Saturday, April 13, 2013

The Smoking Gun from Sandy Hook

About 4 years ago P. James Debney, a Briton in his mid-40s, used to worked at an Alcoa subsidiary that made store-brand plastic wrap and other common household items. Mr. Debney was previously employed by Presto Products and Baco Consumer Products. He has a degree in chemistry from the University of Manchester in England.

In a recent interview for the Wall Street Journal, Mr. Debney said he knew almost nothing about guns before joining the 160-year-old Smith & Wesson in 2009 (He became the CEO in 2011). To prepare for his very first media interview, he had to borrow a friend's gun to practice shooting in the woods.

But just because Mr. Debney is the CEO of Smith & Wesson, it doesn't necessarily mean he calls all the shots. He's most probably just a hired gun.

If you ever want to learn something, just do as Bob Woodward and Carl Bernstein's undercover government connection Deep Throat used to say, "Follow the money. Always follow the money."

According to the Nasdaq website, among Smith & Wesson's largest institutional investors are some of the usual notably named investors in most of the largest U.S. corporations, including the Vanguard Group, Morgan Stanley, Blackrock, Prudential, Bank of New York Mellon, Credit Suisse, Wells Fargo, Goldman Sachs, UBS, JPMorgan (just to name a few). So the CEOs of these banks and private equity firms might have far more say about gun lobbying than does Mr. Debney.

But then, you'll also have to Smith & Wesson just a subsidiary of a subsidiary of another major "bank-owned" U.S. major corporation?

The Freedom Group Inc. (not to be confused with Freedom Works) owns several gun makers, including Remington®, Bushmaster® Firearms, DPMS/Panther Arms™, Marlin, H&R, The Parker Gun, Advanced Armament Corp., Dakota Arms®, and Para™ USA. To that list you can also add Ruger, Colt, Browning, Beretta USA, Savage, Mossberg, U.S. Repeating Arms (manufacturer under the Winchester brand), and Smith & Wesson.

In the U.S. and elsewhere in a global economy with multi-national corporations, the banks, hedge funds and private equity firms own the majority share of a company's stock --- and many also share the same members on their board-of-directors.

Think of the Hydra of Lerna, the ancient serpent-like beast that possessed many heads --- and for each head cut off, it grew two more --- "and with poisonous breath and blood so virulent that even its tracks were deadly."

NOTE: For almost any major publicly traded U.S. corporation, you can do a Google search for "institution investors". To examine their corporate executive's compensation packages and corporate taxes, go to the company's corporate website (accessed usually through their retail website if they have multiple websites) and look for "investor relations" and/or SEC filings. Scan the documents with a search for "effective" to see what the company actually pays in corporate taxes; and then note if it's the statutory rate of 35% or lower. Many times a low effective tax rate is a "selling point" for potential investors, because it might indicate greater returns on their dividends and share prices.

ALSO NOTE: I only use Smith & Wesson in the gun industry as but one example of one company in one industry for the purpose of this article to show the correlation between an industry's lobbyists and Congress, whose members usually reflects the will of these corporations in these industries, once they're elected into office. A typical voter's influence is immediately lost right after their candidate is voted into office (based solely on what that candidate says while they're campaigning for office).

A few business moguls who favor stricter gun-control laws --- such as New York City Mayor Michael Bloomberg, financier George Soros and entertainment honcho David Geffen -- are in a unique position of being able to put their money where their mouths are. With a single bold move they can change the raging gun debate in a way that our corruptible members in Congress can not. You can't get Congress to do anything because of the revolving door between Congress and the lobbyists on K Street, who work for the CEOs on Wall Street, who might own the guns stores on Main Street. They usually come full circle and are all one and the same.

According to Michael Bloomberg's own website, billionaires (and others) should buy Freedom Group Inc., the world’s largest gun manufacturer, from Cerberus Capital Management (which was recently put it up for sale) --- and then literally liquidate it (And when in doubt, just ask Mitt Romney how it's done).

