Review of the Bureau of Alcohol, Tobacco, Firearms and Explosives’
Implementation of the Safe Explosives Act
Evaluation and Inspections Report I-2005-005
Office of the Inspector General
A primary purpose of the SEA is to keep potentially dangerous individuals from obtaining explosives. The Department of the Treasury, Assistant Secretary of Enforcement, testified during a June 2002 congressional hearing on the SEA that “given the increasingly unstable state of affairs in our world today, unchecked access to explosives is unacceptable.”41
The SEA added three categories to the existing four categories of individuals prohibited from having access to explosives, and further required the ATF to conduct complete background checks to ensure that prohibited persons are not granted access to explosives. To meet this requirement, the ATF entered into an agreement with the FBI to conduct NICS background checks on all Employee Possessors.42 After receiving the results of the FBI NICS E-Check, the ATF may collect additional information before determining whether an individual is authorized to have access to explosives.
However, we found that in some cases, the ATF failed to request FBI NICS E-Checks on all Employee Possessor applicants. The ATF also frequently failed to make final determinations on employee clearance status based on the FBI NICS E-Checks and other information sources. Because of these failures, in some cases, prohibited persons were not denied access to explosives.
The ATF failed to request FBI NICS E-Checks on all Employee Possessor applicants. To determine whether the ATF had conducted the required background checks on all Employee Possessors, we asked the ATF to provide us with the number of Employee Possessors in the FLS database. We requested this information because, as the licensing process was initially explained to us by the NLC, each Employee Possessor record in the FLS would have a corresponding and distinct NICS E Check. We compared the number of Employee Possessor records in the FLS with the number of NICS background checks on Employee Possessors recorded by the NICS Section and found that the ATF had 10,069 more Employee Possessor records in the FLS than the number of background checks performed by the FBI NICS Section.43 (See Table 1.)
In a meeting to discuss the discrepancy, ATF Headquarters officials explained that the number of Employee Possessors originally reported to us was overstated because an Employee Possessor could be associated with a single application that requested multiple types of licenses and therefore would appear in the FLS multiple times (once for each license type). In these cases, the outcome of a single NICS E-Check would be used to enter the Employee Possessor’s status in the FLS for each license.44 Further, NLC staff explained, because there is no unique field in the FLS to track individual NICS E-Checks, the FLS is incapable of accurately reporting the number of persons checked through NICS E-Check for comparison with NICS records.
In contrast, we found FBI NICS Section data related to the ATF’s NICS E-Check activities to be reliable. The FBI’s NICS E-Check system is capable of accurately tracking and reporting on usage as each case is assigned a unique control number and is associated with a specific user identification number.45 In a conference call between the OIG Inspection Team, NLC staff, and the FBI’s NICS Section, a manager at the NICS Section told the OIG that the NICS data are complete and accurate because, “It’s the system that did the checks and nothing has been purged.” The ATF did not dispute that statement.
Because we could not compare FLS and NICS data to determine that the ATF had requested NICS E-Checks on all Employee Possessor applicants, we requested from the ATF the first 1,000 Employee Possessor records in the FLS database (sorted alphabetically), as of January 12, 2005.46 After accounting for duplicate records, we determined that the 1,000 records represented 683 individuals. We then asked the FBI to query NICS records to confirm that the ATF had requested NICS E-Checks on those 683 individuals. According to the FBI NICS Section, it compared the ATF records that we provided to the NICS automated system by exact name as requested. While manually evaluating the automated system response, the FBI NICS identified potential omissions. In approximately 23 percent of the cases, a NICS check did not exist when searched by exact name only. A complete search by Social Security number was not feasible because a Social Security number was not provided for some individuals. Therefore, the FBI responded to us by providing all records of NICS E-Checks on Employee Possessors submitted by the ATF NLC for individuals within the same alphabetic range as the ATF records (i.e., names beginning with Aar through Amb).
We manually compared the FBI data with the ATF data and found 63 Employee Possessors in the FLS that had no record of having had a NICS E-Check. Because individuals can be Responsible Persons in addition to being Employee Possessors, and therefore may have had their background checks conducted in that category, we examined FLS data and found that 4 of these 63 individuals were also Responsible Persons.47 Therefore, we concluded that at least 59 of the 683 Employee Possessors in the ATF FLS database (9 percent) had never received a NICS E-Check. Of those 59, FLS records indicated that 34 individuals were in a pending status and 25 had been cleared to access explosives.
Unidentifiable NICS E-Checks. In reviewing and comparing the ATF and FBI records, in addition to identifying individuals for whom no NICS E-Check had been conducted, we identified instances in which the NLC’s NICS user identification number had been used to conduct background checks on persons who did not appear as Employee Possessor applicants. In our review of the data, we determined that, due to duplication as well as names being entered into only one of the databases, the FBI and ATF data comprised 1,193 different records. Of those:
On February 16, 2005, the OIG supplied the ATF with a list of NTNs (the unique identifier used by NICS to track background checks) for 145 of the 147 records which could not be found in the FLS list of 1,000 Employee Possessors (2 were found to be Responsible Persons, not Employee Possessors). We asked the ATF to reconcile the discrepancy between NICS and the FLS. On February 25, 2005, the ATF provided a list of 121 records it had identified as Responsible Persons who were listed in the FLS and matched the FBI-NICS NTN. In addition, the ATF determined that five of the records were Employee Possessors listed in the FLS under different names. The ATF stated that the remaining 19 records could not be found in the FLS. However, after reviewing the ATF-provided list, we found that two records the ATF reported as “found” did not match the person who was the subject of the FBI NICS E-Check. We are concerned about the existence of NICS E-Check records for individuals who cannot be confirmed as explosives license applicants or their employees because it could indicate misuse of the NICS E-Check system. The NLC’s use of the NICS E-Check system is intended for legitimate background checks of explosives license applicants and their employees. If these checks were not initiated on explosives license applicants or their employees, it would be an abuse of the NICS E-Check system.
