.Who’s Profiting from Oakland’s Gun Violence?

As the city struggles with violent crime, major gun makers and their lobbyists are making a financial killing.

Kao Saeturn liked to intimidate people with his Glock. Referring to himself as “the King of Oakland,” Saeturn, along with his gang, kicked off a methamphetamine-fueled spree that wreaked havoc on the Bay Area. After holding up a San Rafael massage parlor at gunpoint, Saeturn’s gang targeted another one in El Cerrito and then a Hayward karaoke club, threatening victims with their firearms. Then in a bizarre episode, Saeturn and an accomplice attempted to carjack a retired San Francisco Sheriff’s deputy at gunpoint on Interstate 580. When police finally apprehended Saeturn’s gang on February 7, 2008, officers recovered the Glock 17 pistol that the 25-year-old ringleader had used during the crime spree, along with other firearms. In 2010, the King of Oakland was sentenced to 272 months in prison.

Saeturn didn’t kill anyone in his spree, but plenty of firearms-related crimes end in death in Oakland. Take the case of Evan Meisner. On March 31, 2011, the 22-year-old Meisner was found in his East Oakland apartment lying face down in a pool of blood from a gunshot wound below his left ear. Phone records led police to Gregory Gadlin, a parolee in custody on domestic violence charges. A wiretap of a phone conversation between Gadlin, then in Santa Rita jail, and a friend, led them to the murder weapon — a 9mm Taurus Luger pistol stashed in Gadlin’s car.

These two cases are just the tip of the iceberg in California’s most violent city. More than one hundred homicides and thousands of shootings and robberies involving firearms occur in Oakland every year. The roster of firearms used to menace, maim, and murder reads like a military armory’s. Even though there isn’t a single gun store in Oakland, the city is awash in guns and high-capacity magazines. Well-known firearm brands like Smith & Wesson, Glock, and Mossberg are as prevalent on the street as are the so-called “junk guns” — cheap, old pistols that were made by companies that are no longer in business.

Regardless of what one thinks of the Second Amendment and the gun-control debate, the consequences of the gun industry’s yearly production of weapons for the American market translates annually into more than 32,000 firearms deaths, one-third of which are homicides. That’s 2,000 more deaths than the entire American casualty count suffered during the eight years of the Revolutionary War. When the Second Amendment of the US Constitution — popularly interpreted as an individual right to own firearms — was adopted in 1791, it took twenty seconds for a skilled gunman to load and fire a single musket round. Today, a teenager can spray fifty rounds in twenty seconds from an automatic 9mm pistol with a high-capacity magazine drum.

Occasionally, law enforcement officials bust criminal networks that traffic firearms, slowing the flow of guns into Oakland before another deluge of legally purchased and illegally procured guns is trucked in. However, because of the sheer ubiquity of firearms in America, and especially due to hamstrung federal regulators and lax gun laws in other states, the flow of arms into Oakland has proven unstoppable.

After mass slayings and heinous crimes — like the Oikos University shooting last year, the killing of three-year-old Carlos Nava, and the Newtown, Connecticut school massacre — calls for more effective gun laws in Oakland and California ring out. Rarely, however, is the ultimate source of all this weaponry scrutinized — the major corporations and private companies assembling and selling millions of pistols, rifles, revolvers, and shotguns every year.

The firearms industry is a multi billion-dollar global business, and the United States is its single biggest profit center. Firearms makers, and the moneymen behind them, use their profits to buy political influence in the US, and gut sensible restrictions on the industry that would reduce the public health impact of gun violence.

And despite the gun lobby’s claims to be protecting “liberty,” the biggest gun companies and their owners include a strange mix of foreigners, state-owned enterprises, private equity investors, pension funds, and dynasties with feudal origins, many of whom could care less about the US Constitution’s ideals. These deadly business interests have a stake not just in keeping America armed and “free,” but also in saturating America’s streets with millions of firearms.

The gun that the King of Oakland waved about during his rampage — a Glock 17 — was likely manufactured in Glock’s factory in Smyrna, Georgia. That factory produces 23,000 semi-automatic pistols for sale each year in the United States. The model 17’s numeric name refers to the number of 9mm bullets that can be packed into a single factory magazine, but aftermarket clips holding 33 rounds are readily available — even though California law prohibits magazines with a capacity of more than ten rounds.

