Internal turmoil that plagued the National Rifle Association five years ago resurfaced Tuesday during testimony at a civil corruption trial in New York, when the gun rights group’s former chief financial officer was asked about a contract agreement for then-NRA president Oliver North.
Wilson “Woody” Phillips, the chief steward of the NRA’s finances from 1993 to 2018, said during his second day of testimony that he was aware that North in 2018 was entering into a contract with Ackerman McQueen, the group’s longtime advertising firm. And while the firm then sought reimbursement from the NRA for paying North more than $1 million a year, Phillips testified that he didn’t bring the contract to the attention of the nonprofit group’s audit committee.
The contract, which involved North working as a host for an NRATV web series, was notable because the position of NRA president is typically unpaid and considered ceremonial.
North, a retired U.S. Marine lieutenant colonel who was at the center of the Reagan-era Iran-Contra scandal, would step down as president in April 2019, less than a year after accepting the job. His departure from the organization came amid reports that he was battling with Wayne LaPierre, the NRA’s chief executive officer, over alleged financial impropriety with the organization’s spending and that he threatened to leak damaging information about LaPierre if he did not resign as CEO.
North was once the co-host of the now-canceled MSNBC political talk show “Equal Time” from 1999 to 2000. MSNBC is owned by NBCUniversal, the parent company of NBC News.
LaPierre would appear to have won the feud with North by maintaining his power, but in the wake, scrutiny grew as New York Attorney General Letitia James brought a lawsuit in 2020 alleging LaPierre, Phillips and two other NRA executives violated nonprofit laws and misused millions of dollars of NRA funds for their personal benefit. John Frazer, the NRA’s corporate secretary and general counsel, is another defendant in the civil trial.
Just days before the trial opened on Jan. 8, a fourth defendant — Joshua Powell, a former chief of staff and executive director of general operations — agreed to settle with James’ office and pay $100,000 in restitution to the NRA. He is still expected to testify.
Before the trial began, LaPierre, 74, announced he would resign at the end of this month from the group he has helmed for more than three decades.
He is accused of diverting millions of dollars away from the NRA to spend on “lavish perks” for himself, including personal use of private jets, expensive meals, travel consultants, private security and trips to the Bahamas for him and his family.
The New York Attorney General’s Office contends that Phillips engaged in practices that violated NRA policies and failed to assert his fiduciary duty and question conflicts of interest involving various vendors and NRA executives, including himself.
None of the defendants has been criminally charged as part of James’ lawsuit. The NRA has operated as a nonprofit charitable corporation in New York since 1871, and James is seeking financial penalties from the defendants and to bar them from leading any nonprofit group conducting business in New York. James initially sought to have the NRA completely dissolved, but a judge disagreed.
Phillips, 75, had faced repeated lines of questioning from a lawyer with the attorney general’s office over his actions as CFO and treasurer under the direction of LaPierre.
On Tuesday, he was asked about a $70,000 check that the NRA sent in May 2018 to an entity that was reportedly set up by an Ackerman McQueen lawyer to help LaPierre buy a $6 million mansion in Dallas. The deal did not move forward, but the check became part of the attorney general office’s probe into the NRA’s tangled finances, The Wall Street Journal first reported in 2019.
Phillips also noted that he had done annual audits with Ackerman McQueen, but the firm held those records and they were not kept at the NRA headquarters in Virginia because they contained sensitive information that not all employees were privy to.
“You didn’t want them to see things that might make headlines,” an AG office’s lawyer asked.
“That is correct,” Phillips responded.
In testimony last week, Phillips said the NRA reimbursed him for his commutes between Dallas, where he had moved to, and Virginia and for hotels for three years, and that he did not tell the NRA’s compensation committee about those expenses.
A lawyer with the attorney general’s office also questioned Phillips about contracts awarded to a former girlfriend that he had not disclosed.
On Tuesday afternoon, Phillips faced cross-examination from lawyers for the other defendants as well as his own. He agreed with his lawyer that he trusted outside auditors to help review the group’s finances and that “if you see something, you say something.”
Cross-examination was expected to resume on Wednesday.
Amid the fallout from the NRA’s faltering financial picture, the group’s membership has fallen in recent years and leaders have pulled back on spending on longtime programs to improve its budget deficits.