The ATF frequently failed to make final determinations on employee clearance status based on the FBI NICS E-Checks and other information sources. In reviewing ATF FLS data, we noted that 25,181 of 56,589 Employee Possessor records (45 percent) were in a “pending” status. According to the procedures explained to us by the ATF NLC, a pending status indicated that the ATF had not made a final determination on clearance or denial.
We determined that the ATF was not completing adjudications of Employee Possessor clearances. According to FBI statistics, 88 percent of all NICS E-Checks are completed within 24 hours, and we confirmed with the FBI NICS Section that the ATF had retrieved the results of almost all of the NICS E-Checks it submitted. According to the FBI NICS Section, as of February 14, 2005, fewer than 100 E-Checks of Employee Possessors had not been retrieved and remained pending in NICS. Cases are automatically cleared from the NICS E-Check pending database when an NLC Examiner queries NICS E-Check for the outcome of a background check. The fact that few cases were held as pending in NICS indicates that NICS checks had been completed and NLC staff had retrieved the outcome of these checks. Therefore, we questioned why a significant number of Employee Possessor records in the FLS were still pending.
When we discussed our findings with the Chief of the NLC and an NLC Program Analyst, they stated that they were unaware of the number of background checks appearing as “pending” in the FLS until we requested the information in September 2004. Both stated that the NLC already had issued the licenses and permits associated with these “pending” Employee Possessors. The Chief of the NLC acknowledged this is as “a major weakness” in the explosives licensing process and began an initiative to address the discrepancy in November 2004.
In discussing possible reasons for the high number of pending records, ATF Headquarters officials hypothesized that Employee Possessors may appear in multiple records but Legal Instrument Examiners may have entered NICS E-Check results in only one of the records and left the other records associated with the individual as pending.48 According to the ATF, an individual could appear in multiple FLS records if a business had applied for multiple licenses, either in one application package or in separate applications.49
To test the ATF’s hypothesis, we reviewed Employee Possessor data for every license and permit application submitted to the ATF since the background check provisions of the SEA became effective in May 2003.50 We found that only 460 of the 8,940 explosives license and permit applications submitted since May 2003 requested multiple license types (i.e., user, manufacturer, importer, retailer) on the same application.51 These 460 applications requested a total of 1,030 explosives licenses and included a maximum total of 1,460 possible duplicate Employee Possessor records. Therefore, this explanation could account for no more than 15 percent of the total discrepancy.52
In addition to finding multiple license types associated with the same application, we also found instances of multiple applications from the same entity for different licenses (e.g., for different license types or different locations) that might possibly explain the difference in Employee Possessor records in the FLS and the number of NICS E-Checks performed on these Employee Possessors.
Therefore, in order to finally ascertain whether individual Employee Possessors had a determination entered in at least one of their records, we reviewed the first 1,000 Employee Possessor records listed alphabetically in the FLS as of January 12, 2005. We found that 43 of the 1,000 records were duplicates because an Employee Possessor was associated with multiple licenses issued based on a single application. In addition, we found that other individuals appeared more than once because they were associated with separate applications from one or more entities. As explained previously, we determined that the 1,000 Employee Possessor records represented 683 distinct Employee Possessors.53 Of those 683 individuals:
Based on the above analysis, the OIG determined that the data does not support the ATF’s claim that a clearance or denial had been entered into at least one FLS record for each Employee Possessor. As the ATF-provided data shows, 31 percent (211 of 683) of the Employee Possessors in our sample were listed in the FLS as pending in all of their records. The average time that these individuals had remained in a pending status was 299 days. Extrapolating from the rates found in our statistically valid sample, the universe of 56,589 Employee Possessor records in the ATF’s FLS database would represent approximately 38,650 individuals, of whom 11,943 would have neither a NICS E-Check result nor a final ATF determination on whether the individual should be allowed access to explosives.
The ATF did not consistently act upon NICS determinations and as a result allowed more than half of the individuals identified by the FBI as potentially prohibited persons to have access to explosives. According to FBI data, as of August 2004, 1,157 Employee Possessors had been identified through the NICS E-Check as potential prohibited persons.54 However, according to ATF data, as of August 2004, only 502 Employee Possessor applicants had been denied the authority to legally possess explosives. Over half of the individuals identified by the FBI as being potential prohibited persons (at least 655 of 1,157) were still categorized as “pending” in the FLS and were still authorized to have access to explosives because the ATF had not made final determinations on their clearance status.55
After we alerted the ATF to the difference in the numbers of FBI- and ATF-identified prohibited persons, the NLC examined a non-statistical sample of 52 records of individuals identified by the FBI as potential prohibited persons to determine their status in the FLS. On November 6, 2004, the ATF reported to us that of the 52 individuals, 23 were listed in the FLS as being “denied” access to explosives, 17 were listed as “pending,” and 2 were listed as “cleared.” The remaining ten were initially not found in the FLS, but subsequently, the ATF reported that it had found nine of these individuals. In January 2005, the ATF corrected its initial response and reported that of the 52 individuals, 26 were listed in the FLS as being “denied” access to explosives, 20 were listed as “pending,” 4 were listed as “cleared,” 1 was listed as “denied” in 1 FLS record and “pending” in another record, and 1 did not appear in the FLS at all.56
To determine the potential significance of the criminal records of those individuals listed in the FLS as “cleared” or “pending” but who were denied by the FBI NICS check, in November 2004 we conducted NCIC background checks on the 17 individuals that the ATF initially reported as pending in the FLS. Among those who received a NICS response of “denied” but were still authorized to possess explosives by the ATF as of November 6, 2004, the OIG found four convicted felons and three aliens (one under an Immigration and Customs Enforcement removal order).57 For example:
Because the ATF had not denied these individuals but continued to show them as pending in the FLS, they continued to have ATF authorization to access explosives for as long as 14 months after being identified as a prohibited person by the FBI.
