Nov. 4, 1997 The latest update is that I met with three Certified Fraud Examiners from the Chicago Treasury Department Inspector General's Office (Regional Inspector General for Investigations, Central Region) on October 22, 1997. They are still in the stages of defining the scope of the investigation, and indicated they are amenable to receiving additional materials from persons who may have been harmed by ATF's procedures (i.e., the wrongful confiscation or forfeiture of a lawfully registered firearm, or an attempt to represent that the firearm was not registered). People who have been told by ATF that a firearm they own isn't registered, who have subsequently located a registration document, should definitely step forward if they want to help. Also, persons to whom ATF has issued clearly erroneous Letter Rulings (that is, the ruling does not conform to the law) regarding firearms classifications should send those as well. Credible testimonials and COPIES of documents should be sent to: Carolyn L. Hicks Carol Bergen Legislative Director Certified Fraud Examiner House Committee on Government Treasury Department Reform and Oversight Office of Inspector General 2157 Rayburn House Office Building 55 W. Monroe Street Washington, D.C. 20515 Chicago, Illinois 60603 (202) 225-5074 (312) 886-6300, ext. 120 FAX: (202) 225-3974 ------------------ Date: August 12, 1997 To: Class III firearms owners From: Eric M. Larson Subject: Internal ATF investigation regarding alleged mismanagement, misconduct and illegality which may have affected the validity and reliability of firearm registration data in the National Firearms Registration and Transfer Record On May 10, 1997, I brought several instances of what appear to me to be serious problems that affect the validity and reliability of firearm registration data in the NFRTR to the attention of the Treasury Department Inspector General. On June 5, 1997, the IG advised me that my allegations were being referred to the Bureau of Alcohol, Tobacco and Firearms. Both letters are reproduced in full along with this message, I would like to invite Class III firearms owners, and persons who may have inherited a Class Ill firearm, to send any information they may have regarding the kinds of problems in the NFRTR that I believe I have documented. Additional examples will certainly be useful. Please send this information to: Special Agent Jeff Groh Bureau of Alcohol, Tobacco and Firearms Suite 200 Four Skyline Place 5113 Leesburg Pike FallS Church, Virginia 22041 (703) 756-6998 and/or to: Eric M. Larson P.O. Box 5497 Takoma Park, Maryland 20913 (301) 270-3450 I recently met personally with Special Agent Groh, and he told me that he hopes to finish his investigation of my allegations by the end of August. Any additional information pertaining to the NFRTR that any of you may have, will be gratefully appreciated. [first letter] May 10, 1997 Ms. Valerie Lau, Inspector General Office of the Inspector General Department of the Treasury 100 Pennsylvania Avenue, N.W., Room 2412 Washington, D.C. 20220 Dear General: I am writing to call your attention to, and provide specific documented valid and reliable evidence of, what appear to me to be serious instances of mismanagement, misconduct and illegality by employees of the Bureau of Alcohol, Tobacco and Firearms (ATF) in administering our Nation's federal gun control laws. I have presented this evidence in testimony to the House Appropriations Subcommittee on April 30, 1996, [footnote 2] and on April 8, 1997. [footnote 3] I have enclosed a copy of my 1997 testimony for your convenience of reference. All of these instances of apparent mismanagement, misconduct and illegality involve the National Firearms Act (NFA) of 1934, as amended, which is a statute that falls under the Tax Code of 1986, and thus involves taxpayer information. Taxpayer information is secret under Internal Revenue Service (IRS) rules and the law, but under court rules and criminal case law, prosecutors are required to disclose any information that could be used to impeach a government witness. Consequently, the instances I have identified here appear to affect certain types of prosecutions for alleged violations of the NFA, and in particular the alleged nonregistration of NFA firearms. Based on my 1996 and 1997 testimonies, it appears that one or more ATF employees have, in the course of their official duties, committed a number of serious acts which are contrary --------------------- 2. "Statement on 'Curio or Relic' Firearms Manufactured in or Before 1934 Which Are Also Classified in the 'Any Other Weapon' Category Under the National Firearms Act (NFA) of 1934, as Amended," by Eric M. Larson, in Treasury, Postal Service, and General Government Appropriations for Fiscal Year 1997, Part 5. Testimony of Members of Congress and Other Interested Individuals and Organizations. Hearings Before a Subcommittee of the Committee on Appropriations, House of Representatives, 104th Congress, 2nd Session. Washington, D.C.: U.S. Government Printing Office, 1996, pages 37-274. 