Printed in the USA.
The Gottlieb-Tartaro Report
Issue 028
April, 1997
NRA Finance Committee Meeting Minutes
The Gottlieb-Tartaro Report is brought to you electronically about one month after publication. To help support the Report, and to receive it when it is current, subscribe by calling 425-454-7012 (and make sure you mention that you heard about it on the Internet!). More information on how to subscribe is available at the end of this page.
Subscribe Electronically to the printed edition of the report, and receive the news when its most current! Our online subscription for the Glottlieb-Tartaro report is available 24-Hours a day.
Dear Subscriber,
With the National Rifle Association’s annual meeting and convention coming up during the first week of May in Seattle, interest is high in the money problems of the nation’s biggest gun lobby.
We have obtained the NRA Finance Committee Meeting Minutes from the meeting held on December 7, 1996 at the Hyatt West Hotel, Dallas Fort Worth Airport.
We reprint excerpts from the official Minutes of the Finance Committee’s most recent meeting without comment:
Meeting Attendance:
Committee Members Present: RICHARD L. CARONE (Chairman), DONNA BIANCHI (Vice Chairman), DAVID E. BENNETT, ROBERT K. CORBIN, FRITZ R. DIXON (by telephone), ROBERT E. HODGON, SUE KING, NEAL KNOX, JOSEPH E. OLSON. FRANCIS WINTERS was out of the country and excused. Note: FRANCIS is the only non Board Member on the Committee and as such could not have voted on any financial policies passed by the Committee per Board Resolution 14.
Other NRA Directors Present: BARBARA PHILLIPS, PHILIP JOURNEY, W. M. “BILL” PACE, RONIN COLMAN, and MICHAEL KINDBERG.
Officers: NRA President Marion Hammer, NRA First Vice President NEAL KNOX, NRA Second Vice President ALBERT ROSS.
Staff Officers Present: The following staff officers attended the non-executive session of the meeting: WAYNE LAPIERRE, Executive Vice President, WILSON PHILLIPS, CFO/Treasurer; EDWARD J. LAND, Secretary; CRAIG SANDLER, Executive Director-General Operations; TANYA METAKSA, Executive Director-ILA.
Matters Discussed By The Committee:
Review of 1996 Financials/Operations
The first issue the Committee reviewed was the results of operations for the nine months ending September 30, 1996 and for the eleven months ending November 30, 1996. It was noted that the cash flow for the periods had moved from a negative ($1.7 million) during the first nine months of the year to a positive $4.4 million during the last eleven months period, and concurrently that the accrual based losses before unrealized gains had moved from a ($7.5 million) operating loss during the nine month period to a ($3.9 million) operating loss for the eleven months ending November 30, 1996. After unrealized gains from our portfolio investments in the stock market, the November 30, 1996 Income Statement showed a loss of ($1.8 million) vs a ($7.1 million) loss in the first nine months (September 30, 1996), the unrealized gains from our security investments in the stock market was only $396,000 on the September financials, yet the eleven month financials show unrealized gains from our investments in the market at $2.2 million for the year to date (11/30/96).
It was noted by the Committee, their continuing serious concern that the major factors in improving the Financial results were not fundamentally obtained by operations, but by fortuitous unrealized gains from the stock market which could just as easily become losses and by funds derived from, and almost exclusively driven by, a fourth quarter (one time) fire sale of upgrades in membership class (to Endowment, Patron, and Benefactor) by offering significant discounts for those memberships (125th anniversary discount promotion). The Committee noted that these funds would be expended to cover losses or costs already incurred through the third quarter, thus cash from this membership promotion was not going to remain in the reserve portfolio’s (assets) to offset the liabilities and significant deficit the NRA has incurred on its financials (balance sheet).
It was noted by the staff that improvements in cost containment are continuing, as evidenced by the financial fact that every (cost) area of NRA operations (except one) was under the Board Approved budget. The exception was the EVP directed public relations expenditures, which were significantly over budget ($2,022,900) through the third quarter. The Committee noted that our problem is not that staff is remaining under budget with respect to Board Approved budgeted cost items or that cost containment is not continuing or contributing toward improvements to the bottom line. The problem is that these efforts as cost containment are not keeping pace with falling net revenues resulting from declining membership and member contributions which in turn produces quarterly losses on budgeted costs incurred, requiring fund raising miracles in an attempt to balance the income statement.
