The Pentagon’s Deadly Secret: It Makes Money From Bullets Used in Mass Shootings
Defense Department gets paid about $30 million a year from sales of military-grade ammunition to civilians.
A US government-owned ammunition plant that made high-powered bullets used by civilian shooters in mass killings has generated tens of millions in cash for the Defense Department each year, according to interviews and documents compiled by Bloomberg News.
The Lake City Army Ammunition Plant in Independence, Missouri, is run by a private company that sells about half its daily production of four million rounds of military-grade ammunition to civilians. Under the Pentagon’s agreement with its contractor — Winchester Ammunition Inc., a brand owned by Olin Corp. — the military gets a few pennies on each bullet sold to the public. Government officials have refused to disclose precisely how much federal revenue the sales generate, though one former senior Pentagon official and equity analysts who follow Olin agreed on an estimate: about $30 million a year. Bloomberg sued the Defense Department in May to obtain public records detailing its income from the plant. The suit is ongoing.
Bullet Stamp
Lake City rounds, marked by the initials “LC” on their base, now comprise about a third of the US market for ammunition used in AR-15-style assault rifles. A review of federal and state records from courts and criminal investigations shows that Lake City’s bullets have been used in a wide array of violent offenses, including mass shootings at the Mandalay Bay Hotel in Las Vegas, Marjory Stoneman Douglas High School in Parkland, Florida, Robb Elementary School in Uvalde, Texas, and the Tops supermarket in Buffalo.
The plant’s products — including its cigar-sized, .50-caliber rounds, powerful enough to down a helicopter — also have surfaced at offshore crime scenes and in smugglers’ hauls bound for the Caribbean and Mexico.
A Bloomberg investigation this year revealed how the US government has fueled gun violence abroad, in part by increasing firearms exports even to countries plagued by corruption and violence. And the US Commerce Department has partnered with the leading gun manufacturers’ group to boost international attendance at its annual trade show. The Pentagon’s Lake City contract reflects an even deeper link, one in which the government itself makes money from products used in mass killings in the US and overseas.
According to ballistics reports obtained by Bloomberg, Lake City ammunition was used in the 2019 murders of nine members of three American Mormon families, including six children, who were ambushed by cartel gunmen while driving in Mexico an hour south of the US border.
Pentagon officials say the sales to civilians are intended to cut costs and, in case of war, preserve a surge capacity at the sprawling, 3,900-acre site just east of Kansas City. Winchester, which has operated the plant since October 2020, declined to comment, as did its parent company, Olin. Orbital ATK, the defense contractor that ran the plant from 2000 until 2020, is now owned by Northrop Grumman Corp., which declined to answer questions about commercial sales of Lake City bullets.
In federal documents circulated during the 2019 bidding for the $8 billion Lake City contract, the Defense Department suggested that the plant operator might pay 5% of commercial sales revenue, either in cash or company-funded improvements to the facility.
Bruce Jette, who oversaw the plant until 2021 as the Army’s assistant secretary for Acquisition, Logistics and Technology, said Winchester also provides major savings to the federal treasury by defraying a significant chunk of the plant’s operating costs, which are hundreds of millions a year. During his final year in the Army, Jette launched a cost assessment study to calculate the total benefit Lake City provides to the US government. He left for the private sector before it was completed, and the military has refused to provide a copy to Bloomberg.
As the spread of high-powered weapons in recent decades has heightened concerns about gun violence on US streets, policy makers have occasionally tried to restrict the plant’s sales of some military-grade ammunition to civilians, mostly on the grounds that it can give criminals the firepower to pierce law enforcement officers’ body armor. The gun industry has blocked those efforts by rallying gun owners and members of Congress who fear ammunition shortages, higher prices and the elimination of some of the plant’s 1,700 jobs.
The vast majority of Lake City bullets sold to civilians, of course, aren’t involved in crimes. But links between Lake City ammunition and US mass shootings, first reported last weekend by The New York Times, have escaped scrutiny until now.
Mark Talley, whose mother, Geraldine, was one of 10 people fatally shot last May during the racially motivated attack at the Tops supermarket in Buffalo, said he was “angry and saddened, but not surprised” to learn that the federal government had made money from bullets used in the massacres.
