Alcohol, Tobacco and Firearms: Issues Related to Use of Force, Dealer
Licensing, and Data Restrictions (Testimony, 04/25/96, GAO/T-GGD-96-104).
GAO discussed the Bureau of Alcohol, Tobacco and Firearms (ATF),
focusing on its: (1) policy on the use of force; (2) licensing of
firearms dealers; and (3) compliance with legislative restrictions on
maintaining certain firearms licensee data. GAO noted that: (1) between
fiscal year (FY) 1990 and FY 1995, ATF arrested an annual average of
8,000 suspects and had fewer than 10 reported shootings or alleged
incidents of excessive force; (2) ATF deadly force and training policies
are consistent with Drug Enforcement Agency (DEA) and Federal Bureau of
Investigation (FBI) policies; (3) when serving high-risk warrants, ATF,
DEA, and FBI use dynamic entry, a tactic that may involve forced entry
and is used to gain rapid entry to premises; (4) in none of the FY 1995
ATF Special Response Team deployments did agents fire their weapons and
in about half, agents used dynamic entries; (5) ATF procedures for
reporting, investigating, and reviewing shootings and alleged excessive
force cases are consistent with DEA and FBI procedures; (6) ATF complied
with its reporting, investigating, and reviewing procedures, determined
that all ATF shootings were justified, determined that most excessive
force allegations were unsubstantiated, and punished agents determined
to have engaged in misconduct; (7) between 1993 and 1995, the number of
licensed firearms dealers declined by about 35 percent due to increased
ATF law enforcement and new licensing laws; and (8) the ATF firearms
licensee data system complies with legislative restrictions.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: T-GGD-96-104
TITLE: Alcohol, Tobacco and Firearms: Issues Related to Use of
Force, Dealer Licensing, and Data Restrictions
DATE: 04/25/96
SUBJECT: Gun control law
Law enforcement
Law enforcement agencies
Crime prevention
Firearms
Police training
Licenses
Computerized information systems
Data bases
Search and seizure
IDENTIFIER: ATF National Firearms Program
ATF Out-of-Business Records System
Federal Law Enforcement Training Center Criminal
Investigator Training Program
Federal Law Enforcement Training Center Use of Force Model
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Cover
================================================================ COVER
Before the Subcommittee on Treasury, Postal Service, and General
Government
Committee on Appropriations
House of Representatives
For Release on Delivery
Expected at 10:00 a.m.
on April 25, 1996
ALCOHOL, TOBACCO AND FIREARMS -
ISSUES RELATED TO USE OF FORCE,
DEALER LICENSING, AND
DATA RESTRICTIONS
Statement of
Norman J. Rabkin, Director
Administration of Justice Issues
General Government Division
GAO/T-GGD-96-104
GAO/GGD-96-104T
(187014)
Abbreviations
=============================================================== ABBREV
ATF - Bureau of Alcohol, Tobacco and Firearms
DEA - Drug Enforcement Administration
FBI - Federal Bureau of Investigation
NTC - National Tracing Center
SRT - Special Response Team
ALCOHOL, TOBACCO AND FIREARMS:
ISSUES RELATED TO USE OF FORCE,
DEALER LICENSING, AND DATA
RESTRICTIONS
====================================================== Chapter SUMMARY
At the Subcommittee's request, GAO reviewed issues relating to the
Bureau of Alcohol, Tobacco and Firearms' (ATF) (1) use-of-force
policies as compared to the Drug Enforcement Administration's (DEA)
and the Federal Bureau of Investigation's (FBI), (2) licensing of
firearms dealers, and (3) compliance with legal restrictions on
maintaining firearms licensee data. Today, GAO is releasing reports
and testifying on the first two issues. GAO's work on the third
issue is ongoing, and its testimony today focuses on one data
system--ATF's Out-of-Business Records System.
USE OF FORCE: On average, ATF arrested 8,000 suspects but was
involved in fewer than 10 reported shooting or alleged excessive
force incidents annually for fiscal years 1990 through 1995. In
October 1995, the Department of the Treasury and the Department of
Justice issued uniform policies governing the use of deadly force.
ATF's prior policy was generally consistent with Treasury's 1995
policy and with DEA's and FBI's deadly force policies in effect
immediately prior to Justice's 1995 policy. ATF conveys its deadly
force policy to new agents through training. The types of training
provided new ATF agents on use of force policies were consistent with
the types of training provided new DEA and FBI agents. Moreover, ATF
requires that agents be frequently reminded of the policy throughout
their careers.
Dynamic entry--a tactic used to gain rapid entry to premises and
which may involve forced entry--was a principal tactical procedure
used by ATF, DEA, and FBI when serving high-risk warrants and entry
to premises was required. ATF Special Response Teams were deployed
157 times during fiscal year 1995 to address high-risk situations,
and dynamic entries were used in about half of these deployments. In
none of these entries did team members fire their weapons.
ATF's procedures for reporting, investigating, and reviewing shooting
and alleged excessive force incidents were generally comparable to
DEA's and FBI's. Review of ATF's investigative files showed that ATF
(1) generally complied with its investigative procedures, (2) found
all intentional shootings justified, (3) found most excessive force
allegations unsubstantiated, and (4) sanctioned agents found to have
engaged in misconduct.
DECLINE IN DEALERS: From an April 1993 high point of about 260,700,
the number of licensed firearms dealers had declined about 35 percent
as of September 30, 1995. Contributing factors for the decline
included increased ATF enforcement of existing laws and new
legislative requirements, including increased licensing fees. ATF
recognized that its increased enforcement emphasis would likely lead
to fewer licensees.
RESTRICTED FIREARMS LICENSEE DATA: GAO concurs with ATF's conclusion
that its Out-of-Business Records System, as designed, complies with
legislative restrictions. Also, on the basis of its review and
observations, GAO basically confirmed that ATF operates the system
consistent with its design. GAO found no evidence that ATF captures
and stores firearms purchasers' names or other identifying
information into an automated file. Rather, ATF microfilms
out-of-business licensee records and indexes the microfilm records to
facilitate locating them for firearms tracing purposes.
ALCOHOL, TOBACCO AND FIREARMS:
ISSUES RELATED TO USE OF FORCE,
DEALER LICENSING, AND DATA
RESTRICTIONS
==================================================== Chapter STATEMENT
Mr. Chairman and Members of the Subcommittee:
We welcome this opportunity to appear before you today to discuss
three areas of concern raised by the Committee last summer in its
fiscal year 1996 appropriations report on the Bureau of Alcohol,
Tobacco and Firearms (ATF). Those concerns involved ATF's (1) use of
force, (2) effect on the number of licensed firearms dealers, and (3)
compliance with legislative restrictions on maintaining certain
firearms licensee data. Today, we are releasing reports that address
the first two concerns--use of force and licensing of firearms
dealers.\1 With respect to the third concern, data restrictions, our
work is ongoing. As agreed, therefore, we will summarize our
findings related to one data system--ATF's system for maintaining
records of firearms licensees who have gone out of business.
