Month: December 2012

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Behind The Cerberus Announcement Yesterday

December 19, 2012 by

As was mentioned yesterday in relation to the announcement that Cerberus Capital Management is putting the Freedom Group up for sale, the threat of the California State Teachers Retirement System to remove $500 million in investments from Cerberus was a good part of their rationale. It appears that CalSTRS was itself reacting to the bad press it was getting regarding their investment in Cerberus and, by extension, the Freedom Group.

From Dan Primack of Fortune.com in his rather anti-gun screed about CalSTRS’s investment in Cerberus:

Do you know who owns more than a 6% stake in the maker of .223
Bushmaster rifles, like the one used last Friday to murder 20 first
graders and seven adults in Newtown, Connecticut? California public
schoolteachers.

The company in question is Freedom Group, a privately-held firearms
conglomerate formed by private equity and hedge fund group Cerberus
Capital Management. Cerberus created the platform in April 2006 via the
acquisition of Bushmaster, after which it added another 10 makers of
firearms, ammunition and accessories (including Remington, Marlin Arms
and Barnes Bullets).

The California State Teachers’ Retirement System (CalSTRS) committed to invest
a whopping $500 million into a $7.5 billion Cerberus fund that has
helped bankroll Freedom Group. That means that it effectively could own a
6.67% stake in the gun maker, which filed to go public in late 2009
before pulling the offering in early 2011. In fact, the figure could be
even higher since CalSTRS also committed $100 million to a $1.4 billion
predecessor fund, which likely made the original investment.

CalSTRS has an investment policy statement that reportedly takes into account a number of risk factors including “social injury” and “human health”. Primack thinks their indirect investment in the Freedom Group violated this investment policy statement. He then serves up this bit of codswallop:

But I also think that it’s time for our large nonprofit institutions to
put some of their money where their mission is. Profit should be the
primary goal of their investment offices, but not at the expense of
their broader purposes. If a schoolteachers union or university
endowment or nonprofit foundation truly cares about stopping the next
mass killing, then they should not provide capital that produces the
instruments of such destruction.

By Primack’s rationale, CalSTRS then should not invest in any company that makes or deals in petroleum products, agricultural fertilizers, metal hardware, garden tools, or any number of other products that could have been used to make improvised explosives or sharp pointy things.

Obviously, this sort of nonsensical criticism found its mark with the CalSTRS’s investment board. They released this statement regarding their investment with Cerberus and the pending sale of the Freedom Group.

WEST SACRAMENTO, CA – The California State Teachers’
Retirement System (CalSTRS) released a statement today regarding its
investments in private equity funds managed by Cerberus Capital
Management that are invested in the Freedom Group, which manufactures
firearms:

“The tragic and devastating acts that took place December 14 at Sandy
Hook Elementary School in Connecticut have prompted many in this
country to call for change: To determine what we can do differently to
help ensure the unthinkable never happens again.

“In our case, CalSTRS investment staff immediately began reviewing
our investments in private equity funds managed by Cerberus Capital
Management (Institutional Series Three and Series Four) that are
invested in the Freedom Group, which manufactures firearms. Our
investments staff also initiated discussions with Cerberus to learn more
about the facts surrounding the investments.

“This morning, Cerberus Capital Management issued a statement (External link) noting its intent to immediately engage in a formal process to sell its investment holdings in the Freedom Group.

“Cerberus is a multi-strategy private equity firm. They invest in a
wide variety of firms and strategies; Financial Services, Healthcare,
Consumer & Retail, Manufacturing & Distribution, Building
Products, Energy & Natural Resources, Apparel, Paper, Packaging
& Printing, Transportation, Industrial & Automotive, and Travel
& Leisure.

“CalSTRS first invested in Cerberus Capital Series 3 in 2003, and
again in 2007 in Cerberus Capital Series 4 as part of the core Private
Equity program. The Freedom Group represents a very small investment
within these funds. CalSTRS owns 2.4 percent of Freedom Group, not 6.67
percent as reported by some media outlets.

“CalSTRS has established a thorough vetting process for potential
investments that seeks to test not only their financial potential, but
their social, human and environmental impacts as well. In fact, current
policies require that the risks associated with products that pose
significant threats to human well-being be taken into account before an
investment is made by CalSTRS investment managers. They are outlined in CalSTRS 21 Risk Factors (PDF – 5.5MB), which we adopted in 2008 after our investments in Cerberus.

“Moving forward, CalSTRS will work to ensure that all of our
investments are taking these very important criteria into
consideration.”

