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    Interesting Glock Stories

    ONLINE EXTRA September 10, 2009, 5:00PM EST
    Glock Pistol Used by Police Raised Safety
    Issues
    In the late 1990s, U.S. employees expressed concerns to the Austrian gun maker
    regarding the Glock 22

    By Paul Barrett and Brian Grow

    Glock markets its weapons as "safe action pistols." But internal company documents reviewed by
    BusinessWeek—and reported here for the first time—reveal that in the late 1990s, company employees
    in the U.S. expressed concern about the safe performance of the Glock 22, a model commonly used by
    American police officers.
    If these documents had surfaced in injury lawsuits filed over the years against Glock, they could have
    created potentially serious liability trouble for the company, according to plaintiffs' lawyers. "Documents
    of this sort were requested in pretrial discovery by us and by lawyers in other cases," says Daniel G.
    Abel, an attorney who helped represent the city of New Orleans in an ultimately unsuccessful lawsuit
    against the gun industry in the late 1990s. "These documents should have been disclosed in discovery.
    There is no excuse—no legitimate excuse—for their not being disclosed."
    Glock's general counsel, Carlos Guevara, said in a written response: "Glock pistols are remarkably safe
    and reliable, historically and currently, and are of exceedingly high quality.…When involved in products
    liability cases, we respond to discovery requests following the rules of the jurisdiction, evidentiary rules
    and practices, and pursuant to the laws of the United States and orders of the courts."
    Safety has long been a point of contention for Glock of Austria. Unlike most handguns, which have
    external on-off safeties, Glock pistols are equipped with internal mechanisms that prevent firing. These
    internal safeties are disengaged merely by depressing the trigger. The ability to fire immediately, without
    worrying about an external safety, is one feature Glock has stressed as an advantage when selling its
    guns, especially to police departments.
    Skeptics see this feature in a different light. The Consumer Federation of America has cited the Glock's
    design as one reason the gun has been the subject of dozens of lawsuits filed after unintentional
    shootings, including a number by police officers. The company has won or confidentially settled most of
    these cases without acknowledging any liability.
    Paul F. Jannuzzo, Glock's former top executive in the U.S., says in an interview that, overall, the
    company's pistols are as safe as comparable handguns—and more durable. "The one problem," he
    says, "was [the Glock] would go off sometimes when it wasn't supposed to."
    OCCASIONAL JAMMING
    Another problem that surfaced in the 1990s and persisted for years thereafter was occasional jamming,
    Jannuzzo says. In 1998 he and other Glock officials in the U.S. discovered guns that failed to fire
    properly. "These malfunctions were very difficult to clear and could not be cleared with the normal 'tap,
    rack' drill," stated a Feb. 12, 1998, memo from American employees to Glock founder and owner Gaston
    Glock entitled "Performance of G 22s." "Law enforcement officers see this type of stoppage as a serious
    failure and one which has life-threatening implications," the memo added. "If these were received by the
    FBI or DEA [both Glock customers], they would immediately suspend the contract and demand a retest
    or other action."
    The memo described tests on eight sample guns that were fired more than 2,000 times in all. "In
    particular, we are concerned with the difference in the poor test results in the U.S., compared with the
    better results achieved in Austria," the memo told Gaston Glock. The company manufactures parts in
    Austria and assembles guns for the American market at a plant outside Atlanta.
    Four days later, on Feb. 16, Jannuzzo followed up with a letter to Gaston Glock. Jannuzzo disputed the
    contention by company executives in Austria that the malfunctioning pistols needed a "breaking-in
    period," after which they would work properly. This notion "flies in the face of the Glock pistol's
    reputation as being the best shooting semi-automatic 'out of the box,'" Jannuzzo wrote.
    In an interview, Jannuzzo adds: "It was a problem, and it was much more of a problem than they
    [executives in Austria] wanted to admit.…They never knew which guns were going to break."
    Guevara, the Glock general counsel, disagreed: "Each pistol undergoes numerous quality control
    checks throughout the manufacturing and assembly process.…Additionally, the firearms industry is
    highly regulated in the United States (and internationally), and Glock fully complies with all rules and
    regulations with respect to every aspect of Glock's business, including sales."


