3/20/00

               The Smith & Wesson Sellout

 On April 27, 1999, President Bill Clinton officially declared his Administration's war on
 American gun owners by identifying his enemy: "another culture in our country, that I think has
 gotten confused about its objectives (the) huge hunting and sport shooting culture in America."

 Smith & Wesson, Inc., a British-owned company, recently became the first to run up the white
 flag of surrender and run behind the Clinton-Gore lines, leaving its competitors in the U.S.
 firearms industry to carry on the fight for the Second Amendment. Of course, there is no Second
 Amendment in Britain, where subjects are barred from owning handguns and many long guns.

 In an act of craven self-interest, on March 17, 2000, Smith & Wesson (S & W) signed an
 agreement with the Departments of the Treasury and Housing and Urban Development in order
 to be dropped as a defendant in a handful of reckless lawsuits filed by municipalities against
 the firearms industry. Only a day after the settlement was announced, HUD Secretary Andrew
 Cuomo and the mayors of Atlanta, Detroit and Miami moved to shore up the S & W maneuver
 by promising to contort their procurement policies and purchase only the company's guns.

 The media instantly portrayed the settlement as an agreement by S & W to adopt gun safety
 measures. In fact, the settlement doesn't merely alter the design of S & W handguns--it elevates
 S & W to the role of self-appointed arbiter of national gun policy.

 Distributors and dealers who want to continue to sell S & W products will be forced to agree
 to a wish list of gun-prohibitionist demands such as: 14-day waiting periods, bans of affordable
 self-defense handguns, paying for anti-gun advertising, to name a few.

 "I'm not willing to be a pawn in a political chess game," S & W CEO Ed Shultz is quoted in the
 March 27, 2000, edition of Newsweek. Yet by signing this sweeping agreement, Shultz has
 become exactly that, manipulated by the Administration into executing a "settlement" that is
 widely portrayed as a political victory for the White House.

 Yet the agreement dispenses with only a third of the municipal lawsuits, and binds only two
 federal agencies and two state attorneys general from filing suits in the future. The remaining
 city suits are unaffected, and other state and federal agencies can continue to threaten the
 industry at will. The price of S & W's maneuver falls primarily on others--lawful firearm
 dealers, distributors, other manufacturers and law-abiding American citizens.

 Here are just some of the terms of the S & W/Clinton-Gore Administration agreement:

 CONSUMER IMPACT . . .

     Prohibited from buying more than one handgun in a 14-day period.
     Prohibited from buying a firearm without passing an unspecified safety test.
     Prohibited from buying a self-defense handgun that did not meet arbitrary accuracy
     standards.
     Prohibited, if under age 18, from even walking into the firearms section of a sporting
     goods store unless accompanied by a parent or guardian.

 DEALER IMPACT . . .

     Prohibited from selling legal semi-automatic rifles, commonplace ammunition magazines
     and firearms that do not meet the difficult standards established in the agreement.
     Prohibited from selling firearms at any gun show where any legal private sale is
     conducted.
     Required to include with every firearm sold, a false written statement in large bold-face
     type that hundreds of children die each year from firearm accidents.
     Required to carry $1 million in liability insurance and perform tasks properly handled by
     law enforcement to comply with the edicts of a new "Oversight Commission."

 MANUFACTURER IMPACT . . .

     Prohibited from marketing any firearm in a way that appeals to young shooters and hunters.
     Required to dedicate 1% of revenues to a propaganda campaign promoting the dangers of
     gun ownership.

     Required to support legislative efforts to reduce firearms misuse and development of
     "smart" gun technology.

     Required to "ballistically fingerprint" every firearm, thus setting up backdoor national
     firearms registration.

     Required to meet certain unproven design standards for handguns sold only to
     civilians--guns sold to military and police would be exempted, thereby showing the intent
     is not to make guns safer or better, but to impose standards that will ultimately eliminate
     sales, to private citizens.

