New York, April 18 (Bloomberg) -- There was a time, just six years ago, when Alfredo Valentin ran a prosperous real estate business in the New York borough the Bronx.
Commissions from house sales and apartment rentals provided the kind of affluence that bought Cadillacs and Caribbean cruises, with enough left over for private-school and college tuition for his three kids.Today Valentin faces financial ruin, a reversal of fortune that began one August night in 1994 when his son Derek was shot and killed in an argument over a girl. Derek was 17, unarmed, a history buff looking forward to college. The loss plunged Valentin into depression, and he stopped working. "When something like this happens, you don't realize the ripple effects," he said.
Those effects go well beyond heartbreak and tragedy to money, and lots of it. The costs of U.S. gun violence in medical care, insurance, lost productivity, and use of the criminal justice system, as well as in pain and suffering, amount to more than $100 billion each year, according to economists and public health statisticians.
Armed with those numbers, city and state officials all over the country have filed 31 lawsuits charging that the gun industry owes billions of dollars for the public costs of gun-related crime. The lawsuits accuse the companies of negligently marketing guns so as to create a public nuisance.
The lawsuits or the cost of legal defense, and the risk of huge payouts associated with them, have already had a stunning impact on the industry.
Lawsuit's Impact
In March, Smith & Wesson, a division of British manufacturer Tomkins Plc and the nation's largest handgun manufacturer, became the first U.S. gun maker to acknowledge a duty beyond the loading dock to monitor its distributors in an effort to minimize sales to criminals. CEO Edward Shultz also promised to redesign guns with more safety features.
As a result of these moves, Smith & Wesson has been dropped as a defendant in most of the lawsuits, but it also became something of a pariah among other manufacturers and dealers.
For Shultz, the decision to cooperate with the government was a survival strategy: "We could spend all our money on our lawyers or ignore the lawsuits and risk a huge damage award against us. Or we could go for a deal that does what we need to preserve the future of our company, he says."
The lawsuits' impact has also been felt in this year's presidential campaign. U.S. vice president Al Gore and Texas governor George W. Bush maintain starkly different views on the subject. Gore supports such suits; Bush signed a law that prohibits them in Texas. Gore also wants laws that require buyers to obtain gun licenses and that bar anyone from buying more than one handgun a month; Bush opposes them.
Greatest Risk
The fierce national debate over gun policy comes at a time when gun violence and crime rates in the U.S. are falling. Overall, homicides and suicides decreased 21 percent from 1993 to 1997, the latest year for which statistics are available, and gun injuries fell about 40 percent over the same period.
Even so, the U.S., with over 12 gun deaths per 100,000 people, holds the greatest risk by far among industrialized nations, more than twice as much as France, which is second with 6 per 100,000, and more than three times Canada, which is fourth, with 4 per 100,000.
Guns cause more than 30,000 deaths and 60,000 injuries a year in the U.S., estimates the Centers for Disease Control and Prevention (CDC).
Also, incidents like the Columbine High School shooting in Colorado that left 14 dead and 23 injured in 1999 and the recent fatal shooting of six-year-old Kayla Rolland by a six-year-old boy in her first-grade class in Michigan grab headlines and fuel the nation's debate about guns.
Who Pays?
The ultimate outcome of the lawsuits and the political debate may rest on the cost data researchers are now unearthing. "It's important to know how much gunfire is costing us, and who is paying the cost, because for many policy makers, that's what determines how they come out on an issue," said Stephen Teret, director of the Johns Hopkins Center for Gun Policy and Research in Baltimore.
Hard numbers are tough to come by. Researchers complain their task is hampered by an inability to get timely and accurate data. Many blame the gun industry and its allies in Congress, who have voted to withhold money and authority from federal agencies that can gather the data, such as the CDC and the Consumer Product Safety Commission (CPSC).
While national statistics on gun homicides can be tabulated from death certificates, the government doesn't keep accurate totals on nonfatal gun injuries. Statisticians and policy makers must rely on estimates collected by the National Electronic Injury Surveillance System (NEISS), a branch of the CPSC.
The commission bases its nationwide assessment on a statistical sample of 101 hospitals. It collects no information on gun injuries that don't require hospitalization.
Gun Lobby
One reason for the incomplete injury data is a 1996 vote in Congress that denied money to the CDC to set up a comprehensive gun-injury data-collection system similar to the one that monitors all car accidents. The vote was considered a victory for the National Rifle Association.
"NEISS is a sample rather than a census, so you do have some uncertainty associated with it," said Philip Cook, a professor of public policy at Duke University who has studied the economics of gun violence for 15 years. He estimates that the total cost of gun injuries exceeds $100 billion.
Economist Ted Miller, of the nonprofit Public Services Research Institute in Landover, Md., puts the cost of gun violence at more than $120 billion in 1996, a year in which 33,000 died, 43,000 were hospitalized, and 139,000 were injured but not hospitalized, according to national hospital surveys.
