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Merchants criticize proposed law regulating resale of metals

  • Author: Devin Kelly
  • Updated: December 2, 2017
  • Published February 27, 2017

A proposed new law in Anchorage designed to make it tougher for thieves to make money from stolen jewelry or copper cable has run afoul of merchants who run auction houses or trade in antique jewelry and gold and silver commodities.

The merchants say they can't afford to comply with a provision of the proposed law that requires people who buy metal to hold it for a month to give theft victims time to reclaim property. They also oppose record-keeping and reporting requirements that they say would be burdensome and cost them trust with customers.

Anchorage Assemblyman Dick Traini introduced the new law. A public hearing is set for Tuesday's Assembly meeting.

Traini said he plans to call for action on the measure to be postponed until March so he can work on a substitute version. He indicated that the postponement and rewrite of the ordinance stemmed from the complaints but he didn't say what he planned to do.

"We heard a lot of comments tonight," Traini said at the end of an Assembly rules committee meeting late last week that at times turned emotional.

Under the current version of the proposal, dealers — defined as people who buy metal for resale or processing — would be asked to record and report transactions to police on a weekly basis.

That would include collecting names, addresses, phone numbers, license plate information, driver's license numbers or another type of government-issued identification from sellers, and a signed statement from the person selling the metal declaring that it was not stolen.

In the case of precious metals, which include gold, silver and platinum, dealers would be required to hold items for 30 days before re-selling or processing them.

Failing to comply could lead to a $500 fine for each violation, the ordinance says.

Traini said he wants to give police another tool to combat theft and burglary.

"That's the problem, all the burglaries going on in Anchorage," Traini said. "Homeowners are calling us saying, why don't you do something about it? People stole my gold, stole my jewelry."

Traini's ordinance got little attention from merchants until recently after police officers went to antique stores, auction houses and commodity brokers to explain it.

At the Assembly committee meeting Friday, merchants packed into the first-floor City Hall conference room, wanting to give Traini an earful.  

At the start of the meeting, Lt. Richard Henning, who oversees the police department's burglary unit, explained the motivation behind the measure. He said more than 2,000 burglaries were reported to the police department in 2016 alone.

Of those, more than a third involved the theft of gold and silver jewelry, he said. And between January 2015 and October 2016, police received nearly 100 reports of copper theft.

Such items can be quickly sold or melted down, making them  nearly impossible to trace, Henning said. He said that's the impetus behind the proposed 30-day hold on precious metals purchased by dealers. Police want to give victims the chance to get their property back, Henning said.

Anchorage has long had a law on the books requiring pawn shops to record and report transactions. The information goes into a database that can be viewed only by police and is not subject to a public records request, Henning said. He said the city would use the internal pawn shop database to track reports from metal dealers.

For pawn shops, record-keeping and weekly reporting is part of the business model. Pawnbrokers offer short-term loans and hold personal items as collateral. But auction houses and commodities brokers say such regulations would be onerous for them and could violate trust.

Henning said that when police informed scrap metal dealers about the proposed new law, most were surprised there wasn't a reporting requirement already. A state law that took effect in early 2015 requires scrap metal dealers to keep records.

But police got a very different reaction from businesses that deal in precious metals, like gold and silver. The overwhelming disagreement was over the 30-day hold, Henning said.

Toni Goodrich, an owner of Oxford Assaying and Refining Corp., an Alaska company that specializes in refining gold and silver, told Assembly members on Friday that she was worried about the security costs that could be associated with the hold.

She said she's already been victimized many times over the years and that it was "completely impossible" for her company to hold metals for a month's time.

She said she doesn't want to relocate to Wasilla, where such a law would not exist.

"I'm not going and this can't pass," Goodrich said.

In an interview Monday, Goodrich said her business frequently gets calls from members of the public who are looking for an item stolen from them. If the item is easily identifiable, such as a piece of jewelry, the store will ask for identification and fill out paperwork, Goodrich said.

But when it comes to gold or silver bars, Goodrich considers collecting information like an address and a license plate number a breach of privacy.

"If you own a bunch of gold, we don't want to ask for that information because it makes (people) uncomfortable," Goodrich said.

Anchorage attorney Phillip Paul Weidner told Assembly members at last week's meeting the measure would face a legal challenge if it passed in its current form. He said it should at least be amended to exclude gold coins and other items that aren't easily identifiable. He also criticized the monthly reports to the police department, saying, "1984 has passed," a reference to the dystopian novel by George Orwell.  

Gary Levin, a former owner of Oxford Assaying and Refining, said this is the third or fourth time the city has attempted to add regulations for merchants who deal in precious or scrap metal.

Levin told the Assembly that police should instead be focusing on using social media or other methods to alert businesses to stolen goods.  

Christine Hill, owner with her husband Duane of Alaska Auction Co., said they'd already spent thousands of dollars on security. She said she was frustrated that police don't come quickly — or at all — when she reports a break-in.

"The intent of this is to protect the public," Hill said, her voice rising. "Well, we are the public too. Protect us."

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