     Required to manufacture pistol with positive, manually-operated safety devices as
     determined by BATF standards applying to imported handguns. BATF has repeatedly
     handed down politically-driven misinterpretations of the "sporting purposes" importation
     law, to prohibit many semi-auto rifles and handguns.

 CONCLUSION:

 Sold as getting S & W out from under reckless litigation, the true intent of this agreement is to
 force down the throats of an entire lawful industry anti-gun polices rejected by the Congress,
 rejected by legislatures across America, and rejected by the judges who have dismissed their
 lawsuits in whole or in part nearly without exception.
 

        Following the signing of the now infamous Smith &
             Wesson agreement there was a great deal of
        misinformation about its ramifications and whether
            or not other gun manufacturers would sign it.
            Recently, Beretta has detailed its reasons for
             steering clear of both the agreement and the
          proposed "code of conduct" that manufacturers
                         have been asked to sign.
 

            The Smith & Wesson Settlement and the
        "Code of Conduct" - Why We Have Not Signed

                                 By Jeff Reh1

 When Smith & Wesson announced, on March 17, 2000, that it had signed an agreement with a
 handful of politicians to try and settle lawsuits filed (or threatened) against the company by
 those politicians, the announcement received great attention, making front-page headlines in
 newspapers across the country and featuring in national news broadcasts.

 Secretary of Housing and Urban Development Andrew Cuomo, self-described as an architect
 of the settlement, claimed that it was by far the most significant accomplishment of his
 administration. Although the Secretary's claim may simply have been a comment on his other
 accomplishments in office, the Smith & Wesson settlement was undoubtedly significant, but
 perhaps for reasons different than those cited by Secretary Cuomo.

 In all of the media attention directed at the settlement, most reports tended to focus on a single
 part of the settlement agreement in which Smith & Wesson agreed to ship locks with handguns
 that it sells. The public thus came to understand the agreement as a commitment on Smith &
 Wesson's part to provide locks with its guns, not realizing that almost every handgun
 manufacturer who sells in the United States, including Beretta U.S.A. and Smith & Wesson,
 already does so. Regrettably, in the rush to simplify the terms of the Smith & Wesson settlement
 to aid public understanding, the media paid a disservice to the public by ignoring the most
 far-reaching and radical terms of the agreement.

 Beretta U.S.A. was not asked to sign the particular agreement which Smith & Wesson signed,
 but the terms of the agreement are ones which have been presented by politicians and gun
 control advocates to the firearm industry on numerous prior occasions. After the Smith &
 Wesson settlement, Secretary Cuomo and other politicians attempted to force other handgun
 manufacturers to sign a separate "Code of Conduct" fashioned around the terms of the Smith &
 Wesson settlement by withholding law enforcement sales to these companies unless they sign.
 Ironically, as will be shown in this article, even Smith & Wesson did not sign the "Code of
 Conduct" and should be subject - even though it signed a settlement agreement - to the same
 restrictions on law enforcement sales being sought against other gun companies. Beretta U.S.A.
 Corp. signed neither, the Settlement Agreement nor the Code of Conduct. Here is why:

 THE "CODE OF CONDUCT" BANS ALMOST ALL SEMIAUTOMATIC PISTOLS.

 Section 1, paragraph 4 (d) of the Code bars a manufacturer from producing a pistol that
 "accepts magazines with a greater than ten-round capacity". Since (with the exception of a few
 semiautomatic pistols that have fixed, rather than removable, magazines) the ability of a
 semiautomatic pistol to hold more than ten rounds depends, not upon the design of the pistol,
 but upon the length and capacity of the magazine, this provision essentially bans all
 semi-automatic pistols that have removable magazines. Thus, for example, all pistols which use
 ten round magazines for civilian use would be banned because those same pistols can also hold
 a larger magazine with more rounds for law enforcement or military use.

