At the end of the day, while it appears the NRA has been very unethical in its financial management, aren’t they a private organization free to spend members money how they choose? If people want to continue to donate to an organization that may or may not misuse the donation isn’t that their choice?
A lot of folks probably see it that way. The lawyers, accountants, tax specialists, and regulators see it a lot different.
When you form a non-profit organization you are filing under the Corporation laws of the state you are choosing to have as your domicile. To be recognized, you incorporate there, filing articles of incorporation, and in doing so, make yourself subject to the Corporation laws (both for-profit and no-profit corporation laws) of that state and any other states you choose to do business in.
Part of that comes with requirements you must follow; by-laws, governance rules, "reasonable and prudent person" standards, self-dealing rules, conflict of interest, self-inurement, and a host of other rules/laws/principles that govern how your for-profit or non-profit must operate. You then put yourself under the purview of the Secretary of State and Attorney General of that state.
Add to that, if a corporation chooses to be a qualified non-profit organization under Internal Revenue Code Section 501(c) you then subject yourself to even more constraints, rules, and guidelines.
The NRA knew all of this. In fact, for many years it was discussed often in the shooting circles whether or not the NRA should move to a less hostile state when it comes to 2A issues. It was well-known they had an exposed flank by being charted/incorporated in NY state.
Then, they get suckered into the insurance business with the blessing of the four folks indicted, which now puts them in a completely different set of regulatory oversight. Bad enough to expose your organization to all those insurance regulations if you are making big money to do it, but when you are losing your ass on this insurance venture in addition to subjecting yourself to more regulation, that is grounds for Executive and Director malpractice/malfeasance.
None of this was/is a surprise to people who regularly operate in these confines. It surely was not a surprise to the attorneys and tax advisors at the NRA. Just whether or not the advisors were listened to by management and the Board. If the NRA was a publicly traded company and this happened, they would probably start clearing out cells in Leavenworth to let these folks join Bernie Madoff and the Enron scammers.
And yes, still each persons' choice if they do/don't want to donate. But not the choice of management and Board of Directors to ignore the rules and laws of the states they incorporate in.
I just wonder if this is a scheme to drain as much out of the NRA in court fees before the election?
Yes, that surely plays into it. But, the NRA played right into that trap by their own mismanagement and questionable decisions.