By Daniel Wallis
DENVER (Reuters) - A U.S. appeals court on Monday backed a federal government demand that firearms dealers in four southwestern border states report "straw buyers" suspected of purchasing multiple weapons for Mexican drug gangs.
The demand sent to gun dealers in Arizona, California, New Mexico and Texas is part of "Project Gunrunner," a Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) initiative to combat cross-border weapons trafficking.
Recipients of the letter must report any sales to the same customer within five consecutive business days of "two or more semiautomatic rifles capable of accepting a detachable magazine and with a caliber greater than .22."
Three gun dealers challenged the demand, arguing that the ATF lacked the statutory authority to issue the letter and saying that the decision to target licensed retailers in the border states was arbitrary and capricious.
But the 10th U.S. Circuit Court of Appeals dismissed the challenge, saying it agreed with the U.S. Court of Appeals for the 5th and the District of Columbia circuits, which recently found the ATF did not exceed its authority.
Project Gunrunner seeks to track the provenance of firearms recovered by law enforcement officers from their importation or manufacture in the United States, via a distribution chain of federally licensed weapons dealerships.
Many guns cross the border illegally, and a 2009 report by the U.S. Government Accountability Office found that between 2004 and 2008 about 70 percent of firearms seized in Mexico had come from Texas, California, and Arizona.
"Straw buyers" with clean records were at the center of the federal government's ill-fated "Fast and Furious" gun-running sting, which ran from late 2009 to early 2011.
That operation was envisioned as a way to track weapons purchased in the Phoenix area by those customers to senior drug cartel members in Mexico.
In most cases, however, ATF agents failed to follow the guns beyond the initial buyers, and a number of firearms purchased in the operation were recovered from crime scenes in Mexico.
In its ruling on Monday, the Denver-based 10th Circuit said there was "ample evidence" of a rational connection between the information that the ATF was considering and its choice to target gun dealerships in the border states.
The court said the dealers also failed to convince with their argument that the ATF was in effect creating a national gun registry, in violation of the act that funds it, and with their contention it did not adequately consider alternatives.
(Reporting by Daniel Wallis; Editing by Eric Beech)