Reaction to Newtown Shootings Spreads to Corporate America

4:43 p.m. | Updated

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Cerberus to Sell Top Gunmaker

In the wake of the Newtown, Conn., killings, the investment firm Cerberus Capital Management said it would sell its stake in Freedom Group, the country's largest gunmaker.

By Claudine Hutton, Elaisha Stokes, Vijai Singh and Pedro Rafael Rosado on Publish Date December 18, 2012.

The reaction to the Newtown shootings spread to corporate America and to California on Tuesday, as a private equity firm said it would immediately sell the company that made the assault-style rifle used in shootings, while California lawmakers announced an effort to regulate the sale of ammunition more tightly.

The legislation, being introduced by State Senator Kevin de León, a Democrat, would require anyone looking to buy ammunition for any kind of weapon to undergo a background check and obtain a one-year permit costing $50. The legislation would also ban the sale of ammunition in California by mail, requiring that all transactions be done in person.

Democrats said that given the party’s increasingly powerful control of the Legislature – they now control two-thirds of the seats, in both the Assembly and the Senate – they were confident that the legislation could pass swiftly and hoped it would set a model for other states around the country.

In announcing the sale of the gun manufacturer, the private equity firm Cerberus Capital Management made clear that the decision stemmed from the killings at Sandy Hook Elementary School, in Newtown, Conn. “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,” Cerberus said in a news release.

The firm said it planned to sell the Freedom Group, which makes the .223 Bushmaster rifle used in the massacre. Cerberus acquired Bushmaster in 2006, later merging it with other gun companies to create the Freedom Group.

Tuesday’s announcement follows a statement from the California State Teachers’ Retirement System, a large pension fund, that it was reviewing its investment in Cerberus in light of the firm’s holding in the Freedom Group.

Cerberus is one of several private equity firms that have holdings in gun manufacturers. Colt Defense, which was spun out of the maker of the .44-40 Colt revolver, is jointly owned by Sciens Capital Management, a fund advised by the Blackstone Group and another fund operated by Credit Suisse.

Separately, Dick’s Sporting Goods, a chain with more than 500 stores, said in a statement on its Web site that it was stopping all sales and displays of guns at its store closest to Newtown and was temporarily ceasing sales of modern rifles nationwide.

Walmart.com removed its information page on the Bushmaster .223, a semiautomatic model said to be used by the Newtown gunman, Adam Lanza. And Bass Pro Shop was not listing information about Bushmaster-brand guns on its Web site, though it had promoted the brand in a Black Friday special.

Walmart, the nation’s largest retailer, said it removed the information page on Bushmaster “in light of the tragic events.” However, it will continue to sell the Bushmaster and said it had made no changes to its sales policies on guns and ammunition.

Recently, Walmart has been increasing its emphasis on gun sales, after a five-year period in which it had backed away from them. In 2006, the company stopped selling guns in most of its United States stores, saying there was little customer demand for the items. But in 2011, it reversed that decision, saying it wanted to appeal to hunting enthusiasts, and began selling guns at more than half of its stores.

Around the country, gun-control advocates continued on Tuesday to seize on public grief and anger about Friday’s massacre of 20 young children to insist on quick, broad action by President Obama and Congress to regulate firearms, confront mental illness and address violence in the media and video games.

The White House hinted at the kinds of gun measures Mr. Obama would embrace. In the past, the president has endorsed reinstatement of an expired ban on assault weapons without putting any political muscle into it on the calculation that the votes were not there. This time, he will be “actively supportive” of a fresh legislative effort, said Jay Carney, the White House press secretary. The president will also support closing a gun show loophole, and “potentially” limits on high-capacity ammunition clips of the sort used in Newtown, Mr. Carney said.

But Mr. Carney said the president hoped to go beyond just gun regulation. “While he supports strongly renewal of the assault weapons ban, and strongly other measures, he wants to expand the conversation beyond those specific areas of legislation to look at other ways we can address this problem,” he said.