As the Chair and other committee members pointed out in this meeting, as well as in previous finance committee meetings, the fundamental problem is simply that the management has failed to match, cut or adjust operations so that actuals in the cost structure are in line with actual revenues as they accrue throughout the calendar year. Each year the Finance Committee and the Board expects NRA’s management to take corrective action throughout the year so that at the end of the year the Board Approved Budget Projections balance with the Actuals Incurred with respect to the bottom line. As JOE OLSON pointed out, no contingencies are provided by management. The fact that NRA’s management has historically been unable to balance the income statement was graphically presented to the Committee by the CFO/Treasurer in a 10 year chart of NRA’s revenues, expenses and net income. This chart, with accompanying figures showed that in the last six years NRA has incurred operating losses in the range of ($70,000,000). The cash drain due to losses and capital expenditures is at least ($85,000,000).
It’s also significant to recognize the Board bears responsibility here as well: at the January/February Board Meeting for each of the years 1991, 92 & 93, the Board approved budgets for those respective years, providing for deficit spending or losses totaling ($53,000,000). However, NRA management greatly exceeded those approved losses. As shown, these losses were covered by liquidating NRA’s assets while at the same time incurring debt, to the point that NRA’s net worth (assets minus liabilities) shows a deficit in excess of ($50,000,000). For as long as any of the present Committee Members have been on the Finance Committee, the Committee has continued to express its serious concern with this deeply disturbing trend. The financials provided to the Committee dated November 30, 1996, show a (Net Worth/Members Equity) Net Assets deficit of ($53,272,000); the NRA has been technically insolvent for several years, while at the same time the Association has incurred substantial debt, continual operating losses concurrent with significant capital spending outlays, and (since mid 1995) a fall in revenues due to declining membership and contributions from members. The unprecedented rate of the liquidation of the Association’s assets over the last five years, used to meet current obligations while future liabilities were increasing, leaves the Association without a cash cushion and few options.
Therefore, while the Chair commended the EVP for pulling off another fund raising miracle, it was also recognized that while this latest promotion significantly helped close the gap on losses for the year (1996) it did not change the fundamental character of the Association’s serious financial troubles, in fact it highlighted our problems. Specifically, as the Committee discussed, the Association’s insatiable need to produce fund raising miracles just to cover operating costs that would otherwise result in even higher operating losses as well as the fact that fund raising promotions such as the certified mail program (recently condemned by the Board) and the membership discount program (including this latest upgrade fire sale) are not treated as discretionary income to the Association because they are required to fund expenses in the overall cost structure and cover losses, not to reduce the significant long term liabilities & debt the Association has incurred.
Promotions such as the recent membership class upgrade fire sale are, in effect, a continuation of the asset liquidation mode the Association has been engaged in over the last several years. It is nothing more than a sell off of a soft asset (recognizing that our members and their good will are the crown jewels of the Association). Further, as the Committee noted, this fire sale of memberships categories dilutes the value of these memberships as a whole, particularly to those who have already paid the full price or to those who otherwise would have paid the full value price of these memberships in the future. As VP ROSS pointed out during the discussion of this issue, in that membership upgrade to “Endowment” implies that we are endowing a category of membership, all of these moneys should be placed into a Board restricted portfolio asset....
At the close of the presentation and discussion on the 3rd Qtr. financials, the Chair asked the CFO what he expected the impact of the discount on membership upgrades would be on year end figures. It was noted that the CFO believed that on a cash basis we would be positive; with respect to the financials on an accrual basis, the Income Statement would probably be negative on revenues over expenses. However, he did not expect it to be more than a $2-3 million deficiency. After unrealized gains from NRA’s investments in securities (the portfolio), he expected that should a loss be incurred he did not feel that loss to be more than what was shown the Committee in the November 30, 1996 Income Statement ($1.8 million) as he expected that loss to diminish due to the response to the (one time) membership class upgrade promotion and unrealized gains in the market. No significant changes are expected in the Balance Sheet deficit.
Sportsmen Camp in Front of Computers Outdoorsmen are clearly not spending all their spare time outdoors. Many are camped in front of their computers.
That’s the conclusion reached by the people behind All Outdoors (www.alloutdoors.com), one of the Internet’s largest communities for hunters and anglers. All Outdoors celebrated the start of its second season online by breaking through the two-million hits per month barrier.
“The growth of this Internet community for outdoorsmen has astounded even the most optimistic of us,” said DOUG TRUAX, director of Web publishing for All Outdoors. “In the last four months we’ve been growing at the rate of 33 to 55 percent per month.”
So hunting and fishing have come to the World Wide Web in a big way!
Who is giving money to OUTLAW hunting? In the wake of a spate of November 5, 1996 anti-hunting ballot initiatives, we can now identify those who funded the effort that affected seven states —— Alaska, Colorado, Idaho, Massachusetts, Michigan, Oregon, and Washington.
