WTF ATF: The ATF's Fake Retail Stores, Bad Behavior... And Why It Only Came Out Because They Failed To Pay Rent

from the wtf-indeed dept

This past week, on This American Life, the first 20 minutes or so are the incredible story of just how screwed up the ATF continues to be (the Bureau of Alcohol, Tobacco and Firearms). Much of this has been reported on over the past year and a half by reporters in Milwaukee (and investigated by Congress), but it's absolutely worth listening to the details -- which you can do over on the This American Life page (I'd post the embed here, but unfortunately This American Life does not yet appear to support HTTPS, so we can't). The story is all kinds of stunning, including the insane fact that most of the details came out, and the reporters only began their investigation, because some undercover ATF agents in Milwaukee had trashed the property they were renting, and refused to pay the rent or damages to the landlord -- even threatening the landlord, claiming he was harassing federal agents by asking for the rent:

John Diedrich: I get a call. And it was from a landlord, a guy named Dave Salkin. And Dave Salkin owns this place that he, unbeknownst to him, rented to the ATF. Didn't know who they were, they were undercover agents. And they had trashed his place, and they were behind on rent. They had threatened him. And I said, where are you, I'm coming right now.

Ira Glass: While they were undercover, agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives basically ripped up his place. Salkin said at the time that they owed $15,000 in damages and back rent. Later he said it was more. When he tried to collect, they didn't pay up. In fact, an ATF lawyer warned him that if he kept asking for the money, it could be seen as harassing federal agents.

The other thing that becomes clear in all of this is that these "undercover" ATF agents aren't just sloppy and stupid, they seem to go out of their way to be ineffective and dangerous.

Ira Glass: And they were robbed. These agents whose job it was to get guns out of the hands of criminals had three guns that were stolen out of an agent's car while he was parked at a coffee shop. These included a fully automatic rifle. This is a machine gun, the kind that normally only law enforcement and military can legally have.

Not long after that, the store itself was burglarized of $39,000 in clothes, jewelry, and merch, reportedly, because the ATF had not bothered to do much to secure the store and just did not seem to care. Nobody was minding the store, literally.

John Diedrich: The ATF had no working burglar alarm on their building. So it was sort of, instead of a smash and grab, it was just this sort of like slow burglary. The neighbors report at one point, once they were able to get in-- again, no burglar alarm-- they kept the door propped open with a shoe. And they were just kind of taking stuff out.

And the word sort of spread. Hey, this place is just open. Nobody's there. We can just go get stuff. And at one point they just pulled up a U-Haul. And they were just sort of emptying this. And this is over several days. And then even--

Ira Glass: Renting a U-Haul is such a crazy move, because is it means that somebody had to go and decide, I'm going to rent a truck. That's how slow this burglary is, that you can do a rental.

John Diedrich: Yeah, exactly. And there's no sort of concern that you're going to be busted at that point, and just say, OK, I can only carry so much in my arms. Let's get something bigger. Let's get a U-Haul.

Ira Glass: The same day the burglary was reported, an ATF ballistic shield, the kind that they would use to raid a house or something, was turned in by a scrapper at a Milwaukee police station. One item that was just left lying around in the store after the robbery for anybody to pick up and read-- it was there when reporter John Diedrich walked through-- was a secret ATF document listing the names of undercover agents, their undercover vehicles from several law enforcement agencies in Milwaukee.

There's a lot more like this. Including potential copyright infringement:

Ira Glass: And they distributed flyers with the store's logo, which was a skull with angel wings made from assault rifles and knives with the words Buy, Sell, Trade, wink, wink. Federal agents actually ripped off the logo from the Sylvester Stallone film, The Expendables, possibly in violation of their copyright.

The story details just how incredibly counterproductive all these efforts were. Since they were paying super high prices for guns, people would suddenly start stealing guns just because the ATF was making them so valuable. And, despite the ATF pretending otherwise, the case in Milwaukee was hardly a one-off situation.

Raquel Rutledge: And as we started looking, really, truly, we came back to one other-- you're not going to believe this. I mean, we were shocked. I don't think we expected to find this going on. Absolutely not, did we expect to find that it would go on elsewhere, because you can't imagine this would be part of a playbook or an MO of a federal agency. So it was stunning to find. Had they been burglarized? Did they trash the landlord's place?

