hesitation, Glock fired Walter, the man widely credited with establishing the company in America.
“I didn’t believe he did it,” Walter said, “because not only did I put a huge effort into it; I picked some of the best people that I could find in the industry to make it happen.”
Walter continued to work in the US gun industry as an executive and consultant, but he never regained the prominence he had at Glock.
Over the next eleven years, Gaston Glock would run through seven US sales managers. Distinguishing oneself within the company became a career-killer, and longtime employees learned to keep their heads down. Wolfgang Riedl realized that his own goal of one day directing the European branch of the company was futile. Herr Glock intended to pass control to his children. Before he could be fired, Riedl left the company for another industry job, eventually becoming a successful independent military arms broker with government clients in Asia.
As a fuming Karl Walter departed, another Glock lieutenant was ascending within the company. Charles Marie Joseph Ewert met Gaston Glock in 1985, when the Austrian traveled to Luxembourg to set up a holding company, also known as a shell company, as the partial owner of his manufacturing operation. Luxembourg does not tax holding companies on income or capital gains, making the tiny principality a popular haven for this sort of arrangement. As far as Luxembourg is concerned, shell companies are a legitimate means of sheltering business revenue (or a personal fortune) from taxation. But from the perspective of other jurisdictions, such as the United States, routing revenue generated elsewhere through a Luxembourg shell corporation may constitute fraudulent tax evasion.
Charles Ewert earned his