Andrew Ross Sorkin Links Credit Cards to Mass Shootings

AMANPOUR: And we focus on the latter with our next guest, the bestselling author and New York Times Columnist Andrew Ross Sorkin who discovered how credit cards are effectively being used to finance mass shootings. He told our Walter Isaacson that monitoring that financial activity could become a law enforcement priority.

WALTER ISAACSON: Andrew, welcome to the show.

ANDREW ROSS SORKIN, FOUNDER, DEALBOOK: Thank you for having me.

ISAACSON: Yes. You just did an amazing series on guns and credit cards in the “New York Times”, deep reporting. Tell me what motivated you to do that.

SORKIN: So after the Parkland shooting, I really started to think hard about what — if you follow the money and you start to think about the role of business, business has been talking their role in society over the past year or two. It’s something you keep hearing this narrative we want to benefit society. We want to have a purpose. And so I started thinking to myself, well, how does business work in the context of guns and the gun problem in our society, in our culture? And one of the things you realize very quickly is that one of the fascinating choke points in the whole system is the credit card business. And given all the information that’s collected about us on a daily basis, whether it’s from Facebook or Google or this or that, what do the credit card companies actually know? And given that the banking system for many years, actually since 1970 but even more so after 9/11, has been involved in trying to protect people in terms of anti-terrorism, money laundering. We’ve used the banking system for so long to protect us actually. And I’m not sure most Americans even realize that. And so then I start to think, OK, is there a way to use the credit card system actually to help in this problem? And one of the things you find out when you go look at every major mass shooting in America really since 2007 is that credit cards are how these murderers are buying these guns.

ISAACSON: It’s not just credit cards because they need to stockpile a whole lot of guns so they need a large amount of credit.

SORKIN: Yes. You need credit. You need money because this — each gun — an AR15 is a $1500 project, to be a $3000 project. Some of these people are spending 10, 20, $30,000. They’re planning on Armageddon. They’re buying ammunition. They’re buying body armor. They’re buying all of this stuff. And so they’re effectively are getting the loan from the bank. That’s what’s really happening. And I’m not sure that banks really ever realized they were loaning money to people who are pursuing these types of mass shootings. And so that was really the focal point of these stories to try to look at that and try to not only prove the connection but say, OK, there’s a way potentially to fix this. And right after I started writing about this, after Parkland, the good news was a number of banks actually did take a step back. Bank of America, Citi Group said, “You know what, we’re no longer going to finance gun manufacturers.” So the next question is, do you want to finance effectively the shooters, right?

ISAACSON: Yes. And you had 8 out of the 13 of the last mass killers had all gotten guns and stockpiled them by taking large amounts of credit on cards. Give me an example. I think there was —

SORKIN: I mean one of the most remarkable was the Orlando Pulse shooting. The murderer, in that case, spent $26,000 on six credit cards all within a very short period of time. And so had the banks been looking, had the systems been in place, you would have seen it. And interestingly, when investigators begin trying to unravel these things after the fact, the first thing they do is they go get the credit card receipts. So if you could have actually looked at that in real time — and by the way, they could if they wanted to and that’s a question of whether they want to. It is very possible that that fellow would have had a knock at his door by the police to say, “This is a little strange. You’ve taken out six credit cards. You’ve just spent all of this money. What are you doing?” And that’s what you need and that’s what prosecutors, law enforcement wish they had.

ISAACSON: And now we have it for anti-terrorism.

SORKIN: We do.

ISAACSON: So when you take that system, that catches terrorists.

SORKIN: That’s the idea. So right now, legally, you decide you’re going to send $10,000 anywhere, that gets reported to the government.

ISAACSON: Instantly.

SORKIN: Instantly. Already does.

ISAACSON: So we could instantly have a report of this person just stockpiled $40,000 worth of weapons and grenades.

SORKIN: Absolutely. And by the way, the credit card industry has on its own volition decided that certain things they don’t want to finance. So if you want to buy Bitcoin, you can’t. Marijuana in many states is legal, you can’t. MasterCard interestingly recently went to a website that had some hate speech on it and said, “We’re no longer going to allow you to use credit card transactions using MasterCard because of this hate speech.” So there are companies that are taking positions if you will on some of these things and the question is how that can work in relation to guns. Apple, Apple Pay, PayPal, Stripe, Square, these are all payment systems. They already have policies that say we are not actually going to transact on guns. I’m not necessarily suggesting there’d be no transactions on guns at all but if the credit cards and the banks understood what was being bought, they can make some decisions. They can maybe say, “OK, you know what, you’re under 21-years-old. We want to look at this in a different way.” How many times have you stopped at a gas station somewhere and your credit card hasn’t worked because they need to make sure it’s you?

