To me the NRA is an organization
that's helping to preserve my rights.
They're the front runners, they're the
ones that are taking the most
heat.
They're not giving up
on our gun rights.
The NRA, known as a defender for
gun rights, and a leader in firearm
education, is mired in controversy.
Never in the history of the NRA
have so many powerful forces attacked
us, on so many different fronts.
Claims of financial wrongdoing, which the
NRA has denied, have led to
multiple investigations in Congress and in
New York State that are
threatening the group's survival.
I think the NRA really is in
existential danger right now, because of
the many forces that have
converged to bring it down.
The NRA says it's facing financial ruin
in claims it may soon be
unable to exist as
a not-for-profit organization.
In a lawsuit targeting Governor Andrew
Cuomo and New York State
regulators, the gun group said
that New York could cause
"irrecoverable loss and irreparable
harm" to the organization.
But is the NRA crying wolf?
Or, with multiple ongoing investigations
could its future actually be
in jeopardy? With
falling revenue, political infighting and
several major scandals on
the horizon, is this the
end of the NRA?
Ladies and gentlemen, thank you
for attending this year's NRA-ILA
leadership forum.
The National Rifle Association was started
in 1871, by a group of
former Union Army officers. Through
most of the 20th century, the
NRA, was known primarily for promoting
firearm safety. The group even backed
the nation's first federal gun
laws, after the Prohibition era.
But in the 1970s,
the NRA reversed course.
The NRA took a hard turn to the
right in 1977 when a dissident faction
took control of the organization.
It was that trajectory that put the NRA
on the path to where it is
today.
In 1980, the group gave its
first ever presidential endorsement to
Ronald Reagan, and in the 90s and
2000s, the NRA continued its shift
to the right.
For everyone within the sound of my
voice, to hear and to heed, and
especially for you, Mr.
Gore -- From my cold, dead hands!
The election in 2000, when the NRA
really began to flex some political
muscle. Because they got heavily
involved in the presidential
election. Charlton Heston went on tour
in some critical states. In
the 2010 midterm elections, near the
peak of its influence, the NRA
spent millions and supported
dozens of candidates.
Of the candidates it spent money
on, about 60 percent won.
But money may not be the
key to the NRA success.
The real power of the NRA doesn't
lie in its finances, the real power
of the NRA lies in its membership.
By 2013, the group was spending over
$3 million dollars a year on
lobbying, a fraction of the
organization's total spending. But
with an army of highly motivated supporters,
it turned the NRA into a
major political force
in Washington.
With nearly 5 million members as of
August 2019, the NRA is a leader
in firearm education.
It has over 100,000 certified
instructors, now training about a
million gun owners a year.
I think the NRA, as a group
of people who are concerned about sport
shooting and concerned
about self-defense.
The NRA is a non-profit, with a
revenue of $312 million in 2017,
according to its most
recent public filings.
The money comes mainly from
membership fees, private contributions
and funding from
large corporations.
Many within the gun industry.
In 2008 and 2012, the group
spent 21 million dollars opposing
Democrat Barack Obama and supporting
Republicans John McCain and Mitt
Romney. But it was in the 2016
election that the NRA took a massive
gamble, placing a $54 million bet
on Donald Trump and protecting
Republican majorities in Congress.
The victory was a huge win for
the NRA, giving allies on Capitol Hill
and the White House. Political
clout it hadn't seen in a decade.
Please welcome the 45th President of
the United States of America,
Donald Trump.
But more legislative influence on Capitol
Hill and in the Oval Office
came at a big cost.
The NRA spending ballooned by more
than $100 million in 2016.
While the group did have some
money problems in the 1990's, 2016
proved to be a devastating
blow to its finances.
The NRA reported a staggering $46
million loss, a significant drop
from income of $33 million in 2015.
And with a pro-gun administration
in the White House, membership
started to lag.
Membership revenue fell 21 percent
to $128 million in 2017.
But this trend isn't new.
Almost always, when a Republican president
is in office, the NRA
experiences a drop in
donations and dues.
And conversely, when Democrats are
in power, people re-up their
membership.
If a Democrat wins, now suddenly
it's like, whoa, this could happen.
And now A I've got to buy weapons
because they may not be around, gun
sales spike, but it also
means contributions to the
NRA and membership to the NRA is
going to increase because now I
really have to be vigilant
with regard to my rights.
The NRA has very effectively
marketed these instances of Democratic
candidate winning the White House as
an existential threat, not just
for the organization, but
for Second Amendment rights.
They have masterfully taken advantage
of these opportunities to grow
their membership and grow
their financial support.
The NRA also tends to see
spikes in money and membership dues
following mass shootings and the
subsequent gun control debates.