 The Smith & Wesson agreement tries to skirt this restriction by applying it only to new models.
 How Smith & Wesson will redesign its pistols to comply with this provision - by eliminating
 removable magazines, for example - remains to be seen.

 THE "CODE OF CONDUCT" BANS THE MANUFACTURE OF ALL SMALL
 HANDGUNS.

 Section I. (3) of the Code prevents a manufacturer from making or distributing guns that cannot
 be imported into the United States under Chapter 18, Section 925 of the U.S. Code, which was
 enacted to only allow importation of handguns suitable for sporting use. Under that restriction,
 small handguns were effectively barred from importation into the United States.

 Long-time observers of gun control issues know, of course, that restrictions based on the
 suitability of a firearm for sporting use ignore the more important role which firearms can also
 play in aiding self-defense. Thus, although some might argue that a small handgun is not
 typically used for sporting purposes, no one would deny that these guns are important for
 self-defense. This is especially true now, when over 30 states have enacted laws allowing
 concealed carry of handguns for self-defense.

 In one stroke of the pen, the Code of Conduct obliterates the notion that handguns can be
 manufactured because of their usefulness for self-defense. Instead, by limiting the manufacture
 of handguns to those that comply with the import restriction, the Code limits handgun
 manufacture to those made for sport.

 The Smith & Wesson settlement, to its credit, does not contain this restriction, but replaces it
 with accuracy restrictions on small handguns. Readers can decide whether this restriction is a
 gun ban by other means.

 THE "CODE OF CONDUCT" POTENTIALLY REQUIRES THE RECALL OF EVERY
 HANDGUN MADE.

 Section I. B (6) of the Code requires the manufacturer to agree, at the manufacturer's cost, to
 retrofit all prior guns with new safety devices that become available and feasible. The Code
 does not specify whether it is the device or the retrofit that must be feasible, and the retrofit
 itself is not limited by the Code to guns made by that manufacturer, so a plain reading of this
 provision could lead one to conclude that a manufacturer who creates an internal lock for a
 handgun must then retrofit all existing handguns - made by that manufacturer or not - with that
 lock.

 The Smith & Wesson agreement, to its credit, does not contain this far-reaching retrofit
 requirement. Smith & Wesson, in other words, did not sign the Code of Conduct, but its own,
 separate agreement.

 BOTH THE "CODE OF CONDUCT" AND THE SMITH & WESSON SETTLEMENT
 REQUIRE GUN DEALERS TO CREATE A FUND THAT ENCOURAGES FUTURE
 LAWSUITS.

 Section II. A.1. c of the Smith & Wesson settlement requires its dealers and distributors to
 carry at least $1 million in liability insurance. The Code of Conduct contains the same
 provision. Whenever someone suing you demands that you carry insurance, watch out. It means
 they want more money to be available for suits in the future. If a thousand Smith & Wesson
 dealers now have a million dollars each in insurance, does anyone believe such a requirement
 benefits public safety, or is this simply a gift for greedy plaintiff's lawyers?

 THE "CODE OF CONDUCT" POTENTIALLY REPLACES A HANDFUL OF
 PRODUCT LIABILITY LAWSUITS WITH HUNDREDS OF OTHER LAWSUITS.

 The signature page of the Code of Conduct allows signature, not only by politicians who are
 currently suing the gun industry, but by any politician. In the same way, the Smith & Wesson
 agreement includes signatures by politicians (for example, Secretary Cuomo from HUD) who
 have not sued the gun industry.

 Notwithstanding the fact that some of the signers have not sued the gun industry, Section V of
 the Code of Conduct allows it to be enforced by any signer. Thus, dozens or even hundreds of
 municipal jurisdictions could sign the agreement, then sue if they decide the manufacturer has
 failed to comply with their requirements.

