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Conn. Subpoenas Firms In Gun Antitrust Probe

By Peter Slevin and Sharon Walsh
Washington Post Staff Writers
Friday, March 31, 2000; Page A02

Connecticut officials, suspecting collusion by the firearms industry to punish gunmaker Smith & Wesson for its promise to improve handgun safety, yesterday subpoenaed records of other companies in the weapons trade.

New York's attorney general said he would follow suit within days as part of a coordinated strategy to bolster Smith & Wesson against a backlash prompted by the company's unprecedented decision to supply gun locks and restrict gun sales.

"We knew and anticipated there would be criticism, some of it quite vehement. We didn't anticipate there would be apparently concerted activity to retaliate," Connecticut Attorney General Richard Blumenthal said. "We have issued subpoenas. We are conducting interviews."

Blumenthal would not name the targets of the civil antitrust investigation or identify the recipients of subpoenas, except to say they are "companies in the industry." His New York counterpart, Eliot Spitzer, said only, "We are intrigued by some of the things we have heard."

Maryland Attorney General J. Joseph Curran Jr. defined the theme of the investigation this way: "If a company is doing the right thing, don't block them. If you do, we're going to take you to task."

Executives of rival gun companies dismissed yesterday's action as unwarranted, at best.

"It's just another effort to put more burdens on us," said Glock Inc. general counsel Paul Jannuzzo. As for a conspiracy among gunmakers to punish Smith & Wesson, he added: "It doesn't exist."

In a settlement of numerous lawsuits, Smith & Wesson pledged March 17 to provide trigger-locking devices within 60 days and "smart gun" technology within three years on any new gun it develops. The company also said it would supply products only to dealers who demand background checks and proof that customers have received firearms safety training.

Reaction to the agreement was swift and angry. The Gun Owners of America, for example, called it a "sellout." Smith & Wesson, the nation's largest gunmaker, soon began registering examples of the firearms industry trying to hurt its business, said company spokesman Ken Jorgensen.

Gun magazines have quoted advertisers as pledging to pull their ads if the magazines continue to accept advertising from Smith & Wesson. Organizations that sponsor competitive shooting matches have said they will pull out if Smith & Wesson is permitted to sponsor the events.

Jorgensen said Smith & Wesson met yesterday with some of its major distributors and dealers.

RSR Management Corp., a Winter Park, Fla., wholesaler and one of the largest distributors of Smith & Wesson weapons, has not decided whether to sign a new contract with the company, a spokesman said. RSR will fulfill its contract to distribute the company's firearms through Dec. 31.

Other gun companies blasted the threat of antitrust litigation as a tactic to force them to match Smith & Wesson's concessions.

"What they're alleging is hogwash," said Jeff Reh, a spokesman for Beretta U.S.A. Corp. "The gun industry hasn't done anything."

To investigators, a central challenge will be the search for collusion.

"If there's a private agreement among competitors of Smith & Wesson to take action that would injure the ability of Smith & Wesson to market its weapons competitively--such as by pulling advertisements in magazines that advertise Smith & Wesson--they could be very much subject to antitrust challenge," said James F. Rill, head of the Justice Department's antitrust division during the Bush administration.

Officials at Beretta and elsewhere point to anger at Smith & Wesson that is not orchestrated. Individual customers and gun dealers, these officials report, have sworn never to buy another Smith & Wesson gun because of what they call the company's capitulation to the anti-gun sentiments of the Clinton administration.

"There's a strong consumer backlash," said Robert Delfay, head of the National Shooting Sports Foundation, the largest firearms trade group. "That's not the industry and it's not antitrust."

To pressure the other gunmakers, the Clinton administration announced last week that 28 cities and counties will give preferences to firearms manufacturers that produce safer guns and endorse a code of conduct. The goal, said Spitzer, is to "squeeze manufacturers like a pincers."

"We want to stand with Smith & Wesson," Los Angeles City Attorney Jim Hahn said yesterday, noting that the city council there is considering a preference rule. "We want to deal with responsible manufacturers."

© Copyright 2000 The Washington Post Company

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