How Smith & Wesson Almost Lost its License to Make Guns

Last week, the National Rifle Association presented its 2025 Golden Bullseye Pioneer Award to Robert L. Scott, chairman of the board at Smith & Wesson, at its annual convention in Atlanta, Georgia. In announcing the award, the NRA cited Scott’s “outstanding personal achievement” and called him “one of the top leaders in the entire firearm industry.” NRA CEO Doug Hamlin said, “If it were not for Bob Scott, there may not be a Smith & Wesson.”¹Mark A. Keefe IV, “NRA Announces Its 2025 Golden Bullseye Pioneer Award Winner,” American Rifleman, January 2, 2025, https://www.americanrifleman.org/content/nra-announces-its-2025-golden-bullseye-pioneer-award-winner/.

Scott has served as a director of Smith & Wesson since 1999, and according to the NRA, it was his “leadership and business acumen” that helped “see this company through its roughest patch”²Mark A. Keefe IV, “NRA Announces Its 2025 Golden Bullseye Pioneer Award Winner.” — when Smith & Wesson faced a nationwide boycott, instigated by the NRA, for striking a deal with the Clinton Administration in March 2000 to reform its business practices in an effort to curb gun violence. The company agreed to develop safer weapons like smart guns, implement a “code of conduct” for its dealers, and keep better track of its inventory, among several other safety initiatives.

The boycott pushed Smith & Wesson to the brink of bankruptcy before it was sold to a startup called Saf-T-Hammer, which reneged on the terms of the agreement with the government. The NRA says Scott worked with Saf-T-Hammer “to eventually purchase Smith & Wesson in 2001 for $15 million” and helped bring the company “not only back from ruin but to its rightful, prominent place”³Mark A. Keefe IV, “NRA Announces Its 2025 Golden Bullseye Pioneer Award Winner.” as one of the country’s largest gun manufacturers.

The NRA’s decision to honor Scott highlights another “rough patch” that the company faced during his time on the board — one that, until now, had not been publicly aired. According to documents obtained via a Freedom of Information Act (FOIA) request, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) considered revoking Smith & Wesson’s licenses to manufacture and import firearms in 2008 after an inspection uncovered serious violations of federal law, including poor inventory controls and repeated failures to report lost or stolen firearms. However, as this report details, the ATF ultimately let Smith & Wesson off with what amounts to a slap of the wrist.

According to the FOIA documents, on September 6, 2007, an analyst with the ATF’s National Tracing Center (NTC) emailed another member of law enforcement spreadsheets indicating that Smith & Wesson had been the top manufacturer of crime guns recovered in nine Northeastern states — Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont — in the previous year.⁴See FOIA Documents, 1: “The second worksheet, ‘2. Top MFG-CAL-TYPE’, lists the top [redacted] firearms traced by manufacturer, caliber, and weapon type. Smith & Wesson ranked 1, 5, and 6.”

Days later, on September 10, the ATF began an inspection of Smith & Wesson’s Springfield, Massachusetts, production facility that grew into a monthslong investigation after ATF inspectors found that numerous firearms had gone missing from the plant.⁵FOIA Documents, 4. Due to the Tiahrt Amendment — a congressional budget rider originally drafted by the NRA that the ATF has interpreted as preventing it from providing certain tracing information to the public⁶Everytown Research & Policy, “Repeal Restrictions on Gun Trace Data,” accessed January 10, 2024, https://everytownresearch.org/solution/gun-trace-data/. — the FOIA documents are heavily redacted, and the exact number of missing firearms is unknown. However, the figure was significant enough for the ATF to request a full inventory at Smith & Wesson’s facility spanning several months.

The inspectors noted that Smith & Wesson had a “practice” of leaving its “main vault unlocked and that a large number of firearms were being stored outside of the vault. Security personnel identified these two items to ATF as security concerns that had been brought to the attention of S&W management but had remained uncorrected.”⁷FOIA Documents, 36.