Miller calculates about $3.6 billion in total medical costs, $33 billion in lost productivity, and more than $90 billion in diminished quality of life.
Pain and Suffering
For a single family of a homicide victim, such as the Valentins, Miller figures the medical expenses, pain and suffering, and lost income amount to more than $3 million.
Among the costs involved in pain and suffering, Miller found that survivors of murder victims entered psychotherapy, as did the Valentin family, three times more often than average families. He calculated the costs of pain and suffering and diminished quality of life by examining and averaging 1,106 jury awards in cases involving shooting victims.
"People find it easier to relate to cost data," said Miller, who has published his findings in the Journal of the American Medical Association, the journal Accident Analysis and Prevention, and the Textbook of Penetrating Trauma. "It's not easy to take such diverse circumstances as a gun wound to the belly, a spinal cord injury, or a death and put them into a coherent cost abstract."
Gun-control advocates, using the new batch of statistics, have caught the gun industry off guard, said Douglas Painter, executive director of the National Shooting Sports Foundation, an industry association based in Newtown, Conn.
Industry Response
His organization has countered with its own numbers. The gun industry, he claims, supports 986,000 jobs associated with hunting, target shooting, and other businesses that pump $30 billion a year into the economy. The only official source, the U.S. Census Bureau, reports $2 billion spent in 1997 on guns, ammunition, and hunting equipment.
The gun-control lobby's basic argument is faulty, Painter said. "They try to charge an entire industry for the cost of criminal misuse or reckless misuse of its product."
The focus on gun deaths or injuries doesn't allow for the times a firearm is used for self-protection, he argues. "If you're responsible, owning the gun isn't a dangerous thing," he said.
Gun-control advocates reject the industry's argument that it isn't to blame for criminal violence. The industry ignores its central role in a crisis that undermines America's urban areas, said David Kairys, a Philadelphia lawyer who has advised dozens of cities filing lawsuits.
He argued further that handgun manufacturers depend on criminals for much of their market, concluding, "in economic terms, cities are, in effect, subsidizing the handgun industry by absorbing a substantial portion of the damages done by their products.
"Cleaning the Blood"
In its lawsuit against gun manufacturers, Chicago cites expenditures of $473 million, or $163 for each of its 2.9 million residents stemming from gun violence between 1993 and 1997. The money was spent on ambulances, hospitalization, incarceration, police, and the courts, among other costs.
During that time, the city experienced 1,859 gun homicides, and 11 percent of those victims were under 17. In 1997 alone, guns were used in 17,366 crimes.
"A city's potential damages can begin with a 911 call and emergency medical care to cleaning the blood off the street, and paying for support of an orphaned child," said Kairys, a Temple University Law School professor.
Discussion of the economics of gun violence makes Alfredo Valentin uncomfortable. It's the fact that his son is gone, he said, that haunts his life and makes it so difficult for him to work.
The boy was shot in the back as he turned to run from his assailant, a neighborhood bully who thought he was avenging an insult to a friend when he took Derek's life.
Emotional Toll
For months, Valentin showed up in court almost every day. He was there when the killer was sentenced to 33 years in prison. It did not bring closure; Valentin still misses his son.
In the months after the shooting, Valentin couldn't focus on work. Phone calls went unanswered. Loan qualification papers sat on his desk. He stopped paying bills. His 12 employees quit.
He took out second mortgages on his home and another building he owned, cashed in his Keogh retirement plan, and ran up more than $100,000 in credit card debt.
He has spent years in therapy, as have his wife and a daughter who became too distraught to stay in college. The man who prided himself on building a nest egg now finds himself hundreds of thousands of dollars in debt.
"I guess you could call this part of the pain and suffering," he said. "To me, the loss of my son is the pain and suffering."
To Don Kates, a San Francisco attorney who has represented gun companies in lawsuits, Derek Valentin is the exception, a law-abiding individual who ended up a victim. "Between 70 and 85 percent of shooting victims are themselves criminals," Kates claimed.
He cited articles, including some by Philip Cook, that show a high percentage of gun victims either have criminal records or a history of drug use.
Emotional Toll
This is of little comfort to Alfredo Valentin. The bullet that killed Derek Valentin was fired from a .25-caliber handgun by Reynaldo Perez, 18, who told police he paid $50 for the gun on the street. Police never recovered the weapon.
Valentin, 56, is trying to start over. He rents office space from a brother several blocks from where his Valentin Real Estate once buzzed with a dozen employees, its overhead neon sign a local landmark that lit up the entire block. "If it weren't for the fact that this kid could buy a gun on the street so easily, my son might have gotten his butt kicked, but he'd be alive today," Alfredo Valentin said.
That's what he remembers, rather than his financial ruin, when he thinks about what he's lost.