Glock’s brand name became ubiquitous on America’s streets in the 1990s due to both police and consumer purchases. This made Gaston Glock — the company’s Austrian owner who began his weapons empire in 1981 by converting his curtain rod factory into a pistol mill — doubly rich off the civilian and law enforcement markets. Thousands of Glock pistols legally sold to civilians have facilitated gruesome murders and assaults. The Bureau of Alcohol, Tobacco, Firearms and Explosives’ only available gun crime trace report for Oakland reveals that Glock 9mm pistols were the fifth most common weapon used here in robberies and murders in the early part of the last decade.

Gaston Glock’s fortune wasn’t just built on the deadly reputation of his polymer casted guns. He also became a multi-millionaire by evading taxes in his most lucrative market, according to journalist Paul Barrett’s book Glock: The Rise of the America’s Gun. Paul Jannuzzo, the former general counsel and chief operating officer of GLOCK, Inc., was sentenced to seven years in prison last year on charges of embezzlement. But Jannuzzo claimed his employer framed him after he blew the whistle on Glock’s tax evasion schemes, which he said have sheltered more than $100 million from the IRS since the late 1980s. Although Glock’s opaque firearms empire is rivaled by few others, seven of the top ten gun makers with US factories, all of which are bigger than Glock, also are secretive private companies about which little is known.

The weapon used to kill Evan Meisner has an equally peculiar origin. Made by Taurus International Manufacturing Inc. in the company’s Miami, Florida shop, the powerful 9mm pistol is one of more than 114,000 built there each year for sale in the United States. Like Glock USA, Taurus is a subsidiary of a foreign company. Forjas Taurus, S.A., a Brazilian conglomerate, began making guns in 1941 for sale in South America. Eager to stake a claim in the United States, Taurus opened its Miami pistol factory in 1984, just in time to supply America with thousands of guns during the hyper-violent decade that followed.

Today, Brazil’s Taurus is the ninth-largest gun maker with a US factory. Unlike Glock, Forjas Taurus is a publicly traded corporation listed on the Brazilian stock exchange. When Americans buy Taurus pistols, the profits accrue to the employee pension fund of the Banco do Brasil and the Brazilian government.

But it’s the handguns, rifles, and shotguns made by industry giants like the Freedom Group, Sturm, Ruger, & Co., Smith & Wesson, and O.F. Mossberg & Sons that turn up most frequently as weapons used in crimes in Oakland. Both Sturm Ruger and Smith & Wesson are publicly traded corporations, and together they manufacture one-third of all the guns made in the US each year, or about two million firearms. Profits distributed as dividends accrue mostly to investment managers, hedge funds, and private equity firms. In 2011, the most recent year in which information was available, Sturm Ruger’s net sales totaled $329 million, up 28 percent from the previous year, while Smith & Wesson reported net sales of $392 million.

The Freedom Group, America’s largest gun maker, with a 20 percent market share, is owned by the New York-based Cerberus Capital Management. Cerberus assembled Freedom Group by combining existing gun brands like Remington with smaller specialized companies like Bushmaster. Under pressure from CalSTRS, the California teachers’ retirement system, which invests heavily in Cerberus, the firm recently pledged to sell off the Freedom Group following the Sandy Hook massacre, in which a Bushmaster assault rifle was used (see “Teachers Financing Guns,” 1/23/2013).

According to Tom Diaz, author of the forthcoming book The Last Gun, ownership of the firearms industry is incredibly concentrated. “In 2000, for example, three companies produced 53 percent of the rifles made in the United States, three companies produced 86 percent of shotguns, two companies produced 76 percent of revolvers, and four companies produced 55 percent of the pistols,” Diaz explained in a 2005 report. In an interview with the Express, he said not much has changed.

Statistics that we compiled from ATF reports show that just three companies — the Freedom Group, Sturm Ruger, and Smith & Wesson — manufactured more than half the firearms made in America in 2011. More than half of these guns were assembled in just three states: New Hampshire and Massachusetts tied for first, with 17 percent of the national market; New York came in third with 16 percent. A single factory owned by Smith & Wesson in Springfield, Massachusetts produced more than 800,000 guns that year. A Sturm Ruger factory in Prescott, Arizona assembled 610,000 guns, and a Freedom Group factory in Ilion, New York built 476,000 guns. The Freedom Group reported net sales of $775 million in 2011, and a gross profit of $220 million.

