The Firearms Industry and the Paycheck Protection Program
Many cities and regions of the country experienced record gun violence in 2020. Despite a record year for gun sales, an Everytown analysis found that the firearms industry received extensive support from the first tranche of funding from the federal Paycheck Protection Program. Specifically, the data indicates that at least 1,871 firearms-related businesses and organizations received PPP funds from the federal government totaling $156.9 million in 2020. In several specific instances, the federal government’s support of larger players in the firearms industry through the PPP is at odds with evidence about the strength of their respective businesses in 2020. Government assistance through the PPP includes $3 million to a producer of AR-platform weapons, $1.6 million to a manufacturer of silencers, and nearly $400,000 to one of the most prominent producers of ghost gun kits and parts in the United States.
The Firearms Industry Enjoyed Strong Demand in 2020
An Unprecedented Surge in NICS Background Checks During the COVID-19 Pandemic
Federal law requires licensed dealers to run background checks on all potential gun buyers through the Federal Bureau of Investigation’s National Instant Criminal Background Check System (NICS), which enables a quick determination on whether a prospective buyer is eligible.1To purchase a firearm from a licensed gun dealer, a would-be buyer presents their ID and fills out a form from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The dealer then relays this information to the agency conducting the background check. While all states use NICS to determine if a gun purchaser is eligible, the agency responsible for conducting the background check differs by state and type of firearm, with some states relying on the FBI and others having their own state agency. For more detailed information about background checks in 2020, see Everytown Research, “Undeniable: How Long-Standing Loopholes in the Background Check System Have Been Exacerbated by COVID-19,” December 10, 2020, available at https://everytownresearch.org/report/background-check-loopholes/#an-unprecedented-surge-in-checks-during-covid-19. As such, the number of NICS background checks can be seen as a rough proxy for the strength of firearms sales in the United States in a given time period. From 2015 to 2019, an average of more than 26 million background checks were processed annually across the country, resulting in an estimated 14.3 million guns sold each year.2Everytown Research, “Undeniable: How Long-Standing Loopholes in the Background Check System Have Been Exacerbated by COVID-19.”
In 2020, approximately 39.7 million NICS background checks were processed in the United States, a 40 percent increase over 2019.3Federal Bureau of Investigation, NICS Firearm Checks: Month/Year, accessed February 22, 2021, https://bit.ly/35ZF1qn. Everytown estimates 22 million guns were sold in 2020. In the background check system’s nearly three-decade history, six of the top 10 weeks with the highest number of background checks initiated occurred in 2020.4Federal Bureau of Investigation, NICS Firearm Checks: Top 10 Highest Days/Weeks, accessed December 2, 2020, https://bit.ly/3lmYgyv. A gun industry financial analyst described the state of demand by noting that gun owners seeking popular ammunition in 2020 have had to hunt for it from store to store like “the guy who’s buying milk during the hurricane.”5Aaron Smith, “Amid Booming Gun and Ammo Sales, Arms Makers Aim Not to Get Burned Again,” Forbes, August 18, 2020, available at https://www.forbes.com/sites/aaronsmith/2020/08/18/amid-booming-gun-and-ammo-sales-arms-makers-aim-not-to-get-burned-again/?sh=5143bd314382.
The Industry Boasts About its Strong Year
The firearms industry has spoken brazenly about the strength of the gun market since the start of the pandemic. Articles in NRA magazines gleefully counted NICS background check data as if it was a scoreboard counting up to a record year for firearms sales: in fact, the NRA has publicly celebrated each monthly release of NICS data since last March.6NRA-ILA News, “Some Might See a Pattern, All Should See Rights in Action,” December 7, 2020, available at https://www.nraila.org/articles/20201207/some-might-see-a-pattern-all-should-see-rights-in-action (“Thirty-five million checks so far this year is an accomplishment. We’re already over 35 million and we may be able to beat the 2019 total – which was the record up until this fall – by 10 million checks if December follows the 2020 trend. If the FBI NICS office runs 2,611,502 checks in December, we’ll have done it”). The NRA’s Shooting Illustrated also spoke to the issue of demand, writing that “according to manufacturers and retailers polled by Shooting Illustrated this week, ammunition is flying off the shelves at a record pace.”7Guy Sagi, “Manufacturers Struggle to Keep Up with Soaring Ammunition Sales,” NRA Shooting Illustrated, July 23, 2020, available at https://www.shootingillustrated.com/articles/2020/7/23/manufacturers-struggle-to-keep-up-with-soaring-ammunition-sales/.
The National Sports Shooting Foundation (NSSF), the firearm industry’s trade association, published a release entitled “Viral Run on Guns Shows America Wants Firearms” and its senior vice president, Larry Keane, wrote, “The industry has been busy keeping up with demand. Manufacturers are working diligently to meet orders and keep shelves stocked. By anyone’s estimate, that’s been difficult.”8Larry Keane, “Americans Vote Yes in a Landslide for Gun Sales,” NSSF, November 3, 2020, available at https://www.nssf.org/americans-vote-yes-in-a-landslide-for-gun-sales/. In another release in January, the NSSF’s Joe Bartozzi said 2020 “was truly a remarkable year for the industry across the board.”9Joe Bartozzi, “Taking Stock of Record-Setting 2020 Firearm Year,” NSSF, January 7, 2021, available at https://www.nssf.org/taking-stock-of-record-setting-2020-firearm-year/. A Forbes article indicated that “gunmakers can barely keep up with demand” and that “sales have been booming since the start of the pandemic.”10Aaron Smith, “Amid Booming Gun and Ammo Sales, Arms Makers Aim Not to Get Burned Again,” Forbes, August 18, 2020, available at https://www.forbes.com/sites/aaronsmith/2020/08/18/amid-booming-gun-and-ammo-sales-arms-makers-aim-not-to-get-burned-again/?sh=5143bd314382. Similarly, several executives of publicly traded firearms companies made statements during earnings calls about the unprecedented strength of the market:
Sturm, Ruger, & Co. CEO Chris Killoy
“Well, in my 30 years plus in the industry frankly, I think, it’s different than what we’ve seen in some of the past demand surges, even in the run-up to the 1994 Assault Weapons Ban we saw in 2013. But again, this is, I think, stronger and fundamentally different in that [it] affects a wide variety of product categories.”1RGR – Q3/2020 Earnings Call, October 29, 2020, available at https://seekingalpha.com/article/4382708-sturm-ruger-companys-rgr-ceo-chris-killoy-on-q3-2020-results-earnings-call-transcript.
Smith & Wesson CFO Deanna McPherson
“The ongoing heightened consumer demand, combined with our ability to increase our production capacity through use of our flexible manufacturing model, resulted in a second consecutive quarter of record revenue totaling $248.7 million, a $135 million increase or more than double the prior year results.”2SWBI – Q2/2020 Earnings Call, December 3, 2020, available at https://www.fool.com/earnings/call-transcripts/2020/12/03/smith-wesson-brands-inc-swbi-q2-2021-earnings-call/.
Vista Outdoor CEO Christopher Metz
“Vista Outdoor delivered outstanding results across the business in the second quarter, where we saw growing consumer demand for all of our key brands. Sales were up 29% year-over-year to $575 million, and gross profit was up 78% to $162 million. Our Shooting Sports segment was up 26% year-over-year to $380 million….”3VSTO – Q2/2020 Earnings Call, November 8, 2020, available at https://seekingalpha.com/article/4386571-vista-outdoor-inc-vsto-ceo-christopher-metz-on-q2-2021-results-earnings-call-transcript.
Less established manufacturers in niche markets also experienced rising demand. This includes the manufacturers of ghost gun parts and kits, do-it-yourself, homemade guns made from easy-to-get, unregulated building blocks. While a ghost gun manufacturer provides the parts and the instructions on how to assemble them, these guns are finished by an individual, not a federally licensed manufacturer or importer. The lack of regulation and background checks on such sales have raised alarm bells throughout the country. Everytown’s research shows that throughout the COVID-19 pandemic, ghost gun manufacturers and distributors have enjoyed “exceptionally high demand,” with dozens of companies reporting shipping delays. And even among those companies that did not explicitly warn customers about delays, “almost all of these sellers said they were dealing with shortages in inventory, indicating they were also experiencing an increase in demand during the pandemic.”11Everytown Research, “Undeniable: How Long-Standing Loopholes in the Background Check System Have Been Exacerbated by COVID-19”, available at https://everytownresearch.org/report/background-check-loopholes/.
The Gun Industry Receives “Essential” Designation, Allowing Many Businesses to Stay Open During COVID Lockdowns
As many industries faced economic hardship caused by COVID-19 lockdown orders, the firearms industry lobbied for, and received, a designation from the federal government that it was an “essential business.” This effort was reportedly led by the NSSF and involved extensive lobbying throughout the executive branch of the federal government.12Anita Kumar, “States Were Closing Gun Shops. Activists Turned to the White House”, April 1, 2020, Politico, available at https://www.politico.com/news/2020/04/01/gun-stores-states-white-house-coronavirus-157543 (“The National Shooting Sports Foundation, which represents retailers, manufacturers and distributors, led the push for new guidance, speaking directly to outgoing acting chief of staff Mick Mulvaney and incoming chief of staff Mark Meadows, as well as the office of Vice President Mike Pence, who is leading the White House Coronavirus Task Force, according to a person familiar with the outreach. The organization also spoke to Mulvaney counselor Michael Williams, a former law clerk for the NRA’s lobbying arm who later served as general counsel for the American Suppressor Association, an industry group pushing to ease restrictions on suppressors – more commonly known as silencers”). The NSSF later took credit for their “quick” action, noting, “When the rest of America was shutting down, NSSF’s team made sure gun manufacturers, distributors, retailers and ranges weren’t forced to close their doors.”13Joe Bartozzi, “Taking Stock of Record-Setting 2020 Firearm Year,” NSSF, January 7, 2021, available at https://www.nssf.org/taking-stock-of-record-setting-2020-firearm-year/. Ultimately, just weeks into the pandemic, the Department of Homeland Security’s “Advisory Memorandum on Identification of Essential Critical Infrastructure Workers” was revised to add those “workers supporting the operation of firearm or ammunition product manufacturers, retailers, importers, distributors, and shooting ranges” to the list of essential workers.14Christopher C. Krebs, “Advisory Memorandum on Identification of Essential Critical Infrastructure Workers During COVID-19 Response,” March 28, 2020, available at https://www.federalreserve.gov/supervisionreg/srletters/SR2006a1.pdf.
While not every state followed the federal government’s guidance, the majority of states allowed businesses in the firearms industry to continue operations in some capacity.15Adam Edelman, “Buckling to Pressure, Many States Deem Gun Stores Essential,” NBC News, April 7, 2020, available at https://www.nbcnews.com/politics/politics-news/buckling-pressure-many-states-deem-gun-stores-essential-allow-them-n1177706 (“Gun retailers in at least 30 of those states, however, have been allowed to stay open amid pushback from gun groups and the federal government”). The result was that the firearms industry, taken as whole, appears to have experienced less financial pressure in 2020 from COVID-19 lockdown orders than other similarly situated industries. Or, as one firearms industry report described it, “One of the reasons why [gun and ammunition] sales have skyrocketed is the virtue of industry businesses remaining open through the pandemic.”16Jade Moldae, “U.S. Firearms Industry Today in 2020,” Shooting Industry, available at https://shootingindustry.com/guns/handguns/firearms-report-2020/.
Paycheck Protection for the Firearms Industry
The Paycheck Protection Program (PPP) was created with the purpose of assisting businesses in keeping their workforce employed during the pandemic. With this program, the federal government provides low-interest (1 percent) loans to businesses, but if the recipient meets certain criteria, including not reducing its payroll and using at least 60 percent of the funds for payroll expenses, the loan is forgiven and effectively converted to a grant. Former Treasury Secretary Steve Mnuchin lauded the PPP, saying the program was “saving millions of Americans jobs and helping small businesses get through this challenging time.”17U.S. Treasury Department, “Statement from Secretary Steven T. Mnuchin,” April 17, 2020, available at https://home.treasury.gov/news/press-releases/sm983. Republican Senate leader Mitch McConnell said, “We couldn’t just let every storefront except the biggest corporate retailers turn into permanent pandemic ghost towns. We had to give small businesses and their workers a fighting chance.”18Mitch McConnell, remarks on the U.S. Senate floor, October, 20, 2020, available at https://www.republicanleader.senate.gov/newsroom/remarks/mcconnell-second-round-of-the-job-saving-paycheck-protection-program-should-be-a-bipartisan-slam-dunk.
