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Friday, May 11, 2018

Gun Control Advocates Score 2 Wins Against Weapons Makers

Sturm Ruger and Remington targeted

Sturm Ruger must produce a report on safety for shareholders,
while Remington faces funding crunch
Pete Evans · CBC News 

Bank of America vice-chair Anne Finucane clarified the bank's policy on gun makers this week. (Michael Nagle/Bloomberg)

Gun control advocates landed two direct hits on the weapons industry they are trying to dismantle on Friday, as a major U.S. bank says it will no longer loan money to one gun maker, and the shareholders of another are demanding that their products somehow be made safer.

Shareholders of Sturm Ruger voted in favour of a proposition that would force the gun maker to look into how the company's products are used in violent crimes, as well as produce a report on producing safer firearms and the risks gun violence could pose to its reputation and finances.

A coalition of religious-based investors, led by the Interfaith Center on Corporate Responsibility, had purchased a minority stake in the company earlier this year with the express purpose of being able to lobby the company for changes in its behaviour.

The group managed to get a safety-focused resolution to be tabled at the company's annual general meeting this week, and lobbied enough major shareholders to win the vote.

CEO Christopher Killoy said the company will abide by the resolution since a majority of shareholders want it, but angrily warned it would not be forced into changing its business. "What it does not do, and cannot do, is force us to adopt misguided principles created by groups who do not own guns, know nothing about our business and frankly would rather see us out of business," Killoy said of the resolution.

A representative for the Interfaith Center on Corporate Responsibility said similar proposals at Sturm Ruger got less than six per cent support when they were last voted on in 2001 and 2002.

But that was before the recent wave of gun violence brought new levels of scrutiny on the entire industry.

Sturm Ruger is far from the only gun maker in the crosshairs. Rival gun maker Remington is poised to emerge from its own financial restructuring thanks in part to a $193 million US loan from seven major banks.

Remington, which makes the Bushmaster AR-15 rifle that was used in 2012's Sandy Hook school shooting and others, declared bankruptcy earlier this year amid mounting debt. A consortium of banks then stepped up to loan the company money while it restructures.

But one of them, Bank of America, is making it clear that it is the last time it will do so for any gun maker.

Last month, the second-largest U.S. bank said it would no longer fund makers of assault style weapons, which is why the company faced criticism when it emerged that the bank was part of the consortium loaning money to Remington, to the tune of $43 million.

Florida high school student David Hogg, who attended the school in Parkland, Fla., that was the site of another gun massacre earlier this year, launched the #BoycottBankofAmerica hashtag on Twitter once he became aware of the bank's participation in the bailout.

Amid mounting protests, in a letter to shareholders this week, Bank of America vice-chair Anne Finucane clarified the firm's policy, clearly distancing the lender from the gun industry.

"There have been some suggestions recently in the press that Bank of America is not standing by the policy that was announced in April" to no longer fund gun makers, the letter said.

A gun enthusiast alters the sight on an AR-15 rifle, the same type of weapon that has been used in multiple mass shootings. (George Frey/Reuters)

"But the Remington bankruptcy financing commitment was in the works for some months and occurred before our current policy was in place," she said. Remington declared bankruptcy in March which was around the time when Bank of America stepped up with the funding.

Which, apparently, she forgot when making the announcement that BofA would no longer fund gun makers. She might have been legally obligated at that time, but she should have articulated that caveat rather than appearing as a hero to military grade gun opponents.

"Let me be clear," Finucane said, "We are not changing our policy to end financing of the manufacture of these military style firearms."

The bank could have faced potential legal action and damages if it had backed out of its commitment to provide Remington financing, particularly if the company failed to emerge from bankruptcy.

In addition, the bank was concerned about its reputation for standing by lending commitments if it reneged on its Remington financing, Reuters quoted an anonymous source familiar with the bank's thinking as saying.

Finucane's letter also hints that the bank could still get out of the funding agreement by selling its stake in it, which would be allowed under the terms of the deal.