“It’s like they had their economists do the math,” said Talley, 34, who founded the group Agents for Advocacy to lobby for racial equality after the Tops shooting. “Hundreds, maybe thousands of civilians killed for millions of dollars a year. And it’s worth it to them.”
The Defense Department declined to answer questions about the government’s financial benefits from Lake City or the factory’s connection to civilian deaths. Two former Pentagon officials, who spoke on condition of anonymity because the department hadn’t authorized them to be interviewed, said military leaders had no qualms about providing consumers a product they can easily buy elsewhere. Given how much ammunition is available in the US, they say, it’s unrealistic to think that a ban of commercial sales from Lake City might significantly reduce killings.
A Sprawling Complex
Independence
78
Missouri
7
Lake City Army
Ammunition Plant
N Twyman Rd
E Truman Rd
2,000 ft
500 m
78
N
N Twyman Rd
7
Lake City Army
Ammunition Plant
E Truman Rd
Independence
Missouri
2,000 ft
500 m
78
N
N Twyman Rd
7
E Truman Rd
Lake City Army
Ammunition Plant
Independence
Missouri
2,000 ft
500 m
Independence
78
Missouri
Lake City Army
Ammunition Plant
7
N Twyman Rd
E Truman Rd
2,000 ft
500 m
In January, though, the first federal study of the firearms market in more than two decades found that the price of small arms ammunition more than doubled from 2000 to 2020, outpacing the price increase of guns by more than four-fold. And gun industry representatives themselves have argued that taking the plant’s products off the civilian market would make bullets for AR-15-style rifles scarcer and even more expensive.
Larry Keane, executive director of the National Shooting Sports Foundation (NSSF), underscored that point last year when he told gun owners that the Biden administration was considering a ban on commercial sales of Lake City rounds. “That would potentially choke off over 30 percent of the ammunition used on AR-15 style rifles by law-abiding citizens,” Keane wrote.
Bullets are far easier to buy than guns in the US. The Firearms Owners’ Protection Act, signed into law by President Ronald Reagan in 1986, banned machine gun sales, but dropped requirements that ammunition merchants have a license and keep records of their sales. And it ended the ban on interstate sales by mail, paving the way for robust online purchasing today.
Ammunition sales also are exempt from the federal background checks required of gun buyers and a mandate for retailers to report large purchases to the federal Bureau of Alcohol, Tobacco, Firearms and Explosives. And while it is unlawful to sell bullets to anyone under 18, there’s no federal requirement that a buyer present proof of age. That means that in all but a handful of states, lottery tickets are harder to purchase than bullets.
Nikolas Cruz, whose erratic behavior and threats to shoot up a school landed him on an FBI watch list before his attack in Parkland, never faced a background check when buying ammunition. Stephen Paddock amassed an arsenal of thousands of high-powered bullets before the Las Vegas mass shooting without law enforcement ever being notified. He fired more than 1,100 rounds.
One of the most startling aspects of the US government’s financial stake in the commercial ammunition market is how little it has been publicly discussed.
In July 2022, a few weeks after massacres in Buffalo, Uvalde and Highland Park, Illinois, the House Oversight and Reform Committee held a hearing where chairwoman Carolyn Maloney chastised gun industry executives for “profiting off the blood of innocent Americans.” But there’s no indication in the Federal Register or Congressional Record that any congressional hearing has attempted to tally the crime victims killed by Lake City bullets or the government’s revenue from the ammunition sales.
During the Obama Administration, the ATF proposed banning commercial sales of some 5.56mm bullets that are designed for AR-15 rifles but also compatible with semiautomatic pistols. The bullets, known as M855s, are one of the most popular commercial rounds produced at Lake City.
Ammo Menu
7.62mm
.30 caliber blank
.50 caliber
5.56mm
.30 caliber
blank
.50
caliber
5.56mm
7.62mm
.30
caliber
blank
5.56mm
7.62mm
.50
caliber
With the help of the NRA and other firearms organizations, gun owners flooded the ATF with more than 80,000 public comments. A letter of opposition signed by 238 members of Congress warned the ATF that it would be “preposterous” to restrict ammunition primarily intended for sporting purposes. “Millions upon millions of these bullets have been sold and the ATF has not alleged, much less offered evidence, that a single one has been fired from a handgun at a police officer, ” the letter said.