--------------------
\1 Use of Force: ATF Policy, Training and Review Process Are
Comparable to DEA's and FBI's (GAO/GGD-96-17, Mar. 29, 1996) and
Federal Firearms Licensees: Various Factors Have Contributed to the
Decline in the Number of Dealers (GAO/GGD-96-78, Mar. 29, 1996).
USE OF FORCE
-------------------------------------------------- Chapter STATEMENT:1
With regard to the use-of-force issue, you asked us to (1) identify
and describe ATF's policies for the use of deadly force, (2)
determine how ATF conveys its policies to agents, (3) determine the
reasons for and the extent to which ATF uses dynamic entry and the
equipment used to accomplish these entries, and (4) determine whether
ATF has complied with its procedures for investigating shooting and
alleged excessive force incidents. Moreover, you asked us to compare
these issues with the way that the Department of Justice's Drug
Enforcement Administration (DEA) and Federal Bureau of Investigation
(FBI) address them.
To place ATF's use-of-force incidents in perspective, from fiscal
years 1990 through 1995, ATF, on average, arrested about 8,000
suspects but was involved in fewer than 10 reported shooting or
alleged excessive force incidents annually.
ATF'S DEADLY FORCE POLICIES
HAVE REMAINED GENERALLY
CONSISTENT IN RECENT YEARS
AND ARE GENERALLY CONSISTENT
WITH DEA'S AND FBI'S PRIOR
POLICIES
------------------------------------------------ Chapter STATEMENT:1.1
In October 1995, the Department of the Treasury and Justice adopted
deadly force policies for their component agencies that are uniform
except for certain agency mission-specific provisions. Both policies
provide that officers may use deadly force only when the officer has
a reasonable belief that the subject of such force poses an imminent
danger of death or serious physical injury to the officer or another
person.
The 1988 ATF deadly force policy, in effect prior to the issuance of
the October 1995 Treasury policy, was, with two distinctions,
consistent with the new policy. The 1988 ATF and 1995 Treasury
policies were consistent in that both policies generally authorized
the use of such force only when the law enforcement officer
reasonably believed or perceived that there was an imminent threat or
danger of death or serious physical injury to the officer or another
person. The two distinctions were that (1) the 1995 Treasury policy
refers to the use of "deadly force," while the 1988 ATF policy
referred more specifically only to the use of a "firearm" and (2) the
1995 Treasury policy allows for the use of deadly force only when the
law enforcement officer has a "reasonable belief" that there is an
imminent danger of death or serious physical injury, while the 1988
ATF policy allowed for the use of such force when the agent
"perceives" such a threat. Additional discussion regarding these
policies and distinctions, as well as those discussed below, is
provided in chapter 2 (pp. 34 to 36) of our Use-of-Force report.
In addition, the prior ATF policy was, with three distinctions,
consistent with prior DEA and FBI policies. The prior ATF policy was
consistent with prior DEA and FBI policies in that they generally
authorized the use of deadly force only when the agents reasonably
believed or perceived that there was a threat or danger of death or
serious bodily injury to the agent or another person. The three
distinctions were that (1) only ATF's policy provided the additional
restriction that the threat of death or serious bodily harm be
"imminent"; (2) the ATF and DEA policies referred to the shooting of
"firearms," while the FBI policy used the term "deadly force"; and
(3) the ATF policy used the term "perceives," while the DEA and FBI
used the terms "reasonably believes" and "reason to believe,"
respectively.
ATF, DEA, AND FBI CONVEY
DEADLY FORCE POLICIES TO
THEIR AGENTS IN SIMILAR WAYS
------------------------------------------------ Chapter STATEMENT:1.2
ATF conveys its deadly force policies to new agents through training.
Our discussions with training officials, reviews of training
materials and policies, and observations showed that the training
provided new ATF agents to introduce them to the deadly force
policies was consistent with the Treasury/ATF deadly force policies,
and the types of training provided were consistent with the training
provided to new DEA and FBI agents.
Each agency trains new agents in how to recognize the perceived level
of threat they face and in how to respond to it with an appropriate
level of force. Appendix I shows the Federal Law Enforcement
Training Center's Use-of-Force Model. New ATF agents are to attend
the Center's 9-week Criminal Investigator Training Program and are to
receive training on this model. The model presents the five levels
of threat agents may encounter. These levels range from one where a
subject complies with a command from a law enforcement officer to one
where a subject assaults an officer with the potential for serious
bodily harm or death. The model also presents five corresponding
levels of force that would be appropriate to respond to the subject's
level of threat. Those responses range from verbal commands when the
threat is low to deadly force when the threat is high. Emphasis is
placed on resolving situations with the proper level of force while
recognizing that situations can escalate and de-escalate from one
level to another.
Once training is completed, ATF requires that the use-of-force
policies are to be reiterated to agents throughout their careers at
quarterly firearms requalifications and during tactical operations
briefings. DEA and FBI officials said that their deadly force
policies also are to be reiterated at firearms requalifications.
ATF'S USE OF DYNAMIC ENTRY
AND RELATED EQUIPMENT WAS
GENERALLY COMPARABLE TO
DEA'S AND FBI'S
------------------------------------------------ Chapter STATEMENT:1.3
Dynamic entry, which relies on speed and surprise and may involve
forced entry, is one of several tactical procedures used by ATF to
execute search and arrest warrants. Dynamic entry was a principal
tactical procedure used by ATF, DEA, and FBI when serving high-risk
warrants--those where ATF believes that suspects pose a threat of
violence--and entry to premises was required. ATF statistics on
suspects arrested from firearms investigations during fiscal years
1990 through 1995 showed that 46 percent had previous felony
convictions, 24 percent had a history of violence, and 18 percent
were armed at arrest.\2
All ATF case agents, including those assigned to special weapons and
tactics units, known as Special Response Teams (SRT), are to be
trained in the dynamic entry technique. From fiscal years 1993
through 1995, ATF conducted 35,949 investigations and arrested 22,894
suspects. During this same period, SRTs were deployed 523 times, and
SRT members were involved in 3 intentional shooting incidents, 1 of
which--the Waco operation--resulted in fatalities. We reviewed the
available documentation for all 157 SRT deployments for fiscal year
1995 and found that the dynamic entry technique was used almost half
the time and was the predominant technique used when entry to a
building was required. In none of the 1995 SRT dynamic entries did
ATF agents fire their weapons at suspects.
The equipment available for use by all ATF agents during dynamic
entries generally includes weaponry; breaching equipment, such as
battering rams; and/or other tactical equipment designed for safety,
such as ballistic vests. In addition to the standard equipment
available, SRTs have access to additional firearms, such as
bolt-action rifles, and specialized tactical equipment, such as
diversionary devices. Equipment used by SRTs is generally comparable
to that used by DEA and FBI agents during similar operations.
--------------------
\2 ATF did not compile data for suspects armed at arrest for fiscal
years 1990 and 1991.
ATF COMPLIED WITH ITS
PROCEDURES FOR INVESTIGATING
SHOOTING AND ALLEGED
EXCESSIVE FORCE INCIDENTS
------------------------------------------------ Chapter STATEMENT:1.4
ATF's procedures for reporting, investigating, and reviewing shooting
and excessive force incidents, as revised in October 1994, are
consistent with guidelines and/or standards recommended by the
International Association of Chiefs of Police, the President's
Council on Integrity and Efficiency, and the Commission on
Accreditation for Law Enforcement Agencies. For example, agents are
required to immediately report shooting incidents to their
supervisors, incidents are to be investigated by an independent unit,
and certain reports are to be reviewed by a review board on the basis
of the nature and seriousness of the incident.
