Closing the Gun Show Loophole

Principles for Effective Legislation

Introduction

In 1996, the Violence Policy Center (VPC) released Gun Shows in America: Tupperware® Parties for Criminals.1 The study was the first to analyze the origin and effect of what is now known as the “gun show loophole”—the anomaly in current law that requires holders of Federal Firearms Licenses (FFLs)2 to conduct background checks on sales made at gun shows while sales made by unlicensed private individuals at such events are exempt.

The VPC study documented how the 1986 “Firearms Owners’ Protection Act” (FOPA) led to the uncontrolled proliferation of gun shows—events at which private citizens and federally licensed gun dealers congregate to buy and sell firearms and related paraphernalia. The VPC’s research revealed that the law has resulted in a dramatic increase in the number and size of shows, which occur in auditoriums, fairgrounds, and other outlets in almost every state on virtually every weekend of the year. The VPC’s research also demonstrated that this dramatic increase was due largely to two little-noticed changes the FOPA made in the way that federally licensed firearms dealers are regulated—

  • The law made it legal for Federal Firearms License (FFL) holders to sell at gun shows.
  • The law expanded the opportunities for private citizens to buy and sell firearms at gun shows by raising the threshold of what constituted being “engaged in the business” of selling firearms for purposes of defining who must obtain a federal gun dealer’s license. 

The study detailed how gun shows have become a readily available source of weapons and ammunition for a wide variety of criminals—including street gangs, white supremacists, would-be presidential assassins, and domestic terrorists. The utility of gun shows to such dangerous individuals stems primarily from the exemption enjoyed by private sellers from the sales criteria of the Brady law, including a background check. This, in turn, encourages licensed dealers (FFL holders) to sell weapons without following the sales criteria of the Brady law in order to compete with unlicensed sellers. 

The VPC’s findings were confirmed in 1999 when the U.S. Departments of Treasury and Justice issued their own study, Gun Shows: Brady Checks and Crime Gun Traces. The study concluded, “Gun shows provide a large market where criminals can shop for firearms anonymously.”3 More recently, a law enforcement sting that targeted gun shows and swap meets in Arizona resulted in the seizure of 1,500 illegal guns. The special agent in charge for the Bureau of Alcohol, Tobacco and Firearms (ATF) told the Arizona Republic that illegal trafficking was rampant at gun shows and swap meets, which attract criminal weapons buyers because a legal loophole allows unlicensed sales without background checks. “They feel emboldened and secure in going to these locations because they know there will be a large number of firearms to choose from,” the agent said. 


Closing The Loophole

There is growing sentiment that it is time to close the gun show loophole. In May 1999, the United States Senate passed legislation which would have effectively closed the loophole. A measure sponsored by then Senator Frank Lautenberg (D-NJ) passed as an amendment to juvenile justice legislation (S. 254). The National Rifle Association (NRA) offered competing proposals that would have significantly weakened existing federal gun laws. Unfortunately, the Lautenberg proposal failed in the House of Representatives and Congress never took final action on S. 254. On the state level, in November 2000 voters in Colorado and Oregon endorsed state-wide referenda to close the loophole by requiring background checks at all sales at gun shows. 

The Lautenberg amendment provided the foundation for effectively closing the gun show loophole. Moreover, proposals offered by the gun lobby illustrated dangerous pitfalls contained in competing measures that deceptively claimed to close the loophole. Overall, the gun show debate in the Senate and the subsequent debate in the House provided valuable insight into the most effective means to close the gun show loophole, as well as a road map to the routes most likely to be traveled by those working to sabotage these efforts. 

There may indeed be general agreement about the need to close the gun show loophole—even President Bush has endorsed the concept. There is, however, no such consensus regarding the specifics of legislation to accomplish this task. As is always the case in such matters, the devil is in the details. It will simply be unproductive to try to close the gun show loophole with legislation that has the effect only of opening new loopholes in federal law. Recognizing this, the Violence Policy Center has drawn upon existing research and analysis and sifted through various proposals to close the loophole. The result is the following set of principles designed to lay the foundation for effective legislation. 