The ATF does not consistently complete background checks on individuals for whom the FBI could not complete a NICS check. Since May 2003, more than 800 cases of individuals whose names appeared in NICS, but whom the FBI could not confirm as a prohibited person within 30 days (e.g., due to unavailability of court records), have been referred by the FBI to the ATF to complete the background investigation. We found that the ATF has failed to follow up and complete the investigations of these individuals’ backgrounds to determine if they should be prohibited from accessing explosives. In response to an OIG inquiry, in September 2004 the ATF told us that the FBI had referred 856 Employee Possessor applicants to have their background checks completed by the ATF.
Subsequent to our inquiry, in November 2004 the ATF reported that it had initiated an effort to determine how many individuals associated with active explosives licenses remained in “pending” status. As of January 2005, the ATF reported that 559 of the Employee Possessors ultimately had been cleared or denied by either NLC Legal Instrument Examiners or the FBI, or they were administratively cancelled (e.g., because the license applications were withdrawn). However, 297 of the individuals who could not be confirmed as prohibited persons by the FBI remained in pending status and continued to have the authority to possess explosives. We determined that the background checks for these individuals had been pending for an average of 363 days.58
We examined the actions taken by the ATF to resolve the 297 cases and determined that the ATF had not established procedures to ensure that such cases are resolved. In similar cases related to potential firearms sales, specialists at the ATF’s Brady Branch determine the additional investigation required and assign the cases to the appropriate ATF Field Division. The Field Division then conducts an investigation to determine whether the individuals should be prohibited from possessing firearms.59 Consistent with that practice, the FBI began forwarding cases involving explosives Employee Possessors to the ATF Brady Branch for processing, and a Brady Branch supervisor told us that the branch initially planned to treat explosives referrals in the same way as firearms cases. However, the supervisor said, the ATF Deputy Assistant Director, Enforcement Programs and Services, verbally informed Brady Branch personnel to set aside explosives-related NICS referrals because the Chief of NELC would process the explosives-related referrals. One Brady Branch Specialist said, “We were told to do nothing with them when they came in. They were put on hold. They weren’t in our mission, which is to do firearms.” The OIG confirmed with the Chief of the NELC that one of his first tasks after being assigned in October 2003 was to process the NICS referrals by following up on the NICS response and determining if the individuals should, in fact, be denied access to explosives.
Although the Brady Branch did not investigate the cases, Legal Instrument Examiners at the NLC continued to monitor some Employee Possessor applicants whose background checks could not be completed by the FBI. In some cases, the NLC Legal Instrument Examiner sent queries (“arrest letters”) to Employee Possessor applicants asking for information to assist in determining whether the individual was indeed prohibited from possessing explosives. The letter also requested that the applicant submit a completed fingerprint card to the ATF within 30 days.60 Otherwise, according to the letter, the applicant’s records would be forwarded to the nearest ATF Field Division for investigation.61 However, as of January 2005, NELC officials we spoke with told us that none of the 297 pending cases had been referred to an ATF Field Division for investigation.
Many explosives licensees have not reported hiring any new Employee Possessors. The SEA requires that explosives licensees and permit holders report all new Employee Possessors to the ATF within 30 days of their being hired. Under the provisions of the SEA, companies should submit Employee Possessor Questionnaires for their new employees, and the ATF should conduct the required background check and issue the company an amended Notice of Clearance reflecting the results of the check. However, our review of data provided by the ATF found that few explosives licensees and permit holders have reported new hires and received amended Notices of Clearance to provide the results of the Employee Possessors’ background checks.
To identify licensees who reported newly hired Employee Possessors, we asked the ATF for information on all companies covered by the background check provisions of the SEA. We also asked for information on all amended Notices of Clearance issued to those companies. On February 11, 2005, the ATF provided data showing that 9,510 new licenses were issued from May 23, 2003, through January 31, 2005, and that 920 amended Notices of Clearance were issued during that same 20-month period.
However, we found that not all of the 920 amended Notices of Clearance were issued as a result of companies reporting new employees. Upon analyzing the ATF data, we found that 338 of the 920 amended Notices of Clearance were issued in January or February 2004. (See Figure 4, next page.) When we questioned the ATF about this, an NLC Program Analyst told us that many of the “amended” Notices of Clearance issued during that time were not actually issued in response to reports of new employees, but were issued because the original Notices of Clearance had been returned to the ATF by the U.S. Postal Service as “undeliverable.” The Notices had been undeliverable because they were mailed to field locations that did not have mailboxes or clearly marked addresses (e.g., coal mines and quarries) rather than to the corporate offices of the companies.62 The Program Analyst reported that he personally initiated 327 of the amended Notices of Clearance and that “a majority” of the notices he issued during that time were only “re-mailings.” However, the ATF could not identify exactly how many of the 920 amended Notices of Clearance were issued in response to reports of new employees and how many were issued to correct address problems.