 This means that, if a manufacturer fails to comply with the terms of the agreement (for example,
 by failing to build locks into all of its handguns within two years, as the Smith & Wesson
 agreement requires), any or all signatories to the Code could sue to enforce the agreement.
 Even if a manufacturer had an understanding with some government officials that it will be
 given leeway in complying with the more burdensome conditions of the Code (for example, the
 requirement to recall and retrofit all prior models with new safety features), that understanding
 may not exist with regard to each of the hundreds of municipalities who might, for their own
 political or even vindictive reasons, decide to sign the Code later to force compliance with
 restrictions as they interpret them.

 THE SMITH & WESSON SETTLEMENT SURRENDERS FIREARM DESIGN AND
 DISTRIBUTION CONTROL TO ANTIGUN POLITICIANS.

 One of the most troubling aspects of the Smith & Wesson agreement is that it establishes a
 "Oversight Commission" (Section III) comprised of five members, the majority of whom (three)
 are suing or threatening to sue the gun industry. This Oversight Commission has the authority to
 enforce that all terms of the agreement.

 If the Oversight Commission decides that an ad showing a father and son hunting together make
 the firearm shown "particularly appealing to juveniles," it can ban the ad (Section II. D. 2). If
 the Oversight Commission decides that ten firearm traces for a dealer is too many, it can ban
 sales to that dealer (Section II.E), even if the dealer sells two thousand guns per year or sold
 the traced guns 10 years ago or had no reason to know that any given gun would be misused or
 end up in a trace.

 The Code of Conduct contains even more vague and open-ended controls. The Code of Conduct
 would allow politicians to ban the sale of handguns with trigger pull weights of less than 10
 pounds if they decided such guns were "readily operated by a child aged 6, or younger,"
 (Section I.A.4), notwithstanding the chance that such a restrictions can make it more difficult
 for the elderly, or infirmed to fire a gun. If these same politicians decided that the
 semi-automatic feature of a pistol made it attractive to criminals, or that certain revolvers are
 more frequently used by criminals, they could ban these as well.

 THE SMITH & WESSON SETTLEMENT AND THE CODE OF CONDUCT ADD
 NOTHING TO THE CURRENT COMMITMENT OF GUN COMPANIES AND USERS
 TO PUBLIC SAFETY.

 Reading the Smith & Wesson settlement agreement and the Code of Conduct, one is left with the
 feeling that the authors of the agreement believe that guns are designed without regard for
 safety, that the distribution of firearms is a free-for-all without restraint or regulation and that
 firearms manufacturers are answerable to no one. To the contrary, of course, gun manufacturers
 incorporate those safety features in their products which they find to be prudent and feasible.
 The distribution of firearms is one of the most heavily regulated commercial activities in the
 United States and every firearm manufacturer is answerable for the consequence of its design
 and distribution decisions, not only to each of its customers, but also to law enforcement
 regulators and to the American public in general. Gun control advocates, when they lament that
 firearms are not subject to jurisdiction of the Consumer Product Safety Commission and seek to
 create an "Oversight Commission" to exert their own control over gun design and distribution,
 forget that the firearm industry already has a regulatory body which governs its every action.
 That regulatory body is found in Article I, Clause I of the Constitution and is called the U.S.
 Congress.

 More importantly, critics of the gun industry ignore the fact that manufacturers have, without
 being required to do so, instituted the types of important safety initiatives and design choices
 which have played a key role in dramatically reducing accidental deaths with firearms. All
 manufacturers ship safety instructions with every firearm they sell. Manufacturers provide a
 variety of firearms with various safety features to meet consumer needs and demand, including
 loaded chamber indicators, internal locks, external locks, firing pin blocks, external safety
 levers, etc. It is the firearm industry and firearm users - not ironically, gun control advocates -
 who have instituted massive firearm safety programs nationwide (like, for example, the
 National Shooting Sports Foundation's Project HomeSafe, which is providing hundreds of
 thousands of free gun locks and the NRA's Eddie Eagle Gunsafe program, which teaches gun
 avoidance to hundreds of thousands of schoolchildren, across the country.)