For example, in 2013, dues collected
by NRA members increased by 62
percent over the previous year following
the killings of 20 children
and six adults at Sandy Hook
Elementary School in late 2012.
In December of 2012, ironically, spurred
not only an increase in gun
sales, but also more people sending money
to the NRA as a way of
expressing their political feeling that
the federal government moving
to enact stronger gun laws was
not the appropriate thing to do.
The group insists the root of
the problem is not the guns.
We have repeated offered real solutions
that are proven to work.
Put trained armed security
in every school.
Fix the broken mental
health care system.
Enforce the federal gun laws.
In the weeks following the February
2018 Stoneman Douglas High School
shooting in Parkland, Florida, that
left 17 people dead.
The NRA Political Victory
Fund saw donations triple.
But according to analysts, the gun
group's finances may not be the
real source of its influence.
Most of the NRA's real power comes
from its legion of foot soldiers.
You cannot turn out hundreds of
supporters of Microsoft at a
congressional town meeting in
upstate New York.
The NRA membership and sympathizers are
people who will mobilize on
behalf of the gun cause they'll
vote based on the gun issue.
They'll go to a demonstration.
Things that most
Americans don't do.
For us, it's an important organization
because they are preserving our
gun rights and they are helping to
preserve the future of the Second
Amendment. I'm a
certified NRA instructor.
I started getting into shooting in
general about twelve years ago.
I was in a bad relationship when I
was in college and then after I
got out, I kind of, really
tried to get myself back together.
Visualize your target. Support
wrist forward.
As long as you're solid and
you have a good control.
They're gonna go where
you want them.
I will continue to support the NRA and
I will continue to do my part
as far as what I can do on local
legislation and what I can do on my
state level and city level.
We're all in this fight together.
The gun industry in the U.S.
is a $52 billion business
that includes manufacturers and retailers
of guns, ammunition
and accessories.
Even though the industry is the
biggest it's ever been, there appear
to be fewer gun owners.
In 1994, 51 percent of
households in the U.S.
reported having a gun
in their home.
By 2018, that number was
down to 43 percent.
A smaller number of people were
buying guns, but they're buying more
guns. Where someone used to own three
or four guns, it may not be
uncommon now for somebody to own a
dozen or 15 or 20 different guns.
Firearm production in the U.S.
was stagnant through the
80's and 90's.
But in the last
decade, that's changed dramatically.
An assault weapons ban signed by
President Clinton in 1994, outlawed
the AR-15 and other
similar semi-automatic rifles.
But after the ban expired in
2004, gun makers reintroduced the
weapons and sales took off.
In the past several decades, there has
been a shift in terms of the
types of firearms that people have
been buying, from handguns, from
revolvers to pistols, virtually all
which are semi-automatics. And
in long guns, there's been a
shift from hunting rifles to AR-style
rifles or what the industry
calls modern sporting rifles.
What people outside of the industry
refer to as assault rifles.
There are about 16 million AR-15
style weapons in the U.S.
and in 2016, the gun industry sold
more than 2 million, according to
the National Shooting
Sports Foundation.
These days, there are roughly 30
gun companies that make some version
of what we would identify as
an assault rifle or more broadly,
assault weapons.
There are many different
models, different styles.
It's a weapon that
is quite accessorizable.
Described in some gun circles as a
Barbie doll for men, for the almost
infinite number of accessories, gun makers
can make even more money
selling everything from laser sights to
magnifier scopes that can be
attached to the weapon.
And just like with donations to the
NRA, gun makers have seen sales
grow when a Democrat moves
into the White House.
When Barack Obama won in 2008 and
again when he was re-elected, there
is immediately a spike in sales of
firearms because there is a fear
that firearms will be taken away.
It often becomes panic buying.
There was a period of time
when there was a shortage of
firearms, shortage of ammunition, where
you really literally could
not find it.
And I say to people very often, one
of the best gun salesmen in the
history of United States
was President Obama.
With the Trump presidency we've
seen a reverse phenomenon. After
Trump's election gun
sales have plummeted.
And as a consequence, the gun industry
has been taking it on the chin
during the Trump administration and in
fact, it's been referred to as
the Trump slump.
And I'm a champion for the Second
Amendment, and so are you -- it's
not going anywhere.
The Trump slump, hasn't been
good for the gun industry.
U.S. firearm sales fell six percent
in 2018, marking the second
straight year of declines. In
2018, U.S.
firearm sales were estimated at 13
million, down from a record 16
million in 2016, according to
the National Shooting Sports
Foundation. Those losses and mounting
public pressure for more gun
control have had a large impact on
some of the biggest gun makers.
There are dozens of companies that
produce firearms, and while many
are privately held, a few
disclose some other financials.