Our further examination of the records of amended Notices of Clearance found that 43 of the 920 Notices were duplicates. We asked the Program Analyst about these cases, and he explained that the duplicate entries did not mean that more than one amended Notice of Clearance had been sent. Instead, he explained, the certificate printing was done using batch processing. Therefore, several “print orders” could be entered into the FLS during the day, but only the last amended Notice of Clearance entered into the system would be printed at the end of the business day. Overall, because some of the 920 amended Notices of Clearance were due solely to address errors, and some of the Notices were duplicates, we estimate that the number of actual amended Notices of Clearance issued in response to reports of new employees is, at most, about 700. That indicates that less than 8 percent of the 9,510 explosives licensees covered by the SEA had reported any new hires to the ATF between May 2003 and January 2005.
Although a low percentage of companies had reported new employees and received amended Notices of Clearance, many companies may be small or family-owned businesses that may have minimal turnover. Because larger companies are more likely to experience turnover, we examined the data related to the 50 licenses (held by a total of 26 companies) with the highest number of related Employee Possessors.63 We found that a total of 25,385 Employee Possessors were associated with the 50 licenses. Since May 2003, new employees had been reported by the companies for 26 of the licenses.64 No new employees had been reported for the remaining 24 licenses, which represented a total of 13,380 Employee Possessors, according to the original applications.
If new Employee Possessors are not reported when they are hired, the ATF may not know to conduct the required background check until their employers’ licenses must be renewed or until compliance inspections are conducted. We reviewed the ATF’s procedure for conducting compliance inspections and confirmed that it includes steps to identify new, unreported employees. During the compliance inspections, Inspectors are instructed to compare the ATF NLC’s list of Employee Possessors against a licensee-generated list of employees to identify any employee changes.65 However, the ATF is only required to conduct compliance inspections on explosives licensees once every three years. New employees would also be reported when the licensees submit applications to renew their licenses, which also occur on a triennial basis. If an employer fails to timely report new employees so that the ATF can check their backgrounds, prohibited persons could have access to explosives until the next time that employer’s permit or license is renewed or a compliance inspection is conducted.
The ATF’s FLS contains significant structural deficiencies that limit its utility for monitoring the licensing process and providing ATF management with information on critical aspects of licensing operations. In addition to structural deficiencies, during this review we found numerous instances of inaccurate, incomplete, and missing data in the FLS database. Combined, these deficiencies prevent timely and effective management of some of the most basic activities related to the ATF’s explosives oversight responsibilities. The following summarizes some of the significant shortcomings of the FLS for managing the explosives licensing program.
The FLS cannot be used to ensure that NICS E-Checks are conducted on all Employee Possessor applicants during the licensing process. One of the most critical functions of the explosives licensing program implemented under the SEA is the conduct of a complete background check on individuals applying to be Employee Possessors before granting them clearance to have access to explosives. In order to determine the eligibility of individuals applying to be Responsible Persons and Employee Possessors, the ATF developed a partnership with the FBI NICS Section. Under the agreement, the FBI conducts a complete background check on Responsible Persons, including a check based on fingerprints, and NICS E-Checks on Employee Possessors who apply to the ATF for authorization to handle explosives.
However, the FLS does not contain fields to confirm that background checks have been initiated and completed. The FLS does track the status of an Employee Possessor’s clearance and indicates whether it is approved, denied, or still pending. As noted earlier in this report, our review found that 61 of the 683 Employee Possessors whose FLS records we reviewed and compared with corresponding FBI data had no record of having had a NICS E-Check conducted. Notwithstanding the fact that these individuals had a NICS status listed in their FLS record, because the FLS does not contain a field to positively track background checks, the system was incapable of notifying ATF management that nearly 9 percent of Employee Possessor applicants appear not to have had the required background checks.
The FLS cannot be used to properly manage and report on the clearance status of employees of explosives licensees. In addition to not tracking the initiation and completion of background checks, the FLS was not capable of accurately tracking and reporting on the status of Employee Possessor applications. The data provided by the ATF in response to our initial requests for information on Employee Possessor records in the FLS indicated that approximately 45 percent of all records had a NICS E-Check status of “pending.” Because some Employee Possessors have more than one record in the FLS, we examined a sample of 1,000 records to determine whether a final determination was listed in at least one record for each Employee Possessor. We found that, after accounting for multiple entries, about 31 percent of all Employee Possessors were listed as pending in all of their records. These individuals had been held in pending status for an average of 299 days.
The high volume of records in a pending status, and the long duration that they remained in that status, occurred because the FLS is not designed to notify ATF management of status problems. For example, the FLS does not provide ATF management with aging reports that would identify the number of Employee Possessor records remaining in pending status for specified timeframes (e.g., 0 to 30 days; 30 to 60 days). Given the quick response time and very few “hold” responses for background checks provided by the NICS Section (see page 16), the number of records remaining in a pending status for long periods should be minimal.