Information from the political campaign finance reporting departments of the seven states draws a revealing picture.
The celebrity donor list was mostly a repeat of past campaigns, with long-time anti-hunting singer/songwriter Don Henley of the musical group The Eagles donating $5,000 each for the efforts in Colorado and Oregon. In Washington’s campaign, “Outland” cartoonist Berkeley Breathed donated original artwork values at $25,000 for its fund-raising efforts. “Margaritaville” singer Jimmy Buffet gave a $130 in-kind donation to the Michigan anti-bear hunting campaign —— which is odd because Buffet is a contributing editor to Sports Afield magazine.
Here is the list of contributors to anti-hunting campaigns: American Humane Association, $16,000; American Society for the Prevention of Cruelty to Animals, $93,000; Animal Protection Institute, $168.48; Animal Rescue League of Boston, $25,000; Joel Bennett (Audio/Video Production), $12,300; Barbara Birdsey (social worker), $26,000; Berkeley Breathed (cartoonist), $25,445; Jimmy Buffet (entertainer), $130; Karen Bunting (self-employed), $35,000; Colorado State University, $300; Vivian Crumley (retired), $16,000; Defenders of Wildlife, $30,390; Malcolm Field (neurosurgeon), $615,433.79; Friends of Animals, $6,500; Fund For Animals, $53,500; Harry Hamlin (actor), $375; Don Henley (entertainer), $10,000; Humane Society of the United States, $545,341.48; Humane Society of the Willamette Valley, $500; In Defense of Animals, $2,000; International Fund For Animal Welfare, $52,676.80; Jack Lemmon (actor), $200; Sandy Lerner (CEO), $10,000; Greg Louganis (athlete), $75; Mike Markarian (Fund for Animals), $125; Madison Mason (actor), $50; Massachusetts Audubon Society, $78,078.87; Massachusetts Society for the Prevention of Cruelty to Animals, $270,571; Jackie Melton (Guaranty National Insurance), $10,000; Mountain Lion Foundation, $3,500; Kevin Nealon (comic), $26,160; Berry Nolan and Terry Murphy (actors), $200; Northwest Ecosystem Alliance, $15,587.67; Oregon Animal Welfare Alliance, $1,000; Oregon Humane Society, $500; Oregon Wildlife Federation, $125; Overseas Film Group, $1,000; Wayne Pacelle (Humane Society of the United States), $5,000; People for Animal rights, $1,000; Portland Audubon Society, $500; Progressive Animal Welfare Society, $125,088.12; Charlotte Rae (actress), $130; James Rogers (retired businessman), $327,146; Edgar Smith (businessman), $40,000; Sally Struthers (actress), $120; Wildlife Defense Northwest, $500; Jacklyn Zeman (actress), $350.
Big Money Foundation Funds Anti-Gun Programs The Joyce Foundation is a Chicago philanthropy established in 1948 by Beatrice Joyce Kean, heir to a lumber fortune. Its assets at the end of 1994 (the most recent reporting period) were $458,397,350. One of its specialties has been funding anti-gun projects, and in September, 1996 and January 1997, it announced more than $1.6 million in anti-gun grants.
Recent recipients of Joyce Foundation largesse were: Harvard School of Public Health, Minnesota Institute of Public Health, Physicians for Social Responsibility, Boston University School of Public Health, Johns Hopkins University, and the National Opinion Research Center of the University of Chicago.
The Johns Hopkins University grant went to their School of Hygiene and Public Health for general support of the Johns Hopkins Center for Gun Policy and Research. The grant to the National Opinion Research Center was to conduct and analyze a national public opinion poll on gun policy issues. Read the story about this public opinion poll on the next page to see the bias that went into the National Opinion Research Center’s report.
To protest the Joyce Foundation’s grants to anti-gun organizations, you can contact Chairman John T. Anderson directly at (312) 782-2464.
Biased Anti-Gun Poll Paid For by Big Money Foundation Scripps Howard newspapers recently carried a story with the lead, “Most Americans believe handguns ought to be regulated like automobiles.”
The story then explained that this remarkable conclusion had been prompted by a new survey by the Johns Hopkins School of Public Health and the University of Chicago’s National Opinion Research Center.
The story did NOT explain that both of these prestigious schools had been paid by the Joyce Foundation’s “Gun Violence” fund to come up with their remarkable conclusion, as detailed in the preceding item on Page 4.
The newspaper story disclosed only that the survey had been done by telephone contact with 1,200 Americans, and then went on to repeat the surveyors’ claims:
There is “an overwhelming public demand for handguns to be treated like other consumer products.” Note that the word “demand” is used instead of “opinion,” which would be more typical of a scientific survey.
