A screen shot from the front page of the Freedom Group, Inc., website.
WASHINGTON — More than a week after Cerberus Capital Management announced that it would sell its stake in one of the world’s largest gun companies, a spokesman for the investment firm will not say how long the sale will take, what it will do with the company — or whether its brands will continue to donate to the National Rifle Association.
“I don’t anticipate that they will comment beyond the press release issued last week,” Peter Duda, a spokesman for Cerberus, told BuzzFeed.
The NRA has offered key regulatory support to Cerberus’s companies, which reported to investors that a restoration of the Assault Weapons Ban — killed by the gun group in the 1990s — would have an “adverse effect” on business. And Cerberus’s silence on its relationship offers a glimpse at the distance between a politically savvy move to distance itself from gun investments and any potentially costly concession on gun policy.
Even before the NRA mounted its unapologetic defense of the right to bear rifles of the sort used in two high-profile shootings this month, Cerberus — a giant, politically sensitive venture firm — had tacked in the opposite direction, announcing that it would dump Freedom Group, Inc., under which it had assembled a package of leading gun companies, including Bushmaster and Remington.
In its Dec. 18 statement, Cerberus called the attack in Newtown, Conn., where a gunman killed 20 children and 6 adults, a “watershed event” and said it had “determined to immediately engage in a formal process to sell our investment in Freedom Group. We will retain a financial advisor to design and execute a process to sell our interests in Freedom Group, and we will then return that capital to our investors.”
But since the announcement, the firm has remained quiet about the planned sale and continues to describe the Freedom Group on its website as one of its “representative company investments.” Cerberus is declining to answer questions about whether Freedom Group and its brands are still donating to the NRA.
According to the NRA’s website, at least three Freedom Group-owned companies — DPMS Panther Arms, Marlin Firearms, and Remington Arms — have donated to the pro-gun powerhouse, which backs its strict opposition to gun control efforts with a combination of grassroots organizing and Washington lobbying.
Cerberus Capital Management is a $20 billion private investment firm that, as reported by The New York Times more than a year ago, has spent the past six years investing in several gun companies under the umbrella of the Freedom Group, which Cerberus describes as “the world’s leading innovator, designer, manufacturer and marketer of firearms, ammunition and related products for the hunting, shooting sports, law enforcement and military markets.”
According to the “Market Leadership” section of the Freedom Group’s brochure available on its website, the Freedom Group is “#1 in commercial AR-style rifle sales, with top two brands. More caliber offerings than any other manufacturer.” Among the AR-style rifles sold by the Freedom Group is the Bushmaster .223 rifle allegedly used at Sandy Hook and in several other recent gun killings.
In its latest quarterly report to investors for the quarter ending Sept. 30, Freedom Group described the status of the Assault Weapons Ban, which was not renewed by Congress in 2004, in a “regulatory developments” section of the report.
“We cannot guarantee that an ‘assault weapons’ ban similar to the AWB, or another version thereof, will not be re-enacted. Legislation of this type, if enacted, could have a material adverse effect on our business,” the report advised investors like Cerberus.
Sen. Dianne Feinstein of California has said she will introduce an assault weapons ban bill at the start of the 113th Congress.
Sales of this magnitude can be complicated, and could take many weeks more to complete. But in the meantime, at least some of its investors are pressuring the firm to get it done.
The California State Teachers’ Retirement System, which has invested in Cerberus funds, initiated discussions with the firm about its Freedom Group investment after the shooting in Newtown, the pension fund has since announced.
Following Cerberus’s announcement on Dec. 18, the California pension fund announced that its “current policies require that the risks associated with products that pose significant threats to human well-being be taken into account before an investment is made by [the fund]. … Moving forward, CalSTRS will work to ensure that all of our investments are taking these very important criteria into consideration.”
Cerberus’s Representative Investments
A screen capture from the Cerberus Capital Management website.