michael barbaro

From The New York Times, I’m Michael Barbaro. This is “The Daily.”

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Today: The nation’s largest retailer says it will stop selling the kinds of bullets used by mass shooters and call on Congress to consider a new ban on assault rifles. Financial columnist Andrew Ross Sorkin on why corporate America is now in the business of regulating guns. It’s Thursday, September 5. Andrew, tell me about this email that you’ve got.

andrew ross sorkin

So I was sitting at my desk. It’s midday Tuesday. I was actually about to get up to go grab lunch. And I looked at my screen, and an email popped up. And it said, from Doug McMillon. Now, Doug McMillon is the C.E.O. of Walmart, the largest retailer in the country. And the subject line was “Walmart’s next steps.” And he started the email — Dear Andrew, I wanted to follow back up with you on the subject of firearms and ammunition. And my eyes widened.

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michael barbaro

And what does it actually say?

andrew ross sorkin

So he lays out a multipart plan, in the wake of this terrible massacre that had taken place at a Walmart store in El Paso in which 22 people were killed, about how Walmart is going to move forward and what steps they’re going to take to try to end gun violence. And he says, one, we’re going to stop selling certain kind of ammunition, the kind of ammunition that’s often used in military-style weapons, the AR-15-style weapons that you hear so much about that are used in these mass shootings. He also says we’re going to stop selling handgun ammunition completely. In addition all that, though, and maybe even more importantly, he says Walmart is going to advocate that lawmakers have a robust debate about reinstating the assault weapon ban, and in addition to that, says that Walmart is going to advocate for the government to fund research into gun violence.

michael barbaro

These are big steps.

andrew ross sorkin

For Walmart, these are very big steps. And unbeknownst to me, 20 minutes later, Walmart is putting out a series of statements. And this email was effectively a heads up that this was about to happen.

archived recording 1 Breaking news now from the world’s largest retailer. Walmart just announced — archived recording 2 Walmart says it will no longer sell ammunition for handguns or for short-barreled rifles. That ammo can be used in assault-style weapons. archived recording 3 Additionally, Walmart asking customers to no longer carry guns into its stores in open carry states. archived recording 4 In a memo to employees, C.E.O. Doug McMillon saying, quote, “We’ve also been listening to a lot of people inside and outside our company as we think about the role we can play in helping to make the country safer. It’s clear to us that the status quo is unacceptable.”

michael barbaro

And Andrew, why is the C.E.O. of Walmart sending this email with these plans to you before he makes it public to the rest of the world?

andrew ross sorkin

Well, oddly enough, this story actually starts over a year and a half ago.

archived recording Now to the latest on the most recent deadly school shooting in America. A gunman armed with an AR-15 semiautomatic rifle and carrying multiple magazines went on a deadly rampage at a high school in Parkland, Florida.

andrew ross sorkin

After the mass shooting at the high school in Parkland, Florida.

archived recording 17 people are dead. 14 other victims remain in the hospital.

andrew ross sorkin

And after that shooting there really felt like there was a moment.

archived recording Well, unprecedented and powerful. Tonight there are plans to do more.

andrew ross sorkin

There was a huge activist movement in this country.

archived recording 1 Young Americans took to the streets today in numbers likely not seen since the Vietnam War. The March for Our Lives was a response to the massacre last month. archived recording 2 Never again! Never again! archived recording 3 In a little over six minutes, 17 of our friends were taken from us, 15 were injured, and everyone — absolutely everyone — in the Douglas community was forever altered. archived recording 4 Never again!

andrew ross sorkin

There was a real — what seemed like conversation happening in Washington.

archived recording (donald trump) Don’t worry about the N.R.A.. They’re on our side. You guys, half of you are so afraid of the N.R.A.. There’s nothing to be afraid of. And you know what? If they’re not with you, we have to fight them every once in a while. That’s OK.

andrew ross sorkin

That there might actually be some change.

archived recording (donald trump) I will tell you they are doing what they think is right. But sometimes we’re going to have to be very tough, and we’re going to have to fight them. But we need strong background checks.

andrew ross sorkin

But interestingly to me as a columnist who covers business and finance and the world of Wall Street, there was one group that nobody was focused on. And that was this business community that was supporting the gun industry. And I started to think to myself, Washington may or may not get there. And of course, they didn’t. But here’s a group of people who have real influence. If you follow the money, you can really start to see this remarkable ecosystem which has supported the gun industry. And I spent virtually the past year and a half regularly writing columns effectually laying out all of the different players in this ecosystem, and also addressed the kinds of roles and opportunities that existed for these companies to play in trying to end gun violence.

