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Breaking News

Government Reaches Agreement with Smith & Wesson

Aired March 17, 2000 - 12:31 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JEANNE MESERVE, CNN ANCHOR: We're going to take you now to the office of Housing and Urban Development. HUD Secretary Andrew Cuomo's about to speak about a settlement with gun Manufacturer Smith & Wesson.

(JOINED IN PROGRESS)

UNIDENTIFIED MALE: Hello.

ED SHULTZ, PRESIDENT & CEO, SMITH & WESSON: Yes, I can hear you.

ANDREW CUOMO, HUD SECRETARY: Hi, Ed. How are you?

SHULTZ: I'm OK. If you'll give us a second, we'll switch to a better phone.

CUOMO: OK.

UNIDENTIFIED MALE: All right.

SHULTZ: Hang on.

MESERVE: Addressing some technical problems there in the auditorium at the housing -- at the Department of Housing and Urban Development before they begin this event. The CEO of Smith & Wesson, Ed Shultz, is also present at this event, as is Lawrence Summers, the treasury secretary, Stuart Eizenstat, the deputy treasury secretary, the president of Handgun Control, Inc., several big city mayors.

CUOMO: While we're waiting for Mr. Shultz, the cities who are going to be participating by phone include Atlanta, Georgia; Miami- Dade County; Bridgeport; Detroit; St. Louis; Gary, Indiana; Camden, New Jersey; Berkeley, California; Los Angeles; Engelwood; San Francisco and Sacramento.

UNIDENTIFIED MALE: Mr. Ramalo (ph) with Mayor Panelles (ph), we're back on.

CUOMO: They're going to call back. OK. This is HUD and high technology.

QUESTION: Can you read those cities a little slower?

CUOMO: OK. Atlanta, Georgia -- and Mayor Bill Campbell is here with us today -- Miami-Dade County, Mayor Alex Panelles, who is en route, literally; Bridgeport, Connecticut; Detroit, Michigan; St. Louis; Gary, Indiana, Mayor King, who's been very helpful to us; Camden, New Jersey; Berkeley, California; Los Angeles, California, city attorney Jim Hahn (ph), who is en route, I believe; Englewood, California; San Francisco and Sacramento.

QUESTION: What's the agreement, Mr. Secretary?

CUOMO: Mr. Shultz is on the telephone.

SHULTZ: Yes.

CUOMO: OK. Ed, you can hear us now?

SHULTZ: I can hear you now very well.

CUOMO: OK.

First, let me thank you all very much for being with us again today, and the distinguished colleagues who are here on stage, and Mr. Ed Shultz, president of Smith & Wesson.

I've been at this department -- you're with us, Ed?

SHULTZ: Yes.

CUOMO: OK.

I've been at this department for seven years and I can say without doubt that, in my seven years in this department, this is the most important announcement that we have made. We have all said that something must be done about unnecessary gun violence in this country. We've heard the statistics many times -- 30,000 gun deaths every year, 100,000 injured by firearms every year, a rate of firearm deaths for children in this country 12 times higher than the other 25 leading industrial nations combined, almost weekly tragedies bringing these statistics to life or death from Michigan to Ohio to Tennessee in just the last few weeks alone.

But despite all this lost, it felt that no real progress could be made, and the recent rhetoric made it seem that any hope of progress was gone. Indeed, after years of Washington gridlock over common- sense gun safety legislation, two years ago, cities, counties and states turned to the courts for relief with 30 eventually filing suit or threatening to file lawsuits against the gun industry.

Then, as many as you recall last December 8, the president announced that HUD would join local governments in litigation against the industry if we weren't able to forge a sensible compromise, because something had to be done. We always viewed litigation as a last resort, always maintained our belief that negotiation was in all of our best interests.

So we approached the process firm in the belief that reasonable gun manufacturers could sit down with reasonable government officials and reach reasonable solutions. Responsible parties would know that something needed to be done, certainly, to stop the senseless violence and the abuses, but would also know that litigation, which would also threaten the responsible gun manufacturers, was not the answer.

Well, today we announce that we were right, and progress is possible. We have reached a settlement with Smith & Wesson, the nation's largest gun manufacturer. This settlement will bring about fundamental changes in the areas we focused on right from the start: areas of design, distribution and advertising. It mandates, first of all, an impressive array of safety features, including locking devices, child safety features and authorized user technology that will prevent, once and for all, accidental gun deaths and keep children safe.

It creates a system of authorized dealerships like we have in so many other industries that will prevent suspect firearm sales like straw purchasing and sales made without background check that make it easier for criminals to get guns. It bans advertising that appeals particularly to criminals, and it is, as we insisted from the start, an agreement with teeth with a real enforcement mechanism and real oversight.

This major accomplishment required two essential ingredients: people showing extraordinary leadership, first of all, and extraordinary cooperation.