 Important efforts to ensure firearm safety have already been undertaken by the firearm industry
 and by firearm users and will continue, with or without the imposition of terms found in the
 Smith & Wesson settlement or in the Code of Conduct.

 THE SMITH & WESSON SETTLEMENT REWARDS LITIGATION THROUGH
 CAPITULATION.

 Critics around the country have decried the lawsuits against the gun industry as an attempt by
 gun control advocates to impose their legislative agenda through the use of harassing lawsuits.
 The formula for this misuse of the court system has now become clear: A "social interest
 group" formulates a legislative agenda, then compares it with what is already being done by an
 industry. The litigants describe anything that is not being done by the industry as "negligence",
 then sues or encourages others to sue based on that "negligence", never minding the fact that
 their original legislative agenda may be misguided, factually or legally wrong, or that the
 alleged "negligence" may not be the actual cause of any harms alleged in the lawsuit.

 The voice of the American public has effectively been taken out of this equation. By resorting
 to the courts rather than the legislative process, in which all sides of an issue may be heard and
 by which every citizen is represented in the debate, these lawsuits circumvent the democratic
 process. Regrettably, by signing the settlement agreement, Smith & Wesson has rewarded this
 anti-democratic tactic by gun control advocates with success.

 There are a host of other problems with both the Smith & Wesson agreement and the Code of
 Conduct, but one further issue bears special and final comment.

 BOTH AGREEMENTS CIRCUMVENT THE CONSTITUTION.

 The Second Amendment of the Constitution does not say that Americans have the right to bear
 arms only if an Oversight Commission tells them they can, or tells them how many guns they can
 buy per month or tells them what type or style of firearm they can purchase. By accepting the
 Oversight Commission and other restrictions in the settlement agreement, Smith & Wesson has
 enabled gun control advocates to neatly sidestep the interference of the Second Amendment
 with their agenda.

 Similarly, when a homeowner in Iowa chooses to buy a firearm, they do not expect their choice
 of models or dealers to be determined by the Secretary of HUD or a politician in New York or
 Atlanta. The power to regulate interstate commerce lies in the elected representatives of all
 people, expressed only through laws passed by the U.S. Congress. The Smith & Wesson
 settlement and the Code of Conduct sidestep this Constitutional protection as well.

 In 1985, the Beretta Model 92FS pistol was chosen as the standard service sidearm for the U.S.
 Armed Forces. That pistol has been carried with pride in the Iraq war, in the Panama
 Campaign, in Bosnia, and in Somalia. In addition, Beretta handguns are carried by hundreds of
 thousands of law enforcement officers throughout the United States. Equally important, Beretta
 handguns are used by hundreds of thousands of American citizens to protect their lives and to
 protect the safety of their families and of others.

 Smith & Wesson's chief executive has publicly stated that the decision to sign the settlement
 agreement was a business decision occasioned by the burdensome cost of fighting the lawsuits
 filed against his company by a number of municipalities. This sentiment is understandable, of
 course, and in the context of many products, (for example, lawnmowers, home appliances, etc.),
 one might argue that the decision was a wise one.

 In the context of firearm ownership, though, with the role which firearms play in saving
 people's lives and ensuring both domestic safety and freedom, simple business decisions of
 profit or loss are only part of the equation. This is why Beretta U.S.A. did not sign the Smith &
 Wesson agreement. When we looked at all aspects of the agreement, the cost was simply too
 great.
 

 1 Jeff Reh is General Counsel for Beretta U.S.A. Corp., a position he has held since 1986. In addition to being distributor of
 Beretta products in the United States and Canada, Beretta U.S.A. Corp. is the supplier of the standard service sidearm for
 the U.S. Armed Forces and provides firearms for personal defense and law enforcement use, as well as for sporting use,
 throughout the United States and Canada. The views expressed in this article are those of Beretta U.S.A. Corp. alone and
 are not intended to represent the views of any other firearm manufacturer.