As an aside: House Republicans voted down a UN sponsored International Gun Treaty to make it illegal to knowingly sell arms to organized crime groups and drug dealers. House members feared it would trample their state's rights and violate their 2nd Amendment Rights. Every country signed the treaty with the exception of 4 --- the United States, North Korea, Syria and Iran. Jon Stewart said, "Congratulations America, you just became one of your own worst enemies."

Last fall Smith & Wesson's CEO said, "It is socially acceptable to carry a firearm, more so than ever before—to carry a firearm for protection, have one at home for protection and go to the range to shoot as a pastime and hobby."

That was before the Newtown massacre on December 14, 2012 --- when 20 children and 6 adults were gunned down at the Sandy Hook Elementary School. Since then (according to the Wall Street Journal) , Mr. Debney has refused to comment. "We are not available at this time," said a Smith & Wesson spokeswoman.

Mr. Debney and others in the gun industry have been especially eager to court more women. Smith & Wesson sponsors the NRA Women's Network, whose website provides information and links to shopping sites featuring such items as pink "bra holsters."

Mr. Debney has noted that the popularity (in the area of handguns) is growing for the lighter-weight pistols, made partly of plastic and small enough to slip into a pocket or a purse. Smith & Wesson introduced a pistol early last year called M&P Shield, which is about 6 inches long and less than an inch thick. The slogan: "Shield Yourself."

Mr. Debney told investors last September that old-style shotguns and bolt-action rifles were on the wane and that the hunting market was "soft." But for semi-automatic rifles, known in the trade as "modern sporting rifles," were becoming very popular. He also pointed to growth prospects from "a younger demographic that grew up playing videogames."*

* The President of the gun lobby, the NRA's Wayne LaPierre, says, "There exists in this country a callous, corrupt and corrupting shadow industry that sells, and sows, violence against its own people. Through vicious, violent video games..." 

So essentially, LaPierre was publicly demonizing a gun manufacturer's private marketing plan. Coincidence?

The CEO of Smith & Wesson had also said at a conference last year, "There is a perception that crime is on the increase because of the economy. That is definitely driving the trend towards purchasing firearms for personal protection."

Note that he said there is a "perception that crime is on the increase". According to the FBI's Preliminary Semiannual Crime Statistics for 2012, "Two of the four offenses in the violent crime category— (1) murder and non-negligent manslaughter and (2) forcible rape—show decreases when data from the first six months of 2012 were compared with data from the first six months of 2011."

Last January the California State Teachers' Retirement System (CalSTRS) board voted unanimously to divest itself of investments (via its investment in a fund managed by the private equity firm Cerberus Capital Management) after discovering that CalSTRS had a multi-million dollar interest in Freedom Group Inc -- the maker of the Bushmaster® AR-15 rifle used in the Newtown massacre.

Ironically, just days before the slaughter, California State officials had offered the maker of that rifle a $1 million loan to bring new jobs to the state. The offer, capping six months of negotiations between the Department of Economic and Community Development and Freedom Group Inc, was dropped after Cerberus Capital Management announced it would sell Freedom Group (the manufacturer of the Bushmaster AR-15).

Cerberus Capital Management has more than $20 billion under management in funds and accounts. Investors include prominent government and private sector pension and retirement funds (such as CalSTRS), charitable foundations, university endowments, insurance companies, family savings and "sovereign wealth funds" used by the top 1%. By comparison, Bain Capital had $66 billion last year.

Cerberus Capital Management claims that “as a firm, we are investors, not statesmen or policy makers.” But their top leadership team includes statesmen and former policymakers like Dan Quayle, a former vice president of the United States, and John Snow, a former Treasury secretary.

Cerberus Capital Management is headquartered at 875 Third Avenue in New York City. It's there where you'll find the Hydra of Lerna, holding the smoking gun from Sandy Hook Elementary School.

