Skip to content


The Smith & Wesson Agreement

How a boycott almost bankrupted America’s largest gun maker after it agreed to reforms



After years of lawsuits and negotiations, the four largest tobacco companies in the U.S. entered into the Master Settlement Agreement (MSA) in November 1998 with the attorneys general of 46 states, Washington, D.C., and five territories. The settlement limited Big Tobacco’s marketing practices, exposed internal documents, and forced the companies to pay billions of dollars in yearly installments.1See Truth Initiative, “Master Settlement Agreement,” accessed May 17, 2023,; and Colorado Attorney General, “Tobacco Master Settlement Agreement and Enforcement,” accessed August 1, 2023,

Many cities then began adopting the same tactics to sue gun manufacturers and dealers for their role in perpetuating gun violence. New Orleans was the first to step forward and sue Smith & Wesson in October of 1998, alleging that the company’s sales of guns without locking devices or safety mechanisms cost the city millions of dollars as a result of gun violence.2See Morial v. Smith & Wesson, Dozens of other cities eventually followed suit, targeting Smith & Wesson as well as other gun makers like Colt, Glock, Kel-Tec, and several others.3Timothy D. Lytton, “Lawsuits Against the Gun Industry: A Comparative Institutional Analysis,” Connecticut Law Review, 2000, p. 1260,

A Shooting Spurs Action

Then, on April 20, 1999, the Columbine attack occurred, becoming the deadliest high school shooting in U.S. history at the time. This spurred New York’s then-attorney general “to take the lead” in July of 1999, “holding closed-door meetings with prominent gun makers like Colt’s Manufacturing of Hartford and Smith & Wesson of Springfield, Mass. Sporadic talks organized by former Mayor Edward G. Rendell of Philadelphia and others had sputtered, despite a backdrop of threatened or filed lawsuits by more than two dozen cities like Bridgeport, New Orleans, Atlanta and Chicago, which were trying to force gun makers to add safety devices and to pay for the medical treatment of gunshot victims.

“Talks started with a small group of gun makers, then were expanded at the gun makers’ insistence to include the industry trade group, the National Shooting Sports Foundation, which was much more resistant to the proposals.”4Eric Lipton, “Duel for the Limelight: A special report; Behind Gun Deal, 2 Ambitious Democrats Wrestle for the Credit,” The New York Times, April 3, 2000,

Eventually, in December 1999, Andrew M. Cuomo, then-secretary of the U.S. Department of Housing and Urban Development (HUD), spearheaded the Clinton administration’s effort to bring gun manufacturers to the negotiating table. According to Cuomo, “In December 1999, with White House coordination, I publicly said that HUD was considering filing a class-action lawsuit against gun manufacturers on behalf of the nation’s 3,191 public housing authorities” and their 3.25 million residents. “At his regular press briefing the next day, President Clinton told reporters that the proposed suit wasn’t to get money from manufacturers but to pressure them to change ‘irresponsible marketing practices.’”5Andrew M. Cuomo, All Things Possible: Setbacks and Success in Politics and Life (New York; Harper  2014), 491. See also Sharon Walsh, “Gunmakers Up in Arms Over HUD Plan to Sue Them,” Washington Post, December 9, 1999,

News articles from the time confirm this.6Charles Babington, “U.S. Plans Role in Gun Lawsuits,” Washington Post, December 8, 1999, According to Cuomo, the New York Attorney General “and the ATF had tried such talks and failed. But I thought there was a win-win. The gun manufacturers needed the lawsuits to end. Any suit could bankrupt the industry.”7Cuomo, All Things Possible, 492.

The Negotiations

For its part, Smith & Wesson, the largest gun maker in the country, was facing over 30 lawsuits.8Mark Kukis, “Government, Smith & Wesson announce deal,” UPI, March 17, 2000, This appears to have been a factor in driving the company’s then-CEO, Ed Shultz, to negotiate.

According to Cuomo, “My HUD deputy general counsel, an intense, thorough guy named Max Stier, called five gun manufacturers. He heard back from none. We were disappointed but not surprised. But one day in January 2000, Max burst into my office, yelling, ‘He talked to me! He talked to me!’ ‘He’ was Ed Shultz, the chief executive of Smith & Wesson.

“I immediately followed up with Shultz, a no-nonsense, fifty-something Iowan, who unlike most gun executives hadn’t grown up in the business. His previous job had been as a president of a company that made office furniture.” Cuomo contends that Shultz “had been the first of the eight American gun manufacturers that had voluntarily provided child safety locks” in 1997. “He had a reputation as a smart businessman.”9Cuomo, All Things Possible, 492.

Cuomo recalls telling Shultz, “We’re interested in two things: making guns safer and keeping them out of the wrong hands. We want to talk to you about changes that have been proven to make a difference. At the same time, we can get you what you need. This is your best hope for protecting Smith & Wesson from all the lawsuits.”10Ibid, 493.