We found in Portland the lady just said, I am so glad you called. She said, I have not known what to do. She said, they left my place in shambles. She had photos of what they left it like-- I mean, like a college fraternity or something. Just trash everywhere, they tore out some walls and they rewired some stuff and caused a leaky roof. She estimates her damages were probably $20,000 roughly, $20,000, $25,000. So that, you think, how does that happen? Is that, again, part of the playbook?

Ira Glass: Raquel and John looked into ATF storefronts in Wichita, Portland, Oregon, Pensacola, Albuquerque, Atlanta, and Phoenix. Some of the Milwaukee problems they found examples of in those other cities? Agents paying extra high prices for guns, buying stolen goods, criminals committing burglaries in the neighborhoods around the stores and then selling the stuff to the ATF. Raquel and John say that the quality of the convictions from these operations around the country, the kinds of people that the ATF was catching were mostly small fry, just like in Milwaukee. The ATF store in Pensacola was robbed just like the Milwaukee store was, twice.

There's a lot more in the story -- and it's totally worth listening to. But the most fascinating point of all may be the one right up front in the story, and then reinforced at the end. None of this likely would have come out if it were not for the unpaid rent.

It wasn't the squid tattoos or the low-IQ employees or getting robbed over and over. It wasn't the way they caught and charged suspects. It was that landlord in Milwaukee. If they hadn't trashed his place, or if they had just paid him promptly to repair it instead of fighting him over every penny, apparently, he wouldn't have called the newspaper. John and Raquel say the whole thing might never have come to light.

The whole effort has resulted in some attempts to actually disband the entire ATF, which might not be such a bad idea. While we hadn't been following the agency that closely (and hadn't been aware of all of these fake storefronts and the crazy stories behind them), in the past we've reported on how the ATF made up an entire robbery plot in order to entrap a group of poor young men in a "crime" that wouldn't have existed, but for the ATF's fantasy.

It would be nice to trust law enforcement officials, but they keep giving us reasons not to trust them at all.

Filed Under: atf, bad behavior, guns, retail stores

Retailers Still Want New Laws Blaming eBay For Shoplifting; Law Enforcement Isn't So Sure

from the anti-competition dept

A group of brick-and-mortar retailers have been pushing for years to pass laws that put liability on online sites, like eBay, if stolen goods are sold through the sites. This really has nothing to do with preventing theft from their stores, as they claim. Instead, it's really an effort to attack online competitors and second-hand sellers to try to boost the primary market. Studies have shown that the number one source of theft in stores is actually employees. If the retailers were serious about cracking down on theft, they would do more to watch their own employees... but instead, they've been trying to create a moral panic by claiming that the use of eBay leads to crime because people get so addicted that, after they run out of their own stuff to sell, they start ripping off stores just to keep that eBay high going. Just look at their own words:

"Thieves often tell the same disturbing story: they begin legitimately selling product on eBay and then become hooked by its addictive qualities, the anonymity it provides and the ease with which they gain exposure to millions of customers. When they run out of legitimate merchandise, they begin to steal intermittently, many times for the first time in their life, so they can continue selling online. The thefts then begin to spiral out of control and before they know it they quit their jobs, are recruiting accomplices and are crossing states lines to steal, all so they can support and perpetuate their online selling habit."

Uh huh. Only problem? Actual stats show that such retail theft is on the decline. But, of course, that won't stop the lobbyists from these stores from pushing -- and that means we've now got the fourth such law introduced just this year to deal with. With the introduction of the new bill, the House Judiciary Committee held hearings with law enforcement officials who did claim that retail theft was a problem, but according to Thomas O'Toole, they also said no new laws were needed. What are the chances of that happening? Apparently, the law enforcement folks said that the online websites like eBay are actually quite cooperative, and the only problem is they need more money and resources -- not more laws. Somehow, that seems unlikely.

Filed Under: retail stores, shoplifting
Companies: ebay

Retail Stores Still Trying To Blame eBay For Shoplifting

from the seriously? dept

Just as the record labels like to blame file sharing for their own business model problems, big retailers have been trying to blame eBay for all sorts of their problems for years. Last summer, the National Retail Federation (NRF), who represents the lobbying interests of big retail stores, started peddling a patently ridiculous line that using eBay led to crime. Seriously. They claimed that people got so addicted to selling stuff on eBay, once they ran out of their own things to sell, they would start stealing. Why even paraphrase it? Let's use their words:

"Thieves often tell the same disturbing story: they begin legitimately selling product on eBay and then become hooked by its addictive qualities, the anonymity it provides and the ease with which they gain exposure to millions of customers. When they run out of legitimate merchandise, they begin to steal intermittently, many times for the first time in their life, so they can continue selling online. The thefts then begin to spiral out of control and before they know it they quit their jobs, are recruiting accomplices and are crossing states lines to steal, all so they can support and perpetuate their online selling habit."

The problem, of course, is that this is complete hogwash. They presented no evidence whatsoever on this, and the actual stats on retail theft showed two things: first, retail theft has been on the decline for years and, two, that most retail theft is due to insiders, not shoplifters. So, if the retailers really wanted to stop theft, they should invest in better security against insiders. Yet, when asked why they didn't do this, a representative claimed that it didn't make any sense to make their employees into police officers. Yet it does make sense to pass draconian laws against eBay?

The truth is that the retailers aren't scared about eBay leading to shoplifting. They're scared about eBay, period. And they want to pass any laws to hurt eBay.

Of course, when presented with the fact that their claims were ludicrous, the NRF refused to back down, insisting its statements were accurate -- not in telling the actual truth, but in "reflecting the sentiments of many retailers that we work with." Seriously.

And, of course, politicians don't bother with fact, either, so the NRF was able to push legislation specifically designed to harm eBay and other online retailers, by adding all sorts of restrictions and liability over what can be sold through those sites. Of course, the NRF still has no evidence to back up its claims... so it looks like it's decided to try to manufacture some.

It recently came out with a report that pretends to show evidence that eBay leads to shoplifting. What's the data? Well, the NRF asked its own members what they thought the percentage of "new in box" merchandise for sale on eBay was stolen, and those members said they thought it was 50%. That's not evidence. That's just "reflecting" the highly biased "sentiments" of the NRF's members. As the NetChoice link above shows, there are lots of other problems with the NRF's position:

• Despite retailers' claims that theft is getting worse, nearly 6 in 10 retailers say they now spend less on loss prevention compared to last year. Yet while cutting spending on loss prevention, these same retailers doubled their spending on lobbying over the last three years, according to the Center for Responsive Politics. And they are lobbying for new laws to restrict competition from online sellers.
• A leading loss prevention consultant told retailers that over 2/3 of all store shrink is preventable, mostly by improving business practices, according to Larry Miller, Director of National Retail Research Group.
• Retail theft is not being caused by the Internet. According to the NRF's survey, retailers don’t identify stolen goods online any more than in traditional places like street corners, swap meets, and pawn shops.
• The NRF says that criminals use online marketplaces because they are anonymous, but these sites know exactly who the seller is, and disclose all that data to law enforcement officials whenever they ask. The truth is, an online auction is the last place a criminal would try to hide the sale of stolen goods.
• The NRF claims that online sellers "threaten the health and safety of innocent consumers", yet Rite Aid, CVS, Target, and Walgreens have paid millions in fines for selling expired products--often by putting stickers over the expiration dates.
• Overall, there is no evidence that organized retail crime has actually gone up -- the study only asks retailers whether they think it has increased. And that perception has only increased over the last two years -- concurrent with the worst economic downturn since the Great Depression. Isn't it much more likely that any increase in store theft may be a result of employees and consumers desperate to make ends meet?

That first bullet point, of course, is the most telling of all. While all of the evidence points to the fact that its insiders who cause the majority of any problem, rather than spending on dealing with that, they've massively increased their lobbying spend to try to craft anti-eBay laws.