Overall, DEA's and FBI's procedures for reporting, investigating, and
reviewing shooting incidents are comparable to ATF's. Distinctions
in the procedures include (1) DEA and FBI delegate some
investigations to their field divisions but ATF does not and (2)
DEA's and FBI's review boards include representatives from
Justice--ATF's review board does not include representatives from
Treasury.
Although ATF's excessive force procedures are comparable to DEA's,
with one distinction relating again to delegation, they are distinct
from those employed by FBI. ATF is to investigate allegations of
excessive force first and--if warranted--refer them to Justice for
possible criminal investigation. In contrast, FBI is to refer all
allegations of excessive force to Justice for possible criminal
investigation before investigating the allegations itself.
Our review of documents in ATF's investigative files for reported
shooting and excessive force incidents in fiscal years 1990 through
1995 showed that ATF complied with its investigative procedures,\3
except that two investigative files did not include a required record
that indicates the file had been reviewed by a designated
headquarters unit. Our review also showed that ATF's investigations
of 38 reported shootings involving ATF agents firing their weapons at
suspects found each to be justified and within the scope of its
use-of-force policy. In addition, ATF's investigations found that 18
of 25 reported excessive force allegations in three misconduct
categories were unsubstantiated. Four investigations found evidence
of some agent misconduct, two investigations were ongoing at the time
of our review, and one was closed without action because ATF
determined that there was no need for further review. Agents found
to have engaged in misconduct received written reprimands and/or
suspensions.
--------------------
\3 Our conclusions are based on whether we found documentation
required by ATF's procedures in the investigative files of shooting
and alleged excessive force incidents and whether the documentation
indicated that investigative procedures had been followed. Where
documentation was not initially found, we obtained documents and/or
explanations from ATF officials. Our conclusions apply only to the
files we reviewed. Due to time and methodological constraints, we
did not evaluate the events that resulted in the incidents or the
quality or adequacy of the ATF investigation. In addition, we did
not verify whether all shooting and alleged excessive force incidents
were reported, or whether all reported allegations of excessive force
were investigated.
DECLINES IN FIREARMS DEALERS
-------------------------------------------------- Chapter STATEMENT:2
Regarding recent declines in the number of firearms dealers, you
asked us to (1) determine the extent and nature of the declines; (2)
determine what factors contributed to the declines, including whether
ATF had a policy to reduce the number of dealers; and (3) obtain the
views of pertinent organizations on the advantages and disadvantages
of reducing the number of dealers.
EXTENT AND NATURE OF
DECLINES
------------------------------------------------ Chapter STATEMENT:2.1
Since reaching a high point in April 1993, the number of firearms
dealers\4 sharply declined by about 35 percent, from about 260,700 to
about 168,400 dealers as of September 30, 1995--the lowest number
since fiscal year 1980. This decline occurred nationwide and ranged
from 23 percent in Montana to 45 percent in Hawaii. To provide a
context for interpreting the recent decline, appendix II shows the
number of firearms dealers in fiscal years 1975 through 1995.
Our analysis of ATF data for all categories\5 of licenses showed that
the number of applications received by ATF for both new licenses and
renewals of existing licenses decreased significantly from fiscal
years 1993 to 1995. Similarly during this period, a relatively large
number of applications was abandoned and withdrawn by former and
prospective licensees when compared to previous years.\6 Also, a
large number of licensees voluntarily surrendered their licenses.\7
Appendix III provides detailed data for fiscal years 1975 through
1995 on application and license activity for all categories of
licensees.
--------------------
\4 ATF issues various categories of federal firearms licenses,
including those for manufacturers, importers, and dealers of
firearms. Our testimony and related report focus on firearms dealer
licenses. Such licenses are granted to dealers and pawnbrokers who
sell firearms at wholesale or retail and gunsmiths who repair
firearms. Federal firearms dealer licenses account for about 90
percent of all federal firearms licenses.
\5 Whenever possible, we use ATF data on firearms dealer licenses in
our testimony and related report. However, in some cases, ATF data
include all categories of licenses, including manufacturers and
importers, as opposed to individual categories.
\6 An application is "abandoned" when an applicant submits an
incomplete or improperly executed application and does not respond to
ATF's notification to correct the application within 30 days of the
notification. An application is "withdrawn" when an applicant
submits an incomplete application and, when notified by ATF,
voluntarily withdraws the application.
\7 A "voluntarily surrendered" license generally results from an ATF
compliance inspection in which one or more violations are detected
and ATF provides the licensee with the opportunity to surrender the
license rather than have the license formally revoked. The term also
includes licenses surrendered after the licensee is advised by ATF of
noncompliance with state or local ordinances. Also, voluntary
surrenders can occur when licensees give up their licenses on their
own without ATF involvement.
SEVERAL FACTORS CONTRIBUTED
TO THE DECLINE
------------------------------------------------ Chapter STATEMENT:2.2
Our review showed that various factors collectively contributed to
the decline in the number of dealers. First, in January 1993, ATF
initiated a National Firearms Program, which consisted of several
regulatory enforcement strategies, including a strategy to closely
scrutinize applicants for federal firearms dealer licenses and the
operations of licensees to ensure strict compliance with the Gun
Control Act of 1968, as amended. Under this program, the number of
ATF full field inspections of firearms dealers and licensees
increased. According to ATF, several factors led to this increased
enforcement strategy. These factors included rising violence
associated with the illegal use and sale of firearms, national media
attention on the ease of obtaining a firearms dealer license, and ATF
data that indicated that many licensees may not have been engaged in
a firearms business.\8
As a result, the number of ATF full field inspections of all
applicants for federal firearms licenses and the operations of all
such licensees increased from about 19,900 in fiscal year 1992 to a
high of about 27,000 in fiscal year 1993--the period during which the
National Firearms Program was initiated. Furthermore, from 1993 to
1995, the number of ATF inspections generally averaged about 9
percent of the total licensees, compared to 7 percent and lower
before fiscal year 1993.
As a result of its increased inspections, according to ATF, about
7,600 firearms dealer licensees voluntarily surrendered their
licenses in fiscal years 1994 and 1995, the only 2 years for which
ATF collected such data. Under ATF's National Firearms Program, when
an inspection showed that a dealer was not "engaged in a firearms
business" at the location shown on the license, ATF inspectors were
to advise the dealer to voluntarily surrender the license before
implementing a formal revocation action.
In addition, ATF used telephone interviews, called preliminary
inspections, in fiscal years 1993 through 1995 as a means of
scrutinizing federal firearms dealer applicants. According to ATF, a
substantial portion of the approximately 2,500 applications abandoned
and 7,200 applications withdrawn by applicants during fiscal year
1993 was directly attributable to ATF's preliminary inspections.
