Section
Two: McClure-Volkmer's Gun Control LegacyMcClure-Volkmer
made two significant changes in federal law that led to an increase in the number
of gun shows and allowed illegal sales to flourish. The
first change made it legal for Federal Firearms License (FFL) holders to operate
at gun shows. The second expanded 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 guns.
Allowing Federal Firearms License Holders to Conduct Business at Gun Shows
From the late 1960s until the
mid-1980s, the policy of the Treasury Department and the Bureau of Alcohol, Tobacco
and Firearms (ATF) on the issue of where Federal Firearms License holders could
conduct sales was consonant with the Gun Control Act of 1968: i.e., that licensing
applied only to the premises where the applicant regularly engaged in the business
of selling firearms—not
temporary locations such as gun shows.11 Dealers were allowed to exhibit
at gun shows, but actual sales had to be consummated at their place of business.
In a memorandum dated August 9,
1983, ATF Chief Counsel Marvin Dessler stated emphatically:
Since enactment of the Gun Control Act
of 1968 [citation omitted], the Bureau, its predecessor agency and the Department
have consistently taken the position that Federal firearms licenses are issued
only for permanent premises where business will be regularly conducted and that
the law does not authorize the issuance of licenses to cover the conduct of business
at temporary locations. Thus, Rev. Rul. 69-59, 1969-1 C.B. 360 was issued and
sets forth the position that a licensee may not engage in business at a gun show
away from his licensed premises. The
memo cited the specific provisions within the statute supporting this interpretation.
Furthermore, Dessler pointed out, "The Bureau's position as expressed in the ruling
is supported by the legislative history of the Act clearly reflecting the desire
of the Congress that firearms businesses be conducted only from a permanent, licensed
premises." One purpose of licensing only permanent business premises, according
to the chief counsel, was to make information available to state and local law
enforcement regarding gun sales in their own localities. This purpose "would hardly
be served where a licensed dealer is conducting business from one place to another
for short periods of time," Dessler concluded. Other
ATF communications during this period, however, seemed to endorse the idea of
allowing dealers to sell at gun shows. Evidence of this internal schizophrenia—most
likely the result of political pressure from Capitol Hill and the agency's historic
role as a lightning rod for gun lobby attacks—can
be seen in a September 1979 letter from ATF Director G.R. Dickerson to Senator
Dennis DeConcini (D-AZ). The correspondence stated, "ATF has been criticized for
past activities and policy regarding gun shows and sales at gun shows by licensed
dealers....[W]e are now reviewing the law and regulations to determine if we can
permit sales by dealers at gun shows within the existing law. While regulatory
changes without a change in law may be difficult to accomplish, we nevertheless
are actively pursuing this alternative." In
spite of concerns that such a move would test the limits of its administrative
discretion, in 1984 ATF proposed a new regulation that would permit licensees
to "conduct business temporarily" at gun shows. (The change was apparently in
response to complaints from licensed dealers that they were losing sales to non-licensees
operating at gun shows.) This turnabout in dealer regulation moved ahead despite
apprehensions expressed by ATF Director Dickerson before a Senate Judiciary subcommittee.
Dickerson cautioned: I
would again state to this committee that extreme care must be used in this regard
[allowing sales by dealers at gun shows] since gun shows have repeatedly proved
to be a preferred source of weapons for the criminal element. This is primarily
because recordkeeping is often nonexistent by many of the persons making sales.
It is documented that the Symbionese Liberation Army, the Black Panthers, the
Hells Angels motorcycle gangs, and individuals such as Sara Jane Moore [who attempted
to assassinate President Gerald Ford] all obtained crime guns at various gun shows.
Despite the law
enforcement problems inherent in gun shows,12 on November 29, 1984,
in a 180-degree reversal of previous policy, ATF promulgated a regulation permitting
Federal Firearms License holders to conduct business temporarily at gun shows13
held in the same state as the licensee's business.14 Because
the agency had made an abrupt policy change the rule was vulnerable to a legal
challenge as being beyond the administrative authority of ATF. However, its codification
in 1986 as part of McClure-Volkmer protected ATF's gun show rule from legal challenge.
