ATF: Thefts of Explosives from State and Local Government Storage Facilities Are Few but May Be Underreported
Published: 2005-10-31T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: More than 5.5 billion pounds of explosives are used each year in the United States by private sector companies and government entities. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) has authority to regulate explosives and to license privately owned explosives storage facilities. After the July 2004 theft of several hundred pounds of explosives from a local government storage facility, concerns arose about vulnerability to theft. This testimony provides information about (1) the extent of explosives thefts from state and local government facilities, (2) ATF's authority to regulate and oversee state and local government storage facilities, and (3) security measures in place at selected state and local government storage facilities. This information is based on a report GAO is releasing today on these issues.
section_title: What GAO Found
paragraphs: Judging from available ATF data, there have been few thefts of explosives from state and local government storage facilities. From January 2002 to February 2005, ATF received 9 reports of thefts or missing explosives from state and local facilities, compared with a total of 205 explosives thefts reported from all sources nationwide during this same period. During the course of the audit, GAO found evidence of 5 thefts from state and local government facilities, 1 of which did not appear in ATF's national database of thefts and missing explosives. Thus, the actual number of thefts occurring at state and local facilities could be higher than that identified by ATF data. ATF has no authority to oversee or inspect state and local government explosives storage facilities. State and local agencies are not required to obtain a license from ATF to use and store explosives, and only licensees--such as private sector explosives storage facilities--are subject to mandatory oversight. Thus, ATF has no means to ensure that state and local facilities comply with federal regulations. Further, ATF does not collect nationwide information on the number and location of state and local storage facilities, nor does the agency know the types and amounts of explosives being stored in these facilities. Because this data collection is a function of the licensing process and state and local facilities are not required to be licensed, no systematic information about these facilities is collected. By comparison, all licensed private sector facilities must submit a variety of information about their facilities--including location and security measures in place--to ATF during the licensing process. ATF also collects information about these facilities during mandatory inspections. At the 18 state and local government storage facilities GAO visited, a variety of security measures were in place, including locked gates, fencing, patrols, and in some cases electronic surveillance. All the facilities' officials told GAO that they conducted routine inventories. But most of the state and local government entities GAO visited were not required to be licensed or inspected by state or local regulatory agencies. GAO identified several instances of possible noncompliance with federal regulations, but these were related primarily to storage safety issues rather than security.

section_title: Letter
paragraphs: I am pleased to be here today to discuss security and safety at state and  local government explosives storage facilities. More than 5.5 billion  pounds of explosives are used each year in the United States. These  explosives are used by both public sector entities (such as state and local  government agencies) and private sector companies for a variety of  purposes—including mining, construction, avalanche control, and law  enforcement. Under current federal explosives laws and regulations, the  Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) is  responsible for licensing and regulating explosives manufacturers,  importers, dealers, and users. It is primarily through this licensing  authority that ATF oversees and inspects privately owned explosives  facilities to ensure they comply with federal explosives storage laws and  regulations. However, state and local government agencies are exempt  from ATF licensing requirements.
In August 2004, the subcommittee held a hearing here in California to  investigate the July 2004 theft of several hundred pounds of explosives  from a storage facility being used by local law enforcement agencies. At  that hearing, the subcommittee heard testimony from federal, state, and  local officials regarding the safety and security of publicly managed  explosives storage facilities and the adequacy of federal authority to  regulate and oversee these facilities. Out of concern that state and local  government explosives storage facilities could be vulnerable to theft, you  asked us to study the security and oversight at these facilities.
My testimony this morning is based on a GAO report being released today  in conjunction with this hearing, and will focus on the following issues:  1.  the extent to which state and local government explosives storage  facilities have been vulnerable to theft,  2.  the extent to which ATF regulates and oversees state and local  government explosives storage facilities, and  3.  the types of security measures in place at selected state and local  government explosives storage facilities.
