The Daily - Walmart Enters the Gun Control Debate

Episode Date: September 5, 2019

A month after a gunman killed 22 people at a Walmart store in El Paso, the nation’s largest retailer, said that it would stop selling ammunition used for handguns and military-style weapons and call on Congress to consider a new ban on assault rifles. We look at what Walmart’s move means, and how corporate America could play a role in curbing the epidemic of gun violence. Guest: Andrew Ross Sorkin, a financial columnist for The New York Times. For more information on today’s episode, visit nytimes.com/thedaily. Background reading: Walmart, whose reach has reshaped communities nationwide, largely avoids publicly wading into politics. That made its decision to limit ammunition sales even more notable.The move by Doug McMillon, Walmart’s chief executive, “to engage in a meaningful conversation about responsible gun sales in America could give license to other business leaders to enter the conversation,” Andrew Ross Sorkin writes.For more information on today’s episode, visit nytimes.com/thedaily.

From The New York Times, I'm Michael Barbaro. This is The Daily. Today, the nation's largest retailer says it will stop selling the kinds of bullets used by mass shooters and call on Congress to consider a new ban on assault rifles. Financial columnist Andrew Ross Sorkin on why corporate America is now in the business of regulating guns. It's Thursday, September 5th. Andrew, tell me about this email that you got. So sitting at my desk, it's midday Tuesday, this email that you got? So sitting at my desk, it's midday Tuesday, actually about to get up to go grab lunch. And I looked at my screen and an email popped up and it said from Doug McMillan. Now, Doug McMillan is the CEO of Walmart, the largest retailer in the country.

And the subject line was Walmart's next steps. And he started the email, Dear Andrew, And the subject line was Walmart's next steps. And he started the email, Dear Andrew, I wanted to follow back up with you on the subject of firearms and ammunition. And my eyes widened. And what does it actually say? terrible massacre that had taken place at a Walmart store in El Paso, which 22 people were killed, about how Walmart is going to move forward and what steps they're going to take to try to end gun violence. And he says, one, we're going to stop selling certain kind of ammunition, the kind of ammunition that's often used in military-style weapons, the AR-15-style

weapons that you hear so much about that are used in these mass shootings. He also says we're going to stop selling handgun ammunition completely. In addition to all that, though, and maybe even more importantly, he says Walmart is going to advocate that lawmakers have a robust debate about reinstating the assault weapon ban. And in addition to that, says that Walmart is going to advocate for the government to fund research into gun violence.

These are big steps. For Walmart, these are very big steps. And unbeknownst to me, 20 minutes later, Walmart is putting out a series of statements. And this email was effectively a heads up that this was about to happen. Breaking news now from the world's largest retailer, Walmart, just announced... Walmart says it will no longer sell ammunition for handguns or for short-barreled rifles. The ammo can be used in assault style weapons. Additionally, Walmart asking customers to no longer carry guns into its stores in open carry states.

In a memo to employees, CEO Doug McMillan saying, quote, we've also been listening to a lot of people inside and outside our company as we think about the role we can play in helping to make the country safer. It's clear to us that the status quo is unacceptable. And Andrew, why is the CEO of Walmart sending this email with these plans to you before he makes it public to the rest of the world? Well, oddly enough, this story actually starts over a year and a half ago. Now to the latest on the most recent deadly school shooting in America.

A gunman armed with an AR-15 semi-automatic rifle and carrying multiple magazines went on a deadly rampage at a high school in Parkland, Florida. After the mass shooting at the high school in Parkland, Florida. 17 people are dead. 14 other victims remain in the hospital. And after that shooting, there really felt like there was a moment. Well, unprecedented and powerful. Tonight, there are plans to do more. There was a huge activist movement in this country.

Young Americans took to the streets today in numbers likely not seen since the Vietnam War. The March for Our Lives was a response to the massacre last month. In a little over six minutes, 17 of our friends were taken from us, 15 were injured, and everyone, absolutely everyone in the Douglas community was forever altered. There was a real, what seemed like, conversation happening in Washington. Don't worry about the NRA. They're on our side. You guys, half of you are so afraid of the NRA. There's nothing to be afraid of. And you know what, if they're not with you, we have to fight them every once in a while.