The paramount goal of gun show legislation must be to extend existing law as stated in the Brady Handgun Violence Prevention Act to all firearm sales at gun shows.4 Any proposal establishing lesser requirements for gun shows than those which currently apply to sales at gun stores will not be effective.

The Brady Law already applies to sales by Federal Firearms License holders at gun shows. This means that licensed dealers are required to follow sales criteria under federal law, including: federal sales forms; age restrictions; and, more recently, background checks. Problems arose almost immediately when FFL holders were allowed to sell at gun shows in direct competition with unlicensed “hobbyists” and “collectors.” Unlicensed sellers—who as private citizens do not have to meet these requirements—make a more appealing sales outlet to both the law-abiding (who, like most Americans, prefer not to wait) as well as criminal purchasers seeking to avoid a paper trail. 


The Three Business Days Rule

There is some confusion regarding the applicability of a waiting period for background checks at gun shows. Under the existing National Instant Criminal Background Check System (NICS)—the system which implements the background check required under the 1993 Brady Handgun Violence Prevention Act—there is no waiting period. However, three business days are allowed to complete suspicious checks. 

The NICS, as indicated by its title, is an instant check system. The Brady Law’s initial five-day waiting period expired on November 30, 1998. State laws may require waiting periods but there is no federal requirement. In fact, the Department of Justice has determined that 73 percent of the NICS checks are completed within minutes, while 95 percent of all checks are completed within two hours. For those background checks that require additional information to determine if the potential purchaser is a prohibited person, the statute provides additional time to collect that information. If the information needed to complete the check is not in the system, federal law allows “3 business days (meaning a day on which State offices are open).”5 This law is applicable to all sales covered by the NICS, including sales by FFLs at gun shows. 


The Five-Percenters

Yet, while the vast majority of sales are completed within minutes, three business days are often needed to weed out the most dangerous purchasers. As just noted, the Department of Justice has determined that 95 percent of background checks are completed within two hours, yet “22 percent of all gun buyers who are found to be prohibited persons are not found to be prohibited until more than 72 hours have passed.” The Federal Bureau of Investigation has estimated that under a 24-hour rule, more than 17,000 people who were stopped by the NICS in a six-month period would have been sold the firearms. In spite of these facts, the NRA has repeatedly argued that 24 hours is sufficient time to complete the checks. 

During the May 1999 Senate vote on whether to expand the current Brady background check to all sales at gun shows (not just those by licensed dealers), an amendment was offered by Senate Judiciary Chair Orrin Hatch (R-UT). The Hatch amendment would have actually weakened our nation’s gun laws by reducing the time allowed to conduct the background check by all gun show sellers—including licensed dealers—from three business days to 24 hours. That amendment passed but fortunately was superceded by passage of the Lautenberg amendment. 


California Gun Show Sales: A Model for the Nation

The gun lobby often argues that expanding current law to sales at gun shows will in effect ban gun shows. This argument has no basis in fact. As already noted, FFLs selling at gun shows are already required to comply with the NICS check. And, in states like California, which have much stricter laws regulating both gun shows and private sales, gun shows still thrive. Under California law, every firearm sale, including those between private sellers, is subject to a background check conducted by a licensed dealer and the sale is also subject to the state’s 10-day waiting period.6 The seller must wait for the full term of the waiting period to elapse before the weapon can be transferred to the buyer. This requirement has not had the effect of banning gun shows. In fact, the February 2, 2001, issue of Gun List magazine advertises more than 10 guns shows in California for the month of February alone. 


The integrity of the National Instant Criminal Background Check System (NICS) must not be undermined. Legislation should not interfere with or weaken current Justice Department policy which allows records generated by the NICS to be kept for 90 days for audit purposes.