Filed Under: retail stores, shoplifting
Companies: ebay, nrf

Big Retailers Pushing Legislation To Harm Online Retailers

from the why-compete-when-you-can-legislate? dept

Why should you compete with new technological innovations when you can just get elected officials to pass laws that greatly limit what those innovations can do? That seems to be the position of the National Retail Federation, the trade group that represents a bunch of the big offline retailers. We wrote about their attempt to do this last year, where they went so far as to claim (and then stand behind) that eBay was driving people to shoplift. Supposedly, selling stuff on eBay was just so addictive that once people ran out of their own stuff to sell on eBay, they would all rush to the nearest big box store to shoplift. That, of course, is totally bogus and not at all backed up by the facts. But who needs facts when you have politicians willing to do your bidding? The NRF's statement was so hilarious, we can't resist republishing it:

"Thieves often tell the same disturbing story: they begin legitimately selling product on eBay and then become hooked by its addictive qualities, the anonymity it provides and the ease with which they gain exposure to millions of customers. When they run out of legitimate merchandise, they begin to steal intermittently, many times for the first time in their life, so they can continue selling online. The thefts then begin to spiral out of control and before they know it they quit their jobs, are recruiting accomplices and are crossing states lines to steal, all so they can support and perpetuate their online selling habit."

While the three laws proposed last year went nowhere, it didn't take long for all three to be introduced again. The intended purpose of these three laws is to force these online platforms to interrogate every seller over every product they put online for sale. It goes against everything that's the basis of section 230 rules for online platforms, in that it says "you're not the tool someone uses, now you're liable for everything that happens with the tool." This is not, at all, about stopping crazy eBay addicts from shoplifting from big box stores. This is about making it tougher for people to buy and sell stuff online so that more people are forced to trek out to their local offline retailer to buy stuff.

The amusing thing is that, last year, when these same bills were introduced, the retailers were asked why they couldn't just do a better job policing their stores for shoplifting -- and the retailers replied that their employees were there to sell stuff, not to be police officers. Yet, the very purpose of these laws is to make that impossible for online retail services. It forces them all to be police officers, or face tremendous liability. It's no secret that it's tough to compete with new online services, but that's no excuse for passing bogus laws to harm those online players.

Filed Under: competition, e-fencing, online auctions, politics, retail stores, shoplifting

Is The Physical Bookstore A Thing Of The Past?

from the may-finally-be-getting-there dept

It's been talked about for over a decade now, but are we finally reaching the tipping point for physical bookstores? Some are pointing out that Amazon's continued success in online sales represents an element of "creative destruction" for physical retailers, and a NY Times piece notes that plenty of bookstores are shutting down -- including some of the big name brands, such as Borders and Barnes & Noble.

What may be most interesting in the NY Times article, though, is that the blame isn't necessarily placed at online retailers directly -- but on the fact that online sites have made it much easier to resell used books. Thus, the argument goes, the market is now flooded with used books that individuals are selling out of their bedrooms, meaning that it rarely makes sense for anyone to pay full price for a new book anymore. It's an interesting argument -- and it's the type of argument we've seen made against used book sales in the past, and more recently that video game makers have been making concerning used video game sales.

However, it's not clear if this is really true. Past studies have shown that an active second hand market helps to boost the sales of new goods, because it makes those goods more valuable to folks who recognize they'll be able to resell them on the second hand market later. That may not be helpful to physical bookstore retailers, but those retailers have to learn to adjust with the times as well. Obviously, just selling books is going to make less and less sense, but we've seen retailers that have worked hard to turn their stores into destinations, where there were good reasons to go and buy stuff, rather than just being a physical version of what you could get online. If bookstores are unwilling to make those changes then is it really a huge loss?

Filed Under: online sales, retail stores, used books
Companies: amazon

National Retailers Refuse To Apologize For Claiming eBay Leads To Crime

from the lies-are-more-fun-than-facts dept

Earlier this week, we noted that the National Retail Federation, a lobbying group made up of a bunch of large traditional retailers, had claimed to Congress that eBay drove people to shoplift by being so addictive that people couldn't help themselves. According to the NRF, otherwise innocent people, after running out of legitimate things to sell, turned to a life of crime to support that eBay selling high. The whole thing is so preposterous, that the group NetChoice called for an apology from the NRF. The NRF's response? It stands by its comments:

"The testimony we submitted reflected the sentiments of many retailers that we work with."

Now there's a neat little rhetorical trick there. When called on the fact that they were lying in claiming a rash of eBay-induced criminals, the response is to claim that the statements "reflected the sentiments" of the retailers. So, even though those sentiments are based on pure lies, it's okay, because the statement reflected those sentiments.