The FLS does not ensure that all records related to the clearance status of Employee Possessors are current and consistent. We found that the FLS is not designed to prevent individual Employee Possessors with multiple records from having a different status listed in each record. Of the 683 individual Employee Possessors in the 1,000 FLS records reviewed by the OIG, just over 8 percent showed multiple statuses in the FLS. We found instances of an Employee Possessor listed as “cleared” for one license and “pending” for another. In other cases, an Employee Possessor was listed as “denied” for one license and “pending” for another. This is a potentially significant deficiency. If the FLS does not warn ATF management when an individual has different statuses listed in different records, individuals prohibited from accessing explosives in response to one license application could mistakenly be authorized access to explosives because they are still “pending” in their records related to other license applications.
The FLS cannot be used to accurately track trends in the reporting of new employees. Under the SEA, employers are required to report new employees within 30 days so that the ATF can conduct the required background checks. Once those checks are completed, the employers are provided with amended Notices of Clearance reflecting the results of those checks. However, we found that few employers had been issued amended Notices of Clearance, indicating that they had not reported any new employees. These included some of the largest employers of explosives workers in the United States for whom having no new hires for many months or years would be highly unlikely.
The FLS is not identifying employers who have gone an extended period of time without reporting any new Employee Possessors. Moreover, the system does not track the reasons that amended Notices of Clearance were issued. Therefore, the FLS cannot accurately distinguish companies that received amended Notices of Clearance because they reported new employees and those that received amended Notices of Clearance for administrative reasons (e.g., reincorporation, address errors). Because of these deficiencies, the ATF cannot effectively use the FLS to identify companies that may not be complying with the reporting requirements of the SEA.
The FLS does not have sufficient error-checking mechanisms and data entry guidelines to prevent the entry of faulty, inaccurate, or inconsistent data. During our examination of more than 2,000 FLS records as a part of this review, we found a high number of data errors and inconsistencies in the FLS database. Examples of data errors and inconsistencies we found include:
Many of the errors occurred because the FLS is not designed to reject data that is obviously incorrect, either because it is misspelled or illogical. The number of data errors also indicates that the ATF does not have an effective quality control program for checking and reporting on the quality of data entry. Because of the errors, the data in the FLS is difficult to use to track individuals applying to access explosives. The poor data quality makes it difficult for the ATF to effectively manage the licensing process, generate or rely on standard reports, conduct system searches, or accurately report performance. Those difficulties were evident as the ATF attempted to respond to our data requests and as we attempted to use the FLS data to ascertain whether individuals had been properly processed.
To effectively implement the SEA, the ATF requires a system that accurately and completely tracks and reports on the number of individual Employee Possessors allowed to work with explosives. While we recognize that the ATF issued the explosives licenses and permits required by the SEA timely and carried out the implementation with minimal disruption to the explosives industry, the primary purpose of the SEA is to keep potentially dangerous individuals from obtaining explosives. The system deficiencies we describe above are a major shortcoming that limits the ATF’s ability to achieve that primary purpose.
We make the following recommendations to help the ATF improve the implementation of the Safe Explosives Act and more effectively regulate explosives within the United States. The recommendations focus on ensuring that prohibited persons do not have access to explosives.
We recommend that the ATF:
— Conduct background checks on any individuals contained in the ATF licensing system but not confirmed as having been checked by the FBI.
— Immediately recheck the license status of all individuals determined by the FBI to be prohibited persons and ensure those individuals are denied access to explosives.
— For any individual that the FBI has recorded a NICS background check under the NLC’s NICS user identification number, but for whom the ATF has no record in its licensing system, determine whether the person is involved in the explosives industry. If the person is, enter the individual into the ATF’s licensing system, and, if not, conduct an investigation to determine who may have performed the background check and why.
— Modification of the FLS to ensure that an Employee Possessor has only one status, system-wide, no matter how many licenses or permits are associated with the individual.
— Modification of the FLS to prevent the entry of illogical or incomplete data.
We found that the ATF was not adjudicating Relief of Disabilities applications in a timely manner. Individuals prohibited from possessing explosives can apply to the ATF’s Explosives Relief of Disabilities (ROD) Section for “relief” from federal regulations (i.e., an exception that will allow them to possess explosives notwithstanding the prohibiting factors). The ROD Section sends completed applications to the ATF Field Divisions responsible for the geographic area in which the applicants reside.
At the Field Division, ATF personnel perform an Application Investigation on the applicant; query NICS, Interpol, and Secret Service databases; and forward fingerprint cards to the FBI to determine the applicant’s criminal history. Upon completion of the Application Investigation, the investigator submits a report to the ATF Resident Agent in Charge for review. A Report of Investigation is then forwarded to the ATF Special Agent in Charge, who makes a recommendation on whether the applicant’s explosives privileges should be restored. Once the completed Report of Investigation is returned to the ROD Section, the case file is sent to the ATF Deputy Assistant Director, Enforcement Programs and Services, who makes the final ATF determination to approve or deny the application.66
As of January 2005, the ATF had not promulgated final regulations for processing applications for Relief of Disability. However, office procedure documents accompanying ATF Draft Order 3320.5 provided timelines for processing applications, including field investigations and review by ATF Headquarters. According to the timelines in the office procedure documents, applications should be investigated and adjudicated within a total of 74 days. According to the procedure documents, ROD Reports of Investigation “should be thorough and should be completed in as expeditious a manner as possible without compromising investigative thoroughness,” which the documents define as 60 days.67 The procedure also allowed 14 days for Headquarters review and adjudication.