The National Rifle Association supports efforts to immediately destroy essential records maintained under the NICS, which serves as the foundation for the background check required under the Brady law. Currently, records generated by the NICS are temporarily retained for six months because the FBI has determined that to be the time necessary to conduct audits of the system’s accuracy and effectiveness. On January 22, 2001, the FBI issued a final rule that sets the time period for the audit at 90 days. The Department of Justice has described the purpose of temporary document retention: 

The audit log [constructed from the retained records] enables the FBI to monitor the use of the NICS by firearms dealers, states serving as points of contact, and FBI personnel. The FBI also examines whether the FBI employees and contractors are making correct determinations as to whether potential transferees are disqualified, to ensure that “proceed” responses are not being supplied with regard to persons who are disqualified. Decisions to allow a firearm purchase are not fully automated, and thus officials must review and evaluate records before making a decision. Review of decisions made by NICS examiners is necessary to ensure that responsible individuals make correct decisions on whether a transfer is permissible, and to enable supervisors to provide additional training where necessary. 

In response to the document retention policy, the National Rifle Association sued the Department of Justice to require the immediate destruction of the records, which would have seriously undermined the effectiveness of the background check system.7 The NRA suit was dismissed by a federal appeals court on July 11, 2000. 

Yet NRA efforts to undermine the NICS continue. In the February 2001 issue of the NRA publication America’s 1st Freedom, NRA Executive Vice President Wayne LaPierre writes in his monthly column that “the National Instant Check System must be made ‘instant’ as Congress intended so that no de facto registration records are kept. The firearms sale records now held in federal computers for claimed ‘audit’ purposes must be purged.” The bottom line is that the NRA will be looking for any possible vehicle to further weaken our federal gun laws and undermine existing policies, including measures designed in theory to strengthen these very laws. 


To most effectively implement a universal background check on all sales at gun shows, access to the NICS should be only through established means.

During debate last Congress, NRA-sponsored amendments would have created a new class of Federal Firearm License (FFL) holder, who would be granted access to the NICS to facilitate non-dealer sales. Such an approach is unnecessary and potentially dangerous. 

In 1999 Senator and NRA Board Member Larry Craig (R-ID) offered an NRA-drafted alternative to the Lautenberg gun show amendment. The Craig amendment would have created a new classification of licensees called “special registrants.” The Craig proposal would have allowed “special registrants” access to the NICS in order to perform background checks at gun shows. Creation of a new bureaucracy composed of this new class of licensees could have dangerous repercussions. 

The idea of “special registrants” has been harshly criticized as an “organized crime loophole” by Representative John Conyers (D-MI), ranking Democrat on the House Judiciary Committee. Rep. Conyers expressed his concern that “the creation of a new entity entrusted with conducting accurate background checks and safeguarding the privacy of the system is an invitation to organized crime ‘front operations’ fraudulently conducting background checks and misusing the system.” 

Furthermore, the creation of a network of special registrants could severely tax the resources available to the Bureau of Alcohol, Tobacco and Firearms (ATF) to conduct routine inspections and ensure compliance with applicable laws. 


The Number of Gun Sellers Should Not Be Allowed to Expand

Another potential danger posed by “special registrants” is that they could easily become a new class of gun seller. Great progress has been made in the battle to reduce and prevent gun violence in part by significantly reducing the number of Federal Firearms License (FFL) holders. The Bureau of Alcohol, Tobacco and Firearms has primary responsibility for insuring that FFLs are in compliance with federal, state, and local laws. To curb the illegal use of firearms and enforce the federal firearm laws, ATF issues firearm licenses and conducts firearms licensee qualification and compliance inspections. In 1993, there were more than 245,000 FFLs—literally more gun dealers than gas stations. Today that number has dropped to fewer than 70,000, to the point where there are more gas stations than gun dealers. Some of the credit goes to ATF programs instituted to ensure that licensees are meeting the legal standards required to obtain and maintain the license. 

The NRA has made reversing the decrease in the number of FFLs a high-priority issue. In the same issue of America’s 1st Freedom mentioned earlier, an article entitled “Gun Dealers Dwindle Under Clinton-Gore” bemoaned the drop in FFLs: 

The number of federally licensed gun dealers dropped from 245,628 to 69,951 in the six years after the failed Brady law and the 1994 Crime Bill were put on the books. While Clinton and Gore have long professed that their efforts have not affected hunters, it’s hard to imagine that none of the 176,000 gun dealers run out of business by the administration catered to hunters or other sportsmen. 