    COVER STORY September 10, 2009, 5:00PM EST
    Glock's Secret Path to Profits

    It's the largest supplier of handguns to law enforcement in the U.S. But behind its
    success lies a troubling tale of business intrigue

    By Paul Barrett, Brian Grow and Jack Ewing

    Gaston Glock, an Austrian manufacturer of shovels and knives, had an improbable dream: He would
    make a fortune selling handguns in America. In the early 1980s, Glock, a self-taught firearm designer,
    produced an innovative pistol for the Austrian military. He then devised a plan for promoting his
    invention in the U.S., the world's richest gun market. First, he'd persuade American police they needed a
    lightweight weapon with more ammunition than traditional revolvers. Then he'd use his law enforcement
    bona fides to win over private gun buyers.
    The strategy succeeded spectacularly. By the late 1980s, major police departments across the U.S.
    wanted more firepower to combat crack-cocaine violence. Glock had the answer. No less impressed,
    street gangsters adopted the squared-off Austrian handgun as an emblem of thuggish prestige. Hiphoppers
    rapped about Glocks; Hollywood put the pistol in the hands of action heroes.
    Gaston Glock shouldered past the storied American brand Smith & Wesson (SWHC) to make his
    creation the best-known police handgun in the U.S., and probably the world. When American soldiers
    hauled Saddam Hussein from his underground hideout in 2003, the deposed Iraqi ruler surfaced with a
    Glock.
    Today the company claims 65% of the American law-enforcement market, an amazing accomplishment
    for a privately held manufacturer based in tiny Ferlach in southern Austria. U.S. fans celebrate
    "Glockmas," the 80-year-old founder's July 19 birthday. U.S. sales soared 71% in the first quarter of its
    2010 fiscal year, largely due to what gun executives call the "Obama stimulus": fear among gun owners
    that the liberal President plans to curb the marketing of handguns. Gaston Glock played on that anxiety
    in an open letter to customers in January. "As shooters and gun owners, we must band together with
    even greater zeal than in the past," he wrote. "We are not going to roll over and have our guns taken
    away because of some of our misguided neighbors, no matter who they are."
    Behind the Glock phenomenon, however, is another story, one rife with intrigue and allegations of
    wrongdoing. The company's hidden history raises questions about its taxpayer-financed law-and-order
    franchise. Is this a company that deserves the patronage of America's police? Does Glock merit the
    lucrative loyalty of private American gun buyers? The Glock tale also underscores the difficulty U.S.
    regulators have overseeing complex international businesses.
    CLAIMS OF SKIMMING
    Allegations of corruption permeate Gaston Glock's empire. His former business associate, Charles
    Marie Joseph Ewert, now resides in a prison in Luxembourg, having been convicted in 2003 of
    contracting to have Glock killed. The murder plot—thwarted when the victim, then 70, fought off a
    hammer-wielding hit man—led to a trial that revealed a network of shell companies linked to Gaston
    Glock. That corporate web is now under scrutiny by the U.S. Internal Revenue Service, according to
    lawyers familiar with the probe. Attorneys for Glock have acknowledged the misuse of company funds.
    But they blame most of the wrongdoing on Ewert, a money man known in the European press as
    "Panama Charly."
    Among the Glock-related material the IRS allegedly is examining: boxes of invoices and memos
    provided by the company's former senior executive in the U.S., Paul F. Jannuzzo. Once one of the most
    prominent gun industry executives in America, Jannuzzo said in a federal complaint he filed last year
    that Gaston Glock used his companies' complicated structure to conceal profits from American tax
    authorities. "[Glock] has organized an elaborate scheme to both skim money from gross sales and to
    launder those funds through various foreign entities," Jannuzzo alleged in the sealed May 12, 2008, IRS
    filing, which BusinessWeek has reviewed. "The skim is approximately $20.00 per firearm sold,"
    according to the complaint. Glock's U.S. unit, which generates the bulk of the company's sales, has sold
    about 5 million pistols since the late 1980s, Jannuzzo estimates in an interview.
    A burly man with a staccato delivery, Jannuzzo has several potential motives for airing these allegations.
    As a whistleblower, he is seeking a percentage of any federal tax recovery. He is also fighting
    embezzlement charges by his former employer. Since 2007, the company has been providing
    information about Jannuzzo to authorities in Cobb County, Ga., where Glock's American subsidiary is
    based. The Cobb County District Attorney's Office is prosecuting Jannuzzo—who once represented the
    company at a White House Rose Garden ceremony and on CBS' (CBS) 60 Minutes—for siphoning
    corporate money into a Cayman Islands account. Jannuzzo, who left the company in 2003, claims he's
    the victim of a vendetta.
    Speaking on behalf of the company and Gaston Glock, Carlos Guevara, the general counsel of Glock
    Inc. in the U.S., said in a written statement: "Glock has acted lawfully and properly throughout its history.
    Unfortunately, Glock was victimized by several former employees and fiduciaries," including Ewert and
    Jannuzzo. "The Glock companies are exceptionally well-run and managed. Glock's tax filings and
    reporting are accurate."
