McClure-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.
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