Industry News: June 1998

By Robert M. Hausman

BATF: Wallet Holster Sale May Constitute NFA Violation

The sale or distribution of a wallet holster-without a firearm- could constitute a violation of the National Firearms Act (NFA) of 1934 in some circumstances, the Bureau of Alcohol, Tobacco & Firearms (BATF) warns.

In the 1970s, the BATF determined that when small handguns were combined with certain “wallet holsters” (a flat holster, usually made of leather, resembling a wallet in appearance and containing cutout sections for the trigger finger and muzzle, allowing the firearm to be fired from within), they fall into the “Any Other Weapon” category of law and are thus subject to the provisions of the NFA. The handgun combined with the wallet holster thus constitutes an NFA-determined firearm.

As defined in Section 5845(e) of the NFA, the term “Any Other Weapon” denotes certain concealable arms. Various types of disguised arms, such as cane guns, belt buckle guns, and briefcase guns (with remote control firing mechanisms) fall within the “Any Other Weapon” category. It is unlawful to make, possess, or transfer such firearms without first complying with the provisions of the NFA, which provide for the payment of a special tax. BATF agents have said firearms concealed in such wallet holsters are a favorite of outlaw motorcycle gangs.

A conventional pistol or revolver possessed without the wallet holster would not be classified as an NFA firearm. A wallet holster alone is not subject to NFA controls and cannot be registered or transferred as a firearm, and firearms contained in conventional holsters, trouser pockets, purses, gun cases, or various other forms of carrying cases have not been determined to fall within the definition of an “Any Other Weapon,” even though it may be possible to discharge the firearm while it is carried in such a manner, the agency says.

Mere sale or possession of the wallet holster without the handgun is not a violation of the NFA. However, 18 USC, section 2, provides that an individual who aids or abets another person in the commission of an offense is also responsible for the offense. Therefore, the BATF warns, sale or distribution of a wallet holster with the knowledge that it will be used to make an unregistered NFA firearm may also place the seller or distributor of the holster in violation of the NFA.

In order for an individual to lawfully “make” a wallet gun -that is to acquire both the handgun and the wallet holster – that person must first submit an Application to Make and Register a Firearm (ATF Form 1), pay a $200 making tax, and receive approval of the application. (SAR will be covering the ATF Form 1 in Vol. 1 No. 10)

The serial number appearing on the handgun should be included when registering the new NFA firearm. Transfer of a wallet gun requires an approved transfer application and payment of the transfer tax. A transfer will not be approved unless the wallet gun has been registered to the transferor.

More BATF News

The agency further notes that thefts from Federal Firearms Licensees (FFLs) continue to rise. Latest available figures show that from 1995 to 1996, the number of incidents and stolen firearms reported lost or stolen by FFL-holders to BATF increased by 40%.

Following an analysis of these incidents, the agency developed the following security tips: keep display cases locked at all times; show only one firearm at a time to your customers; do not leave a customer unattended while handling a firearm; do not meet with customers after business hours; strictly control firearm security at gun shows; institute an employee screening process; and, utilize any security measures you have in place regularly.

The agency has found the most popular method of entry into a store continues to be via a broken window or the front door. The next most common entry points are using a vehicle to smash the front of the building, entering through the back door, and entries made via the roof. It is advised to fortify these areas and to install a burglar alarm with central monitoring.

Another increasing crime is the theft of firearms from gun shows. Often the guns are not stolen at the show itself, but rather from the dealer’s vehicle. BATF advises firearms should be removed from the vehicle and stored at more secure locations, especially if the vehicle will remain parked overnight.

In an item of interest to pawnbrokers licensed to deal in firearms, the BATF is interpreting the Gun Control Act of 1968 to permit FFL holders to return a pawned firearm to a person who is not a resident of the state where the licensee’s premises are located. This interpretation is based upon 18 USC Section 922(a)(2)(A0, which permits a licensee to return a firearm or replacement firearm to the person from whom it was received, even though the person is an out-of-state resident.

Licensees returning pawned firearms to non-licensed aliens may return the firearms to the alien from whom they were received, upon obtaining evidence that the alien is a resident of any state and has resided in such state continuously for at least 90 days prior to the transfer of the firearm.

The Gun Control Act of 1968 has been amended, according to BATF, to allow FFL-holders to sell curio and relic firearms to other licensees away from their licensed premises. Licensees are still subject to all record-keeping requirements in the regulations concerning the sale or other disposition of curios and relics. In addition, the licensee’s record should reflect the location of the sale or disposition.

