NRA Sues Its Longtime Advertising Firm, Revealing Major Internal Dispute

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April 16, 2019 3:40 pm
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NRATV has allegedly told the National Rifle Association that it can take key financial information about the groups’ relationship from its cold dead hands, according to a lawsuit the NRA filed on Friday.

The complaint — filed by the NRA in Virginia’s Alexandria circuit court — demands that Oklahoma-based advertising firm and NRATV operator Ackerman McQueen hand over reams of documents that it has allegedly been withholding for months, saying that “its patience has run out.”

The NRA appears to be seeking the information in connection with an investigation into whether Ackerman and a related company called Mercury — referred to as AMc in the case — were over billing the gun lobby. The gun lobby also appears to be probing whether a separate deal that AMc signed with NRA president Oliver North allowed the advertising firm to lay North’s fees on the gun lobby that he runs.

The filing itself reads at times as if it were written by a lovelorn Wayne LaPierre, recounting the NRA’s 40-year relationship with the firm and how allegations of self-dealing that appear to revolve around Oliver North may have led it to ruin.

“Together, the parties crafted iconic, impactful Second Amendment messaging that featured Charlton Heston (“from my cold, dead hands”) and other important constitutional rights advocates,” the filing reads. “The impasse between them which gives rise to this lawsuit is simple, and baffling: the NRA requested access to material, readily available records that Ackerman and Mercury are contractually obligated to provide. Defendants refused to provide them.”

The heart of the suit comes down to a 2017 contract that the NRA negotiated with AMc.

The 2017 contract also established NRATV, which the gun rights lobbying group says AMc “fervently pitched.”

The agreement allegedly stipulated that the NRA would cover AMc’s “travel and related expenses,” and that it would also pay AMc for third-party contractors hired to do work dedicated to the NRA, including a “termination fee to cover severance payments” if the agreement ended.

The NRA says that it paid big money for AMc for the NRATV work. “By 2017, the NRA’s aggregate payments to Ackerman and Mercury totaled nearly $40 million annually,” the filing reads.

But as it turns out, the people who brought you the public relations response to Columbine may have gotten into trouble with the creation of the TV project.

The NRA is concerned that AMc has been over-billing the gun rights group for the work of third-party contractors, the lawsuit said.

The lawsuit also claims that “certain NRA stakeholders were also concerned that NRATV’s messaging — on topics far afield of the Second Amendment — deviated from the NRA’s core mission and values.”

The channel quickly took fever swamp-mongering to a new level, at one point airing a video telling the New York Times “we’re coming for you.”

By August 2018, the NRA had begun to review its financial ties with “hundreds of vendors,” including AMc. But the ad firm has allegedly refused to give the NRA a range of financial information, including documents surrounding the 2017 contract.

That included budgets that the NRA “purportedly approved,” “copies of material contracts for which the NRA is purportedly liable,” and NRATV performance metrics.

The gun rights lobby appears to have relied on a sort of honor system in its earlier deaings with AMc, auditing the firm each year but relying on “samples assembled in advance by AMc.”

According to the suit, “AMc’s responses became evasive and hostile” after the NRA asked for the documents. At one point, the NRA alleges, AMc demanded that its outside counsel supervise the NRA’s document review, and then stipulated that the NRA pay the outside counsel’s legal fees in exchange for giving the NRA video footage that it had already been invoiced for.

In a statement to the Wall Street Journal, which first reported the existence of the litigation, AMc called the lawsuit “frivolous, inaccurate and intended to cause harm to the reputation of our company,” while a company representative purportedly said that an NRA-hired forensic accountant had received “every single thing they requested.”

At the same time as it was trying to access AMc’s budgets, the NRA writes, it was also trying to get a copy of a third-party contract that its president, Iran-Contra participant Oliver North, purportedly signed with AMc.

The NRA describes North’s role in the group as “a largely ceremonial but high-profile position famously occupied by Charlton Heston during the late 1990s,” and writes that his contract with AMc could put the NRA in violation of a New York State law that stipulates that non-profit groups review any transaction that present potential financial conflicts of interest.

The NRA appears to have been aware that North was signing a separate deal with AMc and so in September 2018, the filing reads, an NRA audit committee reviewed a “purported summary” of North’s contract with AMc. However, the NRATV manager allegedly refused to provide the NRA with a full copy of the contract.

At the same time, the complaint reads, the NRA went through a six-month “back-and-forth” with AMc and North himself, during which North stated through a lawyer that “he could only disclose a copy of the contract” with AMc’s permission.

By February 2019, AMc apparently relented, and allowed the NRA’s general counsel a “circumscribed” review of the North contract without providing him a copy, the document reads.

That review purportedly raised questions over whether the summary of North’s contract “had been complete and accurate” and whether North had separate fiduciary duties to AMc that “supersede his duties to the NRA,” and whether the contract prevented North from “communicating fully and honestly with other NRA fiduciaries about AMc.”

In late March, the NRA says that it sent a final demand to AMc for copies of other third-party contracts, a list of those AMc classified as working on the NRA account, and information about costs associated with North’s contract. The NRA appears to be interested in finding out whether costs “relating to AMc’s engagement of Col. North…were being ‘passed through’ to the NRA.”

AMc purportedly acknowledged receipt without sending the information.

“The NRA is at the end of its rope,” the filing reads. “Its compliance with not-for-profit law cannot be permitted to be held hostage by a recalcitrant advertising agency.”

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