michael barbaro

And tell me about this ecosystem. Describe it to me. What do you mean?

andrew ross sorkin

Well, people think that there’s just gunmakers. But there’s all of the suppliers to the gunmaker. There are distributors. There are retailers. There are credit card companies, credit card networks, credit card processors. There are banks behind all of these institutions. Everybody’s playing a role. There are investors. And I took the position that there was an opportunity for these companies to do something here.

michael barbaro

And what exactly was the opportunity you were asking them to take?

andrew ross sorkin

Well, the first part was just to acknowledge that they were part of the ecosystem. So many of them didn’t even want to acknowledge that they had anything to do with this. Most people didn’t even see the connections or ties. Nobody would ever say a shooting that happened in a high school has something to do with a bank that happens to be located on Park Avenue. For example, in one of the columns that I worked on, we identified that in a majority of the mass shootings over the last decade in America, that they were financed by credit cards, and that in many cases, the shooters could not have afforded the guns that were used if they didn’t have access to the credit card card. So the credit card itself became a key to the shooting, and the banks became unwitting co-conspirators. And some of this was inspired, actually, by what some of the online payment companies had already done. So companies like PayPal and Stripe and Square, and even Apple Pay, had explicit policies that said that they don’t transact online for sales around guns and gun-related merchandise. And I thought to myself, if they can make that decision, can’t others? And in addition to that, you had already started to see some companies, including Walmart, take some early steps. So Walmart had instituted a new age limit — 21 years old, no longer just 18.

michael barbaro

To buy a gun?

andrew ross sorkin

To buy a gun. They had eliminated handguns from most of their stores, and they’d eliminated AR-15s and other assault-style guns completely.

michael barbaro

So explain how you imagine all these different actors working together so that ultimately, there are fewer mass shootings, which is obviously the goal. What exactly would retailers, banks, and credit card companies do? What does this look like in practice?

andrew ross sorkin

So let me lay it out for you. Let’s say somebody that’s planning a mass shooting decides they’re going to buy two or three or four guns in the span of three or four weeks. And then they go online, and they might buy ammunition from somewhere else. They might buy body armor. You would think that the credit card industry, the banking industry, and all of those retailers could effectively track those sales. And in the same way that banks today are looking for anti-money laundering or are looking for human trafficking, they say to themselves, OK, this is a suspicious purchase.

michael barbaro

They connect dots.

andrew ross sorkin

They connect dots. This already exists. They just don’t do it for guns because they can’t see the information. And they can’t see the information because the retailers don’t provide it, and the networks haven’t tried to create systems to allow for it. So it’s a see no evil, hear no evil situation.

michael barbaro

And you want that to change. You want the financial system to treat guns the way it currently treats issues like drugs or money laundering.

andrew ross sorkin

Exactly. And I want to be 100 percent clear here. The goal is not to prevent people from buying guns. These are legal products, 100 percent. The goal is to identify suspicious purchasing activity and then to either try to stop it at the register or to report it so that law enforcement can take a second look. And so the real idea here is that if you could create this best practices sales approach, you could actually change the dynamic in a material way.

michael barbaro

And as a columnist, distinct from a reporter in the newsroom, it sounds like you are taking the position that there is a kind of moral obligation within the financial system that, in your mind, they have not been awakened to or are aware of, that they can and should play a role in restricting or monitoring gun sales in light of these mass shootings.

andrew ross sorkin

Absolutely it’s a responsibility, especially in an environment in which lawmakers seem so deadlocked on everything that nobody is willing to step up.

michael barbaro

So you’re encouraging these companies to take what would be pretty big steps to tackle the question of gun control themselves, to basically go outside the bounds of what we — and I assume they — normally think of as the responsibilities of the private sector. So do they actually do it?

andrew ross sorkin

Kind of. We’ll call it baby steps.

archived recording One of the country’s biggest sporting goods retailers announced today that it will stop selling assault-style rifles along with the sale of any guns to those under 21.

andrew ross sorkin

You had Dick’s Sporting Goods come out.

archived recording (edward stack) We actually sold the shooter a shotgun in November of last year. When we looked at that and found out that we did this, we had a pit in our stomach and said, we don’t want to be a part of this.