Shultz agreed to talk, but only on condition of absolute secrecy. According to Cuomo, Shultz met with Max Stier and Neal Wolin, general counsel for the Treasury Department, which oversaw the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) at the time, at the Nashville airport.11Ibid, 494. Over airport barbecue, the group discussed “the administration’s wish list,” which included a supply-side version of what the ATF uses today for recovered crime guns. “Besides safety locks, we wanted ballistic fingerprinting so guns recovered from crime scenes could be traced back to their source. It was a simple fix: Every firearm would be test-fired at the factory. A computer image of that casing, and the unique marks caused by firing, would be cataloged and available to every law enforcement agency. When a casing was found, the police would scan it and identify it as, for example, a Smith & Wesson 9mm handgun, serial number XYZ123.”12Ibid, 494-495.

According to Cuomo, “Another priority was a limit of one gun per customer per month. This would substantially reduce gun trafficking.” The first meeting was the beginning of several that took place at airports around the country as well as the U.S. Mint in Washington, D.C. Another manufacturer joined in as well, albeit briefly. According to Cuomo, “In February, Shultz brought Paul Jannuzzo, general counsel and vice president of Glock, into the discussions. Having another manufacturer present made Shultz more comfortable. But Jannuzzo and Shultz had different views about what would or wouldn’t work. Shultz believed smart guns were technologically feasible. Jannuzzo did not.”13Ibid, 495-496.

As a result, Glock bowed out in early March, but progress continued with Smith & Wesson. Between in-person meetings, Cuomo talked to Shultz, and they met on March 15, 2000, “near the Hartford Airport in Connecticut, close to the Smith & Wesson Headquarters in Springfield, Massachusetts,” along with Max Stier, Neal Wolin, and Stuart Eizenstat, the deputy treasury secretary at that time.14Ibid, 496.

After five hours of negotiations, Smith & Wesson agreed to several reforms, outlined below, while Cuomo and his team promised to have the municipal lawsuits dropped.15Ibid, 497. The next day, they “made call after call. Fifteen of the cities agreed to drop Smith & Wesson from their suits. Ed sounded pleased, and relieved, when I told him. The others were considering it or checking with their higher-ups.”16Ibid, 498.

After five hours of negotiations, Smith & Wesson agreed to several reforms…while Cuomo and his team promised to have the municipal lawsuits dropped.

Details of the Agreement

The deal was announced on March 17, 2000, at HUD with several officials from the cities that dropped their suits. Shultz did not attend, blaming a snowstorm, but made brief remarks over the phone.17Ibid, 498. The Clinton administration applauded the agreement, stating that it “represents the first time a major gun manufacturer has committed to fundamentally change the way guns are designed, distributed and marketed. This deal shows what is possible when we work together in good faith. We applaud Smith and Wesson’s leadership, and hope other responsible members of the gun industry will step forward too.”18White House Office of the Press Secretary, “Clinton Administration Reaches Historic Agreement with Smith and Wesson,” March 17, 2000,

The 23-page agreement (available here) contained a number of provisions. Notably, Smith & Wesson agreed to:

  • produce handguns with second “hidden serial numbers, manual safeties, loaded-chamber indicators, the option of a magazine disconnect safety, internal and external locking devices, and measures that prevent children under 6 from operating them;
  • subject all of its firearm designs to performance and drop tests, and ensure no new designs could accept large-capacity magazines;
  • develop smart guns that could only be fired by authorized users within 36 months, allocating 2 percent of its annual revenue to that end;
  • not market guns in any matter that might appeal to juveniles or criminals;
  • maintain an electronic record of all ATF trace requests and participate in the ATF’s Access 2000 program (now called NTC Connect), which allows the agency to search a manufacturer’s records electronically for faster crime gun tracing;  
  • implement a code of conduct requiring that authorized dealers:
    • only operate in settings, such as gun shows, where background checks are performed on all gun sales from all vendors;
    • train employees to look for straw purchasers and other signs of gun trafficking;
    • secure their inventories and maintain an electronic inventory tracking plan; and
    • require that anyone under the age of 18 be accompanied by an adult in gun shops or the firearm sections of sporting goods stores;
  • cooperate with an Oversight Commission established by the agreement;
  • forgo firearms sales to licensed dealers known to be under indictment or that have a disproportionate number of crime guns traced to them; and
  • dedicate 1 percent of all firearm revenue to an education trust fund.