Cerberus Capital Management


The author of this post grew up around guns and is from a military family --- and is a firm believer of Second Amendment rights. He also believes in free enterprise, but is deeply opposed to corporate lobbyists who corrupt and influence public policy solely for the purpose of corporate profits --- especially if the company evades taxes, opposes worker's rights, outsources American jobs and pays their lowest paid employees below a "living wage" --- while at the same time, rewarding their CEOs with multi-million salaries every year.

The only reason to own one of these "military assault styled" semi-automatic rifles (such as the Bushmaster®) is not for the purpose of hunting or self-defense, but because of their light weight and because they're also very easy to conceal --- so they have no real purpose other than for target shooting in the woods (or maybe for U.S. Secret Service body guards protecting our POTUS) --- so why would anyone else need a 30-round clip? Afraid a bear will sneak up on you?

A hand gun with 10 rounds is perfectly suited for the purpose of personal self-defense, or in the event of a home invasion (unless you are a drug dealer). If you need more than 10 bullets to stop a break-in, then you'll need to spend more time on a shooting range --- otherwise, even a 30 round clip won't save your ass.

Besides, if home or self-defense was your only argument, a revolver might be more reliable --- they don't jam. Or like Joe Biden said, a shotgun (I'd recommend a multi-shot pump action) is good too, but it will leave you with an awful mess to clean up.

The gun lobby sells us weapons such as the Bushmaster® and 100-round drums for the same exact reason the tobacco lobby sold us cigarettes...for corporate profits (Just ask John Boehner, he'll tell you). Otherwise, maybe these weapons should be restricted to legitimate and registered gun collectors. If the U.S. Government REALLY wanted to take your guns, do you think a Bushmaster® will keep the U.S. Marines from storming your compound? (Ted Nugent need not reply. Besides, wasn't he supposed to be dead or in jail by now?)

While I don't propose an outright ban on these type of weapons, 30-round clips can used for nefarious reasons and should be illegal to sell or give away (like switchblade knives) --- and there's no real good reason why gun shows shouldn't also be required to use background checks, just like legitimately registered firearms dealers must.

And if the NRA won't support a ban on 30-round (or more) clips, then maybe Congress can require the wholesalers and/or manufacturers of these clips/drums be mandated to carry liability insurance for the carnage they may cause. While although we do have a Constitutional right to "bear arms", we don't have a right to bear tanks, bazookas, shoulder-fired sting missiles, nuclear bombs or 30-round clips. Those kids and teachers at Sandy Hook Elementary School had the most fundamental of all rights...a right a life.

1 comment:

  1. At least five family members of Sandy Hook victims have appeared at events for Hillary Clinton. Among them is Erica Smegielski whose mother was killed in the shooting and who also stars in a TV spot supporting Clinton.

    For some, the Clinton campaign is providing a fresh national platform to make their case. But for others affected by the shooting seeing and hearing about the Sandy Hook tragedy on the news again is jarring, particularly connected to a presidential campaign.

    Clinton, who often localizes the primary contests, has begun focusing on the school massacre in Newtown, Conn. Jane Sanders chided Clinton for holding events with Sandy Hook families. “I just don't like to see it be politicized. I think that Secretary Clinton's gun record is a lot more spotty than Bernie's."

    That comment prompted Smegielski to issue a public invitation to Jane Sanders via Twitter. “Will you be in CT this weekend? You’re welcome at my house any time. I would love to open dialogue on this issue.”

    Jane Sanders noted that her husband has, since 1988, "been consistently supportive of instant background checks, opposed to assault weapons, the sale and manufacture of assault weapons, for closing the gun show loophole, ending the strawman problem. And I think that's been since 1988."

    By contrast, she remarked that when Clinton ran for Senate in New York, she was very pro-gun control.

    "When she ran for the presidency against Barack Obama, she was very anti-gun control in 2008," Sanders remarked. "And now that she's running against Bernie, she's back to for gun control."

    The bottom line, Sanders said, is that both candidates agree that guns are an issue but that they disagree on the solution.

    It's very sad, because once Clinton gets her votes from Connecticut, she'll move on and forget — just like she forgot Flint, Michigan.