We conducted our work on this report from February 2005 to August 2005  in accordance with generally accepted government auditing standards.
subsections: section_title: Background
paragraphs: ATF is the chief enforcer of explosives laws and regulations in the United  States and is responsible for licensing and regulating explosives  manufacturers, importers, dealers, and users. ATF is also responsible for  regulating most, but not all, explosives storage facilities. Under federal  explosives regulations, a license is required for persons who manufacture,  import, or deal in explosives and, with some exceptions, for persons who  intend to acquire explosives for use. No license is required solely to  operate an explosives storage facility. State and local government agencies  are not required to obtain an explosives license to use and store  explosives. However, all persons who store explosive materials (including  state and local entities) must conform with applicable ATF storage  regulations, irrespective of whether they are required to obtain an  explosives license for other purposes. According to ATF data, as of  February 2005 there were 12,028 federal explosives licensees in the United  States. Roughly 7,500 of these had some kind of explosives storage  facility, consisting of 22,791 permanent or mobile storage magazines.
ATF storage regulations include requirements relating to the safety and  security of explosives storage magazines—that is, any building or  structure (other than an explosives manufacturing building) used for  storage of explosive materials. Regarding safety, the storage regulations  include requirements related to location, construction, capacity,  housekeeping, interior lighting, and magazine repairs, as well as a  requirement that the local fire safety authority be notified of the location  of each storage magazine. Regarding security, the ATF storage regulations  include the following requirements:    Explosives handling. All explosive materials must be kept in locked  magazines unless they are in the process of manufacture, being physically  handled in the operating process of a licensee or user, being used, or being  transported to a place of storage or use. Explosives are not to be left  unattended when in portable storage magazines.
Magazine construction. Storage magazines must be theft-resistant and  must meet specific requirements dealing with such things as mobility,  exterior construction, door hinges and hasps, and locks.
Magazine inspection. Storage magazines must be inspected at least every  7 days. This inspection need not be an inventory, but it must be sufficient  to determine if there has been an unauthorized entry or attempted entry  into the magazines, or unauthorized removal of the magazine contents.
Magazine inventory. Within the magazine, containers of explosive  materials are to be stored so that marks are visible. Stocks of explosive  materials are to be stored so they can be easily counted and checked.
Notwithstanding the security requirements described above, ATF storage  regulations do not require explosives storage facilities to have any of the  following physical security features—fences, restricted property access,  exterior lighting, alarm systems, or electronic surveillance. Also, while  ATF licensing regulations require explosives licensees to conduct a  physical inventory at least annually, there is no similar inventory  requirement in the storage regulations applicable to other persons who  store explosives.
subsections: section_title: Thefts Reported at State and Local Explosives Storage Facilities Are Few but May Be Underreported
paragraphs: According to ATF data, the number of reported state and local government  thefts is relatively small when compared with the total number of thefts  that have occurred nationwide. During a recent 3-year period (January  2002—February 2005), ATF received reports of 205 explosives thefts from  all sources nationwide. By comparison, during this same period, only 9  thefts were reported that involved state and local government storage  facilities—5 involving state and local law enforcement agencies, 3  involving state government entities (all universities), and 1 involving a  county highway department. The amounts of explosives reported stolen or  missing from state and local government facilities are relatively small  when compared with the total amounts of stolen and missing explosives  nationwide. During a recent 10-month period for which data were  available (March 2003 through December 2003), there were a total of 76  theft incidents nationwide reported to ATF, amounting to a loss of about  3,600 pounds of high explosives, 3,100 pounds of blasting agents, 1,400  detonators, and 2,400 feet of detonating cord and safety fuse. By  comparison, over an entire 10-year period (January 1995 through  December 2004), ATF received only 14 reports of theft from state and local  law enforcement storage magazines. Reported losses in these cases were  about 1,000 pounds of explosive materials, and in 10 of the incidents less  than 50 pounds of explosives was reported stolen or missing.