Sturm, Ruger and Company, one
of the biggest U.S.
gun manufacturers, had firearm sales of
$490 million in 2018, down 25
percent from 2016.
American Outdoor Brands, the owner of
Smith and Wesson, another top
manufacturer, that's been a business since
1852, had sales of $600
million in 2018, down
16 percent from 2016.
Remington, a privately held company
and America's oldest gun maker,
was briefly in Chapter 11 bankruptcy
in the Spring of 2018, amid
falling sales and mounting pressure
for gun control. Falling
sales could be hurting the gun
industry's ability to give money to
the NRA. In
2016, Sturm, Ruger and Company
announced a promotional campaign in
which it donated $2 of every new
firearm purchase to the gun group.
The company paid the NRA $1.5
million dollars in 2017 and 2018, more
than six times less than it
gave in 2015 and 2016.
Money may be at the center of
the NRA as current problems, but it's
internal squabbling that
got them there.
I think we're somewhere between, this
is business as usual vs.
an existential crisis
or cataclysmic event.
At their annual meeting in April
2019, a power struggle broke out
between NRA Chief Executive Wayne
LaPierre and NRA President Oliver
North. North was ousted.
LaPierre, who earns over a million
dollars a year, was accused of
making $275,000 dollars worth of purchases
at a men's luxury store in
Beverly Hills, according to an email
sent by the group's advertising
agency,  Ackerman McQueen. Around
the same time it became known
North was allegedly paid about a
$1 million a year through
Ackerman Mcqueen, according to interviews
with NRA supporters by The New
Yorker and the Trace, a nonpartisan,
nonprofit newsroom that looks at
gun violence in the U.S.
Those scandals and others have led
to a slew of investigations.
In April 2019, the New York
State Attorney General launched an
investigation claiming NRA officials
mismanaged the group's money,
putting its non-profit status
on the line.
CNBC reached out to the New York
Attorney General's office, and as a
matter of policy, it wasn't able
to confirm or deny, whether an
investigation is ongoing.
The NRA said in an email to
CNBC, "The NRA will cooperate with any
appropriate inquiry into
its finances.
The NRA has full confidence
in its accounting practices."
A separate investigation in 2017, by
the New York Department of
Financial Services, found the NRA
Carry Guard Insurance Program,
unlawfully provided liability insurance to gun
owners in the event of
a self-defense shooting.
The program, widely promoted by the
NRA, was dubbed murder insurance
by critics.
According to the New York Governor's office,
the NRA does not have a
license to conduct insurance
business in the State.
In a countersuit, the NRA said,
"Andrew Cuomo has criticized the
political speech and influence of
"Second Amendment types" generally,
and the NRA
specifically, for decades.
Moreover, Cuomo has a history of
abusing his regulatory power to
retaliate against his political opponents
on gun control issues.
In an email to CNBC, the
NRA said, "Government officials can express
viewpoints on matters of public concern,
but when the state crosses
the line from persuasion to coercion,
the First Amendment comes into
play." Congress has also been
scrutinizing the group's finances.
And in July 2019, the attorney
general for Washington, DC issued
subpoenas to the NRA and
its charitable foundation amid allegations
of financial misconduct.
And the gun group is dealing
with the fallout from Russian operative
Maria Butina, who was sentenced to
18-months in prison in April
2019. Butina allegedly used her
NRA activism to illegally infiltrate
conservative political circles.
In response, their internal troubles, the
NRA cut ties with its top
lobbyists, split with its estranged
PR firm Ackerman McQueen, and
shut down production of NRATV.
Despite the NRA's attempt at
damage control, those investigations
could still have serious
implications for the group.
If the NRA lost its non-profit status,
it could have a major, major
impact on their future activities,
severely restricting and hobbling
what they are able to do.
But what does all this mean
for the future of the NRA?
And is bankruptcy imminent?
The NRA's position right now is about as
bad as it has ever been, at
least in modern times.
All of this is coming together
to be the perfect storm.
And the gun group is facing
additional pressure on a national level.
As of 2018, six in 10 U.S.
adults say gun laws should be more
strict, 12 percent more than 2008.
I would expect fallout in
terms of declining revenues.
I would expect fallout in
terms of declining membership.
Is this the end of the NRA?
I think the answer to that is no.
As one of these organizers put it,
the NRA existed long before Wayne
LaPierre was in charge, and the
NRA will exist long after Wayne
LaPierre is gone.
We are always scared about the future
of the Second Amendment and the
future of our gun rights.
If somebody is a law abiding citizen,
then they have that right to
protect themselves.
And that's what we want to keep.
Despite ongoing litigation and fears
of even bigger money problems.
The NRA has built a movement
convincing supporters that gun ownership
is a right that must
be defended daily. And
that operation could prove to be
the financial lifeline the group
needs.
