Tag Archives: second amendment

Mystery company buying up U.S. gun manufacturers

Mystery company buying up U.S. gun manufacturers

Natasha Singer

Lined up in a gun rack beneath mounted deer heads is a Bushmaster Carbon 15, a matte-black semiautomatic rifle that looks as if it belongs to a SWAT team. On another rack rests a Teflon-coated Prairie Panther from DPMS Firearms, a supplier to the U.S. Border Patrol and security agencies in Iraq. On a third is a Remington 750 Woodsmaster, a popular hunting rifle.

The variety of rifles and shotguns on sale here at Cabela’s, the national sporting goods chain, is a testament to America’s enduring gun culture. But, to a surprising degree, it is also a testament to something else: Wall Street deal-making.

In recent years, many top-selling brands – including the 195-year-old Remington Arms, as well as Bushmaster Firearms and DPMS, leading makers of military-style semiautomatics – have quietly passed into the hands of a single private company. It is called the Freedom Group – and it is the most powerful and mysterious force in the U.S. commercial gun industry today.

Never heard of it?

You’re not alone. Even within gun circles, the Freedom Group is something of an enigma. Its rise has been so swift that it has become the subject of wild speculation and grassy-knoll conspiracy theories. In the realm of consumer rifles and shotguns – long guns, in the trade – it is unrivaled in its size and reach. By its own count, the Freedom Group sold 1.2 million long guns and 2.6 billion rounds of ammunition in the 12 months ended March 2010, the most recent year for which figures are publicly available.

Behind this giant is Cerberus Capital Management, the private investment company that first came to widespread attention when it acquired Chrysler in 2007. (Chrysler later had to be rescued by taxpayers). With far less fanfare, Cerberus, through the Freedom Group, has been buying big names in guns and ammo.

From its headquarters in Manhattan, Cerberus has assembled a remarkable arsenal. It began with Bushmaster, which until recently was based here in Maine. Unlike military counterparts like automatic M-16s, rifles like those from Bushmaster don’t spray bullets with one trigger pull. But, with gas-powered mechanisms, semiautomatics can fire rapid follow-up shots as fast as the trigger can be squeezed. They are often called “black guns” because of their color. The police tied a Bushmaster XM15 rifle to shootings in the Washington sniper case in 2002.

After Bushmaster, the Freedom Group moved in on Remington, which traces its history to the days of flintlocks and today is supplying M24 sniper rifles to the government of Afghanistan and making handguns for the first time in decades. The group has also acquired Marlin Firearms, which turned out a special model for Annie Oakley, as well as Dakota Arms, a maker of high-end big-game rifles. It has bought DPMS Firearms, another maker of semiautomatic, military-style rifles, as well as manufacturers of ammunition and tactical clothing.

“We believe our scale and product breadth are unmatched within the industry,” the Freedom Group said in a filing last year with the Securities and Exchange Commission.

Some gun enthusiasts have claimed that the power behind the company is actually George Soros, the hedge-fund billionaire and liberal activist. Soros, these people have warned, is buying U.S. gun companies so he can dismantle the industry, Second Amendment be damned.

The chatter grew so loud that the National Rifle Association issued a statement in October denying the rumors.

“NRA has had contact with officials from Cerberus and Freedom Group for some time,” the NRA assured its members. “The owners and investors involved are strong supporters of the Second Amendment and are avid hunters and shooters.”

Soros isn’t behind the Freedom Group, but, ultimately, another financier is: Stephen Feinberg, the chief executive of Cerberus.

Cerberus is part of one of the signature Wall Street businesses of the past decade: private equity. Buyout kings like Feinberg, 51, try to acquire undervalued companies, often with borrowed money, fix them up and either take them public or sell at a profit to someone else.

Before the financial crisis of 2008, scores of well-known U.S. companies, from Chrysler down, passed into the hands of private-equity firms. For the financiers, the rewards were often enormous. But some companies that they acquired later ran into trouble, in part because they were burdened with debt from the takeovers.

Feinberg, a Princeton graduate who began his Wall Street career at Drexel Burnham Lambert, the junk bond powerhouse of Michael Milken fame, got into private equity in 1992. That year, he and William Richter founded Cerberus, which takes its name from the three-headed dog in Greek mythology that guards the gates of Hades.