To assess the timeliness of the ATF’s processing of applications for relief, we compared processing times for adjudicated cases to the timelines accompanying the Draft Order. From the implementation of the SEA though September 1, 2004, 453 individuals applied for Relief of Disabilities. Of those, 299 (66 percent) had been adjudicated by the ATF, with most requests being granted. (See Figure 5, next page.) We found that the adjudication times ranged from 1 day (for a case in which the applicant withdrew his application) to 443 days (in which the applicant was granted relief). Of the 299 cases, 21 were adjudicated in 74 days or less, 265 were adjudicated in between 75 and 180 days, and 13 cases took more than 180 days to adjudicate. Overall, the ATF took an average of 150 days to investigate and adjudicate the applications for Relief of Disabilities. We determined that most of the time taken to adjudicate the cases was attributable to the time taken by ATF Special Agents to complete their investigations.
In commenting on the time taken to process ROD applications, the ATF Deputy Assistant Director, Enforcement Programs and Services, stated that some Field Divisions are currently overburdened with ROD applications and, therefore, are unable to complete Application Investigations in a timely manner. We found that was not the case. We did confirm that the number of ROD applications assigned to each Field Division from February 2003 through July 2004 varied widely, ranging from one application (Baltimore and Miami Field Divisions) to 58 applications (St. Paul Field Division). However, we found that there was no correlation between a Field Division’s ROD investigation workload and the average time that the Field Division took to process its ROD cases. (See Figure 6, next page.)
Delays in processing ROD applications can cause problems for individuals who work in the explosives industry, as well as for their employers. Unlike the processing of the initial applications of Employee Possessors, who continue to have access to explosives while their applications are pending, denied Employee Possessors who are awaiting adjudication of a ROD application are prohibited from possessing explosives. As a result, their employers have to either reassign the individuals to positions where they do not have access to explosives or dismiss them from employment. However, almost 60 percent of the ROD cases decided by the ATF as of January 2005 resulted in grants of relief from the initial decisions to classify the individuals as prohibited persons. Therefore, timely processing is essential to minimize unnecessary disruptions to Employee Possessors’ careers, as well as to the operations of their employers.
In addition to ensuring that new employees are not prohibited persons, the ATF must ensure that previously reported employees have not become prohibited persons since their initial background check. Although the ATF work plan for compliance inspections contains steps to identify new employees, the work plan is not adequate to ensure that Inspectors identify previously reported Employee Possessors and Responsible Persons who have become prohibited persons since their initial ATF background check. Inspectors are instructed only to conduct “random” background checks on Employee Possessors and Responsible Persons to verify that they have not become prohibited persons since their last NICS background check. The ATF work plan does not specify how the random sample is to be selected or the number of random checks that should be conducted. Further, the work plan does not require that Inspectors query NICS to conduct these rechecks. Instead, Inspectors are instructed to access the Treasury Enforcement Communications System and the National Crime Information Center. Checks of these two systems, however, are not as comprehensive as the NICS E-Checks utilized by NLC personnel.68
The ATF procedures for processing license renewal also are not adequate to ensure that Employee Possessors are checked to ensure they have not become prohibited persons. The ATF requests NICS background checks on all Responsible Persons when an explosives license or permit is renewed. As of November 2004, the Chief of the NLC told us that the ATF was considering how to update the renewal application form, including whether to require Employee Possessors to re-submit Employee Possessor Questionnaires, which provide the NLC the information with which to query NICS. At a meeting with ATF Headquarters officials in January 2005, the OIG Inspection Team was informed that the ATF recently decided to re-check Employee Possessors through the NICS database. Since the ATF assumes that sufficient personal information on existing Employee Possessors is already available in the FLS, the ATF stated that it does not plan to require existing Employee Possessors to resubmit an Employee Possessor Questionnaire. Instead, the ATF will require licensees to submit an “employee list” with their renewal application.
We are concerned that the plans described by the ATF will not enable it to accurately conduct background checks on Employee Possessors at license renewal. During this review, the ATF encountered considerable difficulties (discussed earlier in this report) in reconciling data and providing accurate information on the numbers and status of current Employee Possessors in response to our requests. Our review showed that the FLS cannot be relied on for determining the current status of Employee Possessors, as over 30 percent the individuals we sampled did not have the results of their background check entered in the FLS (see previous findings, p. 27). Moreover, we found that many licensees do not appear to be informing the ATF of new hires, so there are likely to be considerable mismatches between FLS records of employees and the actual rosters of the companies.
Using current records to match against a list of Employee Possessor names will also be difficult because the ATF does not ensure that names are entered in a standard manner and does not require Social Security numbers from Employee Possessors. Consequently, the ATF cannot electronically compare current Employee Possessors in the FLS with a licensee-produced list. Instead, each name on the list will have to be manually checked against the FLS by an NLC Legal Instrument Examiner. That check will be onerous. Among other things, the Examiners will have to determine whether similarly named individuals are, in fact, one person; ensure that individuals associated with multiple licenses are accurately documented in every record; deactivate former Employee Possessors from the FLS; ensure that all new hires have completed Employee Possessor Questionnaires; and perform and enter the results of NICS E-Checks. Because of the above deficiencies, we believe the ATF’s planned renewal process will be prone to inaccuracies and difficult to properly manage.
We also noted that, as of February 2005, the ATF had not informed licensees of its planned renewal procedures. If these procedures are implemented, over time, licensees will be required to track who in their workforce is an Employee Possessor and whether he or she has submitted an Employee Possessor Questionnaire. Therefore, if licensees are required to produce lists of employees other than standard lists produced by their personnel management information systems, they will require sufficient notice to reprogram these systems or manually produce these lists.