In the meantime, it appears that NRF supporters have decided to respond with personal attacks, such as that one, directed at my post. It's also got some neat rhetorical tricks, such as claiming that what the retailers really meant when they said (and I quote), "When they run out of legitimate merchandise, they begin to steal intermittently, many times for the first time in their life, so they can continue selling online" was organized crime. Yet, that's clearly not what the NRF statement was claiming. It was talking about individuals who were selling stuff legitimately, until they couldn't find anything else to sell and began a life of crime.

See? So now that they've narrowly defined the issue as "organized crime" (ignoring what the NRF actually said and brushing over the actual stats on shoplifting being on the decline), the NRF supporter claims that these new laws are just "reasonable duties" for online auction sites to combat that issue -- never once explaining why online auction sites need to step in and do the work that the retailers themselves are unwilling to do. The retailers themselves admitted that they don't want their employees to act as police officers -- but they apparently have no problem demanding that their online competitors act as their police officers.

Filed Under: competition, e-fencing, online auctions, politics, retail stores, shoplifting

Retailers Blame eBay For Driving Good People To Shoplift

from the gotta-feed-the-habit dept

Wow. Earlier this year we wrote about a bill, basically pushed for by big offline retailers, that would regulate online retailers. The big retailers made some bogus claims about an online "crimewave" that necessitated such legislation. Since that first bill was introduced in the house two other related bills have also been introduced, one in the House and one in the Senate. Earlier this week, hearings were held on the three bills, and the big retailers made the astounding claim that online auction sites need to be regulated because their "addictive qualities" lure perfectly innocent people into becoming shoplifters to feed their habit of selling online:

"Thieves often tell the same disturbing story: they begin legitimately selling product on eBay and then become hooked by its addictive qualities, the anonymity it provides and the ease with which they gain exposure to millions of customers. When they run out of legitimate merchandise, they begin to steal intermittently, many times for the first time in their life, so they can continue selling online. The thefts then begin to spiral out of control and before they know it they quit their jobs, are recruiting accomplices and are crossing states lines to steal, all so they can support and perpetuate their online selling habit."

Nevermind that the actual stats show that retail theft has been on the decline, while the majority of retail theft is actually due to insiders. Yes, the problem isn't with online retailers magically luring perfectly innocent individuals into lives of crime, but the big retailers own employees swiping stuff. Yet, when stores were questioned why they don't do more to prevent in-store theft themselves, a representative from Safeway claimed: "our associates are there to sell groceries, not to be police officers." However, even though the problem is with their own employees, who they don't want to turn into police officers, the retailers are asking Congress to, instead, turn all online retailers into police officers for them.

The combination of bills under consideration would give offline retailers the power to demand that online retailers interrogate sellers to find out if the goods they're offering for sale were stolen. They would also include a DMCA-like notice and takedown provision, allowing retailers to force auctions offline with a single letter and little proof. Yet, the notice-and-takedown is even worse than the DMCA's already dreadful system in that there's no provision to deal with any abuse -- meaning retailers could abuse the system sending false takedown notices and burdening online retailers over and over again, and there would be no punishment. On top of that, the bills would put liability on the retailers, directly contradicting the very point of section 230 of the CDA, which was designed to make sure liability went to the actually guilty party.

Basically, these three bills in combination are nothing more than a bogus effort by big traditional retailers to put a ridiculous liability and burden on online retailers to fix a problem that isn't as big as they make it out to be, and which they, themselves, have the most control over -- though they purposely choose not to do much to exercise that control. And, finally, these big retailers make up a totally bogus and unsubstantiated claim that online selling "addiction" is drawing a large group of folks into an unanticipated life of crime. Hopefully Congress sees through this blatant attempt by big traditional retailers to put a bunch of hurdles in front of online sellers.

Filed Under: competition, e-fencing, online auctions, politics, retail stores, shoplifting
Companies: ebay, safeway, target

Retail Chains May Get Congress To Regulate Auction Sites Using Bogus Claims

from the amazing dept

Back in June, we noted that the Retail Industry Leaders Association, a lobbying group representing big store retailers was pushing Congress to start regulating online auction sites, claiming that they were experiencing a huge crimewave from thieves who would resell the goods on sites like eBay. Reader crystalattice points out that some Congressional Reps have put forth just such a piece of legislation, and now the press is parroting the claims that this huge crimewave exists, when the evidence suggests exactly the opposite. Shoplifting is actually decreasing, while insiders (employees) stealing goods is on the rise. The problem is often that stores simply don't police themselves well.