Today, Feinberg presides over a private empire that rivals some of the mightiest public companies in the land. Cerberus manages more than $20 billion in capital. Together, the companies it owns generate annual revenue of about $40 billion – more than either Amazon or Coca-Cola last year.

Why Cerberus went after gun companies isn’t clear. Many private investment firms shy away from such industries to avoid scaring off big investors like pension funds.

Yet, in many ways, the move is classic Cerberus. Feinberg has a history of investing in companies that other people may not want, but that Cerberus believes it can turn around. When Cerberus embarked on its acquisition spree in guns, it essentially had the field to itself.

“There’s much less competition for buying these companies,”
says Steven N. Kaplan, a professor at the University of Chicago Booth School of Business and a private equity expert. “They must have decided there is an opportunity to make money by investing in the firearms industry and trying to build a big company.”

Whatever the reason, Cerberus, through the Freedom Group, is now a major player.

It has sold weapons to the governments of Afghanistan, Thailand, Mexico and Malaysia, among others, and obtained new business from the U.S. Army, including a contract worth up to $28.2 million to upgrade the M24 sniper weapon system.

Cerberus brings connections to the table. The longtime chairman of its global investments group is Dan Quayle, the former vice president. The Freedom Group, meantime, has added two retired generals to its board. One is George Joulwan, who retired from the Army after serving as Supreme Allied Commander of Europe. The other is Michael Hagee, formerly commandant of the Marine Corps.

Jessica Kallam, a spokeswoman at the Freedom Group, said executives there declined to comment for this article. Timothy Price, a managing director of Cerberus, also declined to comment.

The old Bushmaster factory in Windham, Maine, doesn’t look like much. With a facade of brick and gray aluminum siding, it squats in an unassuming office park on the Roosevelt Trail.

But Cerberus representatives who arrived here in 2005 clearly saw potential. Inside, several dozen gunsmiths, working by hand, were fitting together 6,000 to 7,000 weapons a month. At the time, Bushmaster was thriving, although it had been stung by bad publicity stemming from the Beltway sniper shootings. (In a 2004 settlement with victims of the shootings and their families, Bull’s Eye Shooter Supply, the store where the gun was acquired, agreed to pay $2 million, and Bushmaster agreed to pay $568,000, but they did not admit liability.)

Richard Dyke, then the principal owner and chairman of Bushmaster, welcomed the visitors from New York. A blunt-spoken Korean War veteran and Republican fundraiser, he had made a fortune himself by buying companies in trouble, including one that made poker chips. In 1976, he bought a bankrupt gun-maker in Bangor, Maine, for $241,000, moved it to Windham and later changed its name to Bushmaster. The company that Dyke bought had patents on semiautomatic weapons designed for the military and police. But he was drawn to the nascent market in military-style firearms for civilians. He saw as his customers precision target shooters, including current and former military personnel, police officers and, well, military wannabes, he says.

A Bushmaster Carbon 15 .223 semiautomatic is about 3 feet long. But, weighing in at just under 6 pounds, it is surprisingly easy to maneuver, even for a novice. It doesn’t have to be recocked after it’s fired: You just squeeze the trigger over and over.

“At 25 meters, if you are a decent shot,”
Dyke says, “you can put it into a bull’s-eye that is the size of a quarter.

The Bushmaster brand began to grow in the 1980s after the company started supplying its semiautomatics to police departments. It won a much larger consumer following in the 1990s, after it landed several small military contracts.

Bushmaster was among the first to sell ordinary people on weapons that look and feel like the ones carried by soldiers. Today many gunmakers have embraced military-style weapons, a major but controversial source of growth for the commercial gun market, says Tom Diaz, a senior policy analyst at the Violence Policy Center, a research group that backs gun control.

“It’s clear that the militarized stuff is the stuff that sells and is defining the industry,”
Diaz says.

Dyke says he’s not sure why Bushmaster caught the eye of Cerberus. Whatever the case, when Cerberus came calling, Dyke, then past 70, was ready to sell. At the time, Bushmaster had $85 million in annual sales and several million dollars in debt, he says. In April 2006, he sold the company to Cerberus for about $76 million, he says, and Cerberus rented the Bushmaster plant here for five years.

The next year, Cerberus formed the Freedom Group.

