Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, June 4, 1995 TAG: 9506050061
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: Associated Press
DATELINE: LENGTH: Long
The National Rifle Association is the target of a sweeping investigation by the Internal Revenue Service that is expected to review the organization's tax-exempt status and its financial activities, according to current and former NRA officials.
The massive audit is occurring amid allegations of fiscal irregularities within the NRA by former board members who assert that a militant faction now leading the organization may be misusing funds and mismanaging the $150 million budget of the nation's largest gun lobby.
Neal Knox, the NRA's second vice president and an influential member of its board of directors, confirmed that the IRS earlier this year informed the NRA that it had been selected ``at random'' for an audit that could last two to three years and require the NRA to provide office space for the investigators.
Knox - the leader of the hard-line faction that gained control of the organization in 1991 and 1992 - said that he and other NRA officials believe the IRS audit is politically motivated.
``If I'm to believe it's random, I also believe in the tooth fairy,'' Knox said. ``What they're doing appears to me to be a purely political effort.''
Knox and other NRA officials said they believe the IRS is taking action because the gun lobby played a key role in defeating Democratic congressional candidates in the 1994 elections and is working to unseat President Clinton, a gun control supporter, in next year's election.
Clinton, who has taken on the gun lobby, has stated publicly that the NRA was instrumental in the defeat in November of more than 30 members of Congress who supported gun control - thereby tipping the balance of power in the House to the Republicans.
The White House denied that the NRA was being singled out for political punishment. ``The procedures by which the IRS conducts audits are established by law and are well known,'' spokesman Mike McCurry said. ``The White House, to my knowledge, had no role whatsoever in the audit.''
Don Roberts of the IRS would neither confirm nor deny the existence of an audit of the NRA but said ``examinations are not usually done at random'' and ``most are done because there is something that has raised questions that we want to pursue.''
Knox said NRA officials are negotiating details of the IRS review, including access to NRA computer files and information on the financial relationships between the NRA and several charitable organizations that operate under the NRA umbrella.
NRA President Thomas Washington said the organization's books have been reviewed by outside auditors who say the NRA is complying with IRS regulations. ``I'm not worried about it,'' Washington said. ``We have nothing to hide.''
Allegations of fiscal improprieties by the NRA have been made by former board members such as Dave Edmondson, who distributed leaflets detailing some of the charges at the organization's recent convention in Phoenix.
``The NRA is being run by a bunch of incompetents, and they're ruining it,'' Edmondson said. ``My motive is to save the organization, even though I think it's too late.''
Edmondson and others say NRA fiscal mismanagement includes overspending on membership recruitment and contracts improperly awarded to NRA board members.
The audit and charges by Edmondson and other disaffected members of the NRA's old guard occur at a time when the organization is under extreme financial pressure. NRA annual reports show that it incurred a $2.8 million deficit last year and a $21.6 million deficit in 1993. Last week, the NRA warned in a new fund-raising appeal that substantial program cuts will have to be made unless more money can be raised.
The NRA - a formidable force in US politics for generations - has been rocked with bad publicity in recent months. Controversy began to simmer when the new leadership adopted a ``no compromise'' approach in its opposition to gun control and boiled over when a recent direct-mail solicitation referred to agents of the US Bureau of Alcohol, Tobacco and Firearms as ``jack-booted government thugs.''
The mailing was released while a portrait of the suspects charged in the Oklahoma City bombing emerged as militants who spouted similarly hateful rhetoric against the ATF. It resulted in former President George Bush resigning from his lifetime membership in the NRA, and President Clinton stepping up his political attacks against the gun lobby, which he said represented a militant fringe out of touch with mainstream America.
Founded 124 years ago as an organization representing hunters and competitive shootists, the NRA today has 3.5 million members. Its lobbying arm, the Institute for Legislative Action, is considered among the most potent in Washington. Its political action committee, the NRA Political Victory Fund, donated more than $1.8 million to candidates for federal offices in 1993 and 1994, and spent another $1.5 million on commercials, phone banks and direct mailings. A half-dozen additional organizations affiliated with the NRA raise funds for a variety of causes, including an NRA firearms museum and a firearms civil rights legal defense fund.
Headquartered in Fairfax, Va., the NRA is registered as a nonprofit group under the 501(c)(4) tax codes, which empower it to raise funds, which are not tax-deductible, through membership and donations. This is the part of the organization that fuels its lobbying machine. But the association has other branches, such as the NRA Foundation, which was created in 1992, under the 501(c)(3) tax codes as a charity for educational purposes. It is against the law under some circumstances to mix funds from entities under those two separate tax codes. This is one area that IRS auditors are expected to pursue, former NRA officials said.
by CNB