The California State Teachers’ Retirement System, with a
portfolio valued at $154.8 billion as of October 31, 2012, is the
largest educator-only pension fund in the world. CalSTRS administers a
hybrid retirement system, consisting of traditional defined benefit,
cash balance and voluntary defined contribution plans, as well as
disability and survivor benefits. CalSTRS serves California’s 856,000
public school educators and their families from the state’s 1,600 school
districts, county offices of education and community college districts.

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SAF & CCRKBA Propose National Commission On Causes Of Violence

December 19, 2012 by 3 Comments

The Second Amendment Foundation and the Citizens Committee for the Right to Keep and Bear Arms has proposed a national commission to study the causes of violence. Rather than focus solely on the tools, i.e., guns, they are proposing to find the root cause of why you have people go so far off the rails as in Aurora or Newtown. I think this is a much more valuable approach to the tragedy in Newtown than passing more laws that will never stop a madman but might prevent the good people from defending themselves.


BELLEVUE, WA – Two leading national gun rights organizations are calling
for the creation of a national commission to study the causes of
violence in America, and offer possible preventive measures.

The Second Amendment Foundation and Citizens Committee for
the Right to Keep and Bear Arms said that a national dialogue on
violence has already begun in the wake of the Sandy Hook school tragedy,
but that a national commission would be more able to address the
complexity of this dilemma.

“If we don’t identify and get at the root causes of
violence,” said CCRKBA Chairman Alan M. Gottlieb of Bellevue,
Washington, “it won’t matter how many guns you ban, you will still have
violence. There were no guns around when Cain slew Abel, and throughout
recorded history, mankind has engaged in considerable violence. Only in
the past two centuries have firearms played a historic significance.”

“Connecticut already has laws regulating firearms and even
modern semi-automatic rifles,” noted SAF President Joseph Tartaro of
Buffalo, New York. “They did not prevent what happened in Newtown, any
more than Norway’s laws, or Germany’s or Russia’s prevented some of the
recent mass murders in those countries.

“If the public policy debate which is sure to follow,”
Tartaro continued, “focuses solely on gun law solutions and ignores all
the other key questions, we will have done a disservice to the memories
of all the victims of such madness in Connecticut, in Colorado, in
Oregon, or anywhere else.”

Both gun rights leaders noted that violence is a problem in the United States, and “we need to solve it.”

“Gun owners are like anyone else,” Gottlieb observed. “We
have families, we have children and grandchildren. We want to keep them
safe. We walk the same streets as any other citizen, and many gun owners
have decided to protect themselves and their families. Our rights as
gun owners should not be sacrificed in the interest of providing the
illusion that ‘something’ is being done.

“Any meaningful discussion on violence,” Gottlieb added,
“would need to include mental health, violent video games, television
shows and films, media malpractice that sensationalizes violence and the
dangerously false sense of security created by so-called ‘gun-free
zones’.”

“If we have a debate,” Tartaro concluded, “let’s make it a broad and meaningful one.”

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Cerberus Moves To Ditch The Freedom Group

December 18, 2012 by 4 Comments

The Wall Street Journal is reporting that Cerberus Capital Management plans to sell their firearms manufacturing arm in the wake of the Newtown tragedy. Their statement below says that they don’t want to be pulled into a national political debate concerning firearms.

Cerberus Capital Management Statement Regarding Freedom Group, Inc.


NEW YORK, Dec. 18, 2012 /PRNewswire/ — We were shocked and deeply
saddened by the events that took place at the Sandy Hook Elementary
School in Newtown, CT on December 14, 2012.  We cannot comprehend the
losses suffered by the families and friends of those killed by the
unthinkable crimes committed that day.  No words or actions can lessen
the enormity of this event or make a dent in the pain that was inflicted
on so many.


In 2006 affiliates of Cerberus Capital Management, L.P. made a
financial investment in Freedom Group.  Freedom Group does not sell
weapons or ammunition directly to consumers, through gun shows or
otherwise.  Sales are made only to federally licensed firearms dealers
and distributors in accordance with applicable laws and regulations.  We
do not believe that Freedom Group or any single company or individual
can prevent senseless violence or the illegal use or procurement of
firearms and ammunition. 


It is apparent that the Sandy Hook tragedy was a watershed event that
has raised the national debate on gun control to an unprecedented
level.  The debate essentially focuses on the balance between public
safety and the scope of the Constitutional rights under the Second
Amendment. As a Firm, we are investors, not statesmen or policy makers. 
Our role is to make investments on behalf of our clients who are
comprised of the pension plans of firemen, teachers, policemen and other
municipal workers and unions, endowments, and other institutions and
individuals.  It is not our role to take positions, or attempt to shape
or influence the gun control policy debate. That is the job of our
federal and state legislators.