The administration dropped the proposal. Some Democrats in Congress criticized the ATF for “sloppy handling” but did not press the issue.
Last summer, the NSSF, the biggest gun industry lobbyist, again sounded the alarm. On social media sites and in the gun-friendly publications, Keane and his staff reported that the Biden administration had told Winchester that it might prohibit the commercial sale of Lake City ammunition for AR-15 type rifles and other high-powered guns.
This time, 50 members of Congress — including Representative Vicky Hartzler and Representative Sam Graves, the Missouri Republicans whose districts are home to many Lake City employees — signed a letter opposing any restrictions. They warned it would jeopardize military readiness, eliminate 500 jobs at the plant, infringe on gun owners’ Second Amendment rights and “result in increased costs for taxpayers at a time when inflation has hit every part of the economy, including the cost and availability of ammunition.”
The Biden administration never publicly acknowledged that it had been considering a ban, but soon responded with a tweet: “The administration is not going to restrict production/sales of excess ammunition currently available for sale to the public at Lake City Army Ammunition Plant.”
Revelations about the Pentagon making money from the civilian market for high-powered bullets have led some members of Congress to call for an investigation. Representative Robert Garcia, a California Democrat, recently introduced a bill that would require licenses for ammunition sellers, background checks for buyers and size limits on civilian bullet purchases. “The government shouldn’t in any way be providing ways to increase the profit margins of these companies,” he said. Garcia supports a ban on Lake City commercial sales, but he added: “Whether that’s something this Congress will support is less certain.”
The fallout from the sale of Lake City products to civilians has spread beyond US borders.
On a November morning in 2019, three SUVs drove through the northern Mexican desert carrying members of the Langford, Miller and LeBaron families from their homes in the village of La Mora. There were 14 passengers in all — some on their way to a wedding, others heading to visit relatives in Arizona. An hour south of the border, their journeys ended in bursts of gunfire, when heavily armed members of the La Linea cartel stopped the vehicles and began shooting. The gunmen were involved in a turf war with a rival cartel, and had been ordered to attack anyone who passed by the dirt road where they’d been stationed.
Firing semiautomatic rifles, they killed all three women in the SUVs and six of their children, including 8-month-old twins. Five other children were wounded. Mexico’s Attorney General’s Office has not responded to repeated requests for a breakdown of US ammunition brands found at crime scenes throughout the country. But a ballistics report on the Mormon families’ slayings obtained by Bloomberg indicates that spent rounds made at Lake City were among the various shell casings recovered by investigators.
Mexican law enforcement experts estimate that more than 75% of the bullets used in crimes south of the border come from the US. American court records contain an array of criminal cases in which arms smugglers were arrested trafficking Lake City ammunition to cartels in the Mexican states of Jalisco, Sinaloa and Chihuahua. Last May, a former US Marine in California pleaded guilty to attempting to smuggle semiautomatic rifles and almost 65,000 rounds of high-powered bullets to the Jalisco New Generation Cartel, one of Mexico’s deadliest. More than a quarter of those bullets had been made at Lake City, including more than 10,000 rounds of armor-piercing, incendiary .50 BMG, according to court documents.
The Pentagon has also sold hundreds of thousands of rounds of high-powered Lake City bullets to the Mexican military, which has periodically seen its weapons and bullets diverted to crime gangs. The ATF declined Bloomberg’s request for information on the origins of ammunition recovered at crime scenes in the US and other countries, despite its robust tracing system. A lawsuit to obtain that data is ongoing.
In the Caribbean, where murder rates have soared in recent years, US-made weapons comprise more than 80% of crime guns on some islands, according to a study released in April by the Small Arms Survey. It found that in the northern Caribbean region — the Cayman Islands, Turks and Caicos, and Bermuda — Lake City ammunition was one of the 10 most common brands used in shootings where authorities traced the bullets’ origin.
In May, a national customs officer in Anguilla was shot with bullets sold legally on the US commercial market. The slaying of officer Garmon Greenaway, 35, rattled the normally peaceful island, prompting the acting prime minister and Parliament to launch new initiatives to take illegal guns off the street. Most of the 23 shell casings found where Greenaway was gunned down had been made at Lake City, according to law enforcement officials.