That's okay. But there might actually be some change. I will tell you, they are doing what they think is right. But sometimes we're going to have to be very tough and we're going to have to fight them. But we need strong background checks. But interestingly to me, as a columnist who covers business and finance in the world of Wall Street, there was one group that nobody was focused on. And that was this business community that was supporting the gun industry.

And I started to think to myself, Washington may or may not get there. And of course, they didn't. But here's a group of people who have real influence. If you follow the money, you can really start to see this remarkable ecosystem which has supported the gun industry. And I spent virtually the past year and a half regularly writing columns, effectually laying out all of the different players in this ecosystem and also address the kinds of roles and opportunities that existed for these companies to play in trying to end gun violence. And tell me about this ecosystem. Describe it to me. What do you mean? Well, people think that there's just

gun makers, but there's all of the suppliers to the gun maker. There are distributors. There are retailers. There are credit card companies, credit card networks, credit card processors. There are banks behind all of these institutions. Everybody's playing a role. There are investors. And I took the position that there was an opportunity for these companies to do something here. And what exactly was the opportunity you were asking them to take? Well, the first part was just to acknowledge that they were part of the ecosystem. So many of them didn't even want to acknowledge that they had anything to do with this. Most people didn't even see the connections or ties. Nobody would ever say a shooting that happened in a high school

has something to do with a bank that happens to be located on Park Avenue. For example, in one of the columns that I worked on, we identified that in a majority of the mass shootings of the last decade in America, that they were financed by credit cards. And that in many cases, the shooters could not have afforded the guns that were used if they didn't have access to the credit card. So the credit card itself became a key to the shooting and the banks became unwitting co-conspirators. And, you know, some of this was inspired actually by what some of the online payment companies had already done. So companies like PayPal and Stripe and Square and even Apple Pay had explicit policies that said that they don't transact online for sales around guns and gun-related

merchandise. And I thought to myself, if they can make that decision, can't others? And in addition to that, you'd already started to see some companies, including Walmart, take some early steps. So Walmart had instituted a new age limit, 21 years old, no longer just 18. To buy a gun. To buy a gun. They had eliminated handguns from most of their stores. And they'd eliminated AR-15s and other assault-style guns completely. and other assault-style guns completely.

So explain how you imagine all these different actors working together so that ultimately there are fewer mass shootings, which is obviously the goal. What exactly would retailers, banks, and credit card companies do? What does this look like in practice? Okay, so let me lay it out for you. Let's say somebody that's planning a mass shooting

decides they're going to buy two or three or four guns in the span of three or four weeks. And then they go online and they might buy ammunition from somewhere else. They might buy body armor. You would think that the credit card industry, the banking industry, and all of those retailers could effectively track those sales. And in the same way that banks today are looking for anti-money laundering or are looking for human trafficking, they say to themselves, okay, this is a suspicious purchase. They connect dots. They connect dots.

This already exists. They just don't do it for guns because they can't see the information and they can't see the information because the retailers don't provide it and the networks haven't tried to create systems to allow for it. So it's a see no evil, hear no evil situation. And you want that to change. You want the financial system to treat guns the way it currently treats issues like drugs or money laundering. Exactly. And I want to be 100% clear here. The goal is not to prevent people from buying guns. These are legal products, 100%. The goal is to identify suspicious purchasing activity and then to either try to stop it at the

register or to report it so that law enforcement can take a second look. And so the real idea here is that if you could create this best practices sales approach, you could actually change the dynamic in a material way. And as a columnist distinct from a reporter in the newsroom, it sounds like you are taking the position that there's a kind of moral obligation within the financial system that in your mind they have not been awakened to or are aware of, that they can and should play a role in restricting or monitoring gun sales in light of these mass shootings. Absolutely. It's a responsibility.