ISAACSON: Right.

SORKIN: Nobody’s doing anything like that when it comes to the sale of guns.

ISAACSON: And you could have a system where somebody is stockpiling huge amounts —

SORKIN: Huge and nobody would know.

ISAACSON: Yes.

SORKIN: We have laws in this country already that they’re really old laws that say if you buy more than two guns from one store, it gets reported to the ATF. That never really took into account that if you were to go buy 20 guns online from 20 different stores or if you were to go from this Walmart over here 10 miles to this Walmart, it doesn’t get reported. The only people actually have the data are the credit card companies. And so the question is sort of how you can mobilize them. Having said that, I should say, there’s been a lot of great feedback from the series of articles and we have states now looking into this to see what they can do. Federally, very difficult but also lots of pushback. People say, “Andrew, if you’re going to start pushing on guns, what about alcohol? What about a young person who’s under 21-years-old?” You would — the credit card company should know that they’re at a bar when they’re 18-years-old. Maybe they shouldn’t allow that transaction. All sorts of things where they say there’s a slippery slope. My view is at this point of the ballgame, adding any kind of friction to the system to try to prevent these kinds of things is valuable so I would do it.

ISAACSON: You know the slippery slope argument doesn’t work for me because all slopes are slippery.

SORKIN: Yes.

ISAACSON: The question is, where do you draw the line? Wouldn’t this be an invasion of privacy though?

SORKIN: That’s — and look, there are libertarians who make that argument. There are people from the ACLU who would make that argument. And then, of course, people who are the NRA and others who would say this is an invasion of privacy. I would suggest you, A, that your privacy has been invaded a long time ago. And the question is for certain types of products and certain types of things in this country, even legal products, we decide that we want to keep track of them. And the question is, do we want to keep track of guns? Obviously, there’s been a huge movement to try to prevent keeping track of guns. And this would do that to some degree. But I don’t think this is about creating some kind of master list. I think this is about trying to look at trends using machine learning and algorithms to say, OK, this individual just bought 10 guns. And by the way, if you’re a hobbyist or an enthusiast, you just bought 10 guns, I think it’s fine if you get a phone call. And I think you should be able to say I’m a hobbyist and you can explain it. And by the way, the bad news is there will probably be some very clever murderer who will talk their way out of a conversation with the FBI or something. But I think at least you want to have the information up front if you could.

ISAACSON: This gets into a larger thing that you’re right about quite often which is the social responsibility of corporations and business in the age of Trump in particular. Larry Fink has been writing about it and yet there’s a lot of talk about corporations should have a mission more than just serving their shareholders. They should help society, their communities, their stakeholders. Where do you come down on that and how would you push corporations to be more responsible?

SORKIN: Well, look, this is the ultimate sort of Milton Friedman question about profits and what the goal of capitalism is supposed to be. And what’s happened to our culture and our society over the last three or four, maybe even five decades now. And even what’s happened to the American Dream and what the role of the company used to be in a community, whether it be charity, whether it be your retirement and a pension that you actually thought you were going to get. All of the anxiety that we have today I think has — it stems in large part from a breakdown in all of those things. And so the question is, what can companies do? What are their responsibilities? And in an environment where Washington appears, I hate to say, leaderless on so many issues, whether it’s CEOs going to that conference in Saudi Arabia. I ended up stepping back from another. A lot of CEOs had to step back from them, make that decision on their own. It used to be in the old days, the president or government would say we have a problem with what’s going on in Saudi Arabia, we don’t want our business leaders going there. And so you wouldn’t have to take it. But I think we’re at a moment now where CEOs are having to step out. After Charlottesville, you saw Ken Frazier who run Merck get off the president’s council. And then there’s a barrage of CEOs just all leave and also speak out. So I think you’re sort of getting to this point where A, how do they interrelate with the political world? But also this other issue which is whether it’s retirement, whether it’s how they deal with their employees, the power of employees. Somehow, you know, even though we don’t have unions, unions don’t have the same kind of power they used to. In Silicon Valley, employees are running these companies. I mean think about Google. The Google employees effectively pressed the company to no longer do business for certain kinds of things with the Pentagon. That’s fascinating. And sort of how companies and leaders are trying to math that out is — and lots of hard decisions by the way.

ISAACSON: You mentioned a moment ago Milton Friedman.

SORKIN: Yes.

