Proposal #2: Individual FFL Audit Logs (25.9(b)(4))

The rule issued by the Clinton Administration on January 22, 2001, would have allowed the FBI to share information from the audit log with the Bureau of Alcohol, Tobacco and Firearms (ATF) to aid in inspections of federally-licensed firearms dealers (FFLs). The proposed rule would severely limit such use of the audit log including limiting the available records to those containing not more than 30 days worth of allowed transactions. Limiting the available information to 30 days worth of allowed transactions would provide ATF with only a very narrow snapshot of a given dealer’s transactions. ATF should have a more complete picture of a dealer’s activities to ensure that any patterns of suspect transactions can be identified. Moreover, the only information that would be contained in this so-called audit log for allowed transfers is the transaction number and the date of inquiry�this limitation would severely limit the utility of the logs. Such limitations are inconsistent with the important policy goal of identifying and interrupting illegal gun trafficking.

Dealers must retain records of the acquisition and disposition of firearms, so detailed information about purchasers is retained and made available to ATF in the course of their onsite inspections of FFLs. ATF had hoped to be able to perform audits on-site at dealers’ premises using the relevant information about the NICS checks requested by the FFL. However, the FBI’s regulation did not permit such information to be shared by ATF, and the regulation that the Department suspended would have cured the problem. However, in a further indication of the direction of the Department, Attorney General Ashcroft’s proposed rule actually maintains the prohibition on the FBI’s ability to share audit log information with ATF, continuing to deprive the FBI and ATF from fully implementing the audit capabilities of NICS.

Although the prohibition on sharing of information by the FBI with ATF prevented law enforcement from developing a large number of examples of audits that resulted in the apprehension of gun criminals, there are examples of how the audit log would have enabled the FBI to identify fraud and abuse of the system. First, the March 2000 NICS Operations Report confirmed that the audit log “has helped the FBI to identify an FFL who was transferring firearms without doing background checks and has aided in identifying several possible straw purchases forwarded to ATF for investigation.” In addition, Representative Henry Waxman (D-CA) recently held an investigative briefing to examine how individuals use fake identifications to evade a NICS check.23The only way that such abuses could be identified is through the maintenance of an audit log. Otherwise, the near-immediate destruction of identifying information will deprive the FBI and ATF from using the audit log to identify cases of abuse.

According to the Bureau of Alcohol, Tobacco and Firearms, “The most frequent type of trafficking channel identified in ATF investigations is straw purchasing from federally licensed firearms dealers.” In a review of 1,530 firearms trafficking investigations, ATF found that nearly 50 percent of the investigations involved direct or indirect trafficking by straw purchasers. The same analysis determined that corrupt FFLs are a significant source of trafficked firearms. Specifically, ATF determined that although FFLs were involved in the smallest proportion of ATF trafficking investigations, they were associated with “by far the highest mean number of illegally diverted firearms per investigation”�more than 350 per investigation. ATF also found that corrupt gun dealers were the source of the largest total number of illegally diverted firearms when compared with other trafficking channels.24

These statistics demonstrate that every available tool must be utilized to help interrupt illegal trafficking. One such tool is the ability to audit the background checks requested by FFLs and compare the information submitted to the NICS to the information retained by the FFLs. The ability to compare this information would allow the identification of straw purchasers as well as dealers who are using the NICS system for unauthorized purposes or who are submitting false data in an effort to thwart the system. Enhanced information sharing between the FBI and ATF would not only have positive public safety benefits, but it would benefit law-abiding gun dealers by weeding out corrupt competing dealers.

Recommendation: Every available tool must be utilized to help interrupt illegal trafficking operations. The final rule should allow the FBI to extract information from the audit log and provide it to ATF in a form that enhances its usefulness in conducting FFL inspections. ATF should be allowed to retain this information for a minimum of 90 days or a longer time period if necessary to ensure thorough FFL inspections.

  1. General Accounting Office, Firearms Purchased from Federal Firearm Licensees Using Bogus Identification (March 2001).
  2. Following the Gun: Enforcing Federal Laws Against Firearms Traffickers, Department of the Treasury, Bureau of Alcohol, Tobacco and Firearms (June 2000), p. 12.