A second factor contributing to the declines was an August 1993
memorandum from the President directing Treasury and ATF to take
actions to ensure compliance with federal firearms license
requirements. The President pointed out that there were over 287,000
federal firearms licensees (all categories), many of which he stated
probably should not have been licensed because they were not engaged
in a legitimate firearms business.
A third contributing factor was the Federal Firearms License Reform
Act of 1993,\9 passed by Congress in late November 1993. This act
increased the licensing fees for obtaining and renewing a federal
firearms dealer license.
A fourth contributing factor was ATF's revisions to the licensing
application process that were done in late 1993 and early 1994 in
response to the President's August 1993 memorandum. ATF
significantly revised the application form by adding a number of
questions and requirements for supporting information to help it
determine whether applicants intended to engage in the firearms
business. For example, ATF required applicants to (1) submit
fingerprints and photographs of themselves, (2) furnish a diagram of
the business premises where their firearms inventories were located,
and (3) provide a description of their security system for
safeguarding firearms inventories. In July 1995, ATF reduced the
number of questions and amount of supporting documents required.
A fifth factor that contributed to the decline was the Violent Crime
Control and Law Enforcement Act of 1994, which was passed by Congress
in September 1994. This act added more licensing requirements,
including requiring applicants for licenses to certify that their
firearms business would comply with state and local laws.
Finally, along with federal laws and administration actions
contributing to the decline, the enforcement of state and local laws
may have contributed to the reduction in the number of firearms
dealers. These include licensing, taxing, and other business-related
laws.
--------------------
\8 ATF's Operation Snapshot, an inspection project that was conducted
in 1992 and 1993 to obtain information about federal firearms
licensees and their business operations, reported that 46 percent of
all licensees had sold no firearms in the previous 12 months and
another 34 percent had sold 1 to 10 firearms. According to ATF,
these survey results were invaluable in formulating the National
Firearms Program.
\9 The Federal Firearms License Reform Act of 1993, which is found in
Title III of Public Law 103-159, increased the licensing fee for
firearms dealers, effective November 30, 1993, from $10 per year to
$200 for a new 3-year license and from $10 per year to $90 for a
3-year renewal license.
ATF RECOGNIZED THAT
DECLINES WOULD LIKELY
OCCUR
---------------------------------------------- Chapter STATEMENT:2.2.1
Although ATF intensified its enforcement efforts, we found no
evidence from our review of ATF documents and interviews with
numerous ATF officials that ATF had a policy or sought to reduce the
number of licensed dealers by some targeted number. Instead, we
found that ATF's strategy since 1993 had been to closely scrutinize
firearms dealer applicants and licensees to ensure strict compliance
with the Gun Control Act. While ATF had no policy to reduce the
number of dealers to a targeted number, it recognized that its
strategy of increased enforcement, along with the legislative
actions, would likely result in a reduction in the number of dealers.
EXTERNAL ORGANIZATIONS'
VIEWS ON REDUCING THE NUMBER
OF FIREARMS DEALERS
------------------------------------------------ Chapter STATEMENT:2.3
We contacted officials from seven organizations to obtain comments on
the advantages and disadvantages of reducing the number of licensed
firearms dealers. Appendix IV contains the names and descriptions of
the organizations, which represented the firearms industry, firearms
consumers, law enforcement, and gun control interests.
The officials from the seven organizations provided us with a variety
of views on the advantages and disadvantages of reducing the number
of firearms dealers. Their views generally concerned the effect that
declines in the number of firearms dealers may have on crime,
regulatory enforcement, and economics. Their views ranged from those
who believed that by reducing the number of dealers there could be
less crime and better monitoring of dealers to those who feared that
dealer decreases would curb competition, raise prices, and limit the
lawful availability of firearms. Along with these views, the
officials from the seven organizations provided their views on the
reasons for the declines in the number of firearms dealers, which
confirmed the results of our analysis regarding factors contributing
to the declines.
RESTRICTED FIREARMS LICENSEE
DATA
-------------------------------------------------- Chapter STATEMENT:3
Regarding restricted firearms licensee data, you asked us to review
ATF's compliance with legislative restrictions on maintaining certain
firearms licensee data. For these hearings, we agreed to focus on
ATF's Out-of-Business Records System and its role in the firearms
tracing process. Specifically, our objectives were to (1) describe
ATF's overall firearms tracing process and, specifically, the
Out-of-Business Records System and its role in the process; (2)
determine the number and results of ATF's firearms traces and the
number of out-of-business records processed and used; and (3)
determine whether the Out-of-Business Records System complies with
legislative data restrictions. We also agreed to assess information
on the Out-of-Business Records System that ATF supplied to one
Subcommittee member. Detailed results and the scope and methodology
of our review pertaining to ATF's Out-of-Business Records System are
included in appendix V.
FIREARMS TRACING OPERATIONS
------------------------------------------------ Chapter STATEMENT:3.1
The Gun Control Act requires federal firearms licensees to maintain
records of firearms transactions and make these records available to
ATF under certain circumstances.\10 Through the use of these records,
ATF provides criminal firearms tracing services to law enforcement
agencies. To perform traces, ATF needs to know the manufacturer and
serial number of the gun. ATF's National Tracing Center (NTC) traces
the ownership of firearms by using documentation, such as
out-of-business licensee records, which are maintained in ATF's data
systems, and/or by contacting manufacturers, importers, wholesalers,
and retailers (i.e., firearms dealers). NTC's objective is to
identify the last known purchaser of the firearm. NTC considers a
trace completed when it traces the firearm to a retail firearms
licensee or purchaser or when it cannot identify the purchaser.
From fiscal years 1992 through 1995, ATF received a total of about
263,000 trace requests. During this period, the number of trace
requests ATF completed more than doubled, from about 43,000 in fiscal
year 1992 to about 86,200 in fiscal year 1995. ATF completed a total
of about 243,600 trace requests during this 4-year period. In about
41 percent of the completed trace requests, ATF identified a retail
firearms licensee or purchaser of the traced firearm.
--------------------
\10 As originally enacted, the Gun Control Act required licensees to
submit such reports and information as the Secretary of the Treasury
prescribed by regulation, and authorized the Secretary to prescribe
such rules and regulations as he deemed necessary to carry out the
provisions of the act.
OUT-OF-BUSINESS RECORDS
SYSTEM
------------------------------------------------ Chapter STATEMENT:3.2
When firearms licensees discontinue their businesses, ATF needs
access to their records for tracing purposes. To ensure that it had
access to these records, shortly after the passage of the Gun Control
Act, ATF issued regulations requiring firearms licensees that
permanently discontinued their businesses to forward their records to
ATF within 30 days following the discontinuance. The Firearms
Owners' Protection Act of 1986 codified this reporting requirement.
Accordingly, since the enactment of the Gun Control Act, ATF has
maintained the out-of-business records at a central location, which
is currently at NTC in Falling Waters, West Virginia.
Before fiscal year 1991, ATF maintained these records in hard copy.
Performing traces by manually searching these copies was very time
consuming and labor intensive. ATF also had storage space problems.