While the ATF theft data indicate that thefts from state and local facilities  make up only a small part of the overall thefts nationwide, these reports  could be understated by an unknown amount. There are two federal  reporting requirements relating to the theft of explosives. One is specific  to all federal explosives licensees (and permittees) and requires any theft  or loss of explosives to be reported to ATF within 24 hours of discovery.  The second reporting requirement generally requires any other “person”  who has knowledge of the theft or loss of any explosive materials from his  stock to report to ATF within 24 hours. Although the term “person” as  defined in law and regulation does not specifically include state and local  government agencies, ATF has historically interpreted this requirement as  applying to nonlicensed state and local government explosives storage  facilities. However, ATF officials acknowledged that some state and local  government entities could be unsure as to their coverage under the theft  reporting requirements and, as a result, may not know they are required to  report such incidents to ATF. Indeed, during our site visits and other state  and local contacts, we identified five state and local government entities  that had previously experienced a theft or reported missing explosives— two involving local law enforcement agencies, two involving state  universities, and one involving a state department of transportation.  However, one of these five incidents did not appear in ATF’s nationwide  database of reported thefts and missing explosives. Based on these  findings, the actual number of thefts occurring at state and local  government storage facilities nationwide could be more than the number  identified by ATF data.
section_title: ATF Lacks Authority to Regulate and Oversee State and Local Explosives Storage Facilities Nationwide
paragraphs: There is no ATF oversight mechanism in place to ensure that state and  local government facilities comply with federal explosives regulations.  With respect to private sector entities, ATF’s authority to oversee and  inspect explosives storage facilities is primarily a function of its licensing  process. However, state and local government entities are not required to  obtain a federal license to use and store explosives. In addition, ATF has  no specific statutory authority to conduct regulatory inspections at state  and local government storage facilities. Under certain circumstances, ATF  may inspect these facilities—for example, voluntary inspections when  requested by a state and local entity, and mandatory annual inspections at  locations where ATF shares space inside a state and local storage  magazine. Regarding those state and local government facilities that ATF  does not inspect, ATF officials acknowledged they had no way of knowing  the extent to which these facilities are complying with federal explosives  regulations.
ATF officials stated that if the agency were to be required to conduct  mandatory inspections at all state and local government storage facilities,  they would likely need additional resources to conduct these inspections  because they are already challenged to keep up with inspections that are  mandated as part of the explosive licensing requirements. Under  provisions of the Safe Explosives Act, ATF is generally required to  physically inspect a license applicant’s storage facility prior to issuing a  federal explosives license—which effectively means at least one  inspection every 3 years. At the same time, however, ATF inspectors are  also responsible for conducting inspections of federal firearms licensees.  The Department of Justice Inspector General reported that ATF has had to  divert resources from firearms inspections to conduct explosives storage  facility inspections required under the Safe Explosives Act. Despite recent  funding increases for ATF’s explosives program, giving ATF additional  responsibility to oversee and inspect state and local government storage  facilities could further tax the agency’s inspection resources. According to  ATF officials, because inspection of explosives licensees is legislatively  mandated, the effect of additional state and local government explosives  responsibilities (without related increases in inspector resources) could  be to reduce the number of firearms inspections that ATF would be able to  conduct.
ATF does not collect nationwide information on the number and location  of state and local government explosives storage facilities, nor does the  agency know the types and amounts of explosives being stored in these  facilities. Since data collection is a function of the licensing process and  state and local facilities are not required to be licensed, no systematic  information about these facilities is collected. With respect to private  sector licensees, ATF collects descriptive information concerning  explosive storage facilities as part of the licensing process. ATF license  application forms require applicants to submit information about their  storage capabilities, including specific information about the type of  storage magazine, the location of the magazine, the type of security in  place, the capacity of the magazine, and the class of explosives that will be  stored. ATF also collects information about licensed private sector storage  facilities during mandatory inspections, through examination of explosives  inventory and sales records and verification that storage facilities meet the  standards of public safety and security as prescribed in the regulations.