    Still, eyebrow-raising goings-on appear to have been standard at Glock. After the attempt on Gaston
    Glock's life, an internal investigation conducted at his instruction turned up documents apparently
    showing that a Glock affiliate in Panama helped in 1995 to start a bank called Unibank Offshore in the
    Turkish Republic of Northern Cyprus. Unibank's co-founder was an alleged money launderer named
    Hakki Yaman Namli.
    In the U.S., Jannuzzo and another former Glock executive, Peter S. Manown, have claimed that for
    years they distributed company funds to their wives and Glock employees with the understanding that
    the money would be donated to congressional candidates—an apparent violation of U.S. election law.
    The ex-executives, who say they acted with Gaston Glock's approval, have estimated the total amount
    in the hundreds of thousands of dollars. Buttressing this allegation are ledger entries and cancelled
    checks. Guevara, the company lawyer, said: "Glock has never authorized, and would never authorize,
    any act that would violate U.S. campaign finance laws."
    Glock's political and public relations activities in the U.S. sometimes have tended toward strangeness.
    Internal records show payments of thousands of dollars a month over several years to a gun industry
    lobbyist named Richard Feldman. In interviews, Feldman says that at Gaston Glock's request he spent
    some of the money in 1999 and 2000 to arrange U.S. appearances by Jörg Haider, then the leader of
    Austria's anti-immigrant, far-right Freedom Party. Glock has been described in Austria as a political
    supporter of Haider, although the arms maker has sued both an Austrian newspaper and a politician
    there for making that claim. The arrangements Feldman says he worked on included Haider's
    attendance at a January 2000 banquet in New York honoring the birthday of slain civil rights leader
    Martin Luther King Jr. The King dinner, sponsored by the Congress of Racial Equality, received media
    coverage because Hillary Clinton criticized her then-rival for a New York Senate seat, Rudolph Giuliani,
    for attending the celebration Haider present.
    Before he died in a car accident last year, Haider stirred controversy, according to media reports, for
    praising the "character" of elite Nazi SS troops and the "employment policy" of Adolph Hitler. "Glock
    urged me to help Haider overcome some of the [image] problems," says Feldman. The lobbyist says he
    thoroughly researched the situation to satisfy himself that neither Glock nor Haider ever supported the
    Nazi cause. "There were loose statements [by Haider] that were blown out of proportion," he says.
    Glock's Guevara did not respond to questions about the company's or Gaston Glock's relationship with
    Haider.
    GERMAN ARMY CAMPS
    Gaston Glock has recounted that he first learned about firearms during a short stint as a teenager in a
    German military training camp near the end of World War II. "I saw rifle, pistol, hand grenade," he
    recalled in a deposition taken during a product-liability lawsuit in Knoxville, Tenn., in November 1993. "I
    was getting acquainted when you pull a trigger, that it makes boom." He said he spent "just a few days
    in camps of the German Army" in 1944 or 1945, when he was 15 or 16 years old. Asked about his
    wartime experience in subsequent U.S. court proceedings, he has characterized his contact with the
    German military as extremely limited.
    After the war, Glock, a civilian engineer, held a series of manufacturing jobs and eventually came to run
    his own company. He learned in 1980 that the Austrian army was in the market for a new sidearm.
    Despite a lack of experience designing guns, he sought the pistol contract. Intense research and
    consultation with weapon experts prepared him to make a breakthrough. The Austrian Defense Ministry
    awarded him the contract in 1982, bypassing five other manufacturers.
    Simpler than most pistols, the Glock costs relatively little to make. In a 1994 patent lawsuit in the U.S.,
    Glock estimated its profit margin per pistol at 68%. The guns typically sell for $450 to $600 in U.S. retail
    gun stores. The Glock's polymer frame is formed from a mold, not from the more conventional tooled
    steel. The Glock ammunition magazine, which snaps into the handle, can hold as many as 19 rounds.
    Revolvers typically hold only six bullets, which are fired from a revolving cylinder.
    When early Glock models began surfacing in the U.S. in the 1980s, they caused a sensation, recalls
    Massad Ayoob, a personal defense instructor who runs the Lethal Force Institute in Concord, N.H., and
    has done promotional writing about Glock. "They looked like something out of Star Trek," he says.
    DELIGHTING LAW ENFORCEMENT
    To sell his gun to U.S. police departments, Glock employed a combination of German-speaking
    executives and retired American cops. Many police chiefs were receptive to the pitch that they should
    trade in six-shot revolvers for more potent Glocks. "The bad guys were starting to carry high-capacity
    weapons, unlike what they had carried in the past," recalls Sheriff John H. Rutherford of Jacksonville,
    Fla. As a lieutenant, he led a study in 1987 that resulted in the department buying Glocks. The 1,700-
    member force still uses the brand.
    "It was a conscious decision to go after the law enforcement market first," Gaston Glock told Advertising
    Age in June 1995, when the trade magazine honored him as one of its "Marketing 100" stars. "We
    assumed that, by pursuing the law enforcement market, we would then receive the benefit of 'after sales'
