Nevertheless, eight years elapsed before federal authorities shut it down.
The Seattle Times reported Sunday that the case highlights how budget cuts and regulatory restrictions that Congress has imposed under pressure from the gun lobby have made it difficult for the ATF to do its job. In 2012, the Seattle division had only 27 inspectors to cover more than 4,000 licensed gun dealers in five states and Guam. The Justice Department’s inspector general has found that the agency is understaffed.
“They say, ‘Here’s a shovel and a pick, now dig a tunnel under Mount Rainier,’ “ said Special Agent Cheryl Bishop, spokeswoman for the Seattle division. “Then they come back a year later and say, ‘Gee, you didn’t get very far.’?”
In its 2005 inspection of Kesselring Gun Shop, the ATF not only discovered 2,396 unaccountable weapons but also a host of other illegalities: failing to secure caches of explosive powder; selling guns to customers who couldn’t pass background checks; not confirming the identity of buyers in 78 instances; and neglecting to report missing guns to law enforcement.
James Zammillo, a former ATF deputy assistant director, called the lapses “stunning.”
Despite years of high-volume business and red flags, such as dozens of its weapons being linked to crimes, the ATF does not appear to have inspected Kesselring before 2005. And that inspection came only after the shop accused an employee of stealing weapons — an employee who had filed a worker’s compensation claim over a back injury.
It took agents four months to untangle the family owned company’s records. They found that on hundreds of occasions, Kesselring employees failed to have gun buyers provide key information on purchase forms, and that in more than 500 cases, Kesselring workers did not document the outcomes of instant background checks.
During the next five years, the store’s business continued unabated. Only in 2010, a year after the store had a record $14.6 million in sales, did ATF ask Kesselring’s owners to attend a warning conference about the five-year-old violations, The Times reported.
It took another three years — marked by many more background-check and record-keeping violations — before the agency forced Kesselring to surrender its firearms license for “willful” misconduct last October.
Company President Don Kesselring blamed the downfall on dishonest employees, lax security and an outdated paper-accounting system. He called the ATF audit “unprofessional.”
According to court records, the shop ran on a system of cash-stuffed envelopes kept by Frances Kesselring, the mother of the three brothers who ran the store. When receipts came up short, cash would come out of an envelope to make up the difference. When there was an overage, money was tucked into an envelope for a rainy day.
The Kesselrings routinely took cash from the till, buying everything from guns to cars and property, according to documents.
Shawn Hoines, the former warehouse manager who filed the worker’s compensation claim, said he believes staff and customers engaged in routine thievery. Many weapons were stored on open racks in the middle of the store, he noted.
“Thousands of dollars went out the back door,” Hoines said. “Most of it was guns, I’m sure.”
The youngest of the three Kesselring brothers, Brad, committed suicide in 2009, leaving a note that admitted he had stolen nearly $850,000 from the business.
That it took the ATF nearly five years to bring Kesselring’s owners in for a warning conference may appear negligently lax. But the agency has said for years it needs at least 500 more compliance inspectors just to visit each gun dealer within five years, an ATF goal.
Nationally, three of five dealers haven’t been inspected in five years or longer. In 2012, only 8.4 percent of dealers were inspected.
A lawsuit among the brothers required that the inventory from the defunct store be sold and the proceeds distributed. Just before the auction, said Andrew Wilson, a court-appointed receiver overseeing the sale, ATF inspectors combed through the inventory one more time.
In keeping with the shop’s history, they turned up 17 guns earlier believed to have been lost, stolen or missing, the Times reported.
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