andrew ross sorkin

You had BlackRock, the largest investor in the world.

archived recording BlackRock made public a letter with the questions that it is asking of gunmakers and gun sellers.

andrew ross sorkin

Start sending letters to gun manufacturers and gun retailers saying, what are you going to do about gun violence?

archived recording 1 Questions range from litigation risks to gun safety to background checks. archived recording 2 Citigroup has said it’s going to introduce new restrictions on business customers who sell guns.

andrew ross sorkin

You had Citigroup and Bank of America say we are no longer going to finance gun manufacturers. We’re no longer going to advise gunmakers.

archived recording Citi will require clients not sell firearms to anyone who hasn’t passed the background test or anyone under the age of 21, and not to sell high-capacity magazines.

andrew ross sorkin

They’re no longer going to be our clients.

michael barbaro

So from your perspective, there is some momentum here.

andrew ross sorkin

A little momentum. And it felt there was going to be some even more momentum, frankly. But then everything stopped.

michael barbaro

Why?

andrew ross sorkin

So Citigroup, which had announced that they were going to separate themselves from the gunmakers — this is now April, 2018. Some of their senior executives happen to go to a meeting with commissioners from the S.E.C., which is the regulatory body that oversees these banks in large part. And the meeting was not really supposed to be about guns at all. It was supposed to be about all sorts of esoteric regulations that relate to the banks themselves. But at this meeting, one of the commissioners, a conservative commissioner, effectively said we’re not going to help you on any of these things because of the position you’ve taken on guns.

michael barbaro

Wow.

andrew ross sorkin

And once that got around Wall Street, everybody put their pens down. Goldman Sachs, in fact, was about to put out a public policy statement about the position they were going to take related to guns. But upon hearing what the S.E.C. had done, they started to rethink their position.

michael barbaro

So the message here is stay in your lane or else. It sounds a little bit like the message that supporters of gun rights —

andrew ross sorkin

Absolutely.

michael barbaro

Send to elected officials in Washington.

andrew ross sorkin

In the case of the S.E.C., they effectively oversee these banks every single day. And so on the priority list of things that the banks are facing and dealing with —

michael barbaro

They can put guns in their back pocket.

andrew ross sorkin

Right. You know, I used to get calls from C.E.O.s and executives at all sorts of companies virtually every other day during that period. But by the summer, those calls really started to trail off.

michael barbaro

So at this point, it feels like you have reached the end of your capacity to influence this, and the business world is realizing that the cost of engaging on guns is probably just too high. They’re corporations. This is not their problem, especially if it’s going to become a problem for them.

andrew ross sorkin

Well, I hadn’t given up. And sadly, the shootings didn’t stop either.

archived recording We begin with breaking news — a deadly mass shooting at a Walmart in El Paso, Texas. The numbers are staggering.

andrew ross sorkin

So we had this terrible massacre at a Walmart store in El Paso where 22 people were killed. And it was at that point where I went back to the computer. And this time, I decided I was going to write an open letter to Doug McMillon, the C.E.O. of Walmart, to effectively say to him, you have an authentic claim in a way that no other C.E.O. in the country does to address this and to engage in a conversation about gun violence in America because of what had just happened in the store. But you also have now a moral responsibility to try to end this.

michael barbaro

We’ll be right back. So Andrew, after the shooting in El Paso, you decide to go directly to the C.E.O. of Walmart. What do you say in this letter to him?

andrew ross sorkin

I was effectively saying to him, you have leverage over the gunmakers. You have leverage over lawmakers. You have leverage over the financial industry. Go to them. Talk to them. Force them to engage in a conversation about what everybody can do to fix this.

michael barbaro

Right.

andrew ross sorkin

Walmart is famous for squeezing people on the issues that they care about. And my view was this was now an issue that they had to care about. So after I wrote the letter, a couple days later, Doug McMillon posted a memo, which he also sent me, as a letter to his employees. And in that letter, said that he had heard from a lot of people throughout the country about this issue of gun violence, and said that he wanted to take some time to try to figure out what Walmart can or should do.

michael barbaro

And what’s your sense of what he’s likely to do given what Walmart is and his role?