Firearms corporations, whether US-based, or owned by foreign interests, have invested in domestic factories because they provide easy access to what one industry executive called “the last great market for guns.” To keep this last great market open, gun companies have assembled a high-caliber political influence machine that rewards friends and knocks off foes. The firearms industry’s main target of opportunity has been the go-to federal agency for regulating guns: the ATF.

In 2012, Oakland had 131 homicides, 2,153 robberies involving a gun, and 4,600 documented instances of gunfire (including 681 non-fatal shootings of people and more than 700 incidents of vehicles and homes being hit by bullets). Between 1990 and 2010, 1,651 people were killed by guns in Oakland, and 76 percent of the victims were African-American. Young black men are especially prone to becoming victims of gun violence.

Despite the severity of gun violence in Oakland, the city’s troubled police department is handicapped from effectively combating firearms trafficking, and from informing the public about the origins of the guns that make their way to the East Bay, by the political power of the gun industry.

Just a decade ago the ATF made readily available reports that identified the makes and models of weapons seized in cities, as well as information on federal firearms licensees who buy and sell weapons down to the retail level. This data allowed local communities to trace guns used in crimes to the original sellers, and ultimately the manufacturer. It also spawned criminal prosecutions and civil litigation against gun dealers and manufacturers, including lawsuits against the biggest firearms companies. The lawsuits then begat data used to make better public policy. Bans on assault weapons; cheap, compact guns like Saturday night specials; and other more lethal firearms were the product of these efforts.

But the ATF no longer produces publicly available detailed analyses of guns used in crimes. In 2003, Congress, backed by the gun industry, successfully passed the first of the Tiahrt Amendments, a series of prohibitory statutes that have blocked public access to the ATF database that traces recovered guns back to the point of sale. ATF now only releases aggregate data on guns used in crimes.

“It sheds light on why the gun lobby can thumb its nose at gun violence, twist gun violence to its own ends by mischaracterizing its nature, and fob off folksy pabulum about guns on both the public and uninformed policy makers,” explained Tom Diaz, one of the nation’s foremost experts on the gun industry.

According to the ATF’s 2011 report on guns seized in California, a total of 894 firearms were recovered in Oakland that year. However, the ATF did not reveal the types or makes of the guns seized in Oakland, nor did it disclose where the weapons were purchased.

Diaz said this information vacuum is an industry strategy devised after the demise of Big Tobacco’s power last decade. “Like the tobacco industry, the gun lobby has gone to extreme lengths to draw a veil of secrecy over the facts surrounding its terrifying impact on American life,” he said. Instead of verified ATF data, violence researchers now primarily rely on media reports, Diaz said. “We can’t go to the most obvious source because of Tiahrt.”

A 2000 ATF Crime Guns Trace Report, outdated as it may be, is one of the few publicly available documents on the firearms problem in Oakland. ATF’s researchers ran 325 trace requests for guns recovered in the city that year, including 145 semiautomatic pistols, 95 revolvers, 42 rifles, 38 shotguns, and 5 derringers. The ATF’s report made it clear that two-thirds of the firearms recovered in Oakland in 2000 were legally purchased from a federally licensed dealer inside California. Although California has some of the strictest controls on assault weapons in the nation, the majority of firearms used in violent crimes on the streets of Oakland in 2000 were handguns, which are readily available at gun stores in Alameda County and neighboring areas. It was not the gun smugglers who provided most of the weapons used by criminals. Instead, it was legal dealers who bought straight from the gun factories.

But the gun lobby’s influence over the ATF goes beyond making guns difficult to trace. It took the tragic massacre of twenty children and six teachers at Sandy Hook for President Barack Obama to nominate a permanent director for the ATF. The bureau has spun its wheels with a series of interim directors since 2006 when Congress, following the gun lobby’s wishes, changed the law to require Senate confirmation. And due to budget cuts, the ATF now has fewer agents than it did in 1970, and now inspects gun stores only once every eight years on average.

The hobbling of the bureau by the gun lobby also has direct consequences for Oakland: an ATF contractor assigned to OPD to trace guns seized in joint local-federal sting operations was let go in late 2011 because of ATF budget cuts.