Especially in an environment in which lawmakers seem so deadlocked on everything that nobody's willing to step up. So you're encouraging these companies to take what would be pretty big steps to tackle the question of gun control themselves. To basically go outside the bounds of what we, and I assume they, normally think of as the responsibilities of the private sector. So do they actually do it? Kind of. We'll call it baby steps. One of the country's biggest sporting goods retailers announced today that it will stop selling assault-style rifles along with the sale of any guns to those under 21. Dick's Sporting Goods come out. We actually sold the shooter a shotgun in November of last year.

And we looked at that and found out that we did this. We had a pit in our stomach and said, we don't want to be a part of this story. You had BlackRock, the largest investor in the world. BlackRock made public a letter with the questions that it is asking of gun makers and gun sellers. Start sending letters to gun manufacturers and gun retailers saying, what are you going to do about gun violence? Questions range from litigation risks

to gun safety to background checks. Citigroup has said it's going to introduce new restrictions on business customers who sell guns. You had Citigroup and Bank of America say, we are no longer going to finance gun manufacturers. We're no longer going to advise gun makers. We're no longer going to advise gun makers. Citi will require clients not to sell firearms to anyone who hasn't passed a background test or anyone under the age of 21 and not to sell high-capacity magazines.

They're no longer going to be our clients. So from your perspective, there is some momentum here. A little momentum. And it felt like there was going to be some even more momentum, frankly. But then everything stopped. Why? So Citigroup, which had announced that they were going to separate themselves from the gun makers. This is now April 2018.

Some of their senior executives happened to go to a meeting with commissioners from the SEC, which is the regulatory body that oversees these banks in large part. And the meeting was not really supposed to be about guns at all. It was supposed to be about all sorts of esoteric regulations that relate to the banks themselves. But at this meeting, one of the commissioners, a conservative commissioner, effectively said, we're not going to help you on any of these things because of the position you've taken on guns. Wow. And once that got around Wall Street, everybody put their pens down.

Goldman Sachs, in fact, was about to put out a public policy statement about the position they were going to take related to guns. But upon hearing what the SEC had done, they started to rethink their position. Hmm. So the message here is stay in your lane or else. It sounds a little bit like the message that supporters of gun rights Absolutely.

send to elected officials in Washington. In the case of the SEC, they effectively oversee these banks every single day. And so on the priority list of things that the banks are facing and dealing with. They can put guns in their back pocket. Right. You know, I used to get calls from CEOs and executives at all sorts of companies virtually every other day during that period. But by the summer, those calls really started to trail off. So at this point, it feels like you have reached the end of your capacity to influence this.

And the business world is realizing that the cost of engaging on guns is probably just too high. They're corporations. This is not their problem, especially if it's going to become a problem for them. Well, I hadn't given up. And sadly, the shootings didn't stop either. We begin with breaking news. A deadly mass shooting at a Walmart in El Paso, Texas.

The numbers are staggering. So we had this terrible massacre at a Walmart store in El Paso where 22 people were killed. And it was at that point where I went back to the computer. And this time I decided I was going to write an open letter to Doug McMillan, the CEO of Walmart, to effectively say to him, you have an authentic claim in a way that no other CEO in the country does to address this and to engage in a conversation about gun violence in America

because of what had just happened in the store. But you also have now a moral responsibility to try to end this. We'll be right back. So, Andrew, after the shooting in El Paso, you decide to go directly to the CEO of Walmart. What do you say in this letter to him? I was effectively saying to him, you have leverage over the gun makers. You have leverage over lawmakers. You have leverage over the financial industry.

Go to them. Talk to them. Force them to engage in a conversation about what everybody can do to fix this. Walmart is famous for squeezing people on the issues that they care about. And my view was this was now an issue that they had to care about. So after I wrote the letter, a couple of days later, Doug McMillan posted a memo, which he also sent me, as a letter to his employees. And in that letter said that he had heard from a lot of people throughout the country about this issue of gun violence and said that he wanted to take some time to try to figure out what Walmart can or should do. And what's your sense of what he's likely to do, given what Walmart is and his role?