andrew ross sorkin

You know, I’ve covered Walmart and Doug McMillon for a long time now, and you could tell that he has always struggled with this issue of how far to go. This is a company that’s based in Arkansas. This is a red state. And any public statement that he were to make on a polarizing issue in America could have a backlash on the business. And he’d seen it. He’d watched it happen. When Dick’s announced they were no longer going to sell assault-style guns, there was a massive backlash. There were boycotts. Earnings went down. The stock price went down. When Citigroup made their announcement, there were people cutting up their credit cards and posting pictures of it on Twitter. So there are a lot of reasons for him to be cautious on this issue.

michael barbaro

And yet this week, you get this email saying that Doug McMillon, C.E.O. of Walmart, has decided to come out and take these steps around ammunition, around stopping certain gun sales, around going to Congress and saying you should be thinking about an assault weapons ban.

andrew ross sorkin

Right. And this was dramatic because up until this point, Walmart — even when they had taken steps to remove AR-15s, for example, from their stores — had never said that the reason they were doing it was for social issues. The reason was always about the marketplace or something else. And all of a sudden, the C.E.O. of the largest retailer in America is talking about gun violence as a problem. The status quo was no longer acceptable.

michael barbaro

So how do you understand his decision?

andrew ross sorkin

Well, I think when 22 people die in your store, it really makes you rethink what you’re willing to say. I also think there’s a shift in public opinion in this country towards more gun control and background checks and reasonable sales processes than there has been in a very long time. And most of what he’s proposed, frankly, is not that controversial at all. In fact, a lot of critics would say it hasn’t gone far enough.

michael barbaro

Well, let’s talk about what it actually will be doing, these moves that he’s just announced. What’s the practical impact of them?

andrew ross sorkin

Well, let’s take what Walmart is doing on ammunition. They sell 20 percent of all the ammunition. Doug McMillon is now saying that after these policies are put in place, they’ll sell somewhere between 6 percent and 9 percent of the ammunition in the country.

michael barbaro

So cut down by more than more than half.

andrew ross sorkin

More than half. In Washington, he’s writing letters directly to the president. He’s writing letters directly to Congress saying we are asking you to have a debate around the assault weapon ban. That’s real. When the C.E.O. of the largest retailer in the country — which, by the way, is also one of the biggest lobbyists in Washington — speaks, people listen. So what’s the impact of it? Well, it’s something, but it’s not everything. The question is whether it now gives license to the rest of corporate America to join him. If that happens, we might actually look back at this as a tipping point. And the rest of corporate America is watching, literally right now, to see what’s going to happen to Walmart. Are customers going to flee? What’s the real economic impact of what they’ve done?

michael barbaro

And what has been the reaction?

andrew ross sorkin

Well, as you’d imagine, the N.R.A. came out with a statement blasting the company.

archived recording Within hours of the announcement, the N.R.A. tweeted it is shameful to see Walmart succumb to the pressures of the anti-gun elites. Lines at Walmart will soon be replaced by lines at other retailers who are more supportive of America’s fundamental freedoms.

andrew ross sorkin

You have some customers on Twitter with the hashtag #BoycottWalmart.

archived recording Walmart, what are y’all doing? Y’all think that by telling me and other people that have a license to carry that you can’t bring the gun into Walmart is going to stop a mass shooting? Huh? That’s not going to stop nothing. Are y’all stupid? Come on, now.

andrew ross sorkin

At the other extreme, you have people giving them atta boys, saying, this is great. I’m now going to shop at Walmart. And to the extent that people look at the price of the stock as an indicator about what’s going to happen to the company and the company’s sales, well, the stock actually went up.

michael barbaro

I find myself struck that the biggest employer in the country has responded, at least a bit, to this call that you put out. But what you have been advocating for, and many others, is a lot bigger than a single company ending the sales of ammunition or even ending the sales of certain guns. It’s this coordinated attempt to use the financial system to change, basically, the very nature of the gun industry. And are you seeing any signs that that is happening, that larger structural change?

andrew ross sorkin

You know, for the most part, we’re not there yet. Credit card companies still, for the most part, don’t see this as their issue. Some of the banks, some of the retailers are trying to figure out what they can do, but they’re all anxious. They’re all nervous. That’s why what Doug McMillon did may or may not be important. We’ll see.

michael barbaro

And to gun rights supporters, I have to imagine that what you’re outlining sounds like you asking the financial system to do what lawmakers in Washington haven’t done and may never do, in their minds for good reason, which is that it may inevitably infringe on their rights to buy guns.

