana Rohrabacher, the Californian whom some have deemed Putin’s best friend in Washington. In a phone interview in 2016, Rohrabacher recalled meeting Torshin in Moscow a few years earlier and described him as “a mover and shaker.”
Last February when Torshin visited Washington, Rockefeller heir and conservative patron George O’Neill Jr. hosted a fancy four-hour dinner for the banker on Capitol Hill, an event that drew Rohrabacher, Erickson and other big names on the right. Rohrabacher has labeled Torshin as “conservatives’ favorite Russian,” Torshin was in Washington at the time to lead his country’s delegation to the National Prayer Breakfast, where Trump spoke. The banker also was slated to see the presidentat a meet-and-greet event prior to a White House breakfast, but Torshin’s invitation was canceled after the White House learned of his alleged mob connections, Yahoo News reported.
Torshin’s involvement with the NRA may have begun in 2013 when he attended the group’s convention in Houston. Keene, the ex-NRA leader and an avid hunter, was instrumental in building a relationship with the Russian, according to multiple conservative sources.
Keene also helped lead a high-level NRA delegation to Moscow in December 2015 for a week of lavish meals and meetings with Russian business and political leaders. The week’s festivities included a visit to a Russian gun company and a meeting with a senior Kremlin official and wealthy Russians, according to a member of the delegation, Arnold Goldschlager, a California doctor who has been active in NRA programs to raise large donations.
Others on the trip included Joe Gregory, who runs the NRA’s Ring of Freedom program for elite donors who chip in checks of $1 million and upwards, Milwaukee Sheriff David Clarke and Pete Brownell, a chief executive of a gun company and longtime NRA board member.
In a phone interview, Goldschlager described the trip as a “people-to-people mission,” and said he was impressed with Torshin — who, he noted, hosted both a “welcoming” dinner for the NRA contingent and another one.
“They were killing us with vodka and the best Russian food,” Goldschlager said. “The trip exceeded my expectations by logarithmic levels.”
A New Senate Report Is the Latest Threat to NRA’s Tax-exempt Status — and Maybe Its Survival
(September 28, 2019) — Leaders of the National Rifle Association (NRA) traveled to Moscow using NRA funds, according to a new Senate report, raising the question of whether the organization broke laws governing nonprofit spending. If the association did in fact break those laws, it could lose its tax-exempt status — and according to a former IRS official, without its tax-exempt status the NRA could be forced to shut down.
The report, which was compiled by Democrats on the Senate Finance Committee and released on Friday, investigates the relationship between NRA leadership and Russian nationals with Kremlin ties. Those nationals include Maria Butina, a 30-year-old Russian who was convicted last year of conspiring to act as a foreign agent. As Vox’s Andrew Prokop explained, her alleged goal was to “try to influence the Republican Party to be friendlier to Russia, by way of the NRA.”
Part of that relationship involved a 2015 trip to Russia during which Butina promised to introduce top NRA executives to powerful officials, and during which those executives were told they would be given opportunities to advance personal business interests.
The problem — aside from the fact that the NRA is accused of willingly establishing relationships with Russian nationals with close ties with the Kremlin — is that tax-exempt nonprofits aren’t allowed to use their funds for personal gain, as NPR has reported.
“This was an official trip undertaken so NRA insiders could get rich — a clear violation of the principle that tax-exempt resources should not be used for personal benefit,” Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, said in a statement to CNN.
Republicans on the committee disagree with Wyden’s assessment. In their rebuttal to the report, Republican senators brushed off concerns of any finances violations, saying that NRA leaders who went to Russia did so to promote their personal businesses and that they only “concluded [the trip] with an NRA-focused goodwill purpose.” This, the Republicans argue, is “entirely normal behavior.”
Convincing its critics the Republican members of the committee are correct is an important matter for the NRA, which, according to experts like Marc Owens, the former head of the IRS’s tax-exempt organizations division, depends on its tax-exempt status to survive. In April, Owens told the New Yorker that should it lose that status, the organization might cease to exist.
The Report Alleges the NRA and Russian Actors Formed Improper Connections
The report details a plan by Butina and Russian government official Alexander Torshin (who is now sanctioned by the US) to bring NRA leaders to Moscow to meet with officials there. According to CNN, Butina promised the visit would bring business opportunities and a potential meeting with Russian President Vladimir Putin. In 2015, then-NRA Vice President Peter Brownell and other leaders accepted Butina’s offer; Brownell, who also owns a firearms business, was promised meetings with weapons companies that could benefit his own operations.
When the trip came under scrutiny, Brownell and the NRA said the visit was an entirely personal one, made by NRA leaders but not with NRA money. Brownell’s lawyer also told the committee that the purpose of his client’s trip was strictly business and unrelated to the organization.
Despite these claims, however, the committee report maintains that the NRA was intimately involved during the trip preparation by creating “detailed itineraries, schedules, and briefing materials for the delegation, including former NRA President David Keene and then-Vice President Pete Brownell.” The report also stated that NRA funds were used to pay for some of the travel expenses. And then NRA president Allan Cors wrote to Torshin prior to the trip, promising that those chosen to attend would “represent the NRA and our five million members better than anyone else.”
Some of the money the NRA put into the trip was eventually paid back by Brownell, who sent the organization $17,000 in 2018 after concerns were floated about the visit. Still, the report maintains the NRA should have never paid anything for the trip, citing an email Brownell sent to employees at his company that stated the visit was “an opportunity to be hosted in Russia to broaden our business opportunities … to introduce our company to the governing individuals throughout Russia.”
The NRA is already facing questions about its nonprofit status at the state level
Wyden has called on the IRS to investigate the NRA and its status as a tax-exempt organization in response to the findings of his team. But he isn’t the only one scrutinizing the group’s finances.
New York Attorney General Letitia James also opened an investigation into the organization’s nonprofit status back in April following reports of financial mismanagement. The District of Columbia’s attorney general said his office launched a similar inquiry in July, sending subpoenas to the NRA and its charitable arms to collect “financial records, payments to vendors, and payments to officers and directors.”
Both attorneys general hope to better understand “large monetary transfers, executive compensation, and the awarding of certain contracts that financial experts said could have violated laws governing nonprofits,” as Gabriela Resto-Montero has explained for Vox.
The NRA has not been able to respond to these investigations — or the Senate Finance Committee’s work — from a place of strength. As Vox’s Jane Coaston has reported, the NRA is thought to be low on funds, its accounts drained by lobbying efforts, court battles, reduced membership numbers (according to transparency organization OpenSecrets, its rolls have shrunk by 21 percent since 2016), and lately, both federal- and state-level investigations. All told, gun advocacy group The Trace estimates the NRA to be roughly $43 million in debt.
With its coffers in peril, the group has also recently faced turmoil in its leadership, as Coaston has explained: “In April, the NRA lost its president after just a year on the job after he was accused of attempting to extort the organization’s CEO. The group is also dealing with a complex and embarrassing legal battle against its own advertising firm.”
These issues have hurt the organization as it works to advance its legislative goals and to combat a rising tide of activists calling for new gun reforms following mass shootings. It has, however, continued its work, with CEO Wayne LaPierre meeting with President Donald Trump Friday to advocate for federal protections for gun owners. But should it lose its tax-exempt status — whether through an IRS investigation or due to the work of the attorneys general — the NRA could find itself without any agency at all.
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