    in the commercial market." Police departments from New York to Miami to St. Paul, Minn., signed on.
    The strategy closely resembles that of firearm pioneer Samuel Colt, who popularized his six-shooter in
    the mid-19th century by seeking endorsements from soldiers and lawmen.
    Syndicated columnist Jack Anderson raised the Glock profile when he wrote in January 1986 that Libya,
    a notorious terrorist threat, was trying to acquire Austrian-made "plastic" guns that could evade metal
    detectors. Glock pistols are actually made mostly of metal and are easily identified by alert airport
    screeners. The company denied it was marketing to Libya. Rather than tarnish the gunmaker, the
    Anderson column helped spread the idea that serious bad guys preferred Glocks, says Robert Ricker, a
    longtime lobbyist for the firearm industry. "It was an incredible lucky break," Ricker adds. "It raised public
    awareness, got people interested in it." Sales grew rapidly.
    At nearly every turn, Gaston Glock and his executives displayed impressive marketing and legal savvy.
    When arch-rival Smith & Wesson in 1994 came out with a Glock-like pistol called the Sigma, Jannuzzo
    led a successful patent-infringement lawsuit. S&W agreed to pay an undisclosed settlement and modify
    its gun. An S&W spokesman declined to comment on the confidential resolution, other than to say the
    company had neither admitted nor denied wrongdoing. Glock now offers about 40 models in various
    calibers. "They're simple, they work, and you don't have to mess with them," says Herman Gunter III, an
    investment adviser in Live Oak, Fla. He owns two Glocks for personal defense and target shooting.
    The company has boosted its profits with innovative pricing strategies. It has offered discounts to police
    on new pistols if cities turn over used service weapons and guns confiscated from criminals. Glock has
    arranged to have the second-hand firearms sold on the used-gun market, where former police weapons
    command a premium.
    With Jannuzzo as its U.S. front man, Glock deftly ducked repeated legal assaults on the gun industry.
    Jannuzzo, a former state prosecutor in New Jersey who joined the company in 1991, displayed a knack
    for talking compromise while rarely giving much ground. In one notable episode in 2000, he made
    encouraging noises about a master settlement with the Clinton Administration and more than 20 cities
    that would have shielded gunmakers from future liability in exchange for restrictions on gun marketing.
    But at the last minute, Jannuzzo pulled back from the deal, leaving rival Smith & Wesson as the only
    industry signatory. A boycott led by the National Rifle Assn. temporarily crippled S&W, while Glock and
    other manufacturers enjoyed a sales surge. The settlement later collapsed, and the issue faded when
    Congress passed a statute in 2005 to protect gunmakers in court.
    Even as the Glock company faced courtroom challenges in the U.S., a more personal and dangerous
    conflict was playing out for Gaston Glock in Europe. Beginning in 1987, the Austrian industrialist had
    employed Charles Ewert as his financial architect. "I was not a salesman. I am a technician...so I had to
    find a partner that helps me to sell the pistol," Glock explained in a U.S. court deposition in September
    1995.
    Ewert, a mustachioed Luxembourg resident now in his late 50s, wasn't exactly a salesman either.
    Nicknamed "the Duke" by Glock employees because of his imperious manner, he was a purveyor of
    shell companies: paper corporations that can be used to shield income from taxation—sometimes
    legitimately and sometimes in questionable ways. Ewert designed a network of shells to lessen the gun
    empire's exposure to product liability and potential taxation, according to documents filed with the
    Luxembourg court. These firms absorbed millions of dollars, the records show.
    VIOLENT ATTACK
    Over time, Ewert transferred ownership of some of the Glock-affiliated shells to himself, according to
    Luxembourg court judgments. Suspicious of Ewert, Gaston Glock sought an explanation in July 1999.
    On the afternoon of a meeting scheduled at Ewert's office near the tony Rue Royale in central
    Luxembourg, Glock was attacked in an underground garage. The hit man, a former professional wrestler
    and French Legionnaire named Jacques Pecheur, bashed the businessman on the head with a rubber
    mallet, a technique apparently aimed at making it look like the victim had fallen down and fatally injured
    himself. Glock, physically fit from daily swimming—often in the frigid lake abutting his home near
    Klagenfurt, Austria—fought back. When police arrived, they found Glock bleeding from gashes to his
    skull. Pecheur, 67, was unconscious.
    Luxembourg investigators found Ewert's business card in Pecheur's car and determined that the two
    had met at a gun range in Paris in 1998. Both were convicted of participating in a conspiracy to kill
    Glock. Pecheur received a sentence of 17 years, Ewert 20.
    Ewert denies any involvement in the attack, which he blames on unnamed Glock associates who he
    alleges wanted to gain control of the manufacturer. "They needed me out of the way so they could grab
    everything," he says in an interview at a maximum-security prison in rural Luxembourg. His lawyers are
    appealing his conviction to the European Court of Human Rights in Strasbourg, France, arguing that
    police improperly seized records from Ewert's office that were protected by attorney-client privilege.