andrew ross sorkin

Look, I hear that. I see it on my Twitter feed every single day. But there’s a crisis going on in this country. And the question is how we can confront the crisis. None of this is about flouting the law. None of this is about infringing on Second Amendment rights in any way. This is about putting commonsense protections on the sales of guns. Reasonable questions should be asked when suspicious behavior occurs.

michael barbaro

But I have to ask you, should any of this that you’ve been advocating for — should it actually happen? Do we really want private corporations — banks, credit cards, big financial firms, retailers — do we want them being the arbiters of this kind of a decision about what guns are sold, what ammunition is sold? Are you and others asking companies to be something that they really aren’t, and perhaps never should be in the United States, which is basically a stand-in for the government? Because as we talked about with you recently when a bunch of C.E.O.s debated their role, how civic-minded they should be, at the end of the day, they’re companies. They’re for-profit businesses. They’re not elected officials. They’re not advocacy groups. So why should they be doing any of this stuff?

andrew ross sorkin

Look, companies make decisions every single day about what products they’re going to put on their shelves, who they’re going to do business with, who they’re going to provide loans to for all sorts of different reasons. People are making these decisions constantly. So the idea that companies are supposed to actually just sit on their hands and — that is crazy to me. It’s absolutely insanity to think that they are not supposed have any responsibility in all of this.

michael barbaro

But if they take on this role that you’re suggesting, are you worried that it’ll, in a very real way, let the government off the hook for playing a regulatory role we traditionally think of the government playing of protecting the people?

andrew ross sorkin

In a perfect world, the government would put in place reasonable and responsible regulations that would prevent this from happening. But by default, let’s just agree that the laws on the books are not working. If they were, we wouldn’t be having this conversation. If you take that as fact, the question is, what are you going to do about it? And if Washington is not going to do something about it, the question is, who? What is the moral responsibility of business leaders to deal with very human issues? And I think they have some.

michael barbaro

Andrew, thank you.

andrew ross sorkin

Thank you, Michael.

michael barbaro

We’ll be right back. Here’s what else you need to know today.

archived recording (carrie lam) Incidents over these past few months have shocked and saddened Hong Kong people.

michael barbaro

On Wednesday, the chief executive of Hong Kong, Carrie Lam, said she would withdraw an unpopular extradition bill that has ignited months of massive protests across the city.

archived recording (carrie lam) Our foremost priority now is to end violence, to safeguard the rule of law, and to restore order and safety in society.

michael barbaro

The bill would have allowed for citizens of Hong Kong to be tried for crimes in mainland China, sparking fears that China might have used the law as a way to prosecute and silence its critics in Hong Kong. The withdrawal of the bill was a major demand of the protesters, but it’s unclear whether Lam’s decision will end the demonstrations, which have since expanded to encompass broader grievances against her government. And —

archived recording (john bercow) Order. Questions to the prime minister. Siobhain McDonagh. archived recording (siobhain mcdonagh) Brexit, Mr. Speaker. The former prime minister’s deal was unacceptable to this house. But to leave without a deal is unthinkable.

michael barbaro

For the second day in a row, British lawmakers rejected the will of their new prime minister, Boris Johnson, by voting to stop him from leaving the European Union by the end of the month without a negotiated deal.

archived recording (siobhain mcdonagh) Yet the prime minister pursues a game of brinkmanship built on the livelihoods, health, and future of my constituents and our country.

michael barbaro

The showdown over Brexit has triggered a civil war inside Johnson’s Conservative Party as members of his own party turned against him, calling his plan dangerous for Britain. But Johnson vowed to press on with his strategy.

archived recording (john bercow) Mr. Prime Minister. archived recording (boris johnson) Mr. Speaker, as the honorable lady knows very well, this government will take this country out of the European Union on October the 31st.

michael barbaro

Finally —

archived recording Parts of Abaco are decimated. The national airport in Abaco is underwater. The runway is completely flooded. And in fact, the area around the airport now looks like a lake.

michael barbaro

On Wednesday, the full devastation of Hurricane Dorian was revealed in the Bahamas, where government officials said it had destroyed thousands of buildings, wiped out entire neighborhoods, and killed at least 20 people.

archived recording Wow. This is Lenny’s house. Used to be Lenny’s house. What’s left of it. Firefly. Lot of roof damage.

michael barbaro