After the SEA was enacted, the ATF expanded its Advanced Explosives Training course for ATF Inspectors from seven to ten days and enhanced the training to include more product identification information. In addition, the ATF told us that it intends to have all ATF Inspectors eventually attend the revised Advanced Explosives Training course.69 The class, which accommodates 30 students, is offered three times per year.70 The ATF stated that it plans to have 600 Inspectors on board by January 2006.
As of January 2005, 321 Inspectors have taken the Advanced Explosives Training course, but only 74 of those took the revised course. Assuming that none of the 247 Inspectors who took the unrevised course take the revised course, it will take three years for all new ATF Inspectors to attend the Advanced Explosives Training course. If the ATF carries out its stated plan to have the 247 Inspectors who took the unrevised course attend the revised training, it will be seven years before all ATF Inspectors have attended the revised course.
Even though the enhancements to the Advanced Explosives Training course are expected to improve the skills of ATF Inspectors, ATF managers told us that they are concerned that the ATF still will lack a core group of Inspectors with in-depth knowledge to oversee large-scale or complex explosives inspections. The Director of the Enforcement Programs Branch stated t hat he would like at least one Inspector in each of the ATF’s Area Offices to be provided with “more specialized, advanced training beyond the Advanced Explosives Training course, which is basic.”
Several of the Inspectors we interviewed told us that they do not receive enough training on explosives products. For example, one Inspector stated that she learns about new explosives products from licensees. ATF Headquarters officials confirmed that learning about explosives products from licensees is a knowledge acquisition strategy. Almost all of the Inspectors we interviewed told the OIG that, at a minimum, they need refresher training and that they also need better access to advanced explosives training. Even Inspectors who have attended the Advanced Explosives Training course stated that they do not feel qualified to address all of the issues they encounter during the course of inspections. The most frequently cited issue causing difficulty for the Inspectors was calculating the quantities of explosives permitted in storage magazines, based on magazine type and location, according to ATF regulations.
The OIG Inspection Team found that the ATF’s strategy was not always clear to or well-received by explosives licensees. Industry members we spoke with stated that they believed ATF Inspectors needed better training. They were not aware that acquiring knowledge from licensees was part of the ATF’s overall Inspector training strategy. For example, several industry representatives told us that they do not feel Inspectors are adequately trained to inspect various types of explosives. One representative stated that he has to train Inspectors on the products they inspect at his facilities.
The ATF has taken steps to improve product knowledge among Inspectors and supervisors. During this review, the OIG attended the Directors of Industry Operations and Area Supervisors Explosives Training held from August 30 through September 2, 2004, in Providence, Rhode Island. Among other topics, the training provided a half day of instruction on product identification and use. In addition, the training included the use of “Team Inspections,” an approach developed to supplement the small number of available expert Inspectors necessary to conduct large and complex explosives inspections.71 (See text box.)
ATF Inspectors’ interpretations of explosives regulations lack consistency. After the enactment of the SEA, the ATF trained every Inspector on the provisions of the Act.72 However, ATF Headquarters officials, licensees, and industry representatives told us that issues still exist regarding the consistency of Inspectors’ regulatory interpretations. For example, one licensee that operates nationwide stated that because ATF Inspectors conduct inspections and interpret regulations differently at various locations, he cannot develop a consistent corporate policy to comply with ATF regulations. Another industry member we spoke with complained that an ATF Inspector cited his company for storing explosives too close to an “inhabited building” (a garage), although prior Inspectors over almost 20 years had never categorized the structure as an “inhabited building.” Whether the change in the category was correct (either because the latest Inspector noted changed circumstances or the prior Inspectors had been mistaken), the licensee told us that the reasons for the new determination had not been made clear to him.
An ATF official confirmed that the ATF is aware that Inspectors from different Field Divisions often offer inconsistent regulatory interpretations to explosive licensees and permit holders. When we asked the reason for the inconsistency, he stated, “I don’t know if it’s the training or the new people…. Inspectors need to be able to point to regulations and fairly explain the meaning of the regulation and the possible impact of not complying with the regulation.” He further stated that some Inspectors do not understand the rulemaking process. For example, the Notice of Proposed Rulemaking issued by the ATF prior to the SEA has been cited prematurely by Inspectors on numerous occasions as an in-force regulation.
The SEA granted the ATF the authority to collect samples of explosives and ammonium nitrate from manufacturers and importers.73 According to ATF Headquarters and National Forensic Science Laboratory (National Laboratory) officials, the authority to collect samples was intended to enable the ATF to develop databases of explosives information and increase the ATF’s ability to trace explosives used in crimes. During a June 2002 congressional hearing, the Acting ATF Director testified that a library of explosives information “is essential to ATF’s ability to prevent and solve bombings and to trace explosive materials used in terrorist activities and other violent crimes by matching residue with the manufacturers’ samples.”74 At the same hearing, the Department of the Treasury Assistant Secretary of Enforcement stated that the creation of such a library would afford the ATF “the opportunity to solve, and perhaps prevent, future criminal and terrorist acts using explosives.”75 The Chief of the National Laboratory reiterated the need for current explosives libraries during our inspection. He stated that the National Laboratory’s high-explosive gunpowder database is outdated and that the National Laboratory’s “biggest problem” is its inability to trace ammonium nitrate.
However, we found that the National Laboratory has only recently developed a systematic approach to collect, analyze, and catalog samples of explosives as permitted by the SEA. During our review, the Director of the National Laboratory told us that the ATF has only used its authority to collect samples one time – to collect a model rocket motor. As of the completion of our field work, the National Laboratory had not collected or developed a systematic approach for collecting samples of ammonium nitrate.