On September 24, an ATF inspector wrote in an email that, despite being asked to “freez[e] the vault inventory of firearms…for the one or two days that we anticipated these inventories would take” on multiple occasions, Smith & Wesson employees continued shipping out guns. One employee “simply stated he ‘Had’ to ship the guns out. He further admitted he had directed his staff to box up some of the .357 firearms…after agreeing not to do so.” On top of that, Smith & Wesson could not “produce a commercial record” for one of those shipments, meaning the guns were “shipped out without any records of where they went.”⁸FOIA Documents, 64-65.

After discovering more missing firearms on September 27, an ATF inspector emailed a colleague stating that Smith & Wesson’s “computer A&D records are so antiquated and their internal controls are so weak our confidence in any inventory attempted is going to be limited.”⁹FOIA Documents, 66. Further, Smith & Wesson personnel failed to “provide information as we requested” and offered conflicting reports about the missing firearms. The “Plant Manager would not acknowledge the missing guns,” the “Receiving Manager had no idea of the missing guns and/or procedures,” and the “Operational VP stated that the firearms inventories are done for ‘financial reasons only.’” According to the ATF investigator, “there seemed to be no system in place for notifying ATF of missing guns following their inventories.”¹⁰FOIA Documents, 66-67.

ATF inspectors “learned that firearms are transferred about the plant, reentered into different computer systems, loaned [to] employees, sent for testing off site at the academy and/or loaned out to S&W employees. We were also advised that various S&W employees may have guns in their offices, in file cabinets, and at home for ‘loaning’ purposes.”¹¹FOIA Documents, 67.

Finally, the agent noted, “We were flat out told by various S&W employees that financial concerns have governed all else at S&W for the last few years and that ATF compliance was not at the forefront or even thought of in some of their processes, even for missing firearms.”¹²FOIA Documents, 67.

In the months that followed, the ATF found that Smith & Wesson failed to report lost and stolen firearms — which FFLs are required to report to the ATF within 48 hours of discovery¹³ATF, “Report Firearms Theft or Loss,” accessed January 10, 2024, https://www.atf.gov/firearms/report-firearms-theft-or-loss. — during inventories conducted in 2005, 2006, and 2007.¹⁴FOIA Documents, 7, 32. Additionally, an unknown number of “off book” firearms were never logged into Smith & Wesson’s electronic inventory records, a system that did not “conform to ATF requirements” because it lacked important acquisition information and did not “accurately reflect [the] firearms in inventory.”¹⁵FOIA Documents, 3, 5, 34, 36-37. The company also kept a file of “unaccounted for serial numbers that S&W originally claimed they did not manufacture” into firearms, but further investigation revealed that at least some of those numbers were indeed used on firearms that left the factory.¹⁶FOIA Documents, 33-34.

Additionally, ATF investigators discovered that Smith & Wesson had failed to engrave serial numbers on completed pistol frames in its inventory, as required by law, and had duplicated serial numbers on an untold number of firearms, a practice that could complicate or even hinder crime gun tracing efforts.¹⁷FOIA Documents, 6, 12, 13, 44. According to the ATF, Smith & Wesson also failed to respond to crime gun tracing requests from the agency¹⁸FOIA Documents, 10. — a violation that could have led to license revocation under the Biden administration’s “zero tolerance” policy, as described below.

On November 1, 2007, the ATF’s then-deputy assistant director of industry operations, James Zammillo, emailed another ATF agent, asking, “Do you have any info on how S&W is interacting with the Tracing Center? Rumor is that it is not well.” In the communications that followed, Zammillo stated that several crime gun traces from 2005 to 2007 were “unsuccessful” and “stopped at” Smith & Wesson, meaning the ATF could not trace the guns through the supply chain to their first point of sale. Zammillo concluded that “[s]ome” of the failed traces were not Smith & Wesson’s fault because of how long ago the guns were sold, but “[m]any, many are their fault.”¹⁹FOIA Documents, 72-73.