However, despite a record year in sales and demand, the firearms industry received extensive support from the PPP in 2020. Everytown reviewed the data made available by the Small Business Association19On November 5, 2020, Judge James E. Boasberg of the U.S. District Court for the District of Columbia ruled that the Small Business Administration (SBA) had to release data for all 5.2 million approved PPP loans, including each entity’s name, address, and loan amount, for a total of $525 billion. The information, later made available by the Treasury Department, also includes the number of jobs reported by many, but not all, of the companies. For this research, Everytown studied and reviewed the released spreadsheets and identified businesses and organizations in the firearms industry, including gun manufacturers, importers, distributors, and associations. The corresponding results most likely underestimate PPP support to the firearms industry, as it is possible our analysis inadvertently omitted certain smaller entities in the firearms industry without certain keywords in their business description. for the first tranche of funding released under the Trump Administration and identified 1,871 firearms-related businesses and organizations that received PPP funds from the federal government, totaling $156.9 million. Gun manufacturers, importers, and distributors took more than half of that total amount, netting $82.9 million across some 285 businesses.
1,871 firearms-related businesses and organizations received PPP funds from the federal government, totaling $156.9 million.
Gun manufacturers, importers, and distributors received $82.9 million in PPP funds from the federal government across 285 businesses.
The largest firearm manufacturing recipient of PPP funds was Kimber Manufacturing, a producer of pistols and rifles. The company received $7.1 million from the program. Other top recipients included firearm accessories and parts distributor Brownells at $5 million; Taurus Holdings, which manufactures and imports a wide range of handguns, at $3 million; and Daniel Defense, which specializes in AR-platform weapons, at $3 million. Wilson Combat, a company that builds custom-grade firearms costing thousands of dollars, received $1.8 million—the same amount given to Barrett Firearms, which is known for its large-caliber rifles and U.S. military contracts. SilencerCo, a silencer manufacturer, received $1.6 million, and Century Arms, a manufacturer and importer with a heavy focus on AK-style firearms, received $1.6 million.
Top Ten Recipients of PPP Funds in the Gun Industry
|$7,133,500||Kimber Manufacturing||New York|
|$1,479,938||Abrams Airborne (Vltor/Milkor USA)||Arizona|
Several “ghost gun” manufacturers and distributors that sell untraceable firearms components without serial numbers also received support from the PPP. Everytown’s analysis of PPP data identified 19 companies that offer ghost gun components, or “80-percent” frames and receivers, for an aggregate of over $8 million in PPP funds. This includes one of the largest sellers of ghost gun parts and kits, Polymer80, a company that was recently raided by the ATF based on the suspicion it was illegally manufacturing and distributing guns.20Scott Glover, “Feds Raid Ghost Gun Maker Whose Products They Say Are Linked to Hundreds of Crimes,” CNN Investigates, December 11, 2020, available at https://www.cnn.com/2020/12/11/us/atf-raid-ghost-gun-manufacturer-invs/index.html. Polymer80 is already facing a number of lawsuits for its role in producing guns that end up at crime scenes, and in June 2020, Washington, D.C., Attorney General Karl A. Racine, sued the company, stating that “more than 80 percent of the 250 ghost guns recovered by District law enforcement since 2017 were made by Polymer80, including guns linked to nine homicides.”21Karl A. Racine, “AG Racine Sues Gun Manufacturer Polymer80 for Illegally Advertising and Selling Untraceable Firearms to District Consumers,” Office of the Attorney General for the District of Columbia, June 24, 2020, available at https://oag.dc.gov/release/ag-racine-sues-gun-manufacturer-polymer80. More recently, the Los Angeles City Attorney filed suit against Polymer80, as “more than 700 ghost guns seized in Los Angeles last year were made from parts bought from that company.”22Note, Everytown for Gun Safety is counsel in this case. See Richard Winton, “City sues ‘ghost gun’ maker Polymer80; LAPD says more than 700 seized weapons are tied to its parts,” Los Angeles Times, February 17, 2021, available at https://www.latimes.com/california/story/2021-02-17/ghost-gun-maker-polymer80-lawsuit-los-angeles.