Now Bushmaster is gone from Maine. Earlier this year, Dyke says, the Freedom Group notified him it was closing Bushmaster’s operation in the state and moving it to a bigger plant owned by Remington, a typical consolidation play for a private investment firm looking to cut costs and increase efficiency. Remington, for its part, announced earlier this year that it was expanding its manufacturing capacity and hiring new employees to make Bushmasters.

Several months ago, Dyke started a new company, Windham Weaponry, at the old Bushmaster site and has rehired most of his former employees. But he’s not planning to go head-to-head with the Freedom Group.

“It’s the big gorilla in the room,
” he says, adding: “We don’t have to do $100 million. We’d have hopes of doing $20 million.”

Remington has been producing guns since 1816, when, according to lore, a young man named Eliphalet Remington made a flintlock rifle in his father’s forge in Ilion Gulch, in upstate New York. By the 1870s, the brand was so popular that the company diversified into typewriters. In 2007, the Freedom Group swooped in and bought Remington for $370 million, including $252 million in assumed debt. In one stroke, the Freedom Group gained one of the most famous names in U.S. firearms, the largest domestic maker of shotguns and rifles and a major manufacturer of ammunition.

“That caused a lot of stir in the industry,” says Dean J. Lockwood, a weapons systems analyst at Forecast International, a market research firm.

Next, the Freedom Group in rapid succession went after other firearms companies: DPMS; Marlin Firearms, a classic maker that came with two niche shotgun brands, Harrington & Richardson and L.C. Smith; and Dakota Arms. The Freedom Group also bought S&K industries, which supplies wood and laminate for gun stocks, as well as the Advanced Armament Corp., which makes silencers. It acquired Barnes Bullets, which makes copper-jacketed bullets popular with precision shooters and police departments.

The more the company diversifies its portfolio, analysts say, the more it has to offer to firearms distributors and leading retailers like Wal-Mart and Cabela’s.

Read more: SOURCE

Disarmed: Veterans declared “Mentally Defective” denied Second Amendment Rights

100,000 Veterans Declared ‘Mentally Defective,” Denied Second Amendment Rights


They go off to war, fight for our country, for each other, and for the lives of foreigners they do not know. They kill the tyrants and despots who promote and sponsor terrorism. Our veterans are selfless, brave and they represent the best of a generation. So, why does the U.S. government arbitrarily strip many of them of their Second Amendment rights?

Well, one could argue that it stems from the way in which Washington views our veterans.

In 2009, U.S. Secretary of Homeland Security Janet Napolitano released a memo that said, “The return of military veterans facing significant challenges reintegrating into their communities could lead to the potential emergence of terrorist groups or lone wolf extremists capable of carrying out violent attacks.”

Napolitano later apologized for the memo, but actions speak louder than words. And in reviewing the policy the government takes toward those veterans who have been assigned a fiduciary trustee, it becomes evident that there exists, at the very least, a tinge of discriminatory behavior on behalf of Washington.

Currently any U.S. military veteran assigned a fiduciary trustee to act on his/her behalf is automatically declared “mentally defective” and is reported to the FBI’s National Instant Criminal Background Check System (NICS), the database Federal Firearms Licensees use to determine whether a prospective buyer is eligible to buy firearms and/or explosives. Anyone deemed “mentally defective” in the system will be ineligible to make a purchase.

Where the confusion lies with respect to this particular policy is that the VA review process for determining whether or not a veteran requires a fiduciary trustee is based upon an evaluation of a veteran’s ability to manage his/her personal finances, veteran’s benefits, disability compensation, pensions, etc. At no point during the fiduciary review process does the VA examiner make a judgment on whether the veteran is a danger to himself/herself and/or others.

So, in short, the policy says: if a veteran needs assistance managing his/her finances, he/she cannot own a gun. Is it fair to make this assumption?

Sen. Burr (R-NC) and Sen. Webb (D-VA) don’t think so. Together they have introduced the Veterans Second Amendment Protection Act, which would “clarify the conditions under which certain persons may be treated as adjudicated mentally incompetent for certain purposes.” In other words, it would require a judicial authority to determine whether veterans pose a threat to themselves or others before they can be added to the NCIS database.