During the course of our audit work, we compiled some data on state and  local government entities that used and stored explosives. At the 13 state  and local law enforcement bomb squads we visited, there were 16 storage  facilities and 30 storage magazines. According to Federal Bureau of  Investigation data, there are 452 state and local law enforcement bomb  squads nationwide. However, because of the limited nature of our  fieldwork, we cannot estimate the total number of storage facilities or  magazines that might exist at other bomb squad locations. Moreover, other  state and local government entities (such as public universities and state  and local departments of transportation) in addition to law enforcement  bomb squads also have explosives storage facilities. At the one public  university we visited, there were 2 storage facilities and 4 storage  magazines. Again, however, because of the limited nature of our fieldwork,  we cannot estimate the total number of storage facilities and magazines  that exist at these other state and local government entities nationwide.
section_title: Security Measures Varied at State and Local Explosives Storage Facilities We Visited
paragraphs: We found that security measures varied at the 14 state and local  government entities we visited. Overall, we visited, 2 state bomb squads,  11 city or county bomb squads (including police departments and sheriffs’  offices), and 1 public university. Four of the 14 state and local entities had  2 separate storage areas, resulting in a total of 18 explosives storage  facilities among the 14 entities. Three of these storage facilities were  located on state property, 7 were located at city or county police training  facilities, 7 were located on other city or county property, and 1 was  located at a metropolitan airport. Eleven of the 18 explosives storage  facilities we visited contained multiple magazines for the storage of  explosives. As a result, these 18 facilities comprised a total of 34 storage  magazines. All of the 18 facilities contained a variety of high explosives,  including C-4 plastic explosive, detonator cord, TNT, binary (two-part)  explosives, and detonators. Estimates of the amount of explosives being  stored ranged from 10 to 1,000 pounds, with the majority of the entities (9)  indicating they stored 200 pounds or less.
At each of the 14 state and local storage entities we visited, we observed  the types of security measures in place at their explosives storage  facilities. Our criteria for identifying the type of security measures in place  included existing federal explosives storage laws and regulations (27  C.F.R., Part 555, Subpart K) and security guidelines issued by the  explosives industry (the Institute of Makers of Explosives). Most of these  security measures (fencing, vehicle barriers, and electronic surveillance,  for example) are not currently required under federal storage regulations.  However, we are presenting this information in order to demonstrate the  wide range of security measures actually in place at the time of our visits.
Physical security. Thirteen of the 18 storage facilities restricted vehicle  access to the facility grounds by way of a locked exterior security gate or  (in one case) by virtue of being located indoors. Five of the 13 facilities  restricted vehicle access after normal working hours (nights or nights and  weekends). Officials at 7 other facilities said that vehicle access to the  facilities was restricted at all times, including the 1 indoor facility that was  located in the basement of a municipal building. Six of the 18 storage  facilities had an interior barrier—consisting of a chain-link fence with a  locked gate—immediately surrounding their storage magazines to prevent  direct access by persons on foot. One other facility (the indoor basement  facility), relied on multiple locked doors to prevent access by  unauthorized personnel. Conversely, at 1 facility we visited, the storage  magazine could be reached on foot or by vehicle at any time because it did  not have fencing or vehicle barriers to deter unauthorized access. In  addition to restricted access to storage facilities, officials at all of the 18  storage facilities we visited told us that official personnel—either bomb  squad or other police officers—patrolled or inspected the storage facility  on a regular basis. And, at 9 of the 18 storage facilities we visited, officials  said that state or local government employees—police training personnel,  jail or correctional personnel, or other city/county employees—maintained  a 24-hour presence at the facilities.
Electronic security. Four of the 18 explosives storage facilities had either  an alarm or video monitoring system in place. Two storage facilities with  video surveillance took advantage of existing monitoring systems already  in place at their storage locations—one located at a county correctional  facility and one located inside a municipal/police building. Officials at 4  storage facilities told us they had alarm systems planned (funding not yet  approved), and officials at 3 facilities said they had alarm systems pending  (funding approved and awaiting installation). Officials at 2 facilities also  told us they planned to install video monitoring. Regarding the feasibility  of installing electronic monitoring systems, 4 officials noted that storage  facilities are often located in remote areas without easy access to  electricity. Regarding the possibility of new federal regulations that would  require electronic security at storage magazines, 9 officials told us they  would not object as long as it did not create an undue financial burden.