Diaz contends that the gun lobby keeps the ATF around as a convenient political bogeyman to mobilize gun-rights activists, even though the weapons industry has succeeded in declawing the bureau. “I call it the battered wife of Washington,” Diaz said. The gun industry “doesn’t want to shut [ATF] down, they want to keep it alive and ineffective, and it’s probably the worst-run federal law enforcement agency.”

And when the ATF is effective, that effectiveness typically involves programs designed to assist the industry. In 2006, the ATF named John Badowski as the bureau’s “firearms industry technical advisor.” His job is to oversee federal approval of gun-selling licenses. Prior to joining the ATF, Badowski worked for the National Shooting Sports Foundation (NSSF), the gun industry’s official lobbying organization. For NSSF, Badowski developed a legislative- and policy-lobbying program for licensed gun sellers, and devised industry-wide marketing strategies. Badowski even launched a “high powered” training course on how to deal with adverse media inquiries following firearms crimes, according to a 2006 article in Shooting Industry magazine.

Limiting the effectiveness of the ATF is just one example of the many far-reaching, but little-known, victories for the gun industry since the mid 1980s. Topping the industry’s political wins are campaigns to weaken federal and state firearms laws, budget cuts aimed at public health research on gun violence, and legislative immunity against tort lawsuits.

Few realize how much the gun industry influences and fuels these lobbying efforts, however. Instead, many erroneously believe that the gun lobby is a genuine grassroots movement run by gun lovers. In truth, the National Rifle Association, which dwarfs all other gun lobby groups (on both the pro and con side), has worked hand-in-glove with the firearms industry in recent decades.

“For most of its history the NRA was an organization by, for, and about shooters,” explained Garen Wintemute, professor of emergency medicine at UC Davis, and an expert on gun violence. “But beginning in the 1970s, the NRA began to align itself much more closely with the industry, so much so that there have been times when the NRA has had to choose between the interests of its individual members and the industry, and the NRA has gone with the industry.” As an example, Wintemute pointed to the gun industry’s unique immunity against product liability laws thanks to lobbying by the NRA. “That doesn’t help shooters, it helps industry,” he said. The Protection of Lawful Commerce in Arms Act of 2005, drafted by the gun industry’s lobbyists, protects gun makers and dealers from a range of civil liability lawsuits. It’s the first and only law of its kind to shield an entire industry from negligent behavior.

“Since 2005 the NRA has received millions of dollars from the gun industry,” stated Josh Sugarmann and Marty Langley of the Violence Policy Center in a recent report. “Corporate contributors to the NRA come from every sector of the firearms industry, including: manufacturers of handguns, rifles, shotguns, assault weapons, and high-capacity ammunition magazines; gun distributors and dealers; and, vendors of ammunition and other shooting-related products.” Sugarman and Langley have compiled extensive information on the gun industry’s political power in their report “Blood Money.” They estimate that gun companies donated between $19.8 million and $52.6 million to the NRA since 2005. This money is funneled directly into campaign contributions and legislative lobbying.

According to a recent report from the Center for Responsive Politics, which tracks campaign finance and lobbying activity in Washington, DC, the gun lobby’s financial power “crushes that of gun-control supporters. The NRA alone has spent more than ten times as much as gun-control interest groups on lobbying in 2011 and the first three quarters of 2012.”

Data we compiled further reveals the political influence of the gun industry. According to Federal Elections Commission records, executives of the Freedom Group have given more than $100,000 to federal candidates since 2007, almost all to Republicans. The various companies that make up the Freedom Group gave tens of thousands to members of Congress between 1990 and 2006, just before Cerberus Capital assembled them under the Freedom Group brand. The most prolific firearms financier was Bushmaster. Its executives gave more than $66,000 to federal candidates between 1990 and 2006, all them Republicans.

Executives of Smith & Wesson, Sturm Ruger, Colt, and Glock donated hundreds of thousands more, again mostly to Republicans, especially to senators from states where these companies have factories.

Lobbying records also reveal a staggering sum of money employed to shape federal gun legislation. Since 1999, gun companies and pro-gun groups have spent at least $76 million on influencing members of Congress. Among the most aggressive and powerful in the lobbying arena is Bushmaster. It spent $250,000 since 2005, an investment that helped secure a $5.4 million US Army rifle contract.

Another heavy hitter, Sig Sauer — owned by Swiss Arms, a foreign corporation based in Switzerland that is controlled by two German tycoons — has spent $1.3 million since 1999 lobbying the US Congress. Sig Sauer was the most active gun maker in the lobbying campaign to keep the federal assault weapons ban from being renewed after its expiration in 2004, spending more than $700,000. Both Sig Sauer and Bushmaster make millions from the sale of assault rifles to civilians in states where they remain legal.

At the state level, the gun industry, in concert with the American Legislative Exchange Council, a right-wing legislation mill, has pushed for the passage of concealed carry laws as a market-creating opportunity for new gun designs. “They started in Florida loosening concealed carry laws, and then went national,” said Diaz. “For the gun industry, this is wonderful because the more reasons you can come up with for carrying weapons, the more designs they can generate. From the gun industry’s view, this is a whole new market.”

To blunt public understanding of the carnage that assault weapons and compact pistols cause, the gun industry has taken the fight to the public health profession. According to Shannon Frattaroli, a professor of public health at Johns Hopkins University, the gun industry has succeeded in cutting millions from scientific research that might undermine its market for deadly weapons. “In June 1996, the House Appropriations Committee approved an amendment that cut over $2 million from the National Center for Injury Prevention and Control’s [NCIPC] budget, the exact amount spent on gun violence prevention research,” Frattaroli recalled. “Essentially what that money represented was the money that was spent on firearms research, and a very clear message was sent by Congress that firearms research coming out of the center would be punished through the appropriations process. There was never an explicit ban on firearms research, but that action had such a chilling effect on NCIPC to fund firearms research.

“Is there a straight line that can be drawn between the NRA and that appropriations move?” Frattaroli continued. “No, but everyone had their suspicions. It’s been devastating for the field, and now we’re in a situation where policy decisions are being made, but the evidence we’re relying on isn’t as strong as it could be had we done this research over the past seventeen years.”

Sensing changes in the national debate over gun control, Oakland city officials have engineered their own response to the Sandy Hook massacre. City Attorney Barbara Parker recently sent two pieces of firearms-related legislation to the city council: a resolution in support of a renewed federal assault weapons ban, which passed unanimously last month, and a measure to divest the city’s pensions and other funds from firearms-related investments. The City Administrator’s Office is currently researching the divestment measure. By focusing on gun manufacturers and the financial interests behind them, Oakland’s two newest resolutions are shifting the local gun policy debate.

Oakland also is no stranger to legal battles with the gun industry. In 1999, the city joined what ultimately became an unsuccessful class-action lawsuit brought by several other Bay Area municipalities against the firearms industry. This legal setback, however, didn’t prevent the Oakland City Council from passing laws in 2010 that require residents to report stolen guns to OPD within 48 hours, mandate thumbprints for all ammunition purchases, and enforce permit requirements for all ammunition and firearms sales in Oakland.

During the depths of the 1990s, when new drugs and newer, deadlier weapons fueled a spike in murders and assaults, Oakland beefed up its firearms regulations, attempting to do what the ATF has been prevented from doing by Congressional gun industry allies. Since 1992, the city has required police background checks of any gun dealer who hopes to set up shop there. Oakland also reserves the right to inspect any firearms dealer. In 1996, Oakland banned the sale of Saturday night specials, which had facilitated a spike in deadlier crimes in the city. This ban was firmed up in 2000 with an ordinance prohibiting compact handguns, then being marketed by the gun industry through their lobbyists who rewrote state laws allowing for concealed carry permits. These strict laws partly explain why there are no gun shops in Oakland today.

Ultimately, however, Oakland is between a rock and a hard place. Lasting, effective reforms must happen at the federal level, where the gun industry has exerted tremendous sway over the past forty years. Without actions that will stop the continual flood of increasingly deadly, militarized firearms in all states, Oakland will continue to be a victim of the gun industry and its potent lobby.

Professor Wintemute, who has decades of experience fighting the gun industry, said this is no reason to give up. “Later this year the California legislature is going to be considering a regulatory framework around the purchasing of ammo, similar to what we have for guns,” he noted. “So if people try to purchase ammunition who are prohibited, they’ll be blocked. Another bill will prohibit alcohol abusers from purchasing guns or ammo.” Wintemute believes both reforms could save thousands of lives in California, regardless of whether the logjam at the federal level ever clears.


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