    Pecheur was released early from prison in 2007 for good behavior, his attorney, Fränk Rollinger, says.
    Pecheur couldn't be located for comment.
    Although Gaston Glock saw his antagonists punished and regained control of his corporate holdings, the
    investigation of the attempted killing and related financial fraud opened a window on the gun company's
    finances. Most striking are their sheer complexity. With Ewert's help, Gaston Glock purchased a
    Panamanian shell company called Reofin International in 1987. Reofin then bought Unipatent Holding, a
    Luxembourg shell. Unipatent received a 50% stake in Glock's unit in the U.S., where the company
    generated the vast majority of its revenue. "The purpose of this holding company [Unipatent] was to
    appear externally as a partner of Glock and hold approximately 50% of the shares of its subsidiaries,"
    according to an Apr. 3, 2000, document entitled "Establishment of the Glock Group," which Gaston
    Glock's attorneys filed with the Luxembourg court.
    Three other shell companies in Ireland, Liberia, and Curaçao were created to issue bills for various
    "services" to Glock headquarters in Austria and operating units in Latin America and Hong Kong. But
    these service firms "had no economic substance and were motivated by tax reasons," according to a
    confidential 92-page analysis of the Glock companies in 2002 by auditing firm PricewaterhouseCoopers.
    PwC had been retained by the provisional administrator of Unipatent appointed by the Luxembourg
    court. The PwC auditors found that the service companies' role appeared to be the shielding of profits
    from potential taxation in Austria, Latin America, and Hong Kong.
    The Latin American and Hong Kong units, in turn, appeared to be used to extract profits from the U.S.
    subsidiary, PwC alleged—an assertion reiterated by the 2008 IRS complaint filed by Jannuzzo.
    American tax liability allegedly was artificially lowered by having pistols manufactured in Austria sold first
    to the Latin American and Hong Kong units and then resold for higher prices to Glock Inc. in the U.S. By
    inflating costs to the American subsidiary, this arrangement decreased the profits the subsidiary
    reported to the IRS, according to Jannuzzo.
    A spokeswoman for the IRS, Patricia Bergstrom, declined to confirm or deny that the agency is
    investigating Gaston Glock or his companies. The IRS, says Jannuzzo, has interviewed him about Glock
    three times since June 2008.
    Glock's Guevara said that the company has undergone "a series of comprehensive governmental audits
    going back to 1988" in the U.S. and Austria. "No audit has ever resulted in findings of tax fraud in any
    jurisdiction," he added.
    For nearly three years after the attempt on his life, Gaston Glock employed a team of investigators to
    probe the workings of his own company. This group, referred to in internal correspondence as "the ATeam,"
    was headed by James R. Harper III, an ex-U.S. Justice Dept. prosecutor. Harper discovered that
    Reofin, the Glock affiliate in Panama, had taken part in starting Unibank Offshore in Northern Cyprus in
    1995. Unibank's co-founder, according to documents BusinessWeek has reviewed, was Hakki Yaman
    Namli. Law enforcement officials in the U.S. and Europe have alleged that Namli, who is of Turkish
    descent, launders funds for crime syndicates. In 2003, a federal grand jury in Manhattan indicted him for
    fraud carried out through another outfit in Northern Cyprus, First Merchant Bank, which Namli controlled.
    A year later, the U.S. Treasury designated First Merchant as a "primary money-laundering concern."
    Turkey closed the bank in 2006. Namli is listed as a fugitive in the New York case.
    Harper told Gaston Glock and Jannuzzo he believed that Ewert was the one who involved the Glock
    companies with Namli. But Harper wrote in a memo to Jannuzzo dated Nov. 1, 2000, that Gaston Glock
    "is in danger of being flagged as an international money launderer because by all appearances...Ewert
    was working at [Gaston] Glock's direction up until the time of the assault [on Glock]." Harper added: "Mr.
    Glock doesn't understand the breadth of the problems or the potential disaster that could befall him."
    Glock's Guevara said that neither the company nor Gaston Glock has ever had any relationship with "a
    banking institution in Turkey or [the] Turkish Republic [of] Northern Cyprus."
    In recent years, the gun company's U.S. operation has been rattled by scandal. Local authorities in
    Georgia have prosecuted Jannuzzo and fellow former executive Peter Manown at the behest of their
    former employer. On Oct. 18, 2007, Manown, an attorney who handled many of Gaston Glock's
    personal matters in the U.S., testified that he and Jannuzzo had embezzled company funds and
    funneled the money to accounts in the Cayman Islands. He said the pair also skimmed money from
    Glock real estate transactions. And Manown said he and Jannuzzo had withdrawn more than $500,000
    from Glock accounts for political campaign contributions from 1993 to at least 2003. The executives put
    some of that cash in their own pockets, he testified. "There was so much money flying around in this
    company," Manown said. "It was like Monopoly money." He recounted confessing his transgressions
    privately to Gaston Glock back in 2003 and repaying some of the stolen money. The former Glock
    executive pled guilty in 2008 to theft and received a suspended 10-year sentence.
    In connection with the campaign contributions, Manown testified that Gaston Glock knew what his