In the 10 years since McClure-Volkmer's
passage, gun merchants have taken advantage of an extensive network of gun shows,
flea markets, and swap meets where they can "conduct business temporarily at a
location other than the location specified on the license."15
"Engaged in the Business"
The
second key provision in McClure-Volkmer was deceptively bland language requiring
that in order to be eligible to be licensed as a firearms dealer, an individual
must "engage in the business" of buying and selling firearms. The term "engaged
in the business" was defined by the legislation as "a person who devotes time,
attention, and labor to dealing in firearms as a regular course of trade or business
with the principal objective of livelihood and profit through the repetitive purchase
and resale of firearms." Specifically excluded from the definition was
a person who made "occasional sales, exchanges, or purchases of firearms for the
enhancement of a personal collection or for a hobby, or who sells all or part
of his personal collection of firearms."16 The
intent of the new "engaged in the business" requirement was to raise the level
of activity in which an individual must engage before being required to obtain
a Federal Firearms License. The specific exclusion of "occasional" sales and sales
made in pursuit of a "hobby" gave a green light to weekend gun peddlers to sell
firearms at gun shows, flea markets, and swap meets without fear of prosecution
for dealing without a license. Together,
these two seemingly small changes in federal law allowed licensed dealers and
unlicensed hobbyists to peddle their wares side-by-side and opened the floodgates
to a new wave of gun shows.17
- This policy
was set forth in Revenue Ruling 69-59. The Ruling read, "Advice has been requested
whether a person who is licensed under 18 U.S.C. Chapter 44 (which superseded
the Federal Firearms Act (15 U.S.C. Chapter 18)) or who is continuing operations
under a license issued to him under the Federal Firearms Act, as a manufacturer,
importer or dealer in firearms or ammunition may sell firearms or ammunition at
a gun show held on premises other than those covered by his outstanding license.
Under 18 U.S.C. 923 (a), `a separate fee' is required to be paid for each place
at which business as a licensee is to be conducted. Further, each applicant for
a license is required to have in a State `premises from which he conducts business'
(18 U.S.C. 923(d)(1)(E)) and to specify such premises in the license application.
In addition, records are required to be maintained at the business premises covered
by the license (18 U.S.C. 923(g)). Therefore, a person holding a valid license
may engage in the business covered by the license only at the specific business
premises for which his license has been obtained. Thus, a licensee may not sell
firearms or ammunition at a gun show held on premises other than those covered
by his license. He may, however, have a booth or table at such a gun show at which
he displays his wares and takes orders for them, provided that the sale and delivery
of the firearms or ammunition are to be lawfully effected from his licensed business
premises only and his records properly reflect such transactions. There are no
provisions in the law for the issuance of temporary licenses to cover sales at
gun shows and licenses will be issued only for premises where the applicant regularly
intends to engage in the business to be covered by the license."
- The
problems at gun shows, and specifically their role in providing access to guns
for criminals, was already being reported in the national media. A September 3,
1978 Washington Post article, "Celebration of Gun Lovers," described an
annual gun show in Hillsville, Virginia. In it, ATF officials complained about
the number of illegal sales by dealers: "Last year three men were arrested for
selling guns illegally, according to ATF officials. `The problem with shows like
these is that recordkeeping is so minimal,' an ATF official said. `Even though
there isn't supposed to be any selling of guns, there is. And because the recordkeeping
is so bad, they're very hard to trace. It simply provides another source for people
who shouldn't acquire guns to try and acquire them.'" Less than a year earlier
the Post had reported that in 1976 three out-of-state dealers were charged
with illegally selling handguns at two shows in Baltimore. The dealers also failed
to report the purchasers' names and the guns' serial numbers. Another Post
story reported that in December 1977, federal agents seized more than 700 weapons—including
submachine guns, sawed-off shotguns, and bazookas—and
an estimated 60,000 rounds of ammunition in a crackdown on illegal firearm sales
in Maryland and Virginia. Of the five persons arrested, two were gun dealers.
A spokesperson for ATF in Baltimore said that many of the sales were taking place
at gun shows and in parking lots.
- Dealers
were allowed to sell at "gun shows" and "events" which were "sponsored by any
national, State, or local organization, or any affiliate of such organization,
devoted to the collection, competitive use, or other sporting use of firearms,
or an organization or association that sponsors events devoted to the collection,
competitive use, or other sporting use of firearms in the community."
- 49 Fed. Reg.
46891 (Nov. 29, 1984).
- This
is the language of 18 U.S.C. §
923(j) allowing dealers to sell at intrastate gun shows.
- 18
U.S.C. §
921(a)(21)(C).
- This
trend was exacerbated by the Reagan and Bush administration's lax Federal Firearms
License issuance policies. In 1980 the total of Type 1 Federal Firerms License
holders numbered 155,690. By 1992 this number had jumped to 248,155. During these
years virtually anyone willing to pay the $10 per year licensing fee could obtain
an FFL, enabling them to buy any quantity of firearms at wholesale prices and
have it delivered to their doorstep by common carrier. The ease with which a license
could be obtained quickly became an open secret among criminal traffickers. A
detailed analysis of the federal firearms licensing system is contained in the
1992 Violence Policy Center study More Gun Dealers Than Gas Stations.
Go
to Section Three: Changes Seen at Gun Shows as the Result
of McClure-Volkmer Return
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