The National Rifle Association filed a breach of contract lawsuit late last week against Ackerman McQueen, its main ad agency for nearly 40 years. The agency calls the suit “frivolous” and said it will aggressively defend itself.
The NRA alleges in its suit that the agency violated the services agreement between the two organizations by failing to allow it to examine in-depth the agency’s books pertaining to fees for services, including strategic marketing, media planning and buying, PR, digital media and website management and the operation of NRATV, a digital media content platform.
The NRA states in its suit that by 2017, it paid the agency and a PR subsidiary Mercury Group more than $40 million annually.
The gun-rights advocacy group noted that last year, it notified vendors of updated and strengthened procedures for documentation and verification of expenses related to vendor contracts.
Subsequently, the group said it “developed concerns” that the agency’s expenses and activities required greater oversight. Specific concerns included lack of proper documentation for out-of-pocket expenses incurred by the agency and lack of transparency regarding its annual budgets for services provided to the NRA.
There were also concerns that the agency was invoicing the NRA for the entire salaries of some employees that were doing work on the NRA account, and for other clients as well.
There were also issues concerning the digital content platform, such as the agency’s refusal to provide unique visitor, click-through rates and other data that would better help the NRA determine the return it was getting on its investment.
Also at issue was a separate contract between the agency and NRA president Oliver North, who was the host of some of the content on NRATV.
According to the NRA, North’s side deal with agency was defined as a third-party contract between the agency and the organization that would entitle the NRA to additional compensation if the broader agency services contract was terminated.
The NRA argues in its suit that it sought details about the third-party contract the agency refused to provide.
Word of the suit was first reported by The Wall Street Journal earlier today. That story explored details beyond the specifics of the suit. For example, the piece stated that an outside NRA lawyer, William A. Brewer III, “spearheaded” the suit and that he had a hostile relationship with the agency’s top two executives. The agency told the WSJ Brewer’s involvement constituted a conflict of interest.
Brewer was not named as one of the lawyers filing the complaint, however.
The NRA told the Virginia court where the suit was filed that it is seeking a judgment that the agency is in breach of contract. It also wants the court to force the agency to provide it with an array of documents, including all third-party contract between it and the agency, the agency’s annual budgets for work related to the NRA for the past three years and other related paperwork.
Ackerman McQueen issued this response:
“During a three-week review, an NRA forensic auditing firm received every single piece of information they [the NRA] requested. Further, the NRA has had consistent access to any and all documents regarding NRATV analytics. Despite the representation set forth in their lawsuit, the NRA had the personnel contract they claim AM withheld last week, before they filed their lawsuit. It was provided by the Williams & Connolly law firm. The transfer occurred as a result of a process for delivery of such highly confidential information.
“This flagrant misrepresentation, along with other false claims, serve as the foundation of malicious intent exemplified by this lawsuit. Months ago, legal counsel informed the NRA that 'Mr. Brewer himself has an irreconcilable conflict of interest. Mr. Brewer is the son-in-law of [agency Co-Chief Executive Officer] Angus McQueen and brother-in-law of Ackerman McQueen’s CEO, Revan McQueen. Mr. Brewer has demonstrated, in words and deeds, his animus for Ackerman McQueen and these family members and that animus pervades the Brewer firm’s dealings with Ackerman McQueen, whether dealing directly with Ackerman McQueen or through other members of his firm.
“Ackerman McQueen has served the NRA and its members with great pride and dedication for the last 38 years. The NRA’s action is frivolous, inaccurate and intended to cause harm to the reputation of our company and the future of that 38-year relationship. This lawsuit affects not only Ackerman McQueen, but the members of the organization whose dedication to the Second Amendment is shared equally with the defendants in this case. Much like we have done for the NRA and the Second Amendment over the past 38 years, we too will defend our position and performance aggressively.”