About a hundred times a year, regulators strip gun dealers of their licenses for violations of federal law, an extreme step taken only when repeated infractions are deemed a threat to public safety.
But a yearlong Washington Post investigation documented about 60 cases since 2003 in which the businesses stayed open, often re-licensed through relatives, employees, associates or newly formed companies.
"We'll just have to play musical licenses," the owner of the Highland Gun Barn in Michigan said when a federal inspector served him with a final notice to surrender his license.
A California sports shop had its license revoked after inspectors from the Bureau of Alcohol, Tobacco, Firearms and Explosives said the 87-year-old owner's repeated violations of gun laws showed she was unable to run a gun business. Before she forfeited her license, the woman's son obtained a permit to sell guns at the same shop. He said he would be at the shop two days a week and that his mother would "exclusively direct all day-to-day business."
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A Maryland gun store that ATF said lost track of weapons and failed to do background checks was forced to surrender its license after the owner lost a court battle. Six months later, ATF issued the dealer's wife a license at his old shop in Fallston, Md.
A Georgia gun dealer had its license revoked after ATF said it could not account for hundreds of guns. The dealer's daughter and son-in-law secured their own license to keep the business going.
It is all legal.
"This is the way Congress wrote the law," said James Zammillo, who was with ATF for four decades and served as deputy assistant director of industry operations before retiring this year. "The spirit of the law is that unless the applicant is prohibited, you have to issue a license. There is no discretion."
Because of the secrecy Congress imposed on federal gun records in 2003, the details of inspection violations are typically redacted from public records unless a case ends up in court. When revocations are pursued, the problems can include sales done without background checks, improperly completed forms, or missing weapons, one of ATF's chief concerns.
Revoking a gun dealer's license is ATF's most aggressive enforcement action short of criminal prosecution. It is a rare last resort for less than one-quarter of 1 percent of dealers annually. It often follows years of warnings for serious violations and sometimes leads to years of appeals. Although gun dealers complain that ATF harps on clerical errors, the agency says it revokes licenses only when dealers continually fail to comply with gun laws and the violations threaten public safety.
Extent of re-licensing
The Post investigation is the first to document the extent of the re-licensing practice, in which about 7 percent of the gun merchants that had licenses revoked continued to operate.
Several merchants involved in the re-licensings told the Post it was the only way to keep their family businesses going.
"This is what we do for a living," said Sandra Mitchell, who secured her own license to sell guns at Gunrunner in Merced, Calif., after the ATF revoked her husband's license.
At the heart of the issue is the fact that the 1968 Gun Control Act treats each new license applicant as a unique entity — even if it is a similarly named company with the same employees. As long as the applicant is a different individual or business entity, ATF cannot consider violations incurred under a former licensee when weighing the new application. Embattled operations can be reborn with a clean slate at the same location trading under the same business name.
To be licensed, applicants at a minimum need to be 21, cannot have been prohibited from owning a gun — as with felons and people with certain disabilities — and must have a fixed address. Companies can apply for licenses, but their principals must meet the restrictions for individuals. Initial fees are $200. Licenses last three years. The agency might spend years in court revoking a license from a troubled dealer but by law must approve licenses to eligible applicants within 60 days.
'Not a loophole'
Richard Gardiner, a former counsel for the National Rifle Association who has defended many dealers in ATF revocations, said family members, friends or associates who were not directly involved in the old license are legally entitled to their own licenses. "It's not a loophole," he said.
ATF officials say they do not keep track of how often embattled operations turn to relatives or associates, or set up new companies, for re-licensing in the face of mounting violations or impending revocation. But current and former officials say troubled dealers have increasingly resorted to the tactic.
"Our field people get very frustrated," said Teresa Ficaretta, deputy assistant director for enforcement programs and services at ATF. "Based on the phone calls I get from the field, this is happening more often."
The agency, she said, has been working to train attorneys and inspectors how to identify and legally block these cases, but it is extremely difficult and time-consuming. Denied applications, like revocations, have also led to lengthy appeals and court fights.
"If you're being cited by ATF and you feel you're about to lose your license, you can simply get another person to get a new license and you can transfer your inventory to that person," said Michael Bouchard, former ATF assistant director for field operations. "You don't have to change location. You can keep the same business name. It's like starting the business all over. You can still be working there. For the new licensee, it's a clean slate."