In 1991, ATF began a major project to microfilm these records and
destroy the originals. This system still resulted in time-consuming
traces. In fiscal year 1992, using a minicomputer ATF created a
computerized index of the microfilm records. The index contained
information, including the firearm's serial number and the firearms
licensee number, to tell the tracing staff which microfilm cartridge
to search and where on the cartridge the record was located. The
indexed information that is captured by the minicomputer is then
stored on a mainframe computer's database to allow searches of the
indexed information. Information, such as the firearm purchaser's
name or other identifying information, remains stored on the
microfilm and is not computerized. ATF officials said all traces now
begin with a query of the Out-of-Business Records System.
During fiscal years 1992 through 1995, ATF received records from
about 68,700 firearms licensees that went out of business. During
this time, the number of licensees that went out of business more
than doubled, from about 34,700 in 1992 to about 75,600 in 1995, and
the percent of licensees that sent in their records increased by
about three-fourths, from about 25 percent to about 43 percent.
Also, during this period, ATF officials estimated that ATF
microfilmed about 47 million documents contained in about 20,000
boxes. In addition, the officials estimated that ATF used the
out-of-business licensees' records to help complete about 42 percent
of all completed trace requests during this period.
OUT-OF-BUSINESS RECORDS
SYSTEM COMPLIES WITH
LEGISLATIVE DATA
RESTRICTIONS
------------------------------------------------ Chapter STATEMENT:3.3
Since the passage of the Gun Control Act, Congress has enacted two
provisions restricting the information ATF can maintain from firearms
licensee records. Since fiscal year 1979, the annual Treasury
appropriations act generally has prohibited ATF from consolidating or
centralizing the records, or any portions thereof, of the acquisition
or disposition of firearms maintained by federal firearms licensees.
In addition, a provision of the Firearms Owners' Protection Act,
codified at 18 U.S.C. 926(a), prohibits ATF from issuing any rule or
regulation, after the date of that act, requiring that (1) firearms
licensee records (or any portion thereof) be recorded at or
transferred to a federal, state, or local government facility or (2)
any system of registration of firearms, firearms owners, or firearms
transactions or dispositions be established.
In a March 1995 letter to one Subcommittee member following hearings
on Treasury's fiscal year 1996 budget request, ATF described its
maintenance and use of the out-of-business dealers' records and
explained that it believes these records are handled in compliance
with the law.\11 Specifically, ATF concluded that the storage and
retrieval systems used for these records had been designed to comply
with the statutory restriction relating to the establishment of a
registration system for firearms, firearms owners, or firearms
transactions or dispositions. We concur with this conclusion. Our
detailed legal analysis is contained in appendix V.
Furthermore, with regard to the operation of the Out-of-Business
Records System, our review of ATF's system documentation and
discussions with ATF officials, along with our observation of the
out-of-business records process at NTC, basically confirmed that ATF
was operating the system in a manner consistent with the way it was
designed by ATF and described in Treasury's March 1995 letter. We
found no evidence that ATF captures and stores the firearms
purchasers' names or other identifying information from the
out-of-business records in an automated file.
--------------------
\11 See letter from Ronald K. Noble, Under Secretary of the
Department of the Treasury, to Congressman Ernest J. Istook, Jr., in
March 1995.
AGENCY COMMENTS
-------------------------------------------------- Chapter STATEMENT:4
ATF provided oral comments on a draft of our testimony at a meeting
with the ATF Director and other top-level officials on April 16,
1996. With regard to the use-of-force and firearms dealer licensee
issues, the officials reiterated their previous comments on the
respective reports, i.e., our presentation of the facts was accurate,
thorough, and balanced. They also agreed with our findings and
conclusions regarding the Out-of Business Records System and provided
some technical comments, which we incorporated where appropriate.
------------------------------------------------ Chapter STATEMENT:4.1
Mr. Chairman, this concludes my prepared statement. I would be
pleased to answer any questions you or the other Subcommittee members
might have.
FEDERAL LAW ENFORCEMENT TRAINING
CENTER'S USE-OF-FORCE MODEL
=========================================================== Appendix I
(See figure in printed
edition.)
Source: Federal Law
Enforcement Training Center.
(See figure in printed
edition.)
NUMBER OF FEDERALLY LICENSED
FIREARMS DEALERS, FISCAL YEARS
1975 THROUGH 1995
========================================================== Appendix II
Type Type
Fiscal year ending 01\a 02\b Total
---------------------------------------------- ------ ------ ------
1975 146,42 2,813 149,24
9 2
1976 150,76 2,882 153,64
7 9
1977 157,46 2,943 160,40
3 6
1978 152,68 3,113 155,79
1 4
1979 153,86 3,388 157,24
1 9
1980 155,69 3,608 159,29
0 8
1981 168,30 4,308 172,60
1 9
1982 184,84 5,002 189,84
0 2
1983 200,34 5,388 205,73
2 0
1984 195,84 5,140 200,98
7 7
1985 219,36 6,207 225,57
6 3
1986 235,39 6,998 242,39
3 1
1987 230,88 7,316 238,20
8 4
1988 239,63 8,261 247,89
7 8
1989 231,44 8,626 240,06
2 8
1990 235,68 9,029 244,71
4 3
1991 241,70 9,625 251,33
6 1
1992 248,15 10,452 258,60
5 7
1993 246,98 10,958 257,94
4 2\c
1994 213,73 10,872 224,60
4 6
1995 158,24 10,155 168,39
0 5
----------------------------------------------------------------------
\a This type of license is issued to dealers and gunsmiths.
\b This type of license is issued to pawnbrokers.
\c The number of firearms dealers peaked in April 1993 at 260,703.
Source: ATF.
DATA ON ALL CATEGORIES OF FEDERAL
FIREARMSLICENSES AND APPLICATIONS,
FISCAL YEARS 1975 THROUGH 1995
========================================================= Appendix III
Fiscal
year Voluntarily
ending Original Renewal Revoked surrendered Original Renewal Original Renewal Original Renewal
-------- ---------- ---------- ---------- ------------ ------------- ------------- ------------- ------------- ------------- --------------
1975 29,183 138,719 7 N/A 150 273 1,651 334 N/A N/A
1976 29,511 138,050 6 N/A 209 261 2,077 436 N/A N/A
1977 32,560 136,629 10 N/A 216 207 1,645 409 N/A N/A
1978 29,531 139,383 0 N/A 151 168 1,015 141 414 449
1979 32,678 143,021 12 N/A 124 93 432 240 433 942
1980 36,052 143,527 10 N/A 96 31 601 336 661 800
1981 41,798 152,153 7 N/A 85 16 742 385 329 495
1982 44,745 161,390 4 N/A 52 12 580 332 370 350
1983 49,669 163,386 6 N/A 151 48 916 514 649 700
1984 39,321 163,950 9 N/A 98 23 706 449 833 825
1985 37,385 52,768\a 18 N/A 103 9 666 226 598 307
1986 42,842 47,648 27 N/A 299 14 698 135 452 181
1987 36,835 61,596 14 N/A 121 38 874 428 458 225
1988 32,724 52,738 4 N/A 30 19 506 422 315 182
1989 34,318 54,892 12 N/A 34 14 561 1,456\b 360 215
1990 34,336 61,536 9 N/A 46 29 893 48 404 63
1991 34,567 57,327 17 N/A 37 15 1,059 82 685 106
1992 37,085 58,873 24 N/A 57 4 1,337 26 611 88
1993 41,545 66,811 26 N/A 343 53 6,030 1,187 1,844 683
1994 25,393 37,079 44 4,936 136 191 4,480 1,128 3,917 969
1995 7,777 19,541 35 2,657 49 65 1,046 1,077 1,180 1,254
-----------------------------------------------------------------------------------------------------------------------------------------------------
N/A = ATF did not maintain data.