ISAACSON: And Milton Friedman many decades ago started this shift in what a corporation should be when he wrote that they shouldn’t be involved in learning about communities and corporate responsibility or even employees and their other stakeholders. They have simply one mission and that mission is to turn on investment for shareholders. And that sort of got incorporated into the law.

SORKIN: Into everything. Into everything. But I think what you’re seeing is the backlash and you’re seeing it. And the reason why Larry Fink who runs Blackrock, largest investor in the world, $6 trillion. They effectively oversee through 401(k) plans and everything else. He’s seeing the problem and he’s seeing it directly in his own investments which is if your Facebook — all of a sudden you haven’t been spending enough time thinking about some of these other stakeholders, customers being one of them and privacy issues and Washington and regulators. Well, if you don’t think about those things, all the sudden that’s actually going to come back and impact your stock price, your earnings, whether advertisers, whatnot. So it is interrelated. And I think that’s — I think the piece on what Larry Fink and others are saying is all of these stakeholders actually do matter and they matter to profits. Profits for profit’s sake, if you just go down that line, you’re missing it because, at some point, you’re going to run up against a wall of these other constituents. And if you haven’t figured that piece of it out, it’s actually going to impact the profit piece.

ISAACSON: This gets back to your book Too Big to Fail. Your talk about the 2008 crash. To what extent do you think that crash and American people’s view of corporations has led to this populist battle that we feel now?

SORKIN: You know I think there’s a straight line between the [13:50:00] 2008 crisis and the election of President Trump, to me it’s obvious. The financial crisis was a moment at which all of a sudden we questioned as a society, institutions, companies, government, the idea of experts, the idea that there are people who we think are supposed to be expert. And yet all of them, by default, led us down a path that didn’t work. And because of that, there was this huge rise in populism and divisiveness in this country, a real sort of cleaving of America. And a lot of people look at it whether it’s the Tea Party or Occupy Wall Street as part of that. But I think that after every financial crisis, and the University of Chicago Booth School did a great study on this, the electorate gets radicalized. And I think that’s where we are right now. And then the overlay on top of all of this is what effectively — it’s not really about the financial crisis itself. I almost think that that’s become a symbol of something that’s almost misunderstood which is that really what’s happened is debt that — the debt that then leveraged, that led to the financial crisis for so long papered over the much larger problems which we still haven’t dealt with at all, which really is about wage stagflation. It really is about the lack of mobility in this country and really is about the true underlying American dream and whether that’s challenged.

ISAACSON: What can we do about wage stagflation?

SORKIN: Well, that’s — I wish I had a great answer for you. You know, is that really about the minimum wage? Is that really about trying to somehow drive additional growth from companies? Is that about unions?

ISAACSON: Is it about offshoring jobs? Is it about technology?

SORKIN: I think it’s — I have a view which is — and I — it’s fatalistic. I have a view unfortunately that the “American dream” that we all talk about which is really the Leave It to Beaver American dream of the 1950 and ’60s which by the way was a very white dream. It did not incorporate minorities in the same way. But that it might have actually been an aberration that if you really think about what happened to our economy after World War II, we were the only game in town. We have a monopoly on the world for years. And it wasn’t really till 1980 that the rest of the world all of a sudden was competing against us. And so during this period, we were able to charge monopoly rates. It was great for the labor movement. We were able to do all sorts of fabulous things. If you graduated from school, you would get a job, you would get a spouse, a house, a dog and a picking fence.

ISAACSON: And pension plan.

SORKIN: And a pension plan.

ISAACSON: And health benefits.

SORKIN: And it all made sense. But the way stagflation began in 1980 — by the way, that’s the same time period when the rest of the world all of a sudden started competing against us. And now we’re competing against people in India and China and Germany and everywhere else. And then I don’t think — I mean that competition I think has actually created a real challenge for us.

ISAACSON: And part of it — part of that competition came from people like you and me who believed in globalization. We believed that trade was great.

SORKIN: Absolutely.

ISAACSON: We believed that the free flow of people and immigration was great. And now there’s a huge backlash from Budapest to Britain to the United States against that. Were we wrong to think that free trade would benefit everybody?

SORKIN: I think we were — I don’t think that globalization in a whole is a bad idea. I think that we misunderstood its benefits and misunderstood then the allocation of how those benefits would get allocated. And therefore, then you have to rethink a little bit of the system. And then that goes to taxes and goes to where people are domicile. I mean there’s lots of ways to get at this, to “fix it.” The scary part is I don’t think there is a fix, a true fix that gets you back to this 1950, ’60s American Dream Leave to Beaver idea anytime soon.