The newspaper chain reported that 82 percent of respondents favor mandatory registration of handguns.
70 percent want handgun owners to be trained and licensed.
86 percent support laws to require all new handguns be childproofed.
68 percent want new handguns “personalized” so only an authorized user could operate the weapon.
The paper chain quoted the director of the survey, Tom Smith, as characterizing the public’s position as “the automobile model.”
“We register cars and require that people have a license to drive. Similarly, we could register guns and license gun owners.”
The story did not say that this result was preordained and the term “the automobile model” has been floating around the anti-gun community for several years, and is well known at the Joyce Foundation, which funded the survey.
Did the surveyors plant the phrase “regulated like automobiles” in their respondents minds? And then claim the public demands “the automobile model?” We think so.
Significantly, the Scripps Howard newspapers remarked at the end of the story, “No margin of error was available for the survey.”
It is entirely possible that this survey with its massively anti-gun outcome was perfectly legitimate, followed all the accepted rules for constructing non-leading questions, contained control questions to check for accuracy, and was performed by dispassionate technicians following the instructions of dispassionate directors who were paid to do the survey by dispassionate funders.
Just not very likely.
We know that the only reason the survey exists was because a big money foundation wanted to influence public policy against guns and would not have paid the same amount of money to a public opinion surveying institution that had found pro-gun public opinions in previous surveys.
We know that the people who received the big money grants from the Joyce Foundation have an anti-gun bias and are not dispassionate scientists without interest in the outcome of such a survey, based upon their previous statements and behavior.
What we don’t know, however, may be more important than what we do know.
We don’t know what questions they asked, we don’t know how the answers were evaluated, and we don’t know how the survey’s accuracy was checked, or even if it was checked.
Therefore, we have reason to doubt that this survey has any validity at all.
But this poll and its hidden sponsorship is symptomatic of the increasingly intrusive way that big money foundations are trying to shape public opinion and influence public policy while remaining anonymously behind the scenes.
It’s not only in the anti-gun arena that we find the problem. The economic power of a cluster of big money foundations operating outside of our democratic process tries to shape the future of our society in every issue of importance.
Strategic philanthropy —— using great fortunes with tax-exempt status to change public opinion —— is all around us, supplying the media with “information” that may or may not reflect what Americans really think. Should that be changed?
Federal Legislative Update PAUL BILL: Rep. RON PAUL (R-TX) has introduced a bill, H.R. 1147, to repeal the Clinton ban on certain semi-automatic firearms.
Here’s what the bill provides:
Repeals the ban on more than 180 types of semi-automatic firearms.
Repeals the ban on large capacity magazines —— clips that hold over 10 rounds of ammunition.
Repeals the other severe gun control provisions of the 1994 crime bill, which has driven nearly 57 percent of the gun dealers out of business. The 1994 crime bill states that gun dealers cannot operate a business unless “the requirements of State and local law applicable to the business have been met.” In practice, this means the BATF has the authority to arbitrarily use such things as zoning laws to shut down gun dealers —— which they have done. In fact, more than 150,000 dealers have lost their licenses, bringing the number of FFLs to the lowest level in 22 years.
CHENOWETH BILL: Rep. HELEN CHENOWETH (R-ID) has introduced a bill, H.R. 1009, to fully repeal the Lautenberg gun ban which disarms anyone for misdemeanor domestic violence offenses, even those committed as long as 20 years ago. Police were not exempted from this ban, and have brought lawsuits in federal court to have it struck down. Rep. CHENOWETH’s bill has eleven co-sponsors.
As we went to press, the following co-sponsors had officially signed on: Tom Coburn (R-OK), Barbara Cubin (R-WY), John Doolittle (R-CA), Jim Gibbons (R-NV), Virgil Goode (D-VA), Wally Herger (R-CA), John Hostettler (R-IN), Ron Lewis (R-KY), Ron Paul (R-TX), Joe Skeen (R-NM), and Don Young (R-AK).
State Legislative Roundup California: These pieces of major legislation are slated to be heard in the California Assembly’s Public Safety Committee:
AB 131 - Provides that any person who fails to report the theft of a firearm within a 24-hour period of time in guilty of an infraction.
AB 136 - Repeals the State Firearms Preemption Law.
AB 247 - Authorizes any city or county to enact an ordinance by resolution to regulate the sale of firearms; declares that this authorization is declaratory of existing law.
AB 488 - Requires the Department of Justice to compile, publish and maintain the California “Junk Gun” roster listing those handguns determined by the Attorney General that do not carry basic safety features. Makes it a misdemeanor to supply, sell, or give possession or control of the specified firearms.
