Industry News: August 2001
By Robert Hausman
A draft copy of Smith & Wesson’s New Dealer contract has been released. While not final, the document details how the manufacturer will expect its authorized retailers to conduct their businesses.
Specifically, the “Authorized Dealer Code of Responsible Business Practices” requires retailers signing to:
- - (Where available) carry liability insurance coverage of at least $1 million.
- - Provide safety locks with all S&W guns.
- - Make no sales of S&W firearms at gun shows unless all sales by any show seller are conducted after a background check.
- - Not sell any S&W firearm to any FFL-holder who is not an authorized S&W dealer or distributor.
- - Sell only one S&W gun to a multiple purchaser and additional guns after a 14-day wait (security firm sales are exempted).
- - Maintain an inventory record of S&W firearms updated monthly. Termination of the authorized dealership will result if any S&W firearms are unaccounted for after an audit.
- - Keep S&W firearms secured both during business and non-business hours.
- - Not sell S&W magazines able to hold more than ten rounds of ammunition, regardless of date of manufacture.
- - Comply with all monitoring of firearm distribution by S&W, ATF and law enforcement.
- - Maintain a record of all trace requests of S&W firearms initiated by ATF, and report such requests to S&W on a monthly basis. Retailers involved in a “disproportionate” number of crime trace requests may be terminated.
- - Require all employees involved in the sale of S&W firearms to receive training (training format to be developed by S&W) covering laws related to firearms transactions on an annual basis.
- - Require employees handling S&W firearms to pass a comprehensive written exam on the material covered in the training. Those who fail to pass the exam will not be allowed to sell or handle S&W firearms.
- - Not sell S&W firearms to consumers who have not passed a certified gun safety-training course.
When the “Smith & Wesson Agreement” with the Clinton Administration was first announced in March, 2000, the language of the document made it seem that it applied to products of other manufacturers, such as the ban on retailers’ selling over ten round magazines. While S&W reportedly is still seeking clarification of the agreement it signed with the federal government in the courts, the draft copy of the Dealer’s Code clearly bears out what S&W has been saying all along -specifically, that the Agreement only affects products which S&W manufacture.
S&W’s distributors have had their existing (Pre-Clinton Agreement) contracts renewed. New distributor contracts containing the terms of the new “Code of Responsible Distributor Practices” have not yet been released. S&W feels that since the new distributor contracts will limit distributors to selling S&W firearms only to authorized S&W retailers, it makes sense to build up a network of authorized retailers first, and then work on getting the distributors to sign on.
Led by Rep. John Hostettler (R-IN), some 90 members of the U.S. House of Representatives have petitioned Mel Martinez, the new secretary of the Department of Housing and Urban Development (HUD), to abandon the Committee for Safer Guns Coalition created by the Clinton Administration’s anti-gun HUD chief, Andrew Cuomo.
Cuomo had created the Coalition to give preferential local and federal government contract treatment to Smith & Wesson in the wake of the agreement reached with S&W’s former president, Ed Schultz. When other handgun firms refused to sign on to the agreement, and many local police agencies noted they wanted no part of the agreement, the coalition failed.
Tax Collections Rise
Excise tax collections on firearms and ammunition have risen through each of the three quarters reported so far for the year 2000, says the Bureau of Alcohol, Tobacco & Firearms (ATF). During the first quarter fiscal year 2000, the firearms and ammunition (which are taxed at the rates of 10% or 11% of the sales price) tax total came to $52,054,000, compared to $42,925,000 during the same period in 1999.
In the second quarter, the collected taxes totaled $95,394,000 versus $84,055,000 during the same quarter the year before. In 2000’s third fiscal quarter, the collected guns and ammo tax total jumped to $141,754,000, as opposed to $131,735,000 in 1999.
ATF has been active in going after gun law violators. ATF and the Kern County, California Sheriff’s Dept. have seized over 100 firearms and have filed charges including conspiracy to deal firearms without a license, selling/disposing of firearms to a felon, and unlawful receipt/disposition of a stolen firearm, in the culmination of a two-year illegal trafficking investigation.
The investigation began when ATF received information that two individuals, Mickey and Brandon Gladden, were involved in the illegal trafficking of firearms. Subsequent investigation documented the illegal transfer of more than 40 firearms. Pete De Luna, an ex-employee of Floyd’s General Store, a licensed dealer in Shafter, CA, and Monte Preston, were also implicated in aspects of the trafficking operation.
The investigation included a number of undercover purchases that involved “straw purchase” transfers of firearms. Although three search warrants were executed at federally licensed dealers for records, the owners of those businesses are not suspects or targets in the investigation. The warrants were executed by over 85 ATF agents with support from other law enforcement agencies, including the FBI.
The arrest of Tin Nyunt, of Elmhurst, in the New York City borough of Queens was recently made for illegally transporting or receiving firearms from out-of-state while not a federally licensed dealer. The case arose from a traffic stop for erratic operation of a motor vehicle by the New Castle Police Dept. in Westchester County. Search of the vehicle’s trunk revealed a Ruger 9mm pistol. New Castle police notified ATF agents who obtained further information on additional firearms. The subsequent execution of a search warrant at Nyunt’s residence resulted in the recovery of 14 rifles (including several so-called “assault rifles”) and six pistols. The arms are being traced to ascertain their origin.
The New York City Police Dept. is running a controversial “GUN-STOP” program offering a $500 reward for the removal of illegal guns. ATF invited the press in to photograph the seized guns that were on display at its New York office.