“Crimes of this kind occur in other countries,” Cora Richardson Hodge, leader of the opposition in Anguilla’s parliament, told members. “But let us not think that they would only happen offshore, figuring that Anguilla will not be impacted.”
Rising from the fields surrounding Independence, Lake City is such a maze of industry and activity that it resembles a bustling company town. More than 60 miles of road weave around the plant’s 400 buildings, which include a water treatment facility, an emergency services center and an automated warehouse the size of 10 football fields.
The plant, built by Remington Arms and opened in 1941, was one of 12 ammunition factories quickly brought on line during World War II. Missouri’s then-Senator Harry Truman pushed to locate it in Independence, where he was raised.
Lake City’s role as a major player in the civilian ammunition market grew out of the “peace dividend” federal officials promised taxpayers at the end of the Cold War by trimming defense spending. After Congress passed the ARMS Act of 1992, which urged the military to close, consolidate and privatize its excess facilities, the Pentagon began converting its government-owned, contractor-operated ammunition plants to allow civilian sales. Today, Lake City is the Defense Department’s last remaining small arms ammunition plant.
Remington ran Lake City until 1985 and since then Winchester and Orbital ATK have alternated as the plant’s operator. The factory’s commercial sales had begun by 2011 and have delivered uneven financial results for the contractors that have run the plant, according to court records and SEC filings.
When the Lake City contract came up for renewal in 2012, Orbital ATK won by submitting a lowball bid that turned into a disaster. After making rosy predictions that cost-cutting measures would make the plant profitable, the company acknowledged in 2016 that it was running a deficit at Lake City and expected to lose $400 million during the 10-year contract. Shareholders sued Orbital ATK’s then-parent company, Alliant, for making false and misleading statements about Lake City’s prospects in its public filings, and the company ultimately settled the case for $108 million.
Winchester, which had initially run Lake City from 1985 to 2000, also saw some lean times. At the end of that stint, the assault weapons ban was still in effect and commercial sales hadn’t yet been allowed. Winchester reported that its pretax profit on the final year of its Lake City contract was just $5 million.
In 2020, Winchester took over the plant again and reaped a windfall. By then, the AR-15 had become the most popular rifle in America, and tens of millions of assault-style weapons had been purchased by US civilians, according to the ATF — vastly expanding the market for Lake City’s high-powered rounds. A spike in gun sales during the Covid pandemic exacerbated a nationwide ammunition shortage, sending prices soaring.
In 2021, the factory’s gun and ammunition sales had more than doubled their 2019 levels, from $665 million to $1.5 billion, according to company filings that reported commercial bullet sales had risen by hundreds of millions of dollars. Winchester’s overall income grew 10-fold, from $40 million in 2019 to $412 million in 2021.
In a recent earnings call, Brett Flaugher, president of Olin’s Winchester division, cited “nearly 15 million new participants entering the recreational shooting sports over the past few years” as a reason to believe demand for Winchester’s ammunition will stay high.
With a flurry of construction underway, the Army Corps of Engineers is conducting more than a dozen improvement projects at the plant. Lake City is expected to receive billions of dollars of public funding for upgrades over the next decade, according to Andrew Bowlen, the Army Corp’s Kansas City District project manager at the site. A new assembly line will make ammunition for the Defense Department’s latest squad weapon, which will replace the M4 machine gun.
Rory Rowland, mayor of Independence, said the plant is such a deeply ingrained part of the community’s culture that residents feel protective toward it. Gun ownership is such a treasured right in Missouri — there’s a state park with a recreational firing range located just outside the plant’s fence — that any move to restrict weapons or ammunition would be opposed as a matter of principle.
“People here really believe in the right to firearms,” he said.
In the coming months, Lake City will break ground for the production facility that will make the Pentagon’s new 6.8 mm rounds, which were designed to pierce body armor at a distance of 1,000 yards. They are scheduled to begin rolling off the assembly line by 2027 — with a commercial version available to civilians.
Everytown for Gun Safety, which advocates gun-safety measures, is backed by Michael Bloomberg, founder and majority owner of Bloomberg News parent Bloomberg LP.