You know, I've covered Walmart and Doug McMillan for a long time now, and you could tell that he has always struggled with this issue of how far to go. You know, this is a company that's based in Arkansas. This is a red state. And any public statement that he were to make on a polarizing issue in America

could have a backlash on the business. And he'd seen it. He'd watched it happen. When Dix announced they were no longer going to sell assault style guns, there was a massive backlash. There were boycotts. Earnings went down. The stock price went down. You know, when Citigroup made their announcement, there were people cutting up their credit cards and posting pictures of it on Twitter. So there are a lot of reasons for him to be cautious on this issue. And yet this week, you get this email saying that Doug McMillan, CEO of Walmart, has decided to come out and take these steps around ammunition, around stopping certain gun

sales, around going to Congress and saying, you should be thinking about an assault weapons ban. Right. And this was dramatic because up until this point, Walmart, even when they had taken steps to remove AR-15s, for example, from their stores, had never said that the reason they were doing it was for social issues. The reason was always about the marketplace or something else. And all of a sudden, the CEO of the largest retailer in America is talking about gun violence as a problem. The status quo is no longer acceptable. So how do you understand his decision? Well, I think when 22 people die in your store,

it really makes you rethink what you're willing to say. I also think there's a shift in public opinion in this country towards more gun control and background checks and reasonable sales processes than there has been in a very long time. And most of what he's proposed, frankly, is not that controversial at all. In fact, a lot of critics would say

it hasn't gone far enough. Well, let's talk about what it actually will be doing, these moves that he's just announced. What's the practical impact of them? Well, let's take what Walmart's doing on ammunition. They sell 20% of all the ammunition. Doug McMillan is now saying that after these policies are put in place, they'll sell somewhere between 6% and 9% of the ammunition in the country. So cut down by more than half. More than half. In Washington, he's writing letters directly to the president. He's writing letters directly to Congress saying, we are asking you to have a debate around the assault weapon ban.

That's real. When the CEO of the largest retailer in the country, which, by the way, is also one of the biggest lobbyists in Washington, speaks, people listen. So what's the impact of it? Well, it's something, but it's not everything. The question is whether it now gives license to the rest of corporate America to join him. If that happens, we might actually look back at this as a tipping point. And the rest of corporate America is watching literally right now to see what's going to happen to Walmart. Our customer is going to flee?

What's the real economic impact of what they've done? And what has been the reaction? Well, as you'd imagine, the NRA came out with a statement blasting the company. Within hours of the announcement, the NRA tweeted, it is shameful to see Walmart succumb to the pressures of the anti-gun elites. Lines at Walmart will soon be replaced by lines at other retailers who are more supportive of America's fundamental freedoms. You have some customers on Twitter with a hashtag boycott Walmart. Walmart, what are y'all doing? Y'all

think that by telling me and other people that have a license to carry that you can't bring a gun into Walmart is going to stop a man shooting. Huh? That's not going to stop nothing. Are y'all stupid? Come on now. At the other extreme, you have people giving them attaboys, saying, this is great. I'm now going to shop at Walmart. And to the extent that people look at the price of the stock as an indicator about what's going to happen to the company and the company's sales, well, the stock actually went up. I find myself struck that the

biggest employer in the country has responded at least a bit to this call that you put out. But what you have been advocating for, and many others, is a lot bigger than a single company ending the sales of ammunition or even ending the sales of certain guns. It's this coordinated attempt to use the financial system to change basically the very nature of the gun industry. And are you seeing any signs that that is happening, that larger structural change? You know, for the most part, we're not there yet. Credit card companies still, for the most part, don't see this as their issue.