A number of organizations and businesses affiliated with the NRA also received PPP funds. This includes official NRA state affiliates in California, New Jersey, and Texas, in addition to the businesses of NRA board members Ronnie Barrett, Buz Mills, and Bob Nosler.23The NRA’s state affiliates in New Jersey, California, and Texas received a combined $224,642 in PPP loans. Barrett Firearms Manufacturing, founded by board member Ronnie Barrett, received a $1.83 million loan. Nosler, Inc., owned by board member Bob Nosler, received a $1.36 million loan. Gunsite Academy, which is owned by board member Owen “Buz” Mills and where board member Il Ling New is an instructor, received a $146,800 loan.
Further, longtime NRA fundraising consultant Membership Marketing Partners (MMP) received $464,000 from the PPP, even listing the NRA headquarters as its business address. Ackerman McQueen, the NRA’s former public relations firm for over three decades and inventor of the failed NRATV venture, received $2.9 million from the PPP. The NRA, who reportedly had extensive layoffs in 2020 and filed for Chapter 11 bankruptcy in January 2021, did not receive PPP funds in 2020. 501(c)(4) organizations like the NRA are not eligible for PPP loans. 24Peter Stone, “NRA has shed 200 staffers this year as group faces financial crisis,” The Guardian, June 29, 2020, available at https://www.theguardian.com/us-news/2020/jun/29/nra-financial-crisis-layoffs-furloughs. However, the NRA did report on federal lobbying disclosure forms that it lobbied on the PPP bill in Congress, although no details were provided as to what provisions the NRA was attempting to have included or excluded from the bill.25In every quarter of 2020, the NRA reported lobbying on H.R. 748, also known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which created the PPP. In both the second and third quarters of 2020, the NRA reported lobbying on H.R. 7010, Paycheck Protection Program Flexibility Act of 2020, which amended the PPP.
Market Conditions Raise Questions About Certain PPP Loans to the Firearms Industry
To access PPP funds, applicants were required to certify that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.”26PPP First Draw Application Form, available at https://www.sba.gov/document/sba-form-2483-ppp-first-draw-borrower-application-form. The program was a lifeline to many small and medium-sized businesses impacted by the economic downturn caused by the COVID-19 pandemic, although cases of alleged fraud have emerged.27CARES Act Fraud Tracker, Arnold & Porter, available at https://www.arnoldporter.com/en/general/cares-act-fraud-tracker
While the program undoubtedly provided support to any number of struggling businesses, contemporaneous statements from several businesses in the gun industry – an industry enjoying a record year in 2020 – raises questions as to whether certain gun companies needed government funds to support their operations. The importance of these questions is heightened since the program envisions the federal government forgiving the PPP loan, essentially turning the money into a direct grant, if the applying business meets certain criteria about not laying off employees (a likely outcome for many in the gun industry, who to due to high demand in 2020, looked to add, not shed, workers). More than $23.1 million, or nearly 15 percent of the money delivered to the gun industry, went to companies who either reported the loan would save zero jobs or did not report how many jobs it would save. Several examples are provided below.
Iowa-based Brownells, Inc., is a large and politically-connected firearms and accessories retailer. The company’s chairman, Pete Brownell, was a former board president of the NRA who resigned from the organization’s board amid public scrutiny concerning an NRA-sponsored trip to Russia.28Tom Hamburger, “Pete Brownell, who heads major supplier of firearms accessories, resigns from NRA board,” Washington Post, May 30, 2019, available at https://www.washingtonpost.com/politics/pete-brownell-head-of-major-firearms-supplier-resigns-from-nra-board/2019/05/30/55f7399a-831b-11e9-bce7-40b4105f7ca0_story.html. Shortly after he left the NRA board, an entity owned by Pete Brownell purchased AR15.com,29The Firearms Blog, “Breaking: The Brownells Acquire AR15.Com,” June 5, 2019, available at https://www.thefirearmblog.com/blog/2019/06/05/breaking-brownells-acquires-ar15-com/. a web forum which so often traffics in misogyny, hate speech, and threats of armed rebellion that its domain host booted it from its platform after the January 6, 2021, Capitol insurrection.30Lachlan Markay, “GOP digital operatives aim to avoid ‘deplatforming,’” Axios, January 13, 2021, available at https://www.axios.com/gop-digital-operatives-technology-b58e0162-75a6-4626-b813-da5743231173.html.
