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Gun Policy

The ATF Rarely Busts Unlicensed Gun Sellers. Obama’s New Plan Isn’t Going to Change That.

Bureau insiders dissect the downsides to the president’s action on private dealers who should be running background checks.

This past Sunday had it all for Texans in San Antonio before tuning in to watch the Super Bowl, they could check out a gun show. That afternoon, vendors filled the San Antonio Events Center, a 55,000-square foot space in a strip mall on the west side of the city. The center of the room was dominated by booths run by brick-and-mortar gun shops, or retailers who have a federal firearms license (FFL) and must perform background checks on purchasers. When asked where to find any unlicensed dealers, who aren’t obligated to perform background checks, the gun shop reps suggested checking out the rim of hall, where bare-bones booths displayed a large stock of handguns.

Unlicensed dealers were one of the key focuses of the executive actions on gun safety that President Barack Obama announced in January. Through the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), his administration has moved to more sharply define who’s engaged in the business of gun selling, and therefore must register as a licensed dealer or face criminal prosecution. The calculus is that clearer rules will raise the risks of being engaged in the business without a license and nudge more sellers into the background check system.  

But in San Antonio, at least one unlicensed gun seller said he had no plans to heed that warning.

At a booth on the outer edges of the center’s floor, a middle-aged man who declined to give his name shrugged off Obama’s executive actions. The president has made “a lot of speeches and talked a lot but I haven’t seen anything official come down,” he said. The man claimed that even though selling guns is his full-time profession, he doesn’t have a federal firearms dealer license. He seemed to be exactly the sort of seller the president’s actions aim to address — but the White House’s measure has not been forceful enough to change how he runs his business.

Given how easy it is to find unlicensed, full-time firearms dealers at a gun show, it may seem simple enough for the ATF to change that, by ramping up enforcement at events like the one in San Antonio. But the Bureau says it has no plans in the works for taking more aggressive measures to stamp out unlicensed gun dealing. “As of right now, there are no new initiatives,” Brian Garner, an ATF spokesperson, tells The Trace. Of the president’s executive action, he says “it is just guidance to the public.”

Nor has the White House convened a task force to assemble a plan for stronger enforcement of the clarified rule, reports the New York Times. Meanwhile, none of the 92 U.S. Attorney’s offices, who employ the prosecutors that actually bring ATF investigations to court, are assigning more attorneys to unlicensed dealing cases.

Relative to the fanfare that accompanied their announcement, Obama’s actions are having at best a modest impact at closing the so-called private sale loophole. That’s because, despite the force of Obama’s rhetoric, he did not actually change how the law defines who is engaged in the business of selling guns, leaving reluctant federal agents to work with a law they say confounds enforcement.

The biggest obstacle to enforcing the law against unlicensed dealing is the vague wording of the law itself, which is notoriously subject to interpretation. Only those “engaged in the business” of dealing firearms must get licensed; hobbyists are allowed to sell off parts of their personal collections without registering with the government and running background checks. To prove that someone is in violation of the law, investigators and prosecutors have to prove the dealer was motivated by profit and made a substantial portion of their livelihood from gun sales. What qualifies as substantial? Does making any money on a sale constitute a profit motive? The law doesn’t say.

Policy expert Chelsea Parsons at the Center for American Progress has highlighted possible alternative definitions, all of which would use a quantitative threshold as opposed to the current qualitative one. That could be number of guns sold per year, or amount of revenue generated. There’s precedent for such approaches: State governments, for instance, use sales tax schemes to decide which individuals count as engaged in certain kinds of business and therefore subject to regulation.

According to the Washington Post, after the Sandy Hook shooting and the defeat of the Manchin-Toomey bill, Attorney General Eric Holder and the White House Counsel’s office told the president that he had the authority to use a numerical threshold to rewrite the rules for private gun sellers, setting the licensing bar at either 25 or 50 guns sold in a year.

Going that route would have given the ATF a stronger enforcement tool, but it would also have likely meant enduring legal challenges, much as the administration has after using executive power to attempt reforms of deportation policies and coal fired power plant emissions. To attempt such a rule change, Obama would have had to kick it off well before the beginning of 2016, since the process can take more than a year without lawsuits.