The Industry’s Immediate Backlash

The NRA called the agreement the “Smith & Wesson Sellout” and “an act of craven self-interest.” “The price of S&W’s maneuver falls primarily on others — lawful firearms dealers, distributors, other manufacturers and law-abiding American citizens.”19NRA-ILA, “The Smith & Wesson Sellout,” March 20, 2000,

Robert T. Delfay, the president of the National Shooting Sports Foundation, said, “This is an ill-conceived action on the part of one of the most revered names in the American firearms industry. Smith & Wesson has agreed to a laundry list of actions and concessions, some of which are already law, some of which all major handgun manufacturers are already doing and some of which Smith & Wesson has no power or authority to deliver.”20Edward Walsh and David A. Vise, “U.S., Gunmaker Strike a Deal,” Washington Post, March 18, 2000,

For a moment, it appears that Glock was considering its own settlement to become “the first gun maker to follow Smith & Wesson” and not lose important law enforcement contracts. Jim Pledger, Glock’s national sales manager at the time, said, “We’re carefully reviewing the proposal that Smith & Wesson agreed to, and we’re trying to see what our position needs to be. What we need to do is make a good business decision and a good decision related to public policy.”21Eric Lichtblau, “Gun Maker Glock Weighs Liabilities Pact,” Los Angeles Times, March 21, 2000, But the company quickly reversed itself. Glock’s Paul Jannuzzo, who briefly participated in the original meetings with Shultz, said, “It’s not a reasonable agreement. They’re going to try to control a consumer’s behavior.”22“Glock refuses to sign on to Smith & Wesson deal,” CNN, March 21, 2000,

The NRA called the agreement the ‘Smith & Wesson Sellout’ and ‘an act of craven self-interest.’

The NRA rebuked Smith & Wesson, instigating a boycott of Smith & Wesson products23Leslie Wayne, “After taking bullets, Smith & Wesson lives,” The New York Times, April 6, 2006, and claiming that the rules in the agreement “apply to all guns in the store, not just Smith & Wessons.”24Mike Rosenwald, “Smith & Wesson deal decried in gun stores,” Post-Gazette, March 24, 2000,

“Consumers began refusing to buy S&W products and the market became flooded with used S&W goods that people wanted no part of. Gun enthusiasts saw the company as breaking solidarity with them, as a traitor and perpetrator of gun control. Consumers severely punished the firm for its disloyalty,” and the company “experienced an immediate sales decline of nearly 40 percent in the year after its compromise.”25Christina Austin, “How Gun Maker Smith & Wesson Almost Went Out Of Business When It Accepted Gun Control,” Business Insider, January 21, 2013,

The “boycott nearly destroyed Smith & Wesson, forcing its sale to new ownership, and resulted in Shultz’ ouster as CEO,” by September 2000.26Jim Kinney, “Ousted Smith & Wesson CEO Ed Shultz reflects decades after deal with President Bill Clinton drove him from business,” MassLive, October 10, 2021, British conglomerate F.H. Tomkins PLC “sold Smith & Wesson to an American start-up” called Saf-T-Hammer “for $15 million—a fraction of the $100-plus million it had paid for the gunmaker” in 1987.27Avi Selk, “A gunmaker once tried to reform itself. The NRA nearly destroyed it.” Washington Post, February 27, 2018,

The Industry Lobbies for Immunity

The Smith & Wesson agreement was never enforced, and no deals materialized with other gun makers. In fact, as the Clinton administration was working with Smith & Wesson to hammer out its deal, the firearms industry, with help from the NRA, “lobbied state legislatures to pass legislation prohibiting cities from bringing tort claims against gun manufacturers.” As of 2000, these efforts were “successful in thirteen states, including Texas, Georgia and Louisiana”28Timothy D. Lytton, “Lawsuits Against the Gun Industry: A Comparative Institutional Analysis,” Connecticut Law Review, 2000, p. 1265, before becoming codified federally with the Protection of Lawful Commerce in Arms Act (PLCAA) of 2005, which provides broad legal protections to the gun industry.

This coincides with the rise of presidential hopeful George W. Bush, who received promising Super Tuesday results just 10 days before the Smith & Wesson agreement was made.29Ian Christopher McCaleb, “Gore, Bush post impressive Super Tuesday victories,” CNN, March 8, 2000, According to Cuomo, gun manufacturers knew that he would give them legal immunity, as his home state had passed legislation to do just that. “The possibility that a Bush presidency would put an end to the cities’ lawsuits stopped our negotiations with other gun makers. The manufacturers said, in essence, We can wait this out. If George W. Bush wins, we will have immunity, and the Smith & Wesson agreement will be moot. And, with that, it was.”30Andrew M. Cuomo, All Things Possible, 503.

The Bush administration backed away from the Smith & Wesson agreement.31Gary Fields, “Bush Administration Backs Away From Deal With Smith & Wesson,” Wall Street Journal, August 1, 2001,

Years later, during an interview in 2021, former Smith & Wesson CEO Shultz said that he didn’t regret agreeing to reform the company’s business practices. “At one point, both sides were genuinely trying to come to some agreement.”32Jim Kinney, “Ousted Smith & Wesson CEO Ed Shultz reflects decades after deal with President Bill Clinton drove him from business,” MassLive, October 10, 2021, Notably, the article features a photo of Shultz with a “working prototype” of a .40-caliber smart gun that Smith & Wesson had been working on in 2000.

Former Smith & Wesson CEO Ed Shultz holds a working prototype of a .40-caliber smart gun. (AP Photo/Steve Miller)