Inventory and oversight issues. Officials at all 14 of the entities we visited  told us they performed periodic inventories of the contents of their  explosives storage magazines in order to reconcile the contents with  inventory records. In addition, 9 entities said they had received  inspections of their storage facilities, primarily by ATF. Six entities told us  they received the inspections on a periodic basis, with another 3 entities  having received a onetime inspection. Regarding oversight by multiple  regulatory authorities, one entity had been inspected by both ATF and a  local government authority, while another entity was inspected on a  recurring basis by both ATF and a state government authority. Five of the  14 entities we visited told us they were required to obtain a license from  state regulatory authorities to operate their explosives storage facilities.  One of these entities was also required (by the state regulatory authority)  to obtain a federal explosives license issued by ATF. Officials at 13 entities  we visited said they did not object to the possibility of federal licensing or  inspection of their explosives storage facilities. Officials at 3 state and  local entities noted that additional federal oversight was not a concern as  long as they were not held to a higher standard of security and safety than  ATF requires of private industry.
Thefts and compliance issues. Two of the five thefts we documented  during our site visits and other state and local contacts occurred at state  and local entities we visited. At one storage facility, officials told us that  criminals had once used a cutting torch to illegally gain entry to an  explosives storage magazine. At another storage facility, officials said that  an unauthorized individual had obtained keys to a storage magazine and  taken some of the explosives. In both incidents, the perpetrators were  apprehended and the explosives recovered. However, one of these  incidents did not appear in ATF’s nationwide database of reported thefts  and missing explosives. We also observed storage practices at four  facilities that may not be in compliance with federal explosives  regulations. However, these circumstances appeared to be related to  storage safety issues, rather than storage security. In April 2005, the  National Bomb Squad Commanders Advisory Board—which represents  more than 450 law enforcement bomb squads nationwide—initiated a  program encouraging bomb squads to request a voluntary ATF inspection,  maintain an accurate explosives inventory, and assess the adequacy of  security at their explosive storage facilities to determine if additional  measures might be required (such as video monitoring, fencing, and  alarms). This is a voluntary program and it is too soon to tell what effect, if  any, it will have towards enhancing security at state and local law  enforcement storage facilities and reducing the potential for thefts.
section_title: Conclusions and Recommendations
paragraphs: The overall number of state and local government explosives storage  facilities, the types of explosives being stored, and the number of storage  magazines associated with these facilities are currently not known by ATF.  ATF has no authority to oversee state and local government storage  facilities as part of the federal licensing process, nor does it have specific  statutory authority to conduct regulatory inspections of these facilities. As  a result, ATF’s ability to monitor the potential vulnerability of these  facilities to theft or assess the extent to which these facilities are in  compliance with federal explosives storage regulations is limited.
According to ATF’s interpretation of federal explosives laws and  regulations, state and local government agencies—including law  enforcement bomb squads and public universities—are required to report  incidents of theft or missing explosives to ATF within 24 hours of an  occurrence. Because this reporting requirement applies to any “person”  who has knowledge of a theft from his stock and the definition of “person”  does not specifically include state and local government agencies, ATF  officials acknowledged that these entities may be unsure as to whether  they are required to report under this requirement. If state and local  government entities are unsure about whether they are required to report  thefts and missing explosives, ATF’s ability to monitor these incidents and  take appropriate investigative action may be compromised by a potential  lack of information. Further, the size of the theft problem, and thus the  risk, at state and local government storage facilities will remain unclear.
To allow ATF to better monitor and respond to incidents of missing or  stolen explosives, the report we are releasing at this hearing recommends  that the Attorney General direct the ATF Director to clarify the explosives  incident reporting regulations to help ensure that all persons and entities  who store explosives, including state and local government agencies,  understand their obligation to report all thefts or missing explosives to  ATF within 24 hours of an occurrence. The Department of Justice agreed  with our recommendation and said it would take steps to implement it.
Mr. Chairman, this concludes my prepared statement. I would be happy to  respond to any questions that you or members of the subcommittee may  have.
section_title: Contact and Staff Acknowledgments
paragraphs: For information about this testimony, please contact Laurie E. Ekstrand,  Director, Homeland Security and Justice Issues, at (202) 512-8777, or  EkstrandL@gao.gov. Contact points for our Offices of Congressional  Relations and Public Affairs may be found on the last page of this  testimony. Other individuals making key contributions to this testimony  include William Crocker, Assistant Director; Philip Caramia; and Michael  Harmond.
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