    underlings were doing: "This was all done with Mr. Glock's blessing." Manown said he and Jannuzzo
    would withdraw cash for political contributions from a Glock account at the since-closed Summit Bank
    (SBGA) in Atlanta. Sometimes the Glock executives withdrew "$9,000 so it would stay under the
    reporting radar of the bank," Manown said. He was referring to the federal anti-money laundering rule
    that requires banks to report to the Treasury Dept. any cash withdrawal of $10,000 or more. Purposely
    evading the requirement is a federal crime punishable by up to five years in prison.
    Manown went on to explain that he and Jannuzzo at times wrote checks on the Glock account to
    themselves and to their wives. Jannuzzo later "spread [some of the money] around [to] other people at
    Glock," with the understanding that they would use the funds to make political contributions, Manown
    added. He kept a handwritten ledger of many of the withdrawals. A Nov. 1, 2000, entry shows $60,000
    designated for "Bush election campaign per GG and PJ 4 RF." GG apparently is Gaston Glock; PJ, Paul
    Jannuzzo; and RF, Richard Feldman, the lobbyist and consultant. The Cobb County District Attorney's
    Office declined to comment on any "matters related to open cases."
    ALLEGATIONS OF THEFT
    A review of federal campaign donations by Glock employees between 1991 and 2004, conducted for
    BusinessWeek by the nonprofit Center for Responsive Politics, shows more than 100 individual
    donations worth a total of at least $80,000. Jannuzzo says many more contributions were made by
    Glock employees and associates for less than $200 apiece to avoid election-law reporting requirements.
    Among the recipients of Glock-affiliated campaign contributions were former Atlanta-area Republican
    congressman Bob Barr, and two current Republican members of Congress from Georgia,
    Representative Phil Gingrey and Senator Saxby Chambliss.
    Barr said in a written statement that all donations he received from people affiliated with Glock were
    "fully and appropriately reported to the [Federal Election Commission], and so far as we knew, were
    legitimate." A spokeswoman for Gingrey said in a separate statement: "We have never knowingly
    received any unlawful contributions." A Chambliss spokeswoman said that to be on the safe side, the
    senator planned to return contributions from Glock-affiliated donors.
    Glock had a number of reasons to try to make an impression on Capitol Hill. Gun control proposals that
    could affect its business were being debated. The gun industry also lobbied for federal protection from
    liability lawsuits, culminating in the enactment of such a law in 2005.
    In his written response, Glock's Guevara said: "Manown and Jannuzzo stole over $500,000 of Glock
    money for themselves and then labeled it political contributions to hide their crimes. In any event, we
    conducted our own due diligence, which revealed that Manown's statement that Glock money was
    spread to employees to make political contributions is entirely false (except as to Manown and
    Jannuzzo). With respect to the allegation that Glock contributed $60,000 to the 2000 Presidential
    political campaign, the evidence shows that Manown stole this money from Glock and transferred it to
    Cayman Island accounts controlled by Manown and Jannuzzo."
    Manown's confession in Cobb County had serious consequences for Jannuzzo. On Jan. 14, 2008, the
    onetime U.S. chief of Glock's U.S. operation was arrested and charged by local authorities with theft and
    racketeering. The indictment alleges Jannuzzo stole a semi-automatic pistol from his former place of
    employment and conspired with Manown to embezzle $177,000 from Gaston Glock. Jannuzzo denies
    the charges. He says he never stole any money. The dealings described in the indictment related to his
    effort to help his former colleague Manown resolve his mismanagement of Glock funds, Jannuzzo says.
    As for the disputed handgun, Jannuzzo maintains he volunteered to return it but no one at Glock ever
    took him up on the offer.
    In contrast to these denials, Jannuzzo admits he reimbursed fellow Glock employees and others for
    making political contributions, which was illegal. He says he first discussed the practice with Gaston
    Glock in 1993 during a meeting in Austria. The reimbursements, Jannuzzo adds, continued for at least
    10 years. Glock indicated strong interest in the donations. "He would say, 'How are we doing? What do
    the candidates look like? Do we need to make some contributions?'" Jannuzzo adds: "[Gaston Glock]
    knew 100%. I talked to him personally about it on the phone."
    No one has been charged in connection with the alleged reimbursements. Some may now be beyond
    prosecution because the statute of limitations has expired.
    Barrett is an assistant managing editor at BusinessWeek. Grow is a correspondent in BusinessWeek's Atlanta
    bureau. Ewing is BusinessWeek's European regional editor.
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    Hoarding Rounds
    The "Obama stimulus" that caused a surge in gun sales has created another bull market—for bullets.
    The Los Angeles Times (SUNW) reported on Aug. 30 that ammunition prices have jumped as gun
    enthusiasts, worried about new restrictions, stock up on firearms and ammo. "Bullet factories are
    running around the clock to meet demand," the Times noted. The Obama Administration has not,
    however, made a move to toughen gun control, let alone ammunition control.
    To read this article, go to http://bx.businessweek.com/us-manufacturing/reference