3. "Statement on Proposed Removal of Certain Firearms Manufactured in the United States in or Before 1934 from Purview of the National Firearms Act (NFA) of 1934, as Amended, and Their Reclassification as 'Firearms' as Defined in Title 18, U.S.C., Chapter 44," and "Errors in the National Firearms Registration and Transfer Record: A New Amnesty Period May be Required to Correct Them." 1 to law. Consequently, I would like to respectfully ask you to consider conducting a criminal investigation of a number of specific instances where it appears that ATF employees have violated the law. From the nature of these possible violations, it appears that it may be desirable for you to consider conducting a forensic audit of the National Firearms Registration and Transfer Record (NFRTR), as these data may have been illegally created or altered. It may also be necessary to have such a forensic audit conducted by an entity which is totally independent from ATF, to avoid any conflict of interest that would obviously result from allowing ATF to investigate itself. These specific alleged acts are as follows: 1. ATF employees have deliberately destroyed original firearm registration documents that they are required by law to maintain, as noted in sworn testimony in 1996 by ATF Special Agent Gary N. Schaible. [footnote 4] In analyses of data made public by ATF, I found that during 1992 to 1996, ATF may have added 119 or more firearms to the NFRTR which were originally registered on Form 1 or Form 4467 during 1934 to 1971, for which ATF lost or deliberately destroyed the original records. 2. ATF employees registered almost 2,500 unregistered NFA firearms on Form 4467 after December 1, 1968, without proper authorization by the Congress. In addition to not being authorized by the Congress, such registrations were prohibited by the Supreme Court in 1971, yet it appears that ATF registered 172 or more unregistered NFA firearms on Form 4467 after 1971. I have included an example of one apparently illegal post-December 1, 1968, Form 4467 registration in my 1997 testimony. 3. ATF employees Edward M. Owen, Jr. and Terry L. Cates committed felony perjury in letters written to me dated March 23, 1992, and July 29, 1993, respectively. Mr. Owen and Mr. Cates each alleged that "an unlawful trafficker in drugs with an extensive criminal record" was in possession of a .410 bore H&R Handy-Gun "while committing drug violations. This alleged instance of criminal conduct was used to deny my petition to remove the H&R Handy-Gun from the NFA as a collector's item. In fact, a Freedom of Information Act request disclosed that the Handy-Gun was recovered from an acquaintance of the trafficker, who said that the trafficker had given it to him for safe-keeping (see pages 212-215, 222-230, and 233-236 of my 1996 testimony). Any person who petitions for removal of a firearm from the NFA must state the reasons under penalty of perjury. The plain language of the statute at Title 26, U.S.C., section 5861(1) and section 5871 applies to any person who knowingly makes or causes the making of a false entry on any document required to be prepared as a result of ----------------- 4. "United States vs. John Daniel LeaSure, Criminal No. 4:95CR54, Newport New, Virginia, May 21, 1996. Transcript of Proceedings before the Honorable John A. Mackenzie, United States District Judge. United States Court, Eastern District of Virginia, Newport News Division. 2 administering the NFA, including a legal decision regarding the classification of an NFA firearm. Both Mr. Owen and Mr. Cates deliberately falsified the facts of the case they cited. 4. Certain "registration activity" that ATF classifies as "OTHER" could include registrations of firearms that one or more ATF employees registered contrary to law, because ATF has refused to disclose the nature of this "registration activity." To the best of my knowledge, I've never heard of any forms numbered other than 1, 2, 3, 4, 5, 6, 9, 10 or 4467 being used to register or transfer NFA firearms. According to a letter to me dated January 9, 1997, from NFA Branch Chief Nereida W. Levine, the "OTHER" category is "comprised of registrations where the form number is different from the other ones tabulated." Ms. Levine, however, has declined to provide the names or numbers of these forms. Coupled with the other evidence of registration mismanagement I have documented, it appears that the "OTHER" category may represent firearms that were registered illegally, as noted in my 1997 testimony. 