Despite this federal assistance, Brownells routinely bragged about the strength of its business in 2020 and the positive impact of the COVID-19 pandemic on sales. During a November 2020 podcast, Pete Brownell stated “This market is exponentially larger than the Obama market.”31Student of the Gun podcast, “Pete Brownell Discusses the Future of the Industry,” 14:50, November 9, 2020, available at https://open.spotify.com/episode/3CHOYOu0MlS5J2TBFKkzJf?si=5u6y-GvmQT-MOu55w63SdA&fbclid=IwAR0-dqv-taGejRhd8mYnKrHmgrMje8dED8oXZeVO6NOugKrh4X9OTMraiiM. He later added, “We’ll sell a million rounds [of 9mm ammo] in about two hours because the backlog is so big, the demand is so big on certain calibers. It’ll be huge…and that’s the last couple of months, not just the last three or four weeks.”32Id. at 17:10. Brownell concluded, saying, “I think the whole industry frankly got a lifesaver from the Trump dip that happened, and I think everybody’s kind of stepped up to try to serve the customer very well across the industry.”33Id. at 30:55. Similarly, Pete Brownell told Fox Business in August 2020 that the industry recorded a 90-percent spike in firearms sales since the onset of the pandemic and that “We could receive truckloads of nine-millimeter [and] we can sell it in hours where it used to take weeks—weeks to a month.”34Angelica Stabile, “Coronavirus Promoting Surge in Gun Sales,” Fox Business, August 5, 2020, available at https://www.foxbusiness.com/money/coronavirus-surge-gun-sales-ammunition. Brownells’ director of content and communications also told the NRA’s Shooting Illustrated that “it’s not uncommon for us to sell out of common calibers within minutes to hours once it’s live on Brownells.com.”35Guy J. Sagi, “Manufacturers Struggle to Keep Up with Soaring Ammunition Sales,” Shooting Illustrated, July 23, 2020, available at https://www.shootingillustrated.com/articles/2020/7/23/manufacturers-struggle-to-keep-up-with-soaring-ammunition-sales/.
Furthermore, Brownells social media accounts pumped out various posts about the strength of the firearms market and the record number of NICS background checks.
Brownells received a $5,018,600 PPP loan, making the company the second largest recipient of PPP funds in the firearms industry.
Wilson Combat of Berryville, Arkansas, is a manufacturer specializing in custom-grade 1911-style pistols, AR-15s, AR-10s, and shotguns that cost thousands of dollars. However, a March 20, 2020 Instagram post containing a message from the company’s president, Bill Wilson, raises questions as to the negative impact of the COVID-19 pandemic on the company’s business. Specifically, Wilson wrote that “throughout the Nationwide Coronavirus outbreak, our Berryville, AR manufacturing and service facility has remained open, fully staffed and fully operational. We have a steady supply of merchandise being produced and there has been minimal disruption to production at our facility.” He added that the company is facing “increased demand” in the market and is “working diligently to process all orders in a timely fashion.”36Wilson Combat, Instagram, March 20, 2020, available at https://www.instagram.com/p/B99QMuAp8JH/.
On top of that, at the end of 2020, the company announced that it plans to increase its workforce by 20 percent and expand its production facility by 16,000 square feet.37John Magsam, “Berryville’s Wilson Combat Expanding,” Arkansas Democrat Gazette, December 13, 2020, available at https://www.arkansasonline.com/news/2020/dec/13/berryvilles-wilson-combat-expanding/. The company’s director of manufacturing, in an article announcing the expansion, said demand for firearms and parts had been high, noting “demand is overwhelming across the country.”38Id.
Wilson Combat received a $1,844,002 PPP loan in 2020.
Daniel Defense is a firearms manufacturer that specializes in AR-15s, AR-10s, and bolt-action rifles, all marketed toward tactical and hunting audiences. The company is headquartered in Black Creek, Georgia, and it has another production facility in Ridgeland, South Carolina. However, in a March 27, 2020 Facebook post, the company stated, “We are fully operational!”39Daniel Defense, Facebook, March 27, 2020, available at https://www.facebook.com/DanielDefense/posts/2672971262750716
Furthermore, Daniel Defense unveiled a new merchandise line and e-commerce store in May 2020, and in September, the company debuted a brand-new rifle series. Daniel Defense also continues to raffle off guns through its social media accounts, and its website – as of February 2021 – shows almost all of its products as “out of stock,” denoting exceptional demand.
Daniel Defense received $3,067,000 in PPP funds.
