Justin Danhof wants Citigroup to take billionaire investor Warren Buffett’s advice and stop pushing the gun merchants among its customers to set stricter limits on which products they sell and who can buy them.
Under a policy established after a mass shooting at a Florida high school last year, the New York lender no longer does business with retail stores that sell guns to anyone under 21 or whose inventory includes bump stocks or high-capacity magazines.
The bank’s action, taken amid policy changes at a number of corporations alarmed by a spate of mass shootings, prompted an immediate backlash from gun-rights activists who said corporate America was infringing on their Second Amendment protections, an argument Danhof brought to Citi’s annual shareholders meeting on Tuesday.
Policies like Citi’s are likely to spread as gun-control supporters target companies that are protective of their public image after after decades of accomplishing little through Congress, said Danhof, general counsel for the conservative National Center for Public Policy Research. The Washington, D.C.-based organization’s Free Enterprise Project invests in publicly traded companies and uses its holdings to push for right-leaning causes, a tactic borrowed from liberal organizations.
“I see increasing activism on the Left on this issue,” Danhof told the Washington Examiner. “It’s an all-out assault on gun companies, gun manufacturers and any way that they were going to get financing. It’s a growing, not a shrinking, concern.”
He urged Citi’s board to consider the effects on its bottom line, maintaining that penalizing firearms businesses would prompt clients who oppose gun control to find other banks.
“Citigroup has no business threatening law-abiding business owners for exercising their Second Amendment rights,” Danhof told CEO Michael Corbat and the company’s board. The attorney backed up his argument with statements from Buffett, the CEO nicknamed the “Oracle of Omaha,” who said he wouldn’t force his own Democratic viewpoints on Berkshire Hathaway, the conglomerate he formed that controls businesses from fast-food chain Dairy Queen to auto-insurer Geico.
“I don’t think that we should have a question on the Geico policyholder form, ‘Are you an NRA member?'” Buffett told investors at Berkshire’s annual meeting in Omaha, Nebraska, in May. “And if you are, you just aren’t good enough for us or something.’ I think I do not believe in imposing my political opinions on the activities of our businesses.”
That’s not how Citi, which doesn’t include Berkshire among its investors, views its policy, Corbat told Danhof.
“We are not threatening people, and we are certainly not threatening the Second Amendment,” the CEO said, noting that customers are free to buy whatever they want with their credit and debit cards, including firearms. “What our policy seeks to do is not put restrictions on gun ownership, but really try and institute a series of best practices that have, hopefully, a chance of keeping guns out of the wrong people’s hands. We’ve worked with a number of retailers to come up with what we think some of those best practices are.”
Given Citigroup’s struggles during the 2008 financial crisis and its acceptance of a $45 billion government bailout, Danhof said the lender lacks the moral standing to make such a determination.
“To be clear, the company is impinging on the constitutional rights of some of the very Americans who bailed Citi out after you all made a series of poor business decisions,” he told Citi officials. “Maybe you should have just said ‘thank you,’ instead.”
Danhof made a similar argument last year at the annual meeting of Charlotte, N.C.-based Bank of America, which planned to stop financing military-style firearms makers in the aftermath of the south Florida shooting that killed 17 people. He attempted to introduce a shareholder resolution this year that would have required the bank to consider selling itself, partly because of its gun policy, but was rejected by Bank of America’s attorneys and the Securities and Exchange Commission.
By intervening in the ongoing debate over gun regulation — which has taken on new urgency after the Florida killings, an attack on a Texas high school, a mass slaying at a Las Vegas music festival, and the shooting deaths of 50 people at two New Zealand mosques — lenders are engaging in political activity for “purely liberal virtue-signaling reasons,” he said.
“They are adding voice and heft, and now, financial heft, to those who would abolish the Second Amendment if they could,” Danhof told the Washington Examiner. “The Left is dogged on this issue, and they know the way to have the greatest impact is through banks and credit cards.”
While 3 in 10 Americans own a gun and 70 percent have fired one at least once in their lives, polling from the Pew Research Center shows an increasing number favor tighter firearm regulations.
The advocacy group Giffords: Courage to Fight Gun Violence says it spent more money on lobbying last year than the National Rifle Association and backed 300 candidates in elections, 256 of whom won their respective races. The organization was founded by former Arizona Rep. Gabrielle Giffords, who stepped down from her seat after brain injuries suffered when a gunman attacked a meeting she was holding with constituents in early 2011, killing six people.
Views on gun rights vary sharply by party, with a majority of Democrats favoring tougher laws and a majority of Republicans believing current rules are appropriate. The difference of opinion was highlighted in a House Financial Services Committee hearing in early April with Corbat, Bank of America CEO Brian Moynihan, and the heads of five more of the country’s biggest lenders.
Republican Reps. Bill Posey of Florida and Andy Barr of Kentucky both questioned the CEOs about refusing to do business with certain industries because they weren’t “politically fashionable,” and Rep. Sean Duffy, R-Wis., suggested lenders look outside of the gun industry for the culprits responsible for mass violence.
While the killings are horrific, “we have had guns in America for a long time,” he told Moynihan.
“Maybe your bank should look at what else is going on in America that’s changing people’s mindset to pick up a gun and do a horrific thing or use a crock-pot, or a knife, or a machete, or a U-Haul,” Duffy said. “Something’s happening. To take the rights of law-abiding citizens where I live, that does not comport with my view of America. If you’re not going to look at movies, and families, and video games, we find it somewhat problematic.”
Rep. Carolyn Maloney, however, found it problematic that more lenders haven’t followed the examples of Bank of America and Citi. She urged JPMorgan Chase, the largest U.S. bank, to adopt similar rules.
Noting that Dimon had argued that making “bad and unworthy loans is bad for both the bank and the customer” in a shareholder letter, Maloney, D-N.Y., pointed out that JPMorgan had still arranged $273 million financing for manufacturers of military-style firearms.
“Will you live up to your own rhetoric?” she asked.
All of the bank’s loans go through a “severe process of review,” Dimon replied. “We have a very small relationship with gun manufacturers. We have the same gun manufacturers who make military equipment for the U.S. military and for the U.S. police forces.”
The gun merchants who do business with JPMorgan are closely regulated by both federal and state governments, he added, and “if we think they’re doing something wrong, the risk committee stops doing business with them.”