5. It appears that a significant number of NFA firearms are currently registered to persons who are deceased, and that ATF has been aware of this fact since at least 1981 and done nothing about it, as noted in my 1997 testimony. Consequently, a significant number of NFA firearms are now illegally possessed, in some instances by persons who are unaware they are in violation of the law. The reason is that many firearms classified as "Any Other Weapon" are rare collector's items that many people do not consider weapons, as noted in both my 1996 and 1997 testimonies. ATF's most recent data (as of December 31, 1996) disclose that of the 14,259 firearms registered during 1934 to 1939, exactly 11,175 (78.4 percent) are still currently owned by the person or government entity that registered or acquired it during that same time period. And of the 58,904 firearms registered in 1968, a stunning 85.4 percent are still owned as of 1996 by the same persons who registered or received them by transfer in 1968. Consider that in 1981, an internal ATF study reported: We have the condition where people who registered firearms under the original National Firearms Act at age 66 would now be 112 years old. We know that these people are dead and their heirs have not taken the necessary steps to contact us so that the involuntary transfer created by the registrant's death can be formalized. [footnote 5] One result of ATF's negligence is that some persons who own certain rare, valuable firearms that have special value to collectors have been instantly transformed into criminals. The reason is that through natural disasters (such as the recent floods in North Dakota, house fires, and similar tragic events), the owners of these firearms have lost their copies of the documents which prove their lawful ownership, and the law does not allow these firearms -------------------- 5. "Status Report: National Firearms Registration and Transfer Record (NFRTR)," by Deron A. Dobbs. Internal ATF report dated July 1, 1981. 3 to be voluntarily re-registered. I believe there are two possible solutions to this problem, and neither requires legislation. The reason is that each solution may be achieved by administrative action on the part of ATF. These solutions are: 1. Administratively removing approximately 17,000 "curio or relic" firearms classified as "any other weapon" under the NFA, which were originally commercially manufactured in or before 1934 (but not replicas thereof). The Congress determined that these "any other weapon" firearms were mainly collector's items and not likely to be used as weapons in 1960. lt was not until 1968 that the Congress passed legislation enabling these firearms to be removed from the NFA as collector's items. 2. Establishing a 90-day amnesty period to allow persons who may have innocently lost their copies of the registration form to re-register these firearms. The Congress has authorized such amnesty periods to be established by the Secretary of the Treasury under section 207(d) of the Gun Control Act of 1968. For the past several years, in response to my petitions or requests, ATF has refused to implement either solution that I have proposed. I believe that removing these firearms from the NFA is an ideal solution, but also believe that an amnesty period may also be an appropriate solution. I hope that you will take prompt action to resolve the problems that I have documented. if you have any further questions, please contact me. Thank you. Very truly yours, (signed---Eric M. Larson) Eric M. Larson P.O. Box 5497 Takoma Park, Maryland (301) 270-3450 20913 cc: The Honorable Janet Reno Attorney General Department of Justice The Honorable Bill Archer Chairman House Committee on Ways and Means 4 DEPARTMENT OF THE TREASURY WASHINGTON, D.C. 20220 OFFICE OF INSPECTOR GENERAL JUN 5 1997 Eric M. Larson P.O. Box 5497 Takoma Park, Maryland 20913 Dear Mr. Larson: Thank you for the information you provided to the U.S. Department of the Treasury, Office of Inspector General. We have reviewed this information and have determined that your issues are best addressed by the agency involved. Therefore, we are referring your information to: John W, Magaw Director, Bureau of Alcohol, Tobacco and Firearms 650 Massachusetts Avenue, NW Washington, D.C. 20226 We appreciate you bringing this to the attention of the Office of Inspector General. For all future inquiries on this matter, please refer to Case Number 97-1-075-R. Sincerely, Raisa Otero-Cesario Assistant Inspector General for Investigations