Smith & Wesson also loaned firearms, including multiple handguns, to a non-employee — a competitive shooter sponsored by the company²⁰FOIA Documents, 88-89. — who lived in another state. The guns were transferred without completing background checks, multiple sales reports, or Form 4473s, as required by law.²¹FOIA Documents, 9, 49-50.

While searching Smith & Wesson’s facilities, ATF agents discovered multiple short-barreled shotguns, silencers, a machine gun, and at least a dozen grenade launchers with anti-personnel rounds that were not registered in accordance with the National Firearms Act (NFA) of 1934,²²FOIA Documents, 11, 15-20. which placed strict ownership requirements on these weapons because they are particularly dangerous.²³ATF, “National Firearms Act,” accessed April 15, 2025, https://www.atf.gov/rules-and-regulations/national-firearms-act. For example, short-barreled shotguns are easy to conceal on one’s person; silencers muffle the sound of gunfire, making it difficult to pinpoint where a shot originated; fully automatic machine guns allow shooters to fire an entire magazine’s worth of ammunition in seconds; and grenade launchers can fire various munitions, including exploding and teargas rounds. Possession of an unregistered NFA weapon is a felony.²⁴26 U.S.C. § 5861(d).

It appears that Smith & Wesson also illegally transferred an unknown number of short-barreled shotguns to a dealer in Rhode Island, and failed to maintain proof of registration for a number of silencers, including some that were noted missing during a 1980 inspection.²⁵FOIA Documents, 11.

As the investigation dragged on, the ATF met with Smith & Wesson personnel on several occasions to address the violations, but many persisted. On November 16, 2007, senior ATF officials held a meeting with Smith & Wesson’s then-CEO, Michael Golden, as well as the company’s vice president and corporate counsel, at the ATF’s Boston Field Division office to discuss the “significant violations discovered during the inspection” and how the company must “address[] these issues and the lack of control over their firearms.” But ATF investigators “found that S&W had failed to address many of the issues and continued to operate in violation of Federal firearm law and regulations even after this meeting.”²⁶FOIA Documents, 35.

For example, during the November 16 meeting, the ATF told Smith & Wesson to update its inventory records to include more information, including the makes and models of imported firearms and the dates they were received, but a subsequent inspection in January 2008 “determined that this violation had not been corrected,” despite Smith & Wesson’s compliance manager stating otherwise. In fact, ATF investigators found that the gun maker failed to enter some firearms into its records “almost two years after the firearms were imported.”²⁷FOIA Documents, 37-38.

Materials produced by the ATF highlight the importance of Smith & Wesson meeting its record-keeping obligations. On April 16, 2007, a few short months before the ATF began its inspection at the Smith & Wesson factory, a gunman armed with two pistols — a Walther P22 and a Glock 19 — killed 32 people and wounded another 17 at Virginia Tech. Smith & Wesson was the exclusive U.S. importer of Walther pistols²⁸Smith & Wesson, Form 10-K, April 30, 2007, 3, https://ir.smith-wesson.com/static-files/dc4a4f82-0c6c-40db-9c9c-5d03ca14c30b. when the shooter purchased his P22 online and picked it up at a pawn shop across the street from the university in February 2007.²⁹CNN, “Virginia Tech Shootings Fast Facts,” April 3, 2023, https://www.cnn.com/2013/10/31/us/virginia-tech-shootings-fast-facts/index.html. After the pistols were recovered, the ATF contacted Smith & Wesson and successfully traced the P22 through the supply chain.³⁰Josh Meyer and Richard Fausset, “Cho went by the book to purchase the guns he used,” Los Angeles Times, April 18, 2007, https://www.latimes.com/archives/la-xpm-2007-apr-18-na-guns18-story.html. The mass shooting and ensuing law enforcement investigation underscore the critical importance of accurate record-keeping. This may be why the ATF included a New York Times article about the Virginia Tech shooting as an exhibit in its report of violations to Smith & Wesson,³¹Note: Page 63 of the FOIA Documents shows a list of exhibits provided to Smith & Wesson in the ATF’s inspection report. Exhibit 68(a) is redacted, but a printout of the New York Times article included in the FOIA Documents (pages 74-78) has “Ex68a” handwritten on the bottom-right corner of each page. in addition to materials showing the company was the top manufacturer of crime guns in the Northeast at the time.³²See FOIA Documents, 61, Exhibit 7, “Top [redacted] firearms recovered by Manufacturer in NE.”

A January 2008 email exchange captured the frustration of ATF inspectors. When one agent asked another a question about marking requirements for imported firearms — and noted that Smith & Wesson had imported pistol frames “years ago” but failed to engrave its name and location on them within 15 days, as required by law — the other agent remarked, “I am surprised that you are still at Smith & Wesson; you must be hating life by now.”³³FOIA Documents, 79-80.

More missing firearms were discovered during Smith & Wesson’s February 2008 inventory, and a May 2008 inspection report noted that the gun maker was still failing to report lost or stolen firearms within 48 hours and had not reconciled its file of unaccounted-for serial numbers. As the ATF put it, Smith & Wesson had “an ongoing lack of control over their firearms inventory.”³⁴FOIA Documents, 33.

In that report, the ATF noted that it had interviewed several top Smith & Wesson executives along the way, including the company’s then-CEO, CFO, vice president of operations, corporate counsel, IT director, and numerous managers.³⁵FOIA Documents, 27-28. Board member Robert Scott, whom the NRA recently honored for his leadership at the company, was not named in the heavily redacted documents. It is unclear if he or other board members were involved in the inspections or when the board was made aware of the ATF’s findings, though Scott signed subsequent SEC filings disclosing the ATF investigation, discussed below.

Ultimately, disclosed records indicate that the ATF cited Smith & Wesson for 13 violations, and that agents recommended that the company’s manufacturing and import licenses be revoked after ending their investigation in February 2008.³⁶FOIA Documents, 32. In a letter asking Smith & Wesson executives to attend a closing conference, the ATF special agent in charge noted, “Based on the overwhelming scope and nature of the violations, coupled with what appears to be a continued pattern of disregard for the federal requirements, there exists sufficient cause for the Director of Industry Operations to revoke Smith & Wesson’s firearm importer and manufacturer licenses.”³⁷FOIA Documents, 81.

However, the ATF stated that the meeting would also provide an opportunity for the gun maker to “show cause [as to] why such adverse action should not be initiated against its licenses”³⁸FOIA Documents, 81. — an opportunity Smith & Wesson took.

On July 9, 2008, Smith & Wesson sent the ATF’s director of industry operations a legal memo prepared by outside counsel regarding the company’s violations as well as a “Voluntary Compliance Program” drafted by the company.³⁹FOIA Documents, 83-96. The memo argued that none of the violations were willful, that FFLs have “no legal duty” to conduct or maintain physical inventories, and that the company did not report lost or stolen firearms within 48 hours because it “handles thousands of firearms per day”⁴⁰FOIA Documents, 84-87. and had not discovered its loss of firearms, as if the vast quantity of firearms at stake somehow diminish Smith & Wesson’s responsibilities.

Unsurprisingly, the memo does not mention how many guns were lost or stolen at Smith & Wesson and went unreported over the years.

The “Voluntary Compliance Program” proposed many reforms that were later incorporated into the company’s settlement agreement with the ATF in January 2009. In exchange for keeping its licenses, Smith & Wesson acknowledged that it had not complied with federal regulations and agreed to:

• Pay $500,000 to the ATF in lieu of forfeiting property subject to the inspection violations;
• Maintain a corporate compliance department for three years;
• Conduct full serial-number-based audits every quarter and report those findings to the ATF for three years;
• Allow the ATF to conduct warrantless compliance inspections every six months for three years;
• Keep an ATF investigator on site for a full year to work with Smith & Wesson’s newly formed compliance team;
• Consolidate its vaults for storing serialized products;
• Report missing firearms no later than 30 days from the date the firearms were first unaccounted for, and search all records to find the firearms;
• Implement additional procedures to better respond to crime gun tracing requests;
• Conduct annual facility security audits for three years; and
• Retain an independent expert to support training and compliance processes for three years.⁴¹FOIA Documents, 97-102.

While a step toward compliance, these measures are a far cry from the reforms the company’s previous owners agreed to implement in March 2000. The settlement also seems particularly weak considering Smith & Wesson’s size and influence on the gun market. Not only is $500,000 a paltry amount for a company that made $335 million in net sales in fiscal year 2009 alone,⁴²Smith & Wesson, Form 10-K, April 30, 2009, 31, https://ir.smith-wesson.com/node/10981/html. but the company was also allowed to pay that amount in installments.⁴³FOIA Documents, 101. Further, one of the country’s largest gun makers was only required to maintain a compliance department for three years instead of in perpetuity.

Smith & Wesson, a publicly traded company, did mention the ATF audit in annual SEC filings available to shareholders, but without providing a thorough accounting of the violations unearthed — or notifying shareholders how close it came to losing its manufacturing and import licenses. In a 120-page June 2008 report, Smith & Wesson included four sentences about the ATF inspection, noting that the ATF “is asserting various violations by us of the Gun Control Act of 1968 and its attendant rules and regulations following an on-premises inspection of our Springfield, Massachusetts facility. These alleged violations relate to inventory, record keeping, and reporting obligations.”⁴⁴Smith & Wesson, Form 10-K, April 30, 2008, 23, https://ir.smith-wesson.com/static-files/dc4a4f82-0c6c-40db-9c9c-5d03ca14c30b.

In annual filings from 2009 to 2011, the company again mentioned the ATF audit as well as the settlement agreement and its “various measures designed to achieve our goal of positioning ourselves at the forefront of industry compliance efforts.” Yet the company once again repeated that the violations “related to inventory, record keeping, and reporting obligations” without going into further detail.⁴⁵Smith & Wesson, Form 10-K, April 30, 2009, 110, https://ir.smith-wesson.com/static-files/32d0b501-5cb5-4b43-b42f-ab1827b3e3d9; Form 10-K, April 30, 2010, 110, https://ir.smith-wesson.com/static-files/aa90a539-a144-4dea-a7dd-dc3748ad186f; Form 10-K, April 30, 2011, 111, https://ir.smith-wesson.com/static-files/cceb2980-5804-45ba-8f6e-c01db8c2eb17. Scott’s signature appears on all of these filings. But no other publicly available documents, including earnings call transcripts and later filings, were found discussing the ATF investigation.

Years later, in 2013, the ATF cited Smith & Wesson for four more violations after conducting an “importer’s compliance inspection” and partial inventory. The company failed to complete the forms required to notify the ATF of imported weapons, failed to submit those forms to the ATF within 15 days of the guns entering the country, failed to document the correct acquisition dates of imported firearms in its inventory records — a repeat violation from the 2007-2008 inspection — and failed to record the FFL numbers of the gun dealers who took possession of the imported firearms.⁴⁶FOIA Documents, 103-132. The gun maker was let off with a warning letter.⁴⁷FOIA Documents, 133-134.