So, this isn't at all about stopping this supposed crimewave. It's a way for offline retailers to try to hurt the competition by adding some ridiculous liability to them -- somehow making them liable for the actions of users selling "stolen" goods on their sites. This is a blatant anti-competitive move that is using dubious claims to support the case. Hopefully the press and other politicians won't fall for it.

Filed Under: competition, online auctions, politics, retail stores

Retail Chains Ask Congress To Regulate Online Auction Sites

from the competition-is-evil dept

We've seen so many industries freak out as the market changed around them thanks to the internet, that it really shouldn't be surprising when those "old school" players pull out the bag of sneaky tricks. However, in the case of retail stores, the tricks seem especially bad. Specifically, the Retail Industry Leaders Association, a lobbying group that represent the biggest retail chains in the US is asking Congress to start regulating what can be sold on online auction sites. The sneaky part is in how this is positioned. Since just complaining about the competition isn't likely to win over many politicians, these retail stores are claiming that online auction sites are creating a huge crime wave, as organized groups of individuals rob stores and sell off the results online. Of course, if that were the case, rather than blaming the internet, why not focus on better theft prevention techniques?

However, the really sneaky part of this push to get Congress involved is that the reasoning isn't even accurate. I'm sure there may be some groups of shoplifters out there who have been going around stealing goods out of stores and reselling them on eBay, but the details suggest it's barely a blip on the radar. A study by the National Retail Federation (who also represents large retailers) found that most store theft comes from employees or vendors. Only 1/3 comes from shoplifting. Stores themselves are partly to blame, as they've cut back on prosecuting shoplifters. And, most importantly, retail theft appears to be dropping rather consistently over the past few years.

So, basically, retailers get to push for the idea that they need to ban online auctions from selling certain products -- when it turns out what they really want is to get rid of the competition. There's no real evidence of an epidemic of thefts due to online auctions, and even if there were, the problem should be dealt with via the retailers' own loss management efforts.

Filed Under: competition, online auctions, politics, retail stores

Can Blockbuster Turn Its Stores Into Destinations?

from the worth-a-shot dept

Blockbuster clearly knows it's facing mounting challenges to its business. The company has been mostly outplayed by Netflix in the online rental market (though, Blockbuster's competing offering has done much better than some others who have tried to play the Netflix game). The company's financials have been a bit of a mess, but it's still planning for the future -- and that includes recognizing that the market is changing drastically, and it needs to change with it. While no one knows if it will be able to survive these changes, it's still rather refreshing to at least see the company try to meet those challenges head on. Recently, it's talked about a strategy to create its own set top box as well as put out an unsolicited bid to buy Circuit City. While both ideas have some problems (the Circuit City acquisition would be particularly hard to pull off for example), it does show that the company is trying to branch out.

What may be even more interesting, though is that Blockbuster clearly recognizes that it has an asset in its brick-and-mortar stores that Netflix can't easily copy. While some may say that the stores are a liability, that may depend on what Blockbuster can do with them. Already, it tries to leverage the stores in its online rental service (allowing you to return movies to the stores and immediately pick up a new film as part of your subscription), but as Gizmodo points out, it's also experimenting with making the shops into real destinations, rather than just rental shops. It's playing with a few different "formulas" to see how people respond -- including setting up a bar where people can buy soda or coffee and another where there's free WiFi and people can play video games on a big screen. It's also testing out setting up a store where shoppers can buy consumer electronics. You can consider that last one a test run for what would happen if the Circuit City deal goes through.

Turning the stores into more of a destination, with a variety of options on ways to make money off of the customers is a necessary strategy -- though, it's hard to pull off well (so, at the very least, it's good to see the company experiment before rolling something out nationally). Sam Goody, the big record store chain, tried to do something similar a few years back, and it didn't work out all that well. A large part of the problem may be really convincing people that it's a worthwhile destination. This is one case where the company's reputation matters, and Blockbuster's reputation isn't great. Still, this is the right strategy -- though, success or failure is very much dependent on the execution, which isn't exactly Blockbuster's strong suit.

Filed Under: destinations, movie rentals, retail stores
Companies: blockbuster