Amalgamated Bank said it will pull investments from Sturm, Ruger & Company and withhold support for an board member if the gun maker fails to adopt new corporate policies and cut ties with the National Rifle Association. The bank’s chief executive Keith Mestrich described Ruger’s relationship with the NRA as “short-termism” in their resistance to new gun laws.
“They fail to proactively adopt corporate social responsibility efforts commensurate with the lethality of their product, and display hypocrisy in touting adherence to the law while working with the NRA to weaken the law as much as possible,” Mestrich said. He made a fiduciary argument that Amalgamated would have to pull funds because Ruger’s effort “creates significant financial and reputational risks” that will hurt the company and shareholders.
Amalgamated sent a letter, dated April 19, to Ruger’s board urging them to adopt corporate policies for gun makers recommended by gun control group Everytown for Gun Safety. The policies range from endorsing universal background checks and increasing funding for federal regulators and gun violence research to monitoring inventory distribution and investing in gun safety technology (ie smart guns).
The letter also singled out company board member Sandra Froman, who also serves on the NRA’s board. Because of the NRA’s political mission, the bank argued her presence is “a potentially significant conflict of interest.” As shareholders participating in Ruger’s annual meeting on May 9, the bank threatened to withhold support for Froman if the company failed to adopt Everytown’s policies.
Froman, who was appointed to Ruger’s board of directors in 2015, has served on the NRA’s board since 1992 and also served as the organization’s president, an honorary position, from 2005 to 2007. Unlike most other NRA board members, Froman earns compensation from the organization to the tune of $45,180 a year. Yet, in company filings, Ruger has disclosed her relationship with the NRA and clarified the company has contracted the gun lobby for promotional and advertising activities, paying some $800,000 in 2017.
As a publicly traded company, Ruger has been the subject of intense scrutiny since February’s school shooting in Parkland, Florida left 17 people dead and 15 others injured. Students and victims of the attack led a nationwide movement that has influenced businesses to take action. Some major banks and financial institutes have opted to implement policy changes that gun control advocates argue could have prevented the Parkland shooting.
Although most corporate actions were taken before Everytown created an outline for gun policy and procedural changes, Amalgamated was the first bank to publicly endorse and adopt the code of conduct after it was released. However, the effort doubles-down on the bank’s lending policy that already prohibited lending to gun and ammo makers and sellers.
Last month, another group of activist shareholders filed a proposal to be voted on at Ruger’s annual meeting. The Oregon-based Sisters of the Holy Names of Jesus and Mary asked other shareholders to make Ruger treat gun violence as “a public health crisis with extraordinary human and financial costs” and direct monies for preventative measures. Ruger executives asked shareholders to reject the proposal, arguing “the intentional criminal misuse of firearms is beyond our control.”
In the wake of the Parkland tragedy, Ruger has defended its business practices as well as federal and industry standards. Company executives explained adopting new gun control policies would alienate customers and argued that they think the best way to prevent future tragedies would be better enforcement of existing laws.