  2. #2
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    Read the story about Glock's various business entities the other day, not really sure how I feel about it, as in whether its a hit piece or not. I like their guns, do I care how they make their money? Its not like they're testing them on kittens or some shit.
    "It makes no difference what men think of war, said the judge. War endures. As well ask men what they think of stone. War was always here. Before man was, war waited for him. The ultimate trade awaiting its ultimate practitioner."

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    Quote Originally Posted by Rider79 View Post
    Read the story about Glock's various business entities the other day, not really sure how I feel about it, as in whether its a hit piece or not. I like their guns, do I care how they make their money? Its not like they're testing them on kittens or some shit.
    I tend to not want to reward companies that try and scam their way of paying their bills. If I have to pay taxes on my income, then so do they! Especially since they are a foreign company capitalizing on the US market!

    The second article if really the one of interest. Quite some time ago Vickers was run through the ringer on Glock Talk for stating that the G22 had issues.

    Looks like he was right.



    C4

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    I'm glad I got rid of my 22 before I heard about the issues, since I carried it on duty with a light on it, but luckily I had no problems. With everything I've read about Glocks in other calibers, I have no interest in owning Glocks in anything but 9mm now.

    As for the article on business practices, I think most corporations do creative accounting within the parameters of the law to reduce their tax liability. My ex's father was a partner with one of the Big 6 (now Big 4, I think) accounting firms, he retired at 55, but still makes a crapload of money consulting and lecturing on tax law. I just have a tendency to not trust the media on most issues, therefore, I don't know how I feel about this article, and I don't know how much of it is actually true. Anytime I see an article about the gun industry in a non-gun magazine I tend to not trust it. Like I said, creative accounting is one thing, doing something truly terrible like testing their guns on kittens is another thing. Well, I don't like cats, so I guess I'd be more upset if it was puppies. Like how they try to make a connection between Glock and the WW2 German Army, the article is about Glock's business practices, what does painting him as a possible Nazi have to do with it?
    Last edited by Rider79; 09-16-09 at 09:50.
    "It makes no difference what men think of war, said the judge. War endures. As well ask men what they think of stone. War was always here. Before man was, war waited for him. The ultimate trade awaiting its ultimate practitioner."