Some of the banks, some of the retailers are trying to figure out what they can do, but they're all anxious, they're all nervous. And that's why what Doug McMillan did may or may not be important, we'll see. You know, to gun rights supporters, I have to imagine that what you're outlining sounds like you asking the financial system to do what lawmakers in Washington haven't done and may never do in their minds for good reason, which is that it may inevitably

infringe on their rights to buy guns. Look, I hear that. I see it in my Twitter feed every single day. But there's a crisis going on in this country. And the question is how we can confront the crisis. None of this is about flouting the law. None of this is about infringing on Second Amendment rights in any way. This is about putting common sense protections on the sales of guns. Reasonable questions should be asked when suspicious behavior occurs. But I have to ask, should any of this that you've been advocating for, should it actually happen? Do we really want private corporations, banks, credit cards, big financial firms, retailers, do we want them being the arbiters of this kind of a decision about what guns are sold, what ammunition is sold?

Are you and others asking companies to be something that they really aren't and perhaps never should be in the United States, which is basically a stand-in for the government? Because as we talked about with you recently, when a bunch of CEOs debated their role, how civic-minded they should be, at the end of the day, they're companies. They're for-profit businesses. They're not elected officials. They're not advocacy groups. So why should they be doing

any of this stuff? Look, companies make decisions every single day about what products they're going to put on their shelves, who they're going to do business with, who they're going to provide loans to, for all sorts of different reasons. People are making these decisions constantly. So the idea that companies are supposed to actually just sit on their hands is crazy to me. It's absolutely insanity to think that they are not supposed to have any responsibility in all of this. But if they take on this role that you're suggesting, are you worried that it'll, in a very real way, let the government off the hook for playing a regulatory role we traditionally think of the government playing, of protecting the people. In a perfect world, the government would put in place reasonable and responsible regulations that would prevent this from happening. But by default, let's just agree

that the laws on the books are not working. If they were, we wouldn't be having this conversation. If you take that as fact, the question is, what are you going to do about it? And if Washington is not going to do something about it, the question is, what are you going to do about it? And if Washington is not going to do something about it, the question is, who? What is the moral responsibility of business leaders to deal with very human issues? And I think they have some. Andrew, thank you.

Thank you, Michael. We'll be right back. Here's what else you need to know today. Here's what else you need to know today. Incidents over these past two months have shocked and saddened Hong Kong people. On Wednesday, the chief executive of Hong Kong, Carrie Lam, said she would withdraw an unpopular extradition bill that has ignited months of massive protests across the city. Our foremost priority now is to end violence, to safeguard the rule of law, and to restore

order and safety in society. The bill would have allowed for citizens of Hong Kong to be tried for crimes in mainland China, sparking fears that China might have used the law as a way to prosecute and silence its critics in Hong Kong. The withdrawal of the bill was a major demand of the protesters, but it's unclear whether Lam's decision will end the demonstrations, which have since expanded to encompass broader grievances against her government. And...

Order questions to the Prime Minister, Siobhan McDonagh. Brexit, Mr. Speaker. The former Prime Minister's deal was unacceptable to this House, but to leave without a deal is unthinkable. For the second day in a row, British lawmakers rejected the will of their new prime minister, Boris Johnson, by voting to stop him from leaving the European Union by the end of the month without a negotiated deal. Yet the prime minister pursues a game of brinkmanship built on the livelihoods, health and future of my constituents and our country. The showdown over Brexit has triggered a civil war

inside Johnson's Conservative Party as members of his own party turn against him, calling his plan dangerous for Britain. But Johnson vowed to press on with his strategy. Prime Minister! Mr. Speaker,

as the Honourable Lady knows very well, this government will take this country out of the European Union on October the 31st. There is only one thing. Finally. Parts of Abaco are decimated. The national airport in Abaco is underwater. The runway is completely flooded. And in fact, the area around the airport now looks like a lake.

On Wednesday, the full devastation of Hurricane Dorian was revealed in the Bahamas, where government officials said it had destroyed thousands of buildings, wiped out entire neighborhoods, and killed at least 20 people. Ah, this is Lenny's house. Used to be Lenny's house. What's left of it. Firefly. A lot of roof damage.

The hurricane, now traveling parallel to the east coast of the United States as a Category 2 storm, is now forecast to close in on Charleston, South Carolina, by later this afternoon. That's it for The Daily. I'm Michael Barbaro. See you tomorrow. Thank you.