Well, it all starts with a bunch of finger pointing and gun owners as the ultimate losers. President Obama recently saw fit to pass an Executive Action targeting National Firearms Act (NFA) trust and corporate transfers citing that it would close some gaping hole whereby hoards of individuals were illegally skirting the law and obtaining Class III weapons. As is common, there is some truth to both sides, but I am getting ahead of myself.
First, the Executive Action changes nothing. It is not a law nor does it change how things were or will be done in the future. Obama did not outlaw or modify trusts obtaining or owning NFA weapons or accessories. As I understand it… the order is little more than symbolic. What it does do, however, is increase the pressure on the Department of Justice to change the rules regarding the transfer of NFA items to trusts and corporations.
Machine guns, silencers, short-barreled rifles and such items have always been legal to own under federal law. Certain states, counties and municipalities have passed laws to ban ownership however. Enacted on June 26, 1934, the National Firearms Act regulates the sale, ownership and transfer of certain weapons. Basically, the NFA means you can still own the items, but you must submit to additional scrutiny, background checks, forms, waiting periods and more money to the Feds for the privilege.
The NFA Act was passed shortly after the repeal of prohibition and looking back at the times it probably had some reasoned basis based on events at the time. The Achilles’ heel to the form is on the reverse side—where a statement appears requiring a signature by the Chief Law Enforcement Officer (CLEO) with jurisdiction over the area of the applicant’s residence. This sets up a patchwork justice system with little to no continuity. If your CLEO is pro Second Amendment, then no worries. If not, your application will whither on the vine and die. CLEOs can also be subject to pressure from local political leaders to which they are beholden and may choose not to sign or approve application based on political motivations.
A simple signature that was once, “There is nothing in their background to prevent this citizen from being approved,” has changed to, “Why should I stick out my neck?” There is no law or mandate stating they have to sign or assist the BATFE with paperwork; few politicians are willing to pass a law that would be tantamount to an unfunded mandate.
There was a work-around to the CLEOs who enacted their personal form of gun control. Corporation and trusts (sort of a personally owned corporation) can buy property. This meant that corporations could buy firearms, including the NFA items. Corporations, often made up of several people and spread across numerous jurisdictions, eliminated the requirement for fingerprints, photographs and a CLEO signature.
There were advantages to this system. First, it offered individuals who did not want to hold firearms in their own name—for personal or professional reasons—a manner in which to purchase firearms. I worked for several years at an upscale firearms store in the Los Angeles area. We had numerous members of the Hollywood elite that used this method for professional reasons. Few used it to buy a pocket 9mm but for collectible arms priced in the thousand or tens of thousands, it was an important consideration.
Another advantage to a corporation or trust ownership is the Class III weapons. Let’s say I own a short barrel rifle or a suppressor. As the owner, I have to be present with the weapon; ergo, I could not let my wife, daughter, son, or whoever. take it to the range and shoot it. That is considered an illegal transfer, some level of felony and significant jail time with a likely unpleasant roomie. However, by adding these members to the corporation or trust, any of the listed members could use the weapon or item.
The system has been in place and worked for decades. However, as gun control laws have increased, unfounded scrutiny for owning such items has increased and certain CLEOs have become less friendly to the Second Amendment, the use of trusts and corporations has grown substantially. Just to be clear, the tax stamp still has to be purchased and approved; you’ll still wait for several months for approval, and the person from the corporation receiving the item at the FFL still has to go through of the normal NICS check.
The process is open to, and has been abused. I do not know of any major criminal abuses, but there have been instances of individuals who were ineligible to buy a firearm trying to use the corporate or trust route, which is just as illegal and most likely an additional crime. Unfortunately, there has also been boneheads who filed screwball requests naming Mickey Mouse as a corporation or trust member. Others stated the reason for buying the weapon or items for purposes such as zombie slaying or the voices told me to buy a machine gun today. While these pranks may be good for laugh, it simply gives the antis the gasoline to throw on the gun control fire. It also gives the BATFE rightful cause to disapprove the application. I would have to disapprove those applications as well.
The rule change regarding NFA transfers to corporations and trusts was set up well over a year ago. For a variety of reasons, it has remained on the back burner, lacking the will or traction to move it forward. President Obama’s Executive Action expedites the rule making process.
Here is a link to the proposed change. As of the time of this writing, the formal version of the rule has not been posted. Once it is, there should be a public comment period—normally 90 days.
The problem (as written) with the proposal is the same as the aforementioned problem—it requires a CLEO signature, and that’s not all. It requires CLEO signatures for each “responsible person” listed on the corporation or trust. Now if you are thinking that sounds reasonable, after all, we only want responsible individuals accessing firearms or regulated items, you need to understand the government’s definition of responsible.
The government defines responsible persons as, “any individual possessing, directly or indirectly, the power to direct or cause the direction of the management, policies, and practices of the legal entity, insofar as they pertain to firearms.”
That opens a whole can of legal wrangling and definitions. The pitfalls, case law, interpretation and so forth would be a snake pit. Essentially, it would mean any and everyone. As if that was not enough, there’s also a portion referring to the ATF and states, “recognizes that…a trust, partnership, association, company, or corporation may change, and is considering a requirement that new responsible persons submit Form 5320.23 within 30 days of the change.”
This creates an impossible bureaucracy and web of liabilities. If my grandmother had inherited guns from my grandfather and made me an executor to her trust… Not to mention the added strain it would place on the system tasked with processing the paperwork and investigating the individuals. The necessary form would be 5320.23, which incidentally, hasn’t yet been written. Perhaps they will have to enact the new law and then write the form to see what’s in it.
There could be a silver lining or a silver bullet to the Second Amendment as well. The statement the CLEO has to sign and certify has been identified as being changed, but that also has not been yet written. It appears they are going to ask for comment from the public. While it is tempting to send in a couple of zingers, it certainly won’t help and could hurt the pro 2A’s voice in the decision making process. Will the new statement make politically motived CLEOs more likely to sign? Yeah, I doubt it too. After all, if CLEO’s were hesitant to sign off a single person, acknowledging a background check, fingerprints and passport photos, imagine the heartburn they will have at signing off on three, five or 50 people listed on a corporation? Also, assuming these people lived in different jurisdictions, multiple CLEOS would all have sign. Otherwise, no one gets to play; the entire corporation or trust would be ineligible.
Using the earlier mentioned example of my grandmother, I have a black sheep or two in my family. It does not mean she loves them any less, or does not want to leave them something. However, I would not trust them with a paint gun, never mind and NFA weapon or item. The mere necessity to include every individual would make the rest ineligible.
The proposed Executive Action would cast the system back to the whim of and will of the CLEO. It would revert to a lottery system dependent on residing in an area with a pro Second Amendment CLEO, political posturing and influence or simple cronyism. After all, that was the system that sent buyers down the trust or corporation route to avoid. The motives were not prompted by criminal motives; they were simply to navigate around an otherwise unequal application of the law.
If you plan on buying an NFA item as in individual, with a CLEO signature, nothing will change, perhaps with the exception of your wait time. Sandy Hook caused a general buying frenzy and the Executive Action is doing the same for NFA items. This is going to clog an already burdened NFA Branch with a flood of new application as everyone attempts to beat the deadline. As they used to say when I was in the military, “Get ready to hurry up and wait.”