  5. #5
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    Quote Originally Posted by Rider79 View Post
    I'm glad I got rid of my 22 before I heard about the issues, since I carried it on duty with a light on it, but luckily I had no problems. With everything I've read about Glocks in other calibers, I have no interest in owning Glocks in anything but 9mm now.
    Not all G22's had issues with lights on them, but we saw a lot that did.

    As for the article on business practices, I think most corporations do creative accounting within the parameters of the law to reduce their tax liability. My ex's father was a partner with one of the Big 6 (now Big 4, I think) accounting firms, he retired at 55, but still makes a crapload of money consulting and lecturing on tax law. I just have a tendency to not trust the media on most issues, therefore, I don't know how I feel about this article, and I don't know how much of it is actually true. Anytime I see an article about the gun industry in a non-gun magazine I tend to not trust it. Like I said, creative accounting is one thing, doing something truly terrible like testing their guns on kittens is another thing. Well, I don't like cats, so I guess I'd be more upset if it was puppies. Like how they try to make a connection between Glock and the WW2 German Army, the article is about Glock's business practices, what does painting him as a possible Nazi have to do with it?
    As a business owner, I am all for paying less taxes. There are legal ways to do it and then there are not. Glock is not going about it the legal way.

    It has long been known the Gaston supported the families of SS officers (still till this day). Pass on supporting those aholes.


    C4

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    Quote Originally Posted by C4IGrant View Post
    As a business owner, I am all for paying less taxes. There are legal ways to do it and then there are not. Glock is not going about it the legal way.

    It has long been known the Gaston supported the families of SS officers (still till this day). Pass on supporting those aholes.


    C4
    Still have trouble believing anything gun related in non-gun media. That being said, if these things are true, then I guess I'm glad I haven't purchased a brand new Glock in years.

    ETA: Now that I think about it, my Glock 23, the 2nd handgun I ever owned, was the only Glock I ever bought new. Never actually crossed my mind before that every other Glock I own or have owned was picked up secondhand.
    Last edited by Rider79; 09-16-09 at 10:06.
    "It makes no difference what men think of war, said the judge. War endures. As well ask men what they think of stone. War was always here. Before man was, war waited for him. The ultimate trade awaiting its ultimate practitioner."

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    Quote Originally Posted by Rider79 View Post
    Still have trouble believing anything gun related in non-gun media. That being said, if these things are true, then I guess I'm glad I haven't purchased a brand new Glock in years.
    I understand. The G22 story is spot on though so I do not find the other one hard to believe.



    C4

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    People should check out the FN FNP-40 as an alternative. Great polymer pistols.

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    Although I have never owned or liked Glocks, they dominate the market because of their innovative products. The 9mm models have an incredible reputation for being good pistols, not just because of the design but also because of quality.

    Unlike some American companies which are always trying to find a way to cut corners, Glock has continued to create a high quality pistol at a reasonable price. With the introduction of the XD, M&P, and other polymer pistols it will be interesting to see if they can hold their own.

    That being said, Glock has created some products that do not perform to the "Glock Perfection" standard. Their arrogance and failure to take a look at the issues and correct them rather than blaming it on ammo, user, etc. is what bothers me.
    "The sword is more important than the shield, and skill is more important than either. The final weapon is the brain. All else is supplemental." John Steinbeck

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    OK, the US tax code is contradictory and confusing. It is also organic - meaning it grew page by page to the huge document it is today. There is no effort to reconcile previous pages with the new pages. Trying to figure out if you are in compliance or not is a multi-billion dollar international industry. Before you condemn a company - walk a mile in their shoes.

    It is also only good stewardship to create holding companies and transfer companies when dealing with International transactions and business. If you think Glock is the only one who does it you are sadly mistaken. And rather naive. Complex corporate structures are practically mandated by one set of regulations and punished by another.

    Lastly, having been through a few M&A activities - I can assure you that business reporters are as bad at their jobs or worse than political ones are. Maybe worse. I once read a story about a merger in a major, blue-ribbon business publication that bore absolutely zero resemblance to the actual transaction and companies involved. They also missed personality traits that would have been apparent to toll booth workers at 15 mph. So take any article with a grain of salt.

    ETA - not meant to be a comment on the 40 cal Glocks, just the "corporate" parts of the story

    M_P
    Last edited by Business_Casual; 09-16-09 at 20:15.

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