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February 8, 2010

They Definitely Deserve Our Attention

The gun lobby never tires of telling Americans about the fine character of the captains of the firearms industry. Whether it’s National Rifle Association CEO Wayne LaPierre lecturing about the “law-abiding firearm manufacturers, retailers and owners in this country” or politicians like former Senate Majority Leader Bill Frist painting an idyllic picture worthy of Norman Rockwell (“I’ve toured gun manufacturing facilities. I’ve shaken their hands. I’ve looked them in the eye. They’re hard-working, law abiding citizens who deserve our attention.”), we are continuously assured that the industry has nothing but our best interests in mind.

But firearm manufacturers and dealers don’t always turn out to be so “law-abiding” in practice, as two recent national stories reveal...

On January 18, more than 20 representatives from companies that supply products to law enforcement and the military were arrested for violating the U.S. Foreign Corrupt Practices Act (FCPA), a 1977 law that prohibits bribery of foreign government officials. Among those indicted and arrested was Amaro Goncalves, Vice President of Sales at Smith & Wesson, the firearms manufacturer that produces more handguns than any other U.S. company.

The arrests were the culmination of a two-and-a-half year investigation involving the FBI and Department of Justice. The FBI set up a sting operation where an undercover agent impersonated an official of an African country. Goncalves believed he was trying to win a $15 million contract to outfit the country’s presidential guard with pistols. He allegedly offered an illegal bribe—a 20% commission—to the official in order to obtain his business.

According to the Department of Justice, this is the single largest investigation and prosecution against individuals in the 33-year history of the FCPA.

Officials with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), however, have had less luck in bringing a corrupt gun dealer to justice in Wisconsin. ATF agents recommended a revocation of the license of Milwaukee’s Badger Outdoors gun shop after a 2006 audit revealed that numerous firearms in the store’s inventory were missing and unaccounted for. The store regularly ranks among the top five gun shops in the nation in terms of number of guns traced to crime. In 2005 they were first on that disreputable list when 537 guns sold at their shop were recovered from crime scenes nationwide.

Law enforcement officials were surprised when Badger co-owner Milton Beatovic announced he was retiring and voluntarily giving up his Federal Firearms License (FFL) in November 2006. Any hopes of seeing Badger put out of business, however, were dashed when Beatovic and co-owner Walter Allan exploited a loophole in the law and transferred ownership of the store to Allan’s 28 year-old son, Adam Allan, in January 2007. The store’s name was changed to “Badger Guns.” Walter Allan is now technically an employee of the store, working for his son. Beatovic, although “retired,” is still the landlord of the building from which Badger operates.

During his interview for an FFL, Adam Allan was unaware of key details about the gun store he was buying. One federal document states: "[We] asked Allan to estimate the dollar value of the inventory. He said he had no idea and asked [Beatovic] when he came in the room."

17 years of investigation of Badger Outdoors are now effectively down the drain, with the new owner having the equivalent of a clean legal slate. And the store has hardly cleaned up its act under its new “leadership.”

Since “Badger Guns” began operations on September 1, 2007, the ATF has uncovered new violations of federal law. The agency issued Adam Allan a warning letter on May 30, 2008, telling him he may face license revocation if the pattern continues. Additionally, an undercover investigation conducted by the Milwaukee Police Department in June 2009 found that one in five people exiting the store was a convicted felon. That investigation was prompted by the fact that, over the past two years, six Milwaukee police officers have been shot and wounded by individuals using guns purchased from Badger.

In talking about the transfer of Badger to Adam Allan, Milwaukee Police Chief Edward Flynn said, "It looks like a cynical shell game to me." Milwaukee County District Attorney John Chisholm added: “These guys are cagey, sophisticated dealers and they have legally thwarted every attempt ATF has made to regulate their conduct. They have a built-in escape clause. What other industry gets that kind of sweetheart deal?”

The answer is no other industry. For all other businesses, including liquor wholesalers, inspectors have the authority to investigate all the individuals behind a business and deny a license if any one of them is likely to break the law.

Here are Bullet Counter Points, we admit that there is some truth in the statement that gun manufacturers and dealers “deserve our attention,” but it’s probably for a different reason than gun industry lobbyists would have you believe.

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