Prohibitionist Pipe Dreams

Imagine if you will that the Freedom Group is bought by a consortium of investors including Michael Bloomberg and George Soros. Imagine further that the new CEO is a pro-gun control "hunter" and that the new board of directors will include representatives from the families of the children shot in Newtown. Top this all off with the notion that the company will provide "moral leadership" to the gun industry and will establish a fund to compensate crime victims who have been shot with firearms produced by the Freedom Group.

You would be right to ask if I was either showing signs of early dementia or having some sort of drug-induced hallucinogenic dream. Actually, it is neither. This comes from an opinion article written by John Macintosh for CNN.

Mr. Macintosh was a partner with private equity firm Warburg Pincus and is now a partner in SeaChange Capital Partners. The latter sees it mission as:

SeaChange Capital Partners is an entrepreneurial organization that seeks to deploy its resources - team, relationships, reputation and funds - to achieve the greatest social impact. At present, these situations fall into two areas: Nonprofit Collaboration and Advisory Services. SeaChange also engages in making markets within our extended network by organizing convenings wherever we see topics of common interest that are directly connected to transactions.

 Mr. Macintosh specifically suggests that a new non-profit "special purpose acquisition company" be established to buy the Freedom Group. He would call this new non-profit by the cutesy name of  BeForFreedom.org or BFF. He suggests getting the pension funds that have invested in Cerberus to roll their portion of the investment in the Freedom Group into BFF.

His "moral turnaround" plan for the Freedom Group would have the following parts:

(i) Appoints a high-profile CEO with impeccable credentials as a hunter and/or marksman who is nevertheless in favor of gun-control.

(ii) Elects a new board of directors including representatives from the families of victims killed in Newtown (and/or other massacres perpetrated with Freedom Group weapons), military veterans and trauma surgeons with real experience of human-on-human gunfire, and law enforcement and mental health professionals.

(iii) Operates the business as if sensible gun laws were in place (this may turn out to be a wise investment in future-proofing the company): discontinuing sales of the most egregious assault weapons and modifying others as necessary so they cannot take huge-volume clips; offering to buy back all Freedom Group assault weapons in circulation; micro-stamping weapons for easy tracking; and providing price discounts for buyers willing to go through a background check and register in a database available to law enforcement.

(iv) Voluntarily waives its rights to support the NRA and other lobbying groups.

(v) Creates a fund to compensate those who, despite its best efforts, are killed or wounded by its weapons.

(vi) Agrees that if the effort to provide moral leadership in the weapons industry doesn't succeed within a year, BFF should consider corporate euthanasia, even though it entails a risk of allowing more retrograde manufacturers to fill the void in the market left by the then-deceased company.

Mr. Macintosh does realize that this would be a long shot in his opinion but it has to be tried. He goes on to say:

that a reconstructed Freedom Group, fighting for sensible change as a fifth column from within the industry, might well find that many people -- even a significant portion of the NRA's members -- would buy from a truly responsible (and high quality) gunmaker if given the chance.

I'm not some young semi-retired corporate raider who has found religion, so to speak, like Mr. Macintosh. However, I'd say I have a better grasp on the firearms industry and reality than does Mr. Macintosh. If he really thinks this would come to pass and people would buy from the reconstituted Freedom Group, I'd offer these three little words of warning.

Smith and Wesson.