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Lawsuit: NRA’s Unpaid Bills Could Shutter NRATV

By betsy.woodruff@thedailybeast.com (Betsy Woodruff) julia.arciga@thedailybeast.com (Julia Arciga) asawin.suebsaeng@thedailybeast.com (Asawin Suebsaeng)
Bloomberg via Getty

The National Rifle Association is overdue on more than $1.6 million in unpaid bills, according to a new court filing made by its longtime advertising firm.

On Wednesday, Ackerman McQueen, an ad agency that has for years worked with the National Rifle Association and runs the gun group’s media arm NRATV, filed a motion for a preliminary injunction against the NRA. It’s the latest move in a brutal court battle between the ad agency and the powerful pro-gun organization.

It could also spell the death of NRATV, a pro-Trump online TV network known for its culture-war content. In the filing, the company alleges that it will have to stop paying 40 percent of its employees in one week if the NRA doesn’t pay what it owes or give the firm a $3 million letter of credit—which its contract requires if it’s overdue on its bills, according to the suit.

The ad firm is now taking steps to furlough employees who worked on NRA projects, according to a declaration from its chief financial officer filed in court.

“AMc requests that the Court issue an injunctive order requiring the NRA to post the $3,000,000 letter of credit mandated by the parties’ contract,” the filing reads. “The alternative is that AMc will be compelled to discontinue all services to the NRA and lose the employees who perform those services forever, incurring costs for severance the NRA is unlikely to pay without litigation.”

“Worse, shut down of those services will give the NRA an opening to claim a breach by AMc—a situation orchestrated by the NRA,” the court document alleges.

An NRA spokesperson said the group is “skeptical” about the filing’s allegations.

The filing specifically cites NRATV on several pages, including a section that states, “While the NRA has made allegations in which they seek to scapegoat AMc for issues relating to NRATV and even problems related to the NRA's own self-governance, AMc has always operated at the direction of the NRA CEO.”

Ackerman claims over 50 percent of its employees work on “projects and services” that include “in-house media production capabilities” for the NRA. The firm also claims 25 percent are “essentially virtual employees” of the gun-rights group, and most of its Dallas office is “dedicated to support NRA projects and services.”

“The substantial financial damage flowing from the NRA’s ongoing breaches jeopardizes AMc’s continued business existence… AMc will be compelled to terminate many employees who are used on other AMc projects as well as serving the NRA,” the motion reads.

The suit also alleges that the NRA owes the firm more than $1.6 million, based on 11 invoices for “NRATV Programming” and “Monthly Video Support” ranging from $62,000 to $680,000. Because of that failure to pay up, the firm’s “continued existence as a company is now endangered,” the suit says.

The firm also contradicts claims the NRA has made publicly about its former president, Oliver North. The gun group has argued in court that North and Ackerman McQueen have withheld information from them about the nature of his work for the ad firm (North and the firm agreed to produce a documentary series, per NRA filings, but have yet to fully deliver). But according to the ad firm’s new filings, the NRA “directed the amounts of payment” to North.

A spokesperson for the NRA pushed back on the allegations.

“The NRA is skeptical of Ackerman McQueen’s claims—indeed, it was the agency’s repeated failure to provide backup for its invoices that spurred this lawsuit,” said Andrew Arulanandam, the gun group’s public affairs chief, in a statement. “Ackerman’s filing, which demands millions of dollars from the NRA, suggests that the agency cannot sustain its facilities, operations, or employees without continued support from the NRA. The NRA is confident that we will prevail, and we look forward to a complete airing of all the facts relative to Ackerman’s behavior and practices once and for all.”

The NRA is facing a storm of internal and external threats. It is fighting New York Gov. Andrew Cuomo in court for comments he made to insurance companies and banks about the group. The NRA argues that the governor threatened to use the state’s resources to punish companies that do business with the group. Meanwhile, a recent Washington Post report detailed ballooning financial problems for the gun group, and its recently deposed ex-president, Oliver North, alleged months ago that the group faces enormous legal bills that pose an existential threat (the NRA defends its legal expenses).

Read more at The Daily Beast.

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