Blog — Department of the Treasury

December 08, 2015

Spurred by Complaints, NRA Political Spending Faces More Scrutiny

By Adam Rappaport

Political spending by the National Rifle Association (NRA) is again in the news in the wake of more tragic mass shootings.  Significant amounts of the group’s spending remain shrouded in secrecy – the NRA’s non-profit arm that does not disclose its donors spent at least $12 million on federal elections alone in 2014.  Spurred on by complaints filed by CREW and other groups, however, federal and state regulators have started more closely scrutinizing the NRA’s political spending, and the gun rights behemoth recently disclosed more about its political activity than it ever has before.  While serious questions remain about the NRA’s political spending, these developments show that attentively monitoring groups like the NRA and taking legal action against them can lead to more accountability and transparency.

Some of the recent questions about the NRA’s political spending were raised initially in an April 2015 Yahoo News story reporting that the NRA had solicited contributions for its non-profit arm, but directed at least some of the donations to its political committee.  The NRA later admitted the solicitations resulted in $125,153 misdirected contributions, claiming it was the result of a “coding error,” and had its political committee give that amount back to its non-profit. 

Based on the report and further research, CREW in June asked the Federal Election Commission (FEC) and the Internal Revenue Service (IRS) to audit the NRA.  In addition to the allegations about the NRA’s solicitations, CREW also told the FEC that the NRA’s political committee had failed to disclose the employer and/or occupation for donors who gave hundreds of thousands of dollars.  CREW separately filed a complaint with the IRS alleging the NRA’s non-profit violated federal law by failing to disclose on its tax returns more than $33.5 million it spent on political activity between 2008 and 2013.  The NRA claimed this was the result of a “clerical error” – an assertion that strains credulity – but made no representations that it intended to amend the tax returns.

The news report and CREW’s complaints appear to have triggered closer examination of the NRA’s filings as well as more transparency from the NRA itself.  Active FEC investigations and audits are not public, but several queries by the FEC’s reports division indicate more scrutiny of the NRA’s campaign finances.  In September, for example, the FEC sent the NRA a letter noting its identification of donors (including their employers) was “incomplete” and directing it to provide the missing information. The NRA wrote back that its efforts to obtain information about the employers of its contributors complied with the FEC’s regulations, but it is not clear if this resolved the matter.  In November, the FEC sent the NRA another letter, this one asking for clarification about why it disbursed the $125,153 to its non-profit.

The IRS is not allowed to disclose any information about its investigations, so we cannot know if the agency has taken any action in response to CREW’s complaint.  And while the NRA has not amended its earlier tax returns that failed to disclose any political spending, it disclosed far more information about its campaign activities on its newest tax return, filed in September 2015, than it ever has before.  This tax return, covering 2014, acknowledged the NRA’s non-profit spent more than $13 million on political activity, revealed how much it paid in taxes on that spending, and claimed the non-profit did not serve as a conduit for any contributions to the group’s political committee.

Legal action against the NRA is progressing even more quickly at the state level.  In Rhode Island, a Brown University Ph.D. candidate reviewed the NRA’s local political action committee’s filings in 2013 (he was the first to do so in 10 years) and discovered the NRA had failed to report any contributors despite making hundreds of thousands of dollars in contributions since 2002.  A month later, the local NRA PAC went out of business, and in January 2014 the Rhode Island Board of Elections announced the NRA’s federal PAC had settled the case for $63,000, the second largest campaign finance fine in state history.

In Connecticut, a group of gun control advocates, including family members of children and teachers killed in the Sandy Hook Elementary School shooting, filed a similar complaint in August 2015 alleging that the NRA’s federal PAC made thousands of dollars in campaign donations to state candidates but violated state law by failing to notify contributors that some of the money they gave would be used in Connecticut elections.  The State Elections Enforcement Commission launched an investigation in September.

The NRA is one of the strongest political forces in Washington and around the country, and more still needs to be done to hold that organization and other powerful interests accountable, but these recent developments remind us that the public is not powerless.  Shining a light on violations and abuses, helping regulators make sure the NRA and other groups obey the rules, and pressuring political actors to be more transparent are all steps that can make our political process better.

 

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