NRA Executive Vice President Wayne LaPierre also addressed the issue in his column that month, proclaiming, “BATF’s blatant anti-dealer policies—which have harassed thousands out of business—must be reversed.” The NRA clearly wants to increase the number of gun sellers. Their involvement with the creation of the concept of a new class of federal licensees is problematic and will likely lead to a system allowing easier access to guns. 


ATF’s Ability to Monitor Compliance by FFLs Must Not be Undermined.

By insuring compliance with the federal standards for FFLs, ATF assists law enforcement in several ways: inspections of existing licensees focus on assisting law enforcement to identify and apprehend criminals who illegally purchase firearms; inspections improve the likelihood that crime gun traces will be successful, since inspectors educate licensees in proper recordkeeping and business practices; and, compliance inspections target licensees likely to divert firearms from legitimate trade to criminal use, as well as dealers with a history of poor compliance. 

The important role played by ATF to make sure that licensed dealers are complying with the law is a critical component in preventing the easy flow of firearms into the hands of criminals. ATF’s ability to remain vigilant in this effort could be seriously undermined by the creation of a new category of licensee that would dilute ATF’s compliance resources.


Legislation should enhance effective crime gun tracing and ensure that adequate records are maintained on firearms sold at gun shows so that weapons recovered from crime scenes can be readily traced.

A primary goal of gun show legislation must be to ensure that all guns sold at such shows can be efficiently traced if they turn up in a crime scene. For example, three of the guns used in the Columbine High School shooting which were purchased at a gun show were not easily traceable because they had been sold through private sellers without background checks and the required recordkeeping. The goal of effective crime gun tracing would be undermined by the creation of a new category of licensees with fewer recordkeeping duties than full-fledged FFLs. Such a system was proposed by Senator Craig in a competing proposal to the Lautenberg amendment. Scrupulous recordkeeping is essential to the effectiveness of gun show legislation.


Legislation must extend to all gun shows. The definition of gun show must cover all gun-related events and all sales at gun shows.

In order to be effective, the legislation must apply to all events at which guns are sold in any volume, such as gun shows, flea markets, or swap meets. The Lautenberg amendment contained compromise language that defined gun shows as events where “50 or more firearms are offered for sale, transfer, or exchange.” A definition which allows the unregulated sale of more than 50 guns will open a loophole that could allow smaller gun shows to flourish and remain unregulated. In addition, it is imperative that the definition of gun show ensure that transactions initiated at a gun show cannot be consummated off-premises with no background check required. The Lautenberg amendment mandated a background check if any part of a firearm transaction (including the offer for sale, transfer, or exchange) took place at a gun show. Criminals are sure to exploit a “let’s step outside” loophole that would allow unscrupulous gun sellers to use gun shows as venues for arranging sales and then finalizing them off-site to avoid background checks. 


Conclusion

The above stated principles outline the specifics of effective legislation to close the gun show loophole. Legislation meeting the above criteria will once and for all close the gun show loophole and help prevent future tragedies resulting from felons, minors, and other prohibited individuals having unfettered access to firearms at gun shows.

  1. The 72-page study is available online at the VPC’s web site located at www.vpc.org.
  2. The Type 1 Federal Firearms License (FFL) is the basic license issued by the federal Bureau of Alcohol, Tobacco and Firearms (ATF) to sell guns in the United States.
  3. Gun Shows: Brady Checks and Crime Gun Traces, U.S. Department of the Treasury, U.S. Department of Justice, Bureau of Alcohol, Tobacco and Firearms (January 1999).
  4. 18 USC §922(t).
  5. 18 USC §922(t)(1)(B)(ii).
  6. Penal Code §§12071.1;12082; and 12084.
  7. National Rifle Association, Inc. et al v. Reno, 216 F.3d 122 (D.C. Cir. 2000).