The problematic pass-through association [former Treasurer and CFO, Wilson “Woody”] Phillips is alleged to have devised concerned a public relations firm known as Ackerman McQueen and one among its subsidiaries, the Mercury Group.
From the time LaPierre took over the group’s management within the early 1990s till 2018, when Phillips resigned, Ackerman was the NRA’s largest vendor, billing the group $50 million for work achieved in 2017 and 2018 alone. During that two-year interval, Ackerman billed the NRA a further $18 million for expense reimbursements.
A portion of these bills had been incurred by NRA officers, who would search reimbursement from Ackerman, which might then undergo the NRA for reimbursement.
“The NRA used this arrangement to conceal expenditures by NRA executives … many of which were personal or lacked documentation required by IRS publication 463 to permit the NRA to avoid reporting such expenses as taxable income,” the grievance mentioned.
“The effect of the pass-through expense arrangement was that these expenses would be paid for by the NRA without written approvals, receipts, or supporting business purpose documentation in accordance with NRA policies and procedures, and without disclosure to or internal review by the NRA FSD [Financial Services Division],” the grievance mentioned. “Payment of these expenses also violated IRS rules governing reporting of income for each of the recipients on their W-2 forms, exposing the NRA to penalties for false filings and for under-withholding of taxes due.”
– Robert Freedman in Financial irregularities at heart of lawsuit to dissolve NRA