Instead, Obama opted to work with the existing definition, by spelling out certain behaviors that have been found to go along with being illegally engaged in unlicensed gun dealing: printing business cards, taking out advertising, selling a lot of firearms in their original packaging. He also took another step, asking Congress for the money to hire 200 more ATF agents and investigators in his 2017 budget. Pete Gagliardi, the ATF’s director of legislative affairs in the mid-1990s, says that if the funds were authorized, Congress could “tie budget money to reporting requirements,” wonk-speak for asking the ATF to make more cases against unlicensed dealers in order to receive more generous appropriations.

That’s what Gagliardi saw happen in the 1990s with a law called the Armed Career Criminals Act. He says that when the ATF approached the appropriations committees with requests for funding, lawmakers would ask, “What are you doing to enforce the Armed Career Criminals Act? How many cases are you making under that law?’”

But such budget-driven initiatives depends on a Congress that shares the president’s priorities. And this Congress, it is safe to say, does not.

Indeed the reception in the Capitol to Obama’s final budget has been harsh even by recent standards: The House won’t ask the White House budget director to testify, the first time that invitation has not been extended since the funding process was shaped in 1975.

The upshot is that the ATF is likely to be left at its current enforcement muscle. In 2014, the last year for which figures are available, the Bureau had 2,490 special agents and 780 investigators. The Violence Policy Center, a group that advocates for stronger gun laws, estimated there were anywhere from 2,000 to 5,200 gun shows per year during the Clinton era, but they have not updated that number since then. Assuming that at least that many gun shows are still held around the country each year, there simply aren’t enough agents to survey them all for evidence of unlicensed dealing. As it is, the ATF manages to inspect just 7 percent of existing licensed dealers per year.

No influx of manpower and an only marginally less open-ended engaged in the business rule means that from the perspective of the ATF, the status quo reigns. And according to some former ATF agents, the status quo includes a general disinclination to go after everyday unlicensed gun dealers.

One reason, say sources, is that the cases eat up enormous chunks of time and resources for what former special agent John Risenhoover labels as essentially “tax and title violations.” As a consequence, agents tend to only investigate “slam-dunk cases,” where the violations are flagrant and can be tied to other, more violent crimes. Take the example of David Lewisbey, a Chicagoan who regularly bought duffel bags full of guns in Indiana to resell back in his city, often to gang members. Though he claimed he was just a hobbyist maintaining his personal collection, he admitted on the stand that he had an idea the guns he sold would be used in crimes. Lewisbey was successful prosecuted for his offense, but had he quietly sold those duffel bags full of guns at a markup to lawful gun owners, he may never have been caught, even as he would have been just as guilty of violating the engaged in the business rules.

Cases like the Lewisbey bust begin not with sweeps of gun shows, but rather with the recovery of crime guns, says former ATF special agent Jay Wachtel. The weapons are traced to their original retail sale; if along that chain of custody an unlicensed dealer transferred the weapon, agents might consider a case. It’s a highly targeted approach that focuses on investigations where agents can demonstrate that gun dealing created a threat to public safety. Wachtel says this makes the investigation more appealing to prosecutors who actually decide whether to press charges. But because this process depends on waiting for a gun to be used in a crime, it almost certainly misses many instances when dealers openly flout the law.

One other reason the ATF takes this more circumscribed approach, says Risenhoover, is to protect itself against accusations that it tramples on the rights of gun owners. After the Bureau was involved in fatally violent confrontations in Waco, Texas, and Ruby Ridge, Idaho, NRA leader Wayne LaPierre warned his membership against “jackbooted government thugs.” The image has resurfaced when the ATF’s enforcement arm has made its presence felt at gun shows, as it did in Richmond, Virginia in 2004 and 2005. After vendors and customers there said they felt “intimidated” by ATF agents, the Bureau was subjected to a congressional hearing, and the U.S. Attorney scolded the agency for using too many resources to go after minor charges. The rebuke came despite the fact that the ATF was working specific tips regarding unlawful sales. Deploying a dragnet approach at gun shows to catch unlicensed dealers, Risenhoover believes, would be “a guaranteed way to make the ATF into ‘jackbooted thugs’ all over again.”

The wan effort to give teeth to Obama’s executive action could change, of course. ATF administrators could decide to broaden their criteria for making cases against unlicensed dealers. But there’s no evidence yet that the Bureau intends to do so. Wachtel says Obama’s guidance will function like a speed limit sign, reminding the public of the rules. It will “discourage those who can be discouraged” but little more. To the unlicensed dealers at the gun show in San Antonio — held in a state where drivers think nothing of pushing 85 miles per hour on the highway — the president’s new guidelines failed to register as even a speed bump.

Additional reporting by Christopher Hooks.