While he did not specify, Mr. Carney mentioned mental health, education and “perhaps” cultural issues that may contribute to mass killings. He embraced a call by David Axelrod, the president’s strategist in the recent election, to rethink violent video games that glorify killing.

Four days after the shootings, the gun-control debate is intensifying even as the residents of Newtown slowly carry on with the grim task of burying their loved ones. Funerals for the victims of the shooting are being held throughout the week, ahead of the Christmas holiday next Tuesday.

Residents of Newtown, where Mr. Lanza killed 26 people at the elementary school, as well as his mother and himself, announced the formation of a group called Newtown United, focused on turning the tragedy in their community into political pressure to confront the country’s gun culture.

“I would like, when you think of Sandy Hook, you think, ‘Oh, that’s where they banned assault weapons,’ ” John Neuhoff, a Newtown resident, told Reuters. “If we can ban fireworks, we should be able to ban assault weapons.”

At the same time, some gun-rights advocates said that they would resist new limits on firearms, and two of the nation’s Republican governors said the Connecticut shootings should not curtail the rights of their citizens to carry concealed weapons.

Gov. Rick Perry of Texas told a Tea Party group on Monday that he opposed “knee-jerk reaction from Washington, D.C.” in the wake of the shootings and said that schoolteachers and administrators should be allowed to carry concealed weapons, according to The Dallas Morning News.

In Ohio, Gov. John R. Kasich said he still intended to sign a bill allowing guns in the parking garages of the State Capitol, saying in a statement to The Plain Dealer of Cleveland that he is “a Second Amendment supporter and that’s not going to change.”

“There are a range of issues at play here involving mental health, school security and a culture that at times fails to reject the glorification of violence that can desensitize us to the sanctity and majesty of life,” Mr. Kasich told the newspaper. “Going forward, we need to pay close attention to what the experts conclude from this incident in order to see if there are lessons to be learned and applied here in Ohio.”

In its first official statement since the school shooting, the National Rifle Association said it was “shocked, saddened and heartbroken by the murders” and would weigh in on the growing public debate about guns and violence at a news conference on Friday.

In a statement e-mailed by a spokesman on Tuesday, the group said that “out of respect for the families, and as a matter of common decency, we have given time for mourning, prayer and a full investigation of the facts before commenting.”

The group said it would participate in the debate, in part with what its statement described as a “major news conference” on Friday, but it did not offer any particulars on Tuesday.

“The N.R.A. is prepared to offer meaningful contributions to help make sure this never happens again,” the statement said.

The events in Newtown appear to have energized gun-control advocates who view the somber aftermath of the tragedy as an opportunity — but only if change comes quickly, before the memory of the children and their teachers fades.

In California, aides to Mr. de León said that the idea behind his legislation was to try to slow the distribution of ammunition, given how many weapons are already in circulation.

Still, an earlier effort to restrict ammunition sales in the state ran into obstacles. Arnold Schwarzenegger, the former Republican governor, signed a similar measure that would apply only to handguns, in effort to crack down on gangs. The National Rifle Association challenged the legislation in court, and a Superior Court judge ruled that the definition of handgun ammunition was unconstitutionally vague.

Mr. de León said that he was seeking to address those legal concerns by introducing legislation that would apply to all types of ammunition. “It continues to be easier in California to purchase handgun ammunition than it is a packet of cigarettes or allergy medicine,” the sponsors of the bill said in a memorandum released Tuesday.

In addition to California, other states are moving to take legislative action. In Colorado, Gov. John W. Hickenlooper announced Tuesday plans to revamp the state’s mental health services and bolster firearms background checks aimed at making it more difficult for a mentally ill person to buy a gun.

Mr. Hickenlooper will also ask state lawmakers to allocate nearly $20 million to finance improvements to the state’s mental health system. Those improvements would include the building of two transitional facilities for patients being released from mental health hospitals and expansion of case management services for the mentally ill.

Eric Brown, a spokesman for the governor said the changes were being proposed in direct response to the July shootings in a crowded Aurora, Colo., movie theater.

Stephanie Clifford, Nicholas Confessore, Dan Frosch, Peter Baker and Mark Scott contributed reporting.