“As a matter of fairness, a veteran should be permitted to purchase a firearm under the same conditions as every other American,” said Sen. Webb. “This bipartisan bill ensures consistent guidelines are used for reporting citizens to the FBI, and that no veteran is needlessly stripped of their Second Amendment rights.”

Sen. Burr added, “Taking away a Constitutional right is a serious action, and veterans should be afforded the same due process under the law as all other American citizens. This legislation would protect the rights of veterans and their families by ensuring that only a proper judicial authority is able to determine who is referred to NICS. Our veterans took an oath to uphold the Constitution and they deserve to enjoy the rights they fought so hard to protect.”

According to Sen. Burr, more than 100,000 veterans have been referred to the NICS as a result of the VA’s fiduciary trustee evaluation process. As a result, they’ve all been stripped of the right to keep and bear arms.

Again, is this fair? Or is it discriminatory/prejudicial?

Well, as it turns out, there are approximately 7.6 million Social Security beneficiaries who have been assigned fiduciary trustees. However, the Social Security Administration has not turned one name over to the NICS.

It would appear that not everyone the government assigns a fiduciary trustee is subsequently denied the right to keep and bear arms.

Hopefully, Congress recognizes this double standard and gives serious consideration to the Veterans Second Amendment Protection Act

SOURCE

The Warning Is Clear

Michelle Obama’s warning to gun owners

Custom Search

By Chris Cox

Nearly three years into President Obama’s first term in office, Michelle Obama finally said something with which I can agree.

At a recent fundraiser for President Obama’s re-election campaign in Providence, Rhode Island, the first lady told her audience:

“We stand at a fundamental crossroads for our country. You’re here because you know that in just 13 months, we’re going to make a choice that will impact our lives for decades to come … let’s not forget what it meant when my husband appointed those two brilliant Supreme Court justices … let’s not forget the impact that their decisions will have on our lives for decades to come.”

This was music to the ears of the small, affluent crowd of admirers who cheered and applauded. But to gun owners, Michelle Obama’s remarks should sound like a warning bell, alerting us to the danger ahead should Barack Obama win re-election and get the opportunity to alter the current make-up of the Supreme Court.

When Americans flock to the polls in 13 months, we will not simply decide which direction our country should take over the next four years. Rather, we will decide whether or not our fundamental, individual right to keep and bear arms will survive over the next several decades.

Currently, the Second Amendment clings to a 5-4 pro-freedom majority on the Supreme Court. Just one vote is all that stands between the America our Founding Fathers established and a radically different America that Barack Obama and his supporters envision.

If you want to read something scary, take another look at the minority opinions in the Supreme Court’s landmark Heller and McDonald decisions that struck down Washington, D.C.’s and Chicago’s unconstitutional gun bans. In the Heller dissent, four justices concluded that the Second Amendment does not guarantee an individual right to own a firearm, nor does it protect our right to defend ourselves, our families, or our property. In McDonald, the same four justices argued that the 5-4 Heller decision should be reversed.

If these four justices had just one more vote on their side, their opinion — that the Second Amendment should not exist in today’s modern society — would be the law of the land today. And assuredly, the anti-gun activist wing of the court knows how close they are to gaining the upper hand. As Justice Ruth Bader Ginsburg told a Harvard Club audience in 2009, she looks forward to the day when a “future, wiser court” overturns 5-4 decisions like Heller.

Praying for the health of five justices is not a sound legal strategy for ensuring that our Second Amendment freedoms survive the relentless legal assault that gun-ban groups are waging in courtrooms across America. We need a president who will nominate sound, originalist nominees to the high court — nominees who will preserve the freedoms our Founding Fathers enshrined in our Constitution.

If President Obama gets the opportunity to tilt the balance of the Supreme Court in his favor, we’re unlikely to see another pro-gun victory at the Court in our lifetime. Even worse, the 5-4 majorities in Heller and McDonald will be in serious jeopardy of being reversed, effectively eliminating the Second Amendment.

NRA members, gun owners and all freedom-loving Americans should heed Michelle Obama’s warning. We must spend the next 13 months working to make sure her husband doesn’t get four more years to destroy American freedom for generations to come.

Chris W. Cox is the Executive Director of the National Rifle Association Institute for Legislative Action (NRA-ILA) and serves as the organization’s chief lobbyist.

Read more:SOURCE