\a ATF switched from 1-year to 3-year renewals in 1985.
\b According to ATF, this number is due to a cleanup of three
regional offices' firearms files that were transferred to the
Firearms and Explosives Licensing Center in 1989. Also, 1989 was the
renewal year for the 3-year ammunition-only licenses issued in 1986,
prior to a change in the law eliminating the need for a license to
deal in ammunition only. These licensees were advised to withdraw
their renewal applications.
Source: ATF.
DESCRIPTION OF ORGANIZATIONS
CONTACTED BY GAO
========================================================== Appendix IV
AMERICAN SHOOTING SPORTS
COUNCIL, INC.
-------------------------------------------------------- Appendix IV:1
The American Shooting Sports Council represents the firearms industry
and interested individuals. The Council promotes the sport of
shooting and lobbies on firearms issues. The Council has about 350
members and is headquartered in Atlanta, GA.
HANDGUN CONTROL, INC.
-------------------------------------------------------- Appendix IV:2
Handgun Control, Inc., is a public citizens lobby organization
working for legislative controls and governmental regulation on the
manufacture, importation, sale, transfer, and civilian possession of
guns. The organization has about 400,000 members and is
headquartered in Washington, D.C.
The Center to Prevent Handgun Violence is a nonprofit education,
research, and legal advocacy organization established in 1983 to
reduce handgun violence. The Center is an affiliate of Handgun
Control, Inc. They work closely with one another to disseminate
information on handgun violence.
INTERNATIONAL ASSOCIATION OF
CHIEFS OF POLICE
-------------------------------------------------------- Appendix IV:3
The International Association of Chiefs of Police is an organization
of police executives who are commissioners, superintendents, chiefs,
and directors of national, state, provincial, and municipal
departments. The organization provides leadership, support, and
research services in all phases of law enforcement activity. This
nonprofit organization has about 14,500 members from 81 countries and
is headquartered in Alexandria, VA.
NATIONAL ALLIANCE OF STOCKING
GUN DEALERS, INC.
-------------------------------------------------------- Appendix IV:4
The National Alliance of Stocking Gun Dealers is a trade organization
representing independent, storefront shooting sports dealers,
distributors, and manufacturers. The alliance has about 16,300
members and is headquartered in Havelock, NC.
NATIONAL ASSOCIATION OF
FEDERALLY LICENSED FIREARMS
DEALERS
-------------------------------------------------------- Appendix IV:5
The National Association of Federally Licensed Firearms Dealers is a
trade association representing individuals licensed by the federal
government to sell firearms. The association provides firearms
retailers with low-cost liability insurance, current information on
new products for the industry, and retail business guidance. It has
about 10,000 members and is headquartered in Fort Lauderdale, FL.
NATIONAL RIFLE ASSOCIATION
-------------------------------------------------------- Appendix IV:6
The National Rifle Association of America is a nonprofit sports
organization representing target shooters, hunters, gun collectors,
gunsmiths, police officers, and others interested in firearms. The
Association promotes the rights of individuals to possess and use
firearms, promotes shooting sports and firearms safety, and
encourages civilian marksmanship. It has about 3.2 million members
and is headquartered in Fairfax, VA.
VIOLENCE POLICY CENTER
-------------------------------------------------------- Appendix IV:7
The Violence Policy Center is a national, nonprofit educational
foundation that conducts research on violence in America and works to
develop violence-reduction policies and proposals. The Center
examines the role of firearms in America, conducts research on
firearms violence, and explores new ways to decrease it. The Center
is headquartered in Washington, D.C.
RESULTS OF GAO'S REVIEW OF ATF'S
OUT-OF-BUSINESS RECORDS SYSTEM
=========================================================== Appendix V
The Subcommittee on Treasury, Postal Service, and General Government,
House Committee on Appropriations, asked us to review ATF's
compliance with legislative restrictions on maintaining certain
firearms licensee data.\12 Since the passage of the Gun Control Act
of 1968, Congress has enacted two provisions that place restrictions
on ATF's handling of firearms licensee records. Since fiscal year
1979, the annual Treasury appropriations act generally has prohibited
ATF from consolidating or centralizing firearms licensee records.\13
In addition, the Firearms Owners' Protection Act of 1986 prohibits
ATF from issuing any rule or regulation requiring that (1) firearms
licensee records (or any portion thereof) be recorded at or
transferred to a federal, state, or local government facility or (2)
any system of registration of firearms, firearms owners, or firearms
transactions or dispositions be established.\14 Our audit work
addressing this issue is ongoing and should be completed this summer.
On the basis of discussions with Subcommittee staff, for these
hearings we agreed to focus on issues raised in this Subcommittee's
hearings on Treasury's fiscal year 1996 budget request relating to
ATF's Out-of-Business Records System and its role in the firearms
tracing process. Specifically, our objectives were to (1) describe
ATF's overall firearms tracing process and, specifically, ATF's
Out-of-Business Records System and its role in the process; (2)
determine the number and results of ATF's firearms traces and the
number of out-of-business records processed and used; and (3)
determine whether the Out-of-Business Records System complies with
legislative data restrictions. We also agreed to assess information
on ATF's Out-of-Business Records System that ATF previously provided
to one Subcommittee member. The scope and methodology of our review
are included at the end of this appendix.
--------------------
\12 ATF issues various categories of federal firearms licenses,
including those for manufacturers, importers, and dealers of
firearms. Firearms dealer licenses are granted to dealers and
pawnbrokers who sell firearms at wholesale or retail and gunsmiths
who repair firearms. Federal firearms dealer licensees account for
about 90 percent of all federal firearms licensees.
\13 Since fiscal year 1979, the annual Treasury, Postal Service, and
General Government Appropriations Acts have provided that no
appropriated funds shall be available for salaries or administrative
expenses in connection with consolidating or centralizing any portion
of the firearms acquisition and disposition records maintained by
federal firearms licensees.
\14 Public Law 99-308 (1986); see 18 U.S.C. 926(a).
ATF'S FIREARMS TRACING
OPERATION
--------------------------------------------------------- Appendix V:1
The Gun Control Act requires federal firearms licensees to record
firearms transactions, maintain that information at their business
premises, and make such records available to ATF for inspection and
search under certain prescribed circumstances.\15
Through the use of these records,\16 ATF provides firearms tracing
services to federal, state, local, and foreign law enforcement
agencies. ATF uses the records, which are maintained by firearms
licensees, for firearms tracing and other law enforcement purposes.