In another case, Mourad Topalian of Beachwood, OH, was recently sentenced to 37 months imprisonment, a $6,000 fine, three years of supervised release, and 200 hours of community service in connection with his guilty pleas. Topalian was charged with concealment and storage of stolen explosives and possession of two machine guns. Pursuant to a plea agreement, three other counts involving conspiracy, improper storage of explosives and possession of firearms with obliterated serial numbers were dismissed.
The charges arose from Topalian’s possession and storage of more than 100 pounds of stolen dynamite and high explosives, along with 13 firearms - including a fully-automatic Uzi submachine gun, and a full-auto, two-triggered Beretta submachine gun - along with almost 100 rounds of live ammunition, in a public rental storage facility in Bedford, OH, next door to a gas station and close to a children’s day care center.
Finally, a joint ATF and local police investigation has led to the arrest of six individuals who were attempting to commit a “home invasion” style robbery of an alleged drughouse. The month-long investigation also led to the seizure of an Intratec 9mm pistol, a Norinco AK-47 style rifle, a sawed-off Winchester 30/30 rifle, a sawed-off Browning 12 gauge shotgun, and a Beretta .25 caliber pistol.
Two of the individuals were wearing tactical police attire and badges and had in their possession a scanner, walkie-talkies and a list of police frequencies. If convicted, each faces up to 25 years imprisonment.
Thomas Wayne Moore and Paul Larry Mohr were arrested by ATF agents last February on charges of possession and transfer of a machinegun. They were accused of selling a Beretta machine gun to an undercover ATF agent last January. About 75 firearms were seized in the raid, most were from Moore’s Wild West Trading Post in Otero County, New Mexico. About eighty handguns were stolen from a gun show held at the Oklahoma City Fairgrounds last February 17-18. Reportedly security personnel were on duty at the show.
During a recent appearance on CNN’s “Larry King Live,” U.S. Attorney General John Ashcroft, spoke against passage of new gun laws. “I think we’ve got enough laws on the books. I think what we need is tougher enforcement,” Ashcroft said.
Ashcroft also stated, “Law-abiding citizens have a right, under our Constitution, to have firearms.” These words stand in stark contrast to the former Justice Dept. official position (during the Clinton Administration) that “the Second Amendment does not extend an individual right to keep and bear arms.”
Attorneys for the anti-gun group, Handgun Control, Inc. (HCI), are demanding that Liberty Watch, a pro-gun organization, hand over its web site domain names to HCI.
Liberty Watch’s web sites, www.handguncontrol.net, www.cphv.com and www.cphv.net, disseminate information, political beliefs, satire and parody supporting the Second Amendment.
“HCI asserts it owns valid service marks on the domain names - yet has provided no bona fide proof,” states Richard J. Lucibella, Liberty Watch’s executive director. “HCI has no legal right to restrict our web sites’ use of common, everyday English words and phrases.”
In an effort to peaceably co-exist, Liberty Watch has offered to publish mutually acceptable disclaimers, but HCI has been unyielding in its demand that Liberty Watch relinquish the domain names. The group has now filed suit against HCI.
A British company, 21st Century Faxes Ltd., is sending unsolicited facsimile transmissions to Americans. Purporting to be a “survey” on gun issues, the poll asks, “Should gun makers compensate victims of gun crime?” To register an opinion, respondents must FAX replies to a “900” number that, according to fine print at the bottom of the message, costs $2.95 per minute.
On February 3, the National Rifle Association’s board of directors, voted to approve a bylaw change that will help keep NRA President Charlton Heston in office in 2002. The move, which nearly assures the popular Heston’s re-election to a fourth consecutive one-year term, is felt crucial to success in getting out the sportsmen’s vote in the 2002-election cycle.
Last fall, Heston and NRA executive vice president, Wayne LaPierre, toured nearly 24 cities in eight states to rally pro-gun voters. Former President Clinton has publicly conceded such efforts had a major influence on the election results. Historically, NRA presidents were limited to two consecutive one-year terms.
Anti-gun residents of Avon, CT, are attempting to pressure a new Wal-Mart store in their town not to sell guns. Claiming gun sales do not reflect “the values of the community,” some residents are circulating petitions to keep guns out of the store.
The 2000 Las Vegas S.H.O.T. Show drew 16,745 buyers with a total attendance of 29,607 persons. There were 1,420 exhibiting companies at the 2000 Show comprising 465,600 square feet.
The 2001 New Orleans Show comprised 486,200 net sq. ft. with an overall attendance of 25,291, which included 12,857 retailers, 11,234 exhibitor personnel, 1,450 exhibiting companies and 1,200 media persons. Buyer attendance at the first Show in 1979 (held in St. Louis) was 2,450 with 290 exhibiting companies taking up 52,153 sq. ft. Total attendance was 5,600 persons.
Carroll County, Maryland, is thought to be the first school district in the country to make gun safety a required lesson within its health and life classes from kindergarten to 12th grade, according to Cable News Network. The rural district south of Baltimore, which started the program last fall, says that its program is a health and safety effort that is neither anti- nor pro-gun.
Maryland’s Court of Appeals has issued a ruling reversing a lower court decision regarding otherwise legal “weapons” concealed in the home. The case involved an unnamed Baltimore 14-year old who was sentenced to probation in 1998 for hiding a shotgun under his mattress. The teen’s mother found the gun and called police. The boy was charged with violating Maryland’s concealed carry law and was convicted. However, the state’s appeals court noted that generally a person “in possession of a legal, dangerous and deadly weapon may conceal or store it as long as it is on property which the person owns, are a legal resident of, or are present on as an invited guest if the owner has knowledge of the possession of the weapon.”
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