AB 646 - Prohibits any persona from manufacturing or offering for sale explosive material that has not been tagged for purposes of detection and identification.
AB 887 - Requires the Insurance Commissioner to undertake a study on the feasibility of imposing a premium surcharge on homeowners’ policies where firearms that do not have trigger locks are stored in areas accessible to children.
AB 1124 - Requires than an individual who sells a firearm equip the purchaser with a trigger lock.
AB 1369 - Uniform statewide standards for the issuance of a concealed carry weapons permit. Similar to last year’s AB 638.
The makeup of the Assembly Public Safety Committee is largely anti-gun. Insiders tell us the most vigorous opposition to gun rights will come from DION ARONER (D), SHEILA JAMES KUEHL (D), DIANE MARTINEZ (D), CAROLE MIGDEN (D) and GRACE NAPOLITANO (D), each of whom represents safe liberal districts.
Ohio Sheriff Defends Right to Keep and Bear Arms Parting Shot. . .
DANIEL BECK, Sheriff of Allen County, Ohio, wrote this in the Lima News.“Thank you for this opportunity to share my views as sheriff on the subject of the right to keep and bear arms.
“I will begin by stating my position plainly: I am a firm believer in the right of every law-abiding citizen to own, carry and use firearms in a lawful manner, for their defense and security.
“This is not a belief that I have come around to lately, or something I have made up. This belief comes directly from the U.S. Constitution and from the Ohio Constitution.
“When I took my oath as sheriff, I swore to uphold the U.S. Constitution and the laws of Ohio. The issue of whether or not to allow citizens of this free country to own, carry and use firearms in a lawful manner is not an emotional or logical issue. It is a constitutional issue, and to a law-enforcement official, it must be viewed in the light of the Constitution.
“Article I of the Ohio Constitution, The Bill of Rights, Section 4, states: ‘The people have the right to keep and bear arms for their defense and security; but standing armies, in time of peace, are dangerous to liberty, and shall not be kept up; and the military shall be in strict subordination to the civil power.’ “The Second Amendment to the U.S. Constitution states: ‘A well regulated Militia, being necessary to the security of a free state, the right of the people to keep and bear Arms shall not be infringed.’
“As Allen County sheriff, the foregoing is part of the law which I gave my oath to uphold. Every other elected official in this state gave their oath to uphold the same law. Yet almost every time the subject comes up in any court of record, the right to keep and bear arms is always infringed.
“It does not matter what I personally think of these laws. It does not matter what any attorney, court, judge, jury, lobby group or concerned citizen thinks of these laws. These are the laws of the land. To deny the validity of these laws is to deny the validity of the U.S. and Ohio constitutions.
“It is a sad state of affairs when anyone who attempts to quote either constitution on this matter is regarded by the media and the court system as some sort of crackpot, weirdo or Neanderthal.
“My personal belief is that crime in any county, any city and in any country of the free world is tied inseparably to the constitutional right of free citizens to keep and bear arms for personal defense of life and liberty.
“As long as we deny law-abiding citizens their constitutional right to defend themselves, their families and their property from wanton attacks by criminals who refuse to obey our laws, we will never be able to control the crime problem.
“Personal responsibility, in obedience to our laws, and in respect of our constitutional rights as free citizens, is the front-line defense in the historical fight of good against evil in any society.”
The Gottlieb-Tartaro Report: An Insiders Guide for Gun Owners
$30 for a full year of 12 great issues
This publication is available to be ordered online! Find out how, and start your subscription today!
Printed in the USA.
The Gottlieb-Tartaro Report (ISSN 1079-6169) is published monthly by the:
Second Amendment Foundation
James Madison Building
12500 N.E. 10th Place
Bellevue, WA 98005
Phone (425) 454-7012. FAX (425) 451-3959Please call or write if you have a question regarding your subscription.
Subscriptions $30 per year anywhere in the USA, $35 elsewhere. Single issues $5.00.Send address changes to:
The Gottlieb-Tartaro Report
12500 N.E. 10th Place
Bellevue, WA 98005Publishers: Alan M. Gottlieb and Joseph P. Tartaro
Editor: Ron Arnold
Design: Northwoods Studio
Production: Janet Arnold
Subscriptions: Susan Elings
Published by: Second Amendment FoundationCopyright 1999-2002 by Alan M. Gottlieb and Joseph P. Tartaro.
Photocopying, reproduction or quotation strictly prohibited without written permission of the publishers.
Bulk rates on request. Postage paid at Bellevue, WA.