To carry out its firearms tracing responsibilities, ATF maintains a
firearms tracing operation, located at the National Tracing Center
(NTC) in Falling Waters, West Virginia. With a staff of 41 as of
April 1996, NTC systematically tracks firearms suspected of being
involved in crimes from manufacturer to purchaser to assist law
enforcement in identifying suspects.
NTC receives trace requests by facsimile, telephone, and mail. To do
a trace, the manufacturer and the serial number of the gun must be
known. NTC tracks the ownership of firearms by using documentation,
such as out-of-business licensee records, which are maintained in
ATF's data systems, and/or by contacting manufacturers, importers,
wholesalers, and retailers (i.e., firearms dealers). The objective
of the trace is to identify the last known purchaser of the firearm.
ATF documents each trace request and its results, records information
on the chain of firearm ownership from original manufacturer to
retail purchaser, and provides that information to the requester.
ATF considers a request completed when it traces the firearm to a
retail firearms licensee or a purchaser or when it cannot identify
the purchaser for various reasons. For example, the description of
the firearm as submitted by the requester may not have contained
sufficient information. Figure V.1 provides an overview illustration
of the firearms tracing process.
Figure V.1: Flowchart of the
ATF's Firearms Tracing Process
(See figure in printed
edition.)
(See figure in printed
edition.)
\a From this point in the tracing process, an active and/or inactive
manufacturer, importer, or licensee may be involved. It should also
be noted that not all traces are successfully completed. Some are
closed due to age, completed/inaccurate information, or loss of
licensee records or inability to locate licensee.
Source: ATF.
For fiscal years 1992 through 1995, ATF received a total of 262,984
trace requests. The number of trace requests received by ATF
increased about 56 percent, from 51,210 in fiscal year 1992 to 80,042
in fiscal year 1995. During this period, ATF completed a total of
243,584 traces. As shown in figure V.2, the number of traces
completed more than doubled, from 42,980 in fiscal year 1992 to
86,215 in fiscal year 1995. During this 4-year period, ATF
identified a retail firearms licensee or a purchaser of the traced
firearm in about 41 percent of the completed trace requests. In
fiscal year 1995, ATF completed about 52 percent of the trace
requests.
Figure V.2: Number of Traces
ATF Completed and Those
Completed by Tracing Firearm to
a Retail Licensee or Purchaser,
FYs 1992-1995
(See figure in printed
edition.)
Source: ATF.
--------------------
\15 As originally enacted, the Gun Control Act required licensees to
submit such reports and information as the Secretary of the Treasury
prescribed by regulation, and authorized the Secretary to prescribe
such rules and regulations as he deemed necessary to carry out the
provisions of the act.
\16 These records include an acquisition and disposition logbook and
Firearms Transaction Records (ATF Form 4473), which include, among
other things, the name of the purchaser, the kind of firearm
purchased, and the firearm model and serial number.
OUT-OF-BUSINESS RECORDS SYSTEM
HAS EVOLVED
--------------------------------------------------------- Appendix V:2
When firearms licensees discontinue their businesses, ATF needs
access to their records for tracing purposes. To ensure that it had
access to these records, shortly after the passage of the Gun Control
Act, ATF issued regulations requiring firearms licensees that
permanently discontinued their businesses to forward their records to
ATF within 30 days following the discontinuance. The Firearms
Owners' Protection Act codified this reporting requirement.
Accordingly, since the enactment of the Gun Control Act, ATF has
maintained the out-of-business records at a central location, which
is currently at NTC.\17
Before fiscal year 1991, ATF stored the out-of-business records in
boxes with an NTC file number assigned to each firearms licensee. If
during a trace ATF determined that the firearms licensee that sold
the firearm was out of business and had sent in its records, a tracer
would locate the boxes containing the records and manually search
them for the appropriate serial number. This was a time-consuming
and labor-intensive process for ATF, which also involved storage
problems.
In 1991, ATF began a major project to microfilm the out-of-business
records and destroy the originals. Instead of boxes, the
out-of-business records were stored on microfilm cartridges, with the
firearms licensee numbers assigned to them. Although this system
occupied much less space than the hard copies of the records, it was
still time consuming to conduct firearm traces because the researcher
had to examine up to 3,000 images on each microfilm cartridge to
locate a record.
In fiscal year 1992, ATF began using a minicomputer to create an
index of the out-of-business microfilm records containing the
information necessary to identify whether ATF had a record relating
to a firearm being traced. The index contains the following key
information: (1) the cartridge number of the microfilm; (2) an index
number; (3) the serial number of the firearm; (4) the federal
firearms licensee number; (5) and the type of document on microfilm,
i.e., a Firearms Transaction Record (ATF Form 4473) or bound logbook
pages. The indexed information that is captured by the minicomputer
is then stored on a mainframe computer's database to allow searches
of the indexed information by a tracer. The other information on the
microfilm frames, including the firearms purchaser's name, remains on
the microfilm cassette and must be viewed with a microfilm reader.
Since the establishment of the out-of-business records computerized
index, firearm traces are to begin with a query of the
Out-of-Business Records System, rather than a query of the
manufacturer or importer. To perform a query of the Out-of-Business
Records System, a tracer is to enter the serial number of the firearm
in question into the mainframe computer's database to determine if
NTC has a record from an out-of-business licensee containing the
serial number. If the firearm serial number is matched with a
particular out-of-business licensee record, the appropriate cartridge
of microfilm can be located. After locating the appropriate
microfilm, the tracer is to use the location information in the index
to search the microfilm to locate the record containing the serial
number. After locating the record, the tracer is to examine the
record to identify the purchaser of the firearm. If the identified
purchaser is not another licensee, the trace is considered complete.
If the purchaser is another licensee, NTC is to contact the licensee.
If the serial number is not located in the out-of-business records,
NTC is then to contact the manufacturer or importer to determine who
purchased the firearm.
According to ATF officials, the indexed Out-of-Business Records
System has (1) greatly reduced the need to contact manufacturers,
importers, and other licensees and (2) reduced the time and cost,
including storage costs, necessary to conduct firearm traces.
As shown in table V.1, during fiscal years 1992 through 1995, ATF
received out-of-business records from 68,660 firearms licensees. ATF
officials estimated that during this period, ATF had spent about $9.6
million, including the cost of contract employees (65 as of April
1996), to process and maintain out-of-business records. According to
ATF officials, ATF is receiving an increased number of records
primarily because the number of licensees going out of business has
increased, and more of these licensees have sent in their records.
The number of licensees that have gone out of business more than
doubled, from 34,663 in fiscal year 1992 to 75,569 in fiscal year
1995. About 43 percent of the licensees that went out of business in
fiscal year 1995 sent in their records, compared to about 25 percent
in fiscal year 1992--an increase of about three-fourths. ATF
officials estimated that during fiscal years 1992 through 1995, ATF
microfilmed about 47 million documents contained in about 20,000
boxes. Although ATF does not systematically collect data on the
number of traces involving out-of-business records, ATF officials
estimated that ATF used the out-of-business licensees records to help
complete about 42 percent of all completed trace requests during this
period.
