Inspections of Firearm Dealers by the Bureau of Alcohol, Tobacco, Firearms and Explosives

Report Number I-2004-005

July 2004

The report assessed the effectiveness of ATF’s program for inspecting the nation’s federally licensed firearms dealers to verify that they are complying with federal firearms laws and regulations. Under federal law, Federal Firearms Licensees (FFLs) are required to account for all firearms that they have bought and sold. This is to prevent corrupt dealers from illegally selling firearms to prohibited purchasers without background checks, referred to as “dealing under the table.” In addition, FFLs are required to report all multiple handgun sales and firearms thefts to ATF.

There are approximately 104,000 active FFLs in the United States. ATF’s goal is to inspect each FFL at least once every three years. However, in 2002, ATF only conducted 4,581 compliance inspections, or about 4.5 percent of the total number of FFLs nationwide. At that rate, it would take the ATF more than 22 years to inspect all FFLs.

Of the 4,581 compliance inspections conducted by ATF in 2002, 1,934 (42%) uncovered violations by the FFL, with an average of 70 violations for each of the 1,934 inspections with violations. However, ATF rarely takes action when its inspectors uncover violations. ATF issued only 30 Notices of Revocation in 2002 and 54 Notices of Revocation in 2003. That is, only about 2 percent of the FFLs found to be in violation of federal firearms laws had their license revoked.

The report concluded that “ATF’s FFL inspection program is too limited and inconsistent to ensure that FFLs comply with federal firearms laws.” The main reasons cited were (1) lack of resources (i.e., agents) to conduct inspections and (2) lack of standardized inspection procedures that result in inconsistent inspections of FFLs and significant variation in the implementation of the compliance inspection program.

The report stated, “because the ATF does not conduct regular inspection of all FFLs, it cannot effectively monitor the overall level of FFL compliance with federal firearms laws.”

Ashcroft fails to keep his promise to Senate Judiciary Committee to enforce the nation’s gun laws.

If this were not bad enough, new restrictions on retention of gun purchase records will further reduce ATF’s ability to detect fraudulent background checks, according to the Justice Department report.

Prior to selling a gun, an FFL must determine if the potential purchaser is prohibited from owning a gun (Brady Law). The FFL does this by contacting the National Instant Criminal Background Check System (NICS) maintained by the FBI. The FFL provides the NICS agent with the name, date of birth, gender, and race of the purchaser. The NICS agent runs the name through a database of prohibited purchasers. If the purchaser’s name is not on the list of prohibited purchasers, then the sale is allowed to proceed. If the purchaser’s name is on the list, then the sale is denied.

Previously, the FBI retained the NICS gun purchase information for 90 days. This gave ATF time to audit gun purchase records to verify that information submitted by FFLs was accurate. This practice served as a deterrent to prevent corrupt gun dealers from hiding gun transfers to prohibited purchasers by listing the prohibited individual on the sales record but calling in to NICS the name of a person with a clean record.

However, beginning July 2004, Attorney General John Ashcroft directed the FBI to destroy the NICS gun purchase information within 24 hours of the NICS response to the FFL. While this action is strongly supported by the NRA, it only benefits prohibited purchasers and corrupt gun dealers in that it will now be harder to uncover their illegal activities.

During his confirmation hearings, then Attorney General designee John Ashcroft told skeptical members of the Senate Judiciary that he would enforce the nation’s gun laws. But as Attorney General, Ashcroft has done just the opposite.