Polymer80 specializes in “80-percent” frames and receivers that allow people to create untraceable homemade pistols and AR-platform rifles without serial numbers and without background checks. The company also has offered complete pistols and “Buy Build Shoot” kits that, as mentioned supra, have earned increased scrutiny from law enforcement.
The pandemic appears to have created significant demand among DIY gun makers, who profile their “Anti-Virus P80” and “Second Pandemic” builds on websites like Reddit. Across the 102 “ghost gun” distributors identified by Everytown, only 40 percent of all unserialized parts listed for sale were actually in stock (as of November 4, 2020). And 65 of those companies (or 63.7 percent) specifically sell Polymer80 parts and kits. In the comment section of a July 4, 2020 Facebook post, the company mentioned that it’s working hard to “satisfy a massive amount of retailer orders.”40Polymer80, Facebook, July 4, 2020, available at https://www.facebook.com/Polymer80Inc/photos/a.138962616289835/1500668156785934.
And in a September 18, 2020 Facebook post, the company again refers to the “overwhelmingly high demand.”41Polymer80, Facebook,September 18, 2020, available at https://www.facebook.com/Polymer80Inc/photos/a.138962616289835/1567634226755993/.
Polymer80 received $371,067 in PPP funds.
Nosler, Inc. is a manufacturer of guns and ammunition that received a PPP loan in 2020. Yet the company appeared to be doing quite well in 2020, as evidenced by social media posts boasting that “the bullet business is booming” and attempting to hire additional employees.42Nosler Facebook, September 15, 2020, available at https://www.facebook.com/NoslerInc/posts/10158604084652808. Further, the company’s homepage recently featured a statement regarding current “unprecedented demand” and that products are “being shipped… very consistently.”
Nosler received a PPP loan in the amount of $1,364,702.
Česká Zbrojovka (known as “CZ”) is a gun manufacturer based in the Czech Republic with an American branch, CZ-USA, located in Kansas City, Kansas.
CZ-USA applied for and accepted a PPP loan in the amount of $1,454,800. But months after receiving government assistance, CZ USA announced that it was in the process of acquiring American firearms producer Colt Manufacturing Company, as well as a Canadian subsidiary, for $220 million in cash and $18.65 million in stock. CZ projects that its combined holdings would “substantially expand its global customer base” and earn “more than $500 million” in revenue.43Reuters, “Czech gunmaker CZG buys Colt in cash and stock deal,” February 11, 2021, available at https://www.reuters.com/article/czg-colt/corrected-czech-gunmaker-czg-buys-colt-in-cash-and-stock-deal-idUSL1N2KH3HO. A purchase and acquisition of this significance — in the same year the company applied for government assistance — raises serious questions as to whether CZ-USA required PPP funds in the first place.
Big Woods Goods
Big Woods Goods is a gun shop in Canton, GA where the perpetrator of the March 16, 2021 Atlanta mass shooting purchased his weapon. The store’s Facebook page contains several indicia of the surging demand seen throughout the industry (e.g., “in stock while supplies last!”; “in stock!”; “limited quantities”). In fact, the day after the tragic mass shooting in Atlanta, Big Woods Goods advertised “Glock 9mm handgun in stock!” – the same type of gun used in the shooting the day before.
Other social media posts raise serious questions about the business, ranging from use of armed young children, a post featuring an Islamophobic dog whistle, and a video parodying how customers could circumvent ATF regulations concerning short barrel rifles.
Big Woods Goods received a PPP loan of $68,308.
The PPP serves as an important tool for policymakers to assist struggling small and medium-sized businesses throughout the United States during the COVID-19 pandemic. But in stark contrast to shuttered restaurants and retail shops facing plummeting sales, the firearms industry thrived during the pandemic, with several companies and organizations tripping over themselves to announce record demand and sales. Yet significant segments of the firearms industry applied for, and received, millions of dollars in federal assistance. This raises important questions for those entrusted with overseeing the PPP and detecting fraud against the government and taxpayers around the country, especially considering a second round of loans was approved in December 2020.
Everytown Research & Policy is a program of Everytown for Gun Safety Support Fund, an independent, non-partisan organization dedicated to understanding and reducing gun violence. Everytown Research & Policy works to do so by conducting methodologically rigorous research, supporting evidence-based policies, and communicating this knowledge to the American public.