It’s unclear what Smith & Wesson’s compliance measures look like today, or when it was last inspected. The ATF saw its own transformation under the Biden administration, which announced a “zero tolerance” policy in June 2021 tasking the ATF with revoking the licenses of FFLs who willfully violate certain federal laws, namely transferring a firearm to a prohibited person, failing to run a required background check, falsifying records, failing to respond to an ATF tracing request, or refusing to permit ATF to conduct an inspection in violation of the law.⁴⁸White House Briefing Room, “Fact Sheet: Biden-⁠Harris Administration Announces Comprehensive Strategy to Prevent and Respond to Gun Crime and Ensure Public Safety,” June 23, 2021, https://web.archive.org/web/20210623090809/https://www.whitehouse.gov/briefing-room/statements-releases/2021/06/23/fact-sheet-biden-harris-administration-announces-comprehensive-strategy-to-prevent-and-respond-to-gun-crime-and-ensure-public-safety/. Under the policy, the agency conducted more FFL inspections, found more violations, and revoked more FFLs. The inspection records reveal damning evidence of FFLs violating federal law — many of which were repeat violations from previous inspections.

Yet the National Shooting Sports Foundation (NSSF), the gun industry’s trade association — which counts many firearm executives as “governors,” including Robert Scott⁴⁹See NSSF, “NSSF Board of Governors,” accessed April 15, 2025, https://www.nssf.org/about-us/nssf-board-of-governors/. — attempted to play down the willful violations as “minor clerical errors” and claimed that the Biden administration was “weaponizing inspections” to “dismantle the firearms industry.”⁵⁰Larry Keane, “ATF’s ‘Zero-Tolerance’ Unrelenting and Revealing,” NSSF, July 6, 2023, https://www.nssf.org/articles/atfs-zero-tolerance-unrelenting-and-revealing/.

It was the NSSF that took credit for having the Trump administration rescind the “zero tolerance” policy, and the organization has also lobbied against proposals that would require FFLs to secure their inventories during non-business hours, calling them too “costly” and “burdensome,” and claiming that they would drive gun dealers out of business.

The inspection results revealed in these FOIA documents raise serious questions: Would the ATF have shut down a smaller company with such significant violations? And what do Smith & Wesson’s compliance efforts look like today? While the ATF flagged Smith & Wesson as the top manufacturer of crime guns recovered in nine Northeastern states back in 2007,⁵¹FOIA Documents, 1. more recent ATF data shows that between 2017 and 2021, Smith & Wesson was the second-leading manufacturer of pistol-type crime guns recovered and traced across the U.S. and the top manufacturer of revolver-type crime guns, representing 14 and 25.7 percent of all recoveries in those categories, respectively. Combined, the company produced over 237,000 of the crime guns recovered during those years.⁵²ATF, National Firearms Commerce and Trafficking Assessment, Volume II, “Part III: Crime Guns Recovered and Traced Within the United States and Its Territories,” 19-20, https://www.atf.gov/firearms/docs/report/nfcta-volume-ii-part-iii-crime-guns-recovered-and-traced-us/download.

Smith & Wesson has not published any inspection results. But one person who might know the answers to these questions is Robert Scott, who is still with the company after so many years. In 2020, Scott was elevated from Smith & Wesson board member to chairman,⁵³Smith & Wesson, “Robert L. Scott,” accessed April 28, 2025, https://ir.smith-wesson.com/board-member/robert-scott. and as the NRA put it, “[u]nder his watch, many new and innovative firearms — or even Smith’s rendition of existing models — have continued to aid the company’s rise.”⁵⁴Mark A. Keefe IV, “NRA Announces Its 2025 Golden Bullseye Pioneer Award Winner.” Scott is also the chairman of the NSSF board, and has served as its treasurer and vice president.⁵⁵NSSF, “NSSF Board of Governors.”

One thing is certain: Instead of setting an example for other manufacturers as a leader in the gun industry, Smith & Wesson spent years shirking its responsibilities and allowing guns to go missing while simultaneously making it harder for the ATF to trace crime guns, a fact made exponentially worse considering how many weapons Smith & Wesson produces — and how many fall into the wrong hands.

READ THE FOIA DOCUMENTS