There are, however, actions that we as a firm can take.  Accordingly,
we have determined to immediately engage in a formal process to sell our
investment in Freedom Group.  We will retain a financial advisor to
design and execute a process to sell our interests in Freedom Group, and
we will then return that capital to our investors.  We believe that
this decision allows us to meet our obligations to the investors whose
interests we are entrusted to protect without being drawn into the
national debate that is more properly pursued by those with the formal
charter and public responsibility to do so.

Our thoughts and prayers are with the families and communities impacted by this tragic and devastating event.

The Freedom Group which has been renamed Remington Outdoor Company, Inc. consists of Remington, Bushmaster, DPMS/Panther Arms, Remington Military, Remington LE, Parker Gunmakers, Barnes Bullets, Advanced Armament, Tapco, Dakota Arms, Marlin, Para-USA, H&R, Mountain Khakis, and Remington PMPD.

Among the upper management of Cerberus are such political figures as former VP Dan Quayle and former Treasury Secretary John Snow. Steve Feinberg, CEO of Cerberus, is reportedly an avid hunter and shooter. According to the Journal, Cerberus came under pressure from certain investors to sell the unit.

Cerberus’s statement comes shortly after it faced pressure Monday from
former New York Governor Eliot Spitzer as well as the California State
Teachers Retirement System, which said it is reviewing a $500 million
investment commitment to the New York-based private-equity firm.

 I find the move by Cerberus to sell Freedom Group aka Remington Outdoor Company much more disturbing than the nonsense coming from the gun prohibitionists and their politician allies. To me it seem a great harbinger of the difficulties that lie ahead for us with regards to gun rights. Investment capital companies such as Cerberus are known to make decisions on numbers and fact without dealing in emotion. They obviously feel that the business environment for them will be difficult in the days ahead due to political forces. The Freedom Group companies manufacture a lot of AR-15s and these are the focus of the gun prohibitionists.

For the firearms industry, this move by Cerberus may actually be beneficial. If the new owners of Remington Outdoor Company are not beholden to public employee/union pension funds and other institutional investors, it will be a good thing. The unity of the firearms industry in the face of the threat of legislation is paramount. They don’t need the management of one of the major players to go wobbly such as is evident in the response of Cerberus.

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And Gun Control Would Have Prevented This How?

December 17, 2012 by 1 Comment

Perhaps the gun prohibitionists would care to explain this and how any new gun control laws would have kept these guns off the street.


Truck driver Elliot Perez and his accomplice Michael Murphy were indicted in US District Court in Bridgeport, CT for stealing 111 firearms from Smith and Wesson.

According to the indictment against them, on November 8, Perez had a scheduled delivery of guns to pick-up at Smith & Wesson in Springfield. He was supposed to pick up five boxes of firearms to bring back, but ended up taking an additional three. Driving back down to Connecticut, he allegedly stopped at his Bridgeport home and met with Murphy before bringing the truck to his company’s warehouse in Stratford, where he unloaded only the five that he was supposed to deliver.

The indictment charges that on November 15, Perez and Murphy sold one of the stolen guns to another individual. Five days later, when questioned by ATF special agents, Perez allegedly lied and said that a “black male” at Smith & Wesson had instructed him on which boxes he was supposed to load onto the truck, adding that he had dropped off all of the cases of guns at the company warehouse.

At the time of the two men’s arrests days later, Stratford Police had only been able to recover 28 of the stolen guns.

Charges include conspiracy, possession of stolen firearms, trafficking, and making false statements to a law enforcement officer.

Perez was not an employee of Smith and Wesson. He worked for a trucking company contracted to handle transportation services for S&W.

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The Kirsten Gillibrand Of West By God Virginia

December 17, 2012 by 4 Comments

That was then:

This is now. From MSNBC’s Morning Joe:

“I’m a proud outdoors-man and huntsman, like many Americans, and I like
shooting, but this doesn’t make sense,” Manchin said. “I don’t know
anyone in the sporting and hunting arena who goes out with an assault
rifle; I don’t know anyone who needs 30 rounds in the clip to go
hunting.”

I think Joe Manchin needs to be reminded that the Second Amendment has nothing to do with either duck hunting or deer hunting. It has everything to do with being able to protect yourself and your family. That includes protecting yourself from state-sponsored violence and a tyrannic government.

Manchin said that after the fiscal cliff is resolved, this will be a high priority.

Newtown’s shooting “has changed the dialogue and it should move beyond dialogue, we need action.”

With people like Joe Manchin who sways with the politically-expedient winds, is it any wonder that the country is in such trouble?

UPDATE: The West Virginia Citizens Defense League has scheduled a protest outside of Joe Manchin’s Charleston, WV office on Saturday, December 22nd. It is scheduled for 10am. The location is 300 Virginia Street East. See their Facebook page for more details.

H/T Sebastian

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Comment Of The Day

December 17, 2012 by

It is no surprise that the gun prohibitionists and their politician allies have gone into a feeding frenzy after the murders in Connecticut. With a new session of Congress only weeks away, politicians are already announcing their plans for new draconian gun control laws egged on by the President who is calling for “meaningful action”.

The comment of the day comes from Frank James in response to a post by Tam on her View from the Porch blog.

I think up till now we’ve all been operating under condition ‘Orange’ and now it’s gone to ‘Red’.

When Congress reconvenes next year I look for the situation to go to condition ‘Black’. (No pun intended!)…

I think the good Colonel would approve of this use of his color code with regard to the intentions of the hoplophobes.

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Ham Radio Communications Cheat Sheet

December 17, 2012 by 2 Comments

I came across this infographic on Pinterest this morning. It was developed by the folks at OffGridSurvival.com and gives the new amateur radio operator something of a cheat sheet.

I found it very useful as I have my Technician Class amateur radio license. While I really haven’t really pursued it that much, I got the license and radio so as to be prepared. While a Katrina or Sandy is unlikely in western North Carolina, we do lose power, we do have flood situations, we do get the remnants of hurricanes, and sometimes we do get blizzards. It is nice to have some means of communication in those situations beyond smoke signals and semaphore flags.

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Quote Of The Day

December 16, 2012 by 3 Comments

The quote of the day comes from Say Uncle concerning all the laws broken by the madman in Connecticut. Given that all these laws didn’t stop him, why do some people think another law would have stopped him?

A 20 year-old had a couple of handguns (illegal). And, depending on the press report, had an assault weapon (illegal), automatic rifle (illegal), or machine gun (illegal). Shot his mom in the face (illegal). Stole his mom’s vehicle (illegal). Transported the gun in the vehicle (illegal) within 1,000 feet of a school (illegal). Carried it onto school property (illegal). Broke and entered (illegal). Carried a gun in a school (illegal). Discharged a firearm (illegal). Shot at people (illegal). Killed some people (illegal). Killed himself (not sure if illegal).

And I’m sure broke other laws I’m not aware of. But, you know, one more gun law ought to do it. Right?

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Vile Opportunist(s)

December 15, 2012 by 3 Comments

On a day that should have been reserved for thought, reflection, and praying for the repose of the souls of those killed in that school in Connecticut, certain gun prohibitionists just couldn’t resist the temptation to call for more gun control. Never mind that gun control has never stopped any madman in a officially gun-free zone, the siren call proved too great for some of them.

In proof of the saying that money can’t buy class comes this statement from Mayor Bloomberg:

“With all the carnage from gun violence in our country, it’s still
almost impossible to believe that a mass shooting in a kindergarten
class could happen. It has come to that. Not even kindergarteners
learning their A,B,Cs are safe. We heard after Columbine that it was too
soon to talk about gun laws. We heard it after Virginia Tech. After
Tucson and Aurora and Oak Creek. And now we are hearing it again. For
every day we wait, 34 more people are murdered with guns. Today, many of
them were five-year olds. President Obama rightly sent his heartfelt
condolences to the families in Newtown. But the country needs him to
send a bill to Congress to fix this problem. Calling for ‘meaningful
action’ is not enough. We need immediate action. We have heard all the
rhetoric before. What we have not seen is leadership – not from the
White House and not from Congress. That must end today. This is a
national tragedy and it demands a national response. My deepest
sympathies are with the families of all those affected, and my
determination to stop this madness is stronger than ever.”

His erstwhile colleague in the Illegal Mayors, Boston’s Thomas Menino joined in the fray and included automatic weapons in his call for more gun control:

“As a parent and grandparent, I am overcome with both grief and outrage
by the tragedy in Newtown, Connecticut. This unspeakable act of violence
will forever imprint this day in our hearts and minds. My heart goes
out to the families impacted by this senseless tragedy and the many
others we have recently witnessed across the United States. As a Mayor
who has witnessed too many lives forever altered by gun violence, it is
my responsibility to fight for action. Today’s tragedy reminds us that
now is the time for action. Innocent children will now never attend a
prom, never play in a big game, never step foot on a college campus. Now
is the time for a national policy on guns that takes the loopholes out
of the laws, the automatic weapons out of our neighborhoods and the
tragedies like today out of our future.” 

Josh and Ladd were not to be outdone at the Coalition to Stop Gun Violence (sic):

THOUGHTS AND PRAYERS ARE NOT ENOUGH

Washington, DC—We can only imagine the scale of the human tragedy that has unfolded in Newtown, Connecticut as reports continue to emerge about the massacre committed at Sandy Hook Elementary School. There are many parents, brothers, sisters, husbands, wives, and others who will now never see their loved ones again, never again know the warmth of their presence, never see their potential realized over the course of their natural lives. While shockingly familiar, the nature of this tragedy has left those of us at the Coalition to Stop Gun Violence feeling shaken to our core, physically and spiritually sick that this could happen in a civilized society in a place of learning for children.

Our elected leaders, in the coming hours, will issue the typical platitudes to those who have seen their loved ones gunned down in cold blood, telling them, “Our thoughts and prayers with you.” Then, if the pattern holds, they will immediately retreat into silence and refuse to engage in any meaningful debate about America’s catastrophically flawed gun laws, which directly facilitate one gun massacre after the next.

To people of conscience, this should not be acceptable. After today’s horror, Americans must demand immediate action by our President and Congress to reform our gun laws. This must include legislation requiring background checks on all gun sales, strengthening those background checks (particularly in terms of mental health and substance abuse screening), and renewing the ban on military-style assault weapons and high-capacity ammunition magazines. We expect President Obama—as a man who has seen first-hand the devastation that gun violence inflicts on families and communities during his time as a volunteer in Chicago—to be a leader in this process and to speak out boldly and directly.

If we’ve reached a point where our children cannot attend school without fear of being gunned down by a homicidal maniac who has obtained easy access to firearms, then the freedom we cherish as citizens of the world’s greatest democracy is at risk of extinction.

More than a dozen children were massacred in a kindergarten classroom today. If elected officials cannot find their voices now and call for change—if NRA campaign contributions and threats continue to dictate their decision-making, taking priority over the preservation of life, liberty and the pursuit of happiness—what will it say about them?

Moreover, if we allow them to remain silent, what will it say about us?

Dan Gross of the Brady Campaign was more reserved on the surface though I have heard reports that fund-raising e-mails went out yesterday.


Like all Americans, our hearts are broken by this terrible tragedy. We send our thoughts and prayers to all those directly affected. Across the country, we will be giving extra strong hugs to our kids when they come home safely from school. But in the name of those who didn’t and in the name of the eight children and teens that die from guns every day in our nation, we cannot let it end there. We have to take terrible moments like this and use it as a catalyst to demand the sensible change in our nation that is too long overdue. We are better than this.

Please go to WeAreBetterThanThis.org and sign the letter of condolence to the families of the victims in Connecticut We all just want to live in a safer nation.

One wonders how soon after sending the “letter of condolence” will you be put on a mailing list for fund-raising purposes. I’d wage sooner than later.

The Violence Policy Center seems to have no official release on the matter. Nonetheless, on their links to the stories about the tragedy, they can’t resist noting that Newtown, CT is also home to the National Shooting Sports Foundation. How subtle.

LCAV or the Law Center to Prevent Gun Violence as they are now known had not one but two posts calling for more gun control.

It would be too much to expect that Rep. Carolyn McCarthy (D-NY) remain silent and I was right.

GARDEN CITY, NY – Rep. Carolyn McCarthy (D-NY4) issued the following statement on today’s school shooting in Newtown, Connecticut:

“Our hearts go out to the victims and families from this horrific tragedy, especially during the holidays when kids should be thinking about presents and having fun with their families and friends, not America’s deadly problem with gun violence.

“There are a lot of unanswered questions right now, but one thing is clear – there’s too much gun violence in our country. These shootings are becoming all too common, and it’s too easy for dangerous people to get the weapons that help them perform mass executions like today’s.

“Leaders in Washington from both parties, and groups like the NRA, all say that now is not the time to talk about how gun safety laws can save lives in America. I agree, now is not the time to talk about gun laws – the time for that conversation was long before all those kids in Connecticut died today.

“We owe it to our children to work harder to reduce gun violence. The Second Amendment is the law of the land but it was never intended to allow murderers to take the lives of innocent kids. It’s our moral obligation as policymakers and as parents to do more to save lives.

“I hope the President’s words about taking ‘meaningful action to prevent more tragedies like this regardless of the politics’ stay true as we continue down this road again.”

I’m sure there are more statements such as these but I can stand only so much. It goes without saying that there will be more calls for gun control and “meaningful action” in the coming days. The Newtown tragedy is, and I hate to say it, tailor-made for the gun prohibitionists’ purposes. It reads like something out of a Matthew Bracken novel in terms of its utility for more gun control legislation. We need to be prepared for it and get ready to act to stop any of this misguided legislation.