Table V.1
Disposition of Records of Federal
Firearms Licensees That Went Out of
Business, FYs 1992-1995
Percen Percen
Fiscal year Number t Number t Number
------------------------------ ------ ------ ------ ------ ------
1992 8,692 25 25,971 75 34,663
1993 7,189 17 34,195 83 41,384
1994 20,504 32 42,699 68 63,203
1995 32,275 43 43,294 57 75,569
======================================================================
Total 68,660 32 146,15 68 214,81
9 9
----------------------------------------------------------------------
Source: ATF.
--------------------
\17 An ATF regulation allows firearms licensees who discontinue their
businesses to deliver their records to any ATF office in the region
in which the business was located. The local office is to forward
them to NTC.
ATF'S OUT-OF-BUSINESS RECORDS
SYSTEM COMPLIES WITH
LEGISLATIVE DATA RESTRICTIONS
--------------------------------------------------------- Appendix V:3
As stated previously, Congress has enacted legislation restricting
the information ATF can maintain from firearms licensee records. In
a March 1995 letter to one of the Subcommittee's members following
hearings on Treasury's fiscal year 1996 budget request, ATF described
its maintenance and use of the out-of-business dealers' records and
explained why it believes these records are handled in compliance
with the law.\18
ATF concluded that
"the storage and retrieval systems utilized for these records
have been carefully designed to comply with a separate statutory
restriction relating to the establishment of a system of
registration of firearms, firearms owners, or firearms
transactions or dispositions."
We concur with this conclusion.
We believe that ATF has the requisite authority to maintain firearms
licensees' out-of-business records at a central government facility
to conduct firearms traces, notwithstanding the data restriction
provisions. As part of the Firearms Owners' Protection Act, Congress
codified in 18 U.S.C. 923(g)(4) the regulatory requirement that ATF
collect out-of-business records.\19 At the same time, Congress passed
the data restriction contained in 18 U.S.C. 926(a), which prohibits
any rule or regulation prescribed after the enactment of the Firearms
Owners' Protection Act (May 19, 1986), from requiring "that records
required to be maintained under this chapter [of title 18] or any
portion of the contents of such records, be recorded at or
transferred to a [Federal, state, or local government] facility" or
"that any system of registration of firearms, firearms owners, or
firearms transactions or dispositions be established."
ATF's collection of the out-of-business records at a central location
in accordance with section 923(g)(4) does not violate section 926(a)
because Congress specifically authorized ATF to collect these records
at the same time it added the section 926(a) restriction. Similarly,
in our view, the collection of out-of-business licensees records does
not violate the appropriations rider prohibition against
consolidating or centralizing licensee records because of ATF's
specific authority contained in section 923(g)(4) to collect these
records.\20 The requirement to collect these records has been in
existence either in regulation or statute since the appropriations
rider was passed for fiscal year 1979.
The next issue raised by ATF's current retrieval practice is whether
the microfilming or the computerized indexing of the records (as
opposed to the mere collection of the records) violates section
926(a), since these are changes to ATF's records collection process
instituted after May 19, 1986. The specific language of section
926(a) only covers post-Firearms Owners' Protection Act rules or
regulations. ATF has not issued any rules or regulations regarding
the current out-of-business storage and retrieval system and,
therefore, as maintained by ATF, has not violated section 926(a).
Even applying the substantive section 926(a) prohibition against
creating a firearms registration system to these changes, we have
found no basis to disagree with ATF's conclusion that the storage and
retrieval system has been designed to comply with the restriction.
For example, the computerized index does not include the firearms
purchaser's name or the type or model of firearm. Lastly, we would
note that section 926(a) specifically provides that ATF's authority
to inquire into the disposition of a firearm during a criminal
investigation is not restricted or expanded by this section. In this
instance, the storage and retrieval system designed by ATF apparently
solved legitimate storage and trace timing problems, thereby
enhancing ATF's tracing capabilities, while also balancing the data
restriction provisions. In conclusion, we believe that the current
storage and retrieval system for out-of-business records does not
violate either data restriction provision.
Furthermore, with regard to the operation of the Out-of-Business
Records System, our review of system documentation provided by ATF,
our discussions with ATF officials, and our observation of the
out-of-business records process basically confirmed that ATF was
operating the system in a manner consistent with the way it was
designed by ATF and described in Treasury's March 1995 letter.
During a visit to NTC, we observed that the Out-of- Business Records
System does not permit the operator to enter the name or other
identifying information of any firearm purchaser, or the type or
model of any firearm. Thus, we found no evidence that ATF captures
and stores the firearms purchasers' names or other identifying
information from the out-of-business records in an automated file.
--------------------
\18 See letter from Ronald K. Noble, Under Secretary of the
Department of the Treasury, to Congressman Ernest J. Istook, Jr., in
March 1995.
\19 Specifically, 18 U.S.C. 923(g)(4) provides "Where a firearms or
ammunition business is discontinued and succeeded by a new licensee,
the records required to be kept by this chapter shall appropriately
reflect such facts and shall be delivered to the successor. Where
discontinuance of the business is absolute, such records shall be
delivered within thirty days after the business discontinuance to the
Secretary. However, where State law or local ordinance requires the
delivery of records to other responsible authority, the Secretary may
arrange for the delivery of such records to such other responsible
authority."
\20 In 1978, ATF proposed additional reporting requirements that
would have required firearms licensees to report virtually all of
their firearms transactions to ATF on a quarterly basis (43 Fed.
Reg. 11,800 (Mar. 21, 1978)). To prevent the final issuance of
these regulations, Congress passed an appropriation restriction that
prevented ATF from "consolidating or centralizing within the
Department of the Treasury the records of receipt and disposition of
firearms maintained by Federal firearms licensees or for issuing or
carrying out any provisions" or from issuing the subject proposed
regulations (P.L. 95-429 (1978)).
SCOPE AND METHODOLOGY
--------------------------------------------------------- Appendix V:4
To obtain information on ATF's firearms tracing process and the
Out-of-Business Records System, we interviewed ATF headquarters
officials and reviewed system documentation. We also observed the
firearms tracing operation and the out-of-business records processing
operation and discussed these operations with officials at NTC.
To determine the number of and results of firearms traces ATF
performs, we obtained statistical data from ATF on all trace requests
for fiscal years 1992 through 1995. With regard to out-of-business
records, we obtained statistical data from ATF on the number of (1)
firearms licensees that had gone out of business and sent in their
records and (2) out-of-business records ATF processed for fiscal
years 1992 through 1995. We also obtained data on the cost of
processing and maintaining the out-of-business records from fiscal
years 1992 through 1995. As agreed, because of time constraints, we
did not verify the data provided by ATF.
To determine whether the Out-of-Business Records System complies with
the legislative data restrictions, we reviewed relevant laws, ATF
regulations, and a March 1995 letter to one of the Subcommittee's
members containing ATF's opinion on whether the out-of-business
records are handled in compliance with the data restriction
provisions. We also discussed ATF's opinion with ATF's Associate
Chief Counsel (Firearms and Explosives) and other headquarters
officials. Furthermore, to determine whether ATF's actual handling
of the records is in accord with the system's design, we observed the
processing and maintenance of the out-of-business records at NTC and
discussed this operation with NTC officials.
We performed our work from December 1995 to March 1996 in accordance
with generally accepted government auditing standards.
*** End of document. ***