NRA's 'unabated' corruption justifies shutting it down, New York says

News conference regarding New York Governor Andrew Cuomo in New York City
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By Jonathan Stempel

NEW YORK (Reuters) - The National Rifle Association has failed to root out rampant internal corruption, even after a bankruptcy case designed to avoid that obligation was thrown out, New York Attorney General Letitia James said in a court filing seeking to dissolve the gun rights group.

In an amended complaint filed on Monday, James said the NRA's concealment of questionable transactions, awarding perks to longtime Chief Executive Wayne LaPierre and other insiders, disregard of good governance, and evasion of accountability have "continued unabated" since she sued the nonprofit last August.

The amended complaint was filed after U.S. Bankruptcy Judge Harlin Hale in Dallas dismissed the NRA's Chapter 11 bankruptcy case in May, calling it an improper effort to gain an "unfair litigation advantage" and avoid James' oversight.

William Brewer, a lawyer for the NRA, accused James of quoting "selectively" from Hale's opinion to support her case.

"It is now more evident than ever that the NYAG's action is a politically-motivated attack," Brewer said in a statement. "The fact is, those proceedings underscored the NRA's commitment to good governance--and undermine the NYAG's case."

James' accusations include that the NRA told the Internal Revenue Service for the first time late last year that LaPierre had "spent charitable assets to benefit himself personally."

She also said the group's treasurer at the time wouldn't sign an Internal Revenue Service tax form because several NRA officials wouldn't assure it was accurate. LaPierre signed the form, and the treasurer was fired soon afterward, James said.

Founded in 1871 in New York, the NRA has accused James of violating its free speech rights because the Democrat disliked its politics and support of Republicans, many of whom have made expanded gun rights a priority.

Hale faulted LaPierre for arranging the bankruptcy without telling many top NRA officials, calling it "nothing less than shocking," but said 12 days of trial testimony suggested that the group "now understands the importance of compliance."

James is also seeking LaPierre's ouster.

The case is New York v. The National Rifle Association of America Inc et al, New York State Supreme Court, New York County, No. 451625/2020.

(Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis)

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