First, President Clinton showed extraordinary leadership in this issue from the start, raising this issue and keeping it in the center of our public discourse. The president pushed hard every day for common-sense gun legislation and had the courage to stand up and say that HUD would support a lawsuit against the gun industry, a bold step, indeed, on a different course. Today we see the fruits of the president's vision.

Mr. Ed Shultz, president and CEO of Smith & Wesson, who showed outstanding leadership and also showed good business judgment knowing that these continued lawsuits would be ultimately the death of the gun industry.

The cities, counties and states who started this process months ago: We have with us today Mayor Campbell -- Mayor Panelles is en route -- the attorney generals of the states of Connecticut and New York, Mr. Richard Blumenthal of New York and Mr. Elliott Spitzer of -- Mr. Richard Blumenthal of Connecticut and Attorney General Elliott Spitzer of New York, who set an aggressive course from day one and who said that negotiation was preferable to litigation if we could make the right agreement. And the attorney generals' leadership is evident here today.

Our partners in the White House, Mr. Bruce Reed; the Treasury Department, Secretary Summers, who grabbed hold of this issue right from the very beginning; Deputy Secretary Stu Eizenstat who provided guidance; general counsel Neal Wollan (ph) at the Department of Treasury, who was a get-to-yes attorney and a tireless advocate; our friends at the Department of Justice, Deputy Attorney General Eric Holder; groups like the NAACP and handgun control who made this fight their highest goal; and on a point of personal privilege, my deputy general counsel Max Stier (ph) who literally worked day and night to make this a reality.

On December 14, this group stood in this very room and pledged unprecedented solidarity. We said, one for all and all for one, and it happened. What we do here today is only the first step, but it is a big step indeed. The principles outlined in this agreement provide a framework for a new enlightened gun policy for this nation, and our agreement and compromise rather than our division and hostility establishes a new, positive, productive relationship. After many false starts and after much gridlock, we are finally on the road to a safer, more peaceful America.

I want to thank all of those who worked so hard to make today possible because today really is a collective achievement with all of the people who are on the stage, all of the cities who are on the phone, all contributing to make today possible.

And Mr. Ed Shultz, who is on the telephone, who has shown great civic leadership, in my opinion wise business judgment, but also showing that compromise and agreement is preferable to endless litigation.

Mr. Shultz, we'll turn it over to you at this point. Mr. Shultz was going to join us in person, he is in Hartford, and there is a weather condition, inclement weather in Hartford so he's...

It is good inclement weather, but it is inclement weather, and he is going to be joining us by telephone. Mr. Shultz.

SHULTZ: Good afternoon.

CUOMO: Good afternoon.

SHULTZ: As each of you know, Smith & Wesson has, for much of its life as a company, worked to find ways to continually reduce the misuse of firearms, and particularly in the last three years, we've worked with various entities that have approached us from time to time to seriously look at ways to make our products and products similar to ours safer for the country.

We have reached an agreement today, which we believe will be do two things: first, it will provide for the future viability of the business entity of Smith & Wesson by putting our efforts and our fund toward technology and to make our guns better and safer in the future. The ability for us to continue to produce products that can be sold to ordinary citizens in our country without threatening their Second Amendment rights.

MESERVE: You've been listening to a press conference from the Department of Housing and Urban Development, announcing a major settlement with gun manufacturer Smith & Wesson, the largest gun manufacturer in the country.

HUD Secretary Andrew Cuomo calls this "the first step, but a big first step toward an enlightened gun policy." It would effect the design, distribution and advertising of firearms. It would include locking devices, authorized user technology, and child safety features, which hopefully would cut down on accidental gun deaths. It also establishes an authorized dealership system, and it bans advertising that would appeal specifically to criminals.

It also, we are told, has an enforcement mechanism which includes teeth. Participating in this press conference today, in addition to U.S. government officials, was the CEO of Smith & Wesson, also some mayors of big cities around the country who had brought lawsuit or threatened to bring suit against gun manufacturers for gun violence incidents in their cities.

We will have more on this story as the day progressed. Right now, we are going to take you back to "BURDEN OF PROOF."

VAN SUSTEREN: Thanks, Jeanne. Let's go to Alan Dershowitz, up at Harvard.

Alan, what is your reaction to the latest news on the gun settlement before we get back to your book.

ALAN DERSHOWITZ, CRIMINAL DEFENSE ATTORNEY: Well, I think it is a great, great piece of news. This sounds like the beginning of what happened to the cigarette industry, we see one major company breaking with what appears to be the stand of the National Rifle Associate.

On a personal note, it is ironic that it was Andrew Cuomo who broke into the program because his father, former Governor Cuomo is one of the people who gave me a blurb for my book. So I will always be appreciative and not resent intrusion.

But it is a very, very important message, and I think it could mark the beginning of a trend toward gun manufacturers starting to react the way cigarette manufacturers are reacting.

VAN SUSTEREN: And of course, I decline to comment either way, in light of the fact that my husband has been involved in representing some cities against gun manufacturers.

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