Moreover, as of the completion of our field work in August 2004, the ATF had developed minimal plans for collecting explosives samples and creating the libraries of information authorized by the SEA. We found that the National Laboratory’s plans to develop the databases consisted only of a four-page document, written in 2002, which described the potential use of explosives databases and the roles of the three chemists and one program manager needed to oversee them. The ATF had yet to develop comprehensive plans, funding requests, industry notices, proposed regulations, or any other documents necessary to implement the authority granted under the SEA. The ATF Director of Laboratory Services stated that the National Laboratory’s plans to implement this aspect of the SEA were contingent on funding and had not been reexamined since passage of the Act.
Planning for an electronic database to house explosives information collected by the laboratory began in late August 2004. As part of this review, the OIG contacted National Laboratory staff to determine what, if any, progress had been made by the ATF to carry out laboratory-related functions authorized by the SEA. On September 30, 2004, the ATF signed a contract with a software consulting firm to design the database.76 According to the National Laboratory’s October 12, 2004, operating plan, the ATF plans to formalize protocols for gathering information from explosives manufacturers by June 2005 and, by July 2005, develop a prototype of the explosives database. At a meeting with ATF Headquarters officials in January 2005, however, the OIG was informed that the National Laboratory had only recently begun the planning process for both the collection and analysis activities.
One of the critical steps toward the collecting and analyzing of explosives is the construction of an explosives storage facility. During our review, the ATF had not begun planning this initiative. Subsequent to the completion of the OIG’s field work in this review, the National Laboratory began the planning process for constructing an explosives storage facility, the first step toward enabling the laboratory to collect and analyze explosives samples. In October 2004, the ATF contracted the services of an engineering consultant to discuss and finalize designs for an explosives storage facility at the laboratory.
In the ATF’s FY 2004 appropriations, Congress authorized the ATF to create the NELC, stating, “The conference agreement includes … $4,000,000 to upgrade databases and systems, space alterations, and other costs related to creating the National Explosives Licensing Center … at the Bureau of Alcohol, Tobacco, Firearms and Explosives National Tracing Center.”77 The ATF selected a Chief for the NELC in October 2003. The Chief stated that, “on paper,” he assumed the title of Chief in October 2003, but said that he continued his previous ATF duties at the National Tracing Center until he was assigned staff.78 In May 2004, seven months after being appointed, the Chief traveled to Atlanta to observe NLC operations for two weeks. The Chief stated that during the visit he met “with Examiners and Contractors to develop an overview of NLC operations.” When asked about his activities since being named to head the NELC, the Chief stated that he had spent a considerable amount of time ordering equipment and overseeing budgetary issues.
In July 2004, the NLC began transferring licensing authorities for new license applications – not renewal applications – to the NELC. As of October 2004, the NLC has transferred these authorities for 32 states to the NELC. However, as of September 2004, the Chief told us that he had not yet developed any plans, timelines, or reports related to the transfer of the remaining explosives licensing authorities to the NELC. Nonetheless, the Chief stated that he expects the NELC to be fully operational by August 2005. However, in September 2004, the ATF Deputy Assistant Director, Enforcement Programs and Services, told the OIG Inspection Team that the NELC will be fully operational “as soon as they are able to handle it.” The Deputy Assistant Director said, “It will take some time. I don’t know when.” In January 2005, ATF Headquarters officials stated that the NELC was developing detailed plans for the full transfer of licensing operations. However, we have not seen these plans.
To help us assess the adequacy of the planning activities related to the establishment of the NELC, we met with management staff at the NLC. The NLC carries out firearms licensing functions within the ATF and has been handling explosives licensing functions pending the establishment of the NELC, and are therefore well aware of the requirement for implementing a full-scale licensing function. They stated that, in their opinion, the NELC is not prepared to handle issues beyond basic licensing. An NLC Program Analyst stated that the NELC has yet to prepare for basic activities such as the delivery of application materials, the handling and storage of inspection reports, data issues, printing and controlling Type 60 permit coupons, processing address changes, and numerous other functions.79
We also found that the ATF had not promptly trained the Chief and staff of the NELC. Two NELC Examiners – one hired in January 2004, the other in February 2004 – visited the NLC in June 2004 to observe the operations there. The NLC staff members we spoke with described the June 2004 visits by the NELC staff members as basic. One NLC staff member described the June 2004 visit as a “cursory introduction” to the ATF’s licensing operations. We also found that the ATF did not begin to develop a training plan for the Chief and NELC staff until September 2004, almost a full year after the Chief was selected. As of October 2004, the ATF had not scheduled training for NELC staff.
The ATF’s timetable for transferring explosives licensing functions from the NLC to the NELC may be affected by recent Congressional direction to move the NLC. As part of the Consolidated Appropriations Act of 2005, P.L. 108-447, December 8, 2004, the ATF received $5.6 million “for the construction and establishment of the Federal Firearms Licensing Center at the Bureau of Alcohol, Tobacco, Firearms and Explosives National Tracing Center Facility.” This means that the ATF NLC will be moved from Atlanta, Georgia, and collocated with the NELC in West Virginia.
We make the following additional recommendations to help the ATF improve the implementation of the Safe Explosives Act and more effectively regulate explosives within the United States. The recommendations focus on improving the consistency of the ATF’s oversight activities, completing the establishment of an explosives licensing center, and implementing a process for collecting and cataloging explosives at the ATF National Laboratory.
We recommend that the ATF: