Jannuzzo reacted nimbly to the administration’s intimidation. He jabbed and feinted, coordinating courtroom efforts to get the municipal suits dismissed while quietly talking to emissaries from the cities and Washington. Glock and Smith & Wesson, more than other manufacturers, depended on the patronage of government customers buying their handguns. Both Glock and S&W also had foreign owners hesitant to antagonize the White House. Tomkins, the British conglomerate that had acquired Smith & Wesson in 1987, was particularly keen to resolve the liability issues because it wanted to sell the struggling Massachusetts-based company. Jannuzzo suspected that S&W’s American CEO, Ed Shultz, might try to cut a deal with the Clinton administration in exchange for government contracts. Keeping an eye on Shultz, Jannuzzo attended a number of secret settlement talks with administration lawyers in Washington, including sessions held in an unoccupied wing of the United States Mint.
As a legal-affairs reporter at the Wall Street Journal , I tried to decipher the increasingly puzzling gun litigation and backroom negotiation. I spoke frequently with Jannuzzo, Shultz, and their government contacts as they maneuvered for advantage. For public consumption, Jannuzzo sounded patient and open to a deal. “There are undoubtedly … commonsense solutions that take a crime-fighting approach without affecting law-abiding citizens,” he told me at the time. “We are still weighing the idea of bleeding to death with legal bills versus the cost of complying with government demands,” he said on CNN. Privately, the Glock lawyer worried about offending the NRA and being seen as appeasing Clinton, Cuomo, and Democratic big-city mayors.
The covert negotiations culminated on March 17, 2000, when Smith & Wesson’s Shultz met with Cuomo in a Hartford, Connecticut, hotel room to sign a twenty-five-page agreement. Smith & Wesson would obtain immunity from government suits at all levels, in exchange for agreeing to a long list of restrictions, well beyond what the law mandated. The company committed to designing all of its guns so that small children could not operate them—for example, increasing trigger-pull resistance to at least ten pounds. Smith & Wesson also promised to stop making guns that could accommodate magazines with more than ten rounds. And S&W was to allocate 2 percent of its annual revenue to R&D on smart-gun technology. In a move viewed as even more far-reaching, the gun maker said it would impose a series of requirements on its distributors and retailers. These included limits on customers seeking to buy more than one gun at a time and new obligations for keeping computerized records and locking up inventory every night to prevent theft. For the first time in history, a gun manufacturer—in fact, the largest maker of handguns—agreed to serve as a quasi-regulator of the entire supply chain, from factory to distributor to retail store.
Cuomo told Shultz that he was confident he could persuade Jannuzzo to sign the pact on behalf of Glock—if for no other reason than that the Austrian company would fear Smith & Wesson becoming the favorite with American government. “We thought that there would be two names on that agreement—Ed’s and Paul’s,” Cuomo said in a later interview.
But Cuomo miscalculated. While the Clinton administration trumpeted its breakthrough with Smith & Wesson, the media provided saturation coverage, and gun-control groups celebrated, Glock headed in the other direction. Jannuzzo denounced the agreement, giving the impression that he had never seriously considered signing. At his direction, Glock employees did a quick straw poll of all customers who called the company for any reason in the days after the S&W settlement was announced. The reaction was overwhelmingly negative. Gun owners thought Smith & Wesson had sold out to political forces hostile to firearms and the Second Amendment.
The NRA, meanwhile, signaled to its four million members that they should boycott the traitor. “Smith & Wesson, a British-owned company, recently became the first to run up the white flag of surrender and run behind the Clinton-Gore lines,” the NRA declared in one of a salvo of Internet alerts and mass faxes. Gun enthusiasts got the point, and many obeyed, swearing off Smith & Wesson.
Glock Talk and other websites buzzed with condemnation of Smith & Wesson. L. Neil Smith, a science-fiction author popular in gun-owner circles, wrote a widely distributed e-mail that repeated thirteen times “Smith & Wesson must die.” The switchboard at S&W headquarters in Springfield nearly melted down. CEO Ed Shultz, a former army sergeant and firearm-rights advocate, received death threats. Gun shops in many states canceled purchase orders and sent S&W inventory back to the factory. The company announced a monthlong employee furlough in July 2000, and sales dropped 50 percent for the year. Some in the industry wondered whether Smith & Wesson would survive.
Watching his strategy backfire, Cuomo personally called Glock, Inc., headquarters in Smyrna. “What percentage of Glock’s business is derived from law enforcement?” the cabinet secretary asked Jannuzzo.
“About 30 percent,” Jannuzzo answered.
“You know, Paul,” Cuomo continued, “I have a lot of push with the big-city mayors. Your business is likely to suffer unless Glock agrees to the terms of the March 17 agreement.”
“The decision has already been made,” Jannuzzo said.
Cuomo did not give up. He telephoned again to let Jannuzzo know that he was going to arrange for the American ambassador in Vienna to speak directly with Gaston Glock.
“Fine,” said Jannuzzo. “I didn’t know the ambassador corps answers to HUD, but I guess they do in this administration.”
Kathryn Walt Hall, the US emissary to Austria, did take a message to Gaston Glock, inviting the industrialist to meet with Secretary Cuomo. Glock was polite but noncommittal, saying perhaps they could arrange something the next time he was in the United States. That meeting never happened.
Further undercutting Cuomo’s credibility, police chiefs across the United States did not abandon their Glocks and buy Smith & Wessons. And as S&W sales to civilians plummeted, Glock gained market share. “This will probably be our best year in history,” Jannuzzo told the Hartford Courant in June. “Guns sales go up, dramatically, as soon as gun owners feel threatened by gun control.” While this was true for Glock, it was decidedly not true for Smith & Wesson.
A particularly painful rebuke to the Clinton administration came from the Inspector General’s Office of Cuomo’s own department. The IG at Housing and Urban Development was scheduled to buy seventy new pistols for its investigators in mid-2000. Rather than switch the purchase to Smith & Wesson, the HUD IG went ahead with a preexisting deal to buy the guns from Glock. In the future, Michael Zerega, a spokesman for the IG, told the Wall Street Journal , “We will probably continue to purchase Glocks.” The Austrian pistol was simply the better gun for the money.
By flirting with a settlement and then pulling back at the last moment, Glock had isolated S&W and further entrenched itself as the dominant pistol maker in America. And it was largely Jannuzzo’s doing. The attorney had played a risky game of firearm poker and won.
Lost in the process was a unique opportunity for an industry, or at least some industry leaders, to agree to police their conduct more vigorously. Although not a panacea for gun violence, the Smith & Wesson settlement contained a number of constructive elements. As the company retreated in the face of NRA and consumer attacks, the concessions it had made became irrelevant. In September 2000, Ed Shultz resigned as CEO. Tomkins soon thereafter sold Smith & Wesson to a group of American investors, who formally renounced the pact with the Clinton administration.