While in the last several years many FFL holders have given up their licenses, the BATF reports many of these licensees have not sent their records to its out-of-business records center. If a business is being discontinued completely, the licensed dealer is required, within 30 days, to forward his records to the BATF. Failure to submit the required records is a felony and could result in a licensee being fined up to $250,000, imprisoned up to five years, or both.

The BATF is issuing proposed regulations to implement the provisions of Public Law 103-159, relating to the permanent provisions of the so-called “Brady Handgun Violence Prevention Act.” These proposed regulations implement the law by requiring, with some exceptions, a licensed firearms importer, manufacturer, or dealer to contact the national instant criminal background check system (NICS) before transferring a firearm to an unlicensed individual. NICS will advise the licensee whether or not the system contains any information that the prospective purchaser is prohibited by law from possessing or receiving a firearm. More information may be obtained from the February 19, 1998 issue of the Federal Register, or by visiting the agency’s website at: www.atf.treas.gov.

The federal agency’s recent efforts to reclassify certain muzzleloading rifles using modern rifle primers for ignition has prompted one of the affected manufacturers to go to court. Modern Muzzleloading’s initial request for a preliminary injunction against the BATF was denied, but the court ordered the agency to provide more information on why they are seeking to reclassify the guns.

Many members of the industry have voiced concern over the recent confirmation of Dr. David Satcher as U.S. Surgeon General. As chief executive at the Centers for Disease Control & Prevention (CDC) in Atlanta, Satcher used the agency to promote gun violence as a “disease” and gun control as the “cure.” The National Rifle Association’s lobbying arm, the Institute for Legislative Action (ILA) issued a statement noting, “While he was at the helm of CDC, the National Center for Injury Prevention and Control, a division within the CDC, funded numerous unscientific, anti-gun ‘studies.’ With Dr. Satcher serving as Surgeon General, NRA members and gun owners across the nation have reason to be concerned.”

An omnibus spending bill signed last fall by President Clinton reportedly contains a $500,000 appropriation that could lead to the establishment of a national anti-gun museum in Washington, DC.

Within the President’s spending measure was a provision for funding a commission to develop a plan for a National Health Museum to be built in a prominent location near the National Mall where many of the capital district’s leading monuments are situated. The new facility would house many of the exhibits now contained in the poorly-visited display at the Walter Reed Army Medical Center, located at a nearby army base.

Leading the effort to establish the new museum is former U.S, Surgeon General C. Everett Koop, an active anti-gunner. He has thus far helped to raise about $2 million from private donors, and he has expressed confidence that additional funding in the range of $98 million could be raised. The current museum attracts about 45,000 visitors per year. It is estimated the figure could reach 1 million or more if it were in a more accessible location. Current exhibits include the projectile that killed President Lincoln alongside his doctor’s blood-stained shirt cuffs, an assortment of Civil War skeletons, and deformed but preserved fetuses.

The Civilian Marksmanship Program (CMP), which provides surplus firearms to civilians to encourage rifle practice, is under fire again. Twenty-three U.S. representatives recently sent a letter to acting Secretary of the Army, Robert M. Walker seeking a prohibition on the CMP from selling M-1 carbines. This, despite the fact that the M-1 carbine is specifically “protected” under the 1994 Clinton “Assault Weapons” Ban and rarely used in crime.

Despite increases during 1997’s fourth quarter, overall sales and earnings declined for the year, reports Sturm, Ruger & Co., one of the few publicly traded firearms firms. For 1997, sales were $209.4 million, net income $27.8 million, and earnings per share $1.03. The respective figures for 1996 were sales of $223.3 million, net income of $34.4 million, and earnings per share of $1.28.

For 1997’s fourth quarter, sales were $52.6 million, net income $7.5 million, and earnings per share 28 cents. Comparable amounts for 1996’s fourth quarter were sales of $43.8 million, net income of $6 million and earnings per share of 22 cents.

Commenting on the results, William B. Ruger, chairman of the board of directors noted, “While 1997 as a whole did not meet the record levels achieved during 1996, earnings per share for the last half of 1997 exceeded the results for the comparable period in 1996. Our casting sales remain strong and the balance sheet shows significant improvement in cash, short-term investments, and inventories.”

Cash on hand at December 31, 1997 was $4,488,000, compared to $2,729,000 at the same date the year before. Short-term investments grew to $45,484,000 at the end of 1997, versus $30,652,000 a year earlier. Inventories dropped to $45,549,000 at the close of 1997, while totaling $55,068,000 at the end of 1996. Founded in 1949, Sturm, Ruger has since 1950 never failed to show an annual profit and has never required financing from outside sources.

Ruger’s chairman recently personally contributed $1 million to the National Rifle Association’s National Firearms Museum, which is expected to open June 1. “I feel the National Firearms Museum will tie together the history, craftsmanship, engineering and design of firearms as an integral part of the heritage of this country,” said Ruger. State News

In California, SKS rifles with detachable magazines are now considered “assault weapons,” under state law. Daniel E. Lungren, the state’s Attorney General, has issued a written warning to gun owners and dealers that, “Given further review…anyone in the state of California who has purchased an SKS with a detachable magazine, or converted an SKS with a fixed magazine, is in possession of an ‘assault weapon.’

“This is an illegal weapon unless and until it is registered. If the owner of the firearm can prove he or she possessed it prior to June 1, 1989, it may be registered with the Department of Justice. Otherwise, any SKS with a detachable magazine is an illegal weapon and must be relinquished to a local police station or sheriff’s department.

Since taking office in 1991 however, Lungren had allowed the sale of aftermarket detachable magazines and SKS rifles equipped with them.

But the California Court of appeals has ruled the core of California’s 1989 Roberti-Roos “Assault Weapons” Act to be unconstitutional and sent a case challenging the law back to a lower court. The court held that the list of 62 firearms deemed “assault weapons” was vague and violated constitutional equal protection principles. The provision of the Roberti-Roos Act allowing guns to be added to the prohibited list violated constitutional due process and separation of power requirements, the court added.

The California appeals court pointed out “assault weapons” are not machineguns, which have been heavily regulated since 1934, and that the semi-auto firearms listed in the law are seldom used in crime. It was further mentioned that the law’s notice provisions related to the adding of additional guns to the prohibited list by the state attorney general was so vague that it could lead to gun owners becoming unwitting felons before a list was published. “This is intolerable,” said the court.

While sales of handguns have seen a dramatic decline since the implementation of the Brady Law’s five-working-day waiting period, and the often illegal background checks of handgun buyers and attendant fees being conducted by law enforcement in some areas, in at least one state, legislation has been introduced to halt illegal police practices.

In Vermont, the state with the most liberal gun laws in the nation, a trio of elected representatives have introduced legislation that would impose criminal sanctions on police who continue to conduct background checks of gun buyers. While the US Supreme Court struck down as unconstitutional, the Brady Law’s mandate that local law enforcement officials must conduct background checks to satisfy the federal law, U.S. Attorney General Janet Reno had urged local officials to conduct the checks “voluntarily.” But this is illegal in many areas, including in the state of Vermont. The bill’s sponsors say that while it is illegal for the Vermont State Police to conduct background checks while on duty, the agency has continued the practice by having its officers perform the checks on a voluntary basis on their own (unpaid) time.

In Pennsylvania, the Bucks County Sportsmen’s Coalition (BCSC) noted in a recent newsletter that the Bucks County sheriff “has taken the first step toward cessation of his policy of violating Pennsylvania state law” by stopping the collection of fees for performing Brady handgun buyer background checks. However, he is still performing the checks.

As in Vermont, Pennsylvania law does not permit sheriffs to undertake such actions without authorizing legislation and no such legislation has ever been passed. “By performing and requiring the background checks, the Bucks County sheriff was not only breaking the law, he was illegally extorting money from consumers. According to an official county estimate, almost $37,000 had been collected before the middle of 1997,” the BCSC noted.

Meanwhile, a Colorado State Senate bill that would have banned all private sales of semi-automatic firearms in the state recently failed to pass the Colorado Senate Judiciary Committee by a 4-4 vote.

Two alleged gunrunners were recently nabbed in Ohio after a female accompanying them purchased 26 pistols from a Columbus, Ohio gun shop. The men face 26 counts of possession of a firearm by a convicted felon. The pistols, purchased for $3,900 from the gun shop owner who was acting in cooperation with police, have a street value of $6,500. The arrests came after a multi-agency surveillance operation led by the Columbus Police Department. The operation was initiated when agents from the BATF informed Columbus authorities the suspected gunrunners would purchase a large amount of firearms in the city.

Virginia House of Delegates member William P. Robinson, Jr., who opposed passage of the concealed carry law in 1996, has since obtained a carry permit and is packing a pistol. Robinson was pistol-whipped by a man wearing a ski mask as he left his law office last December. “I have a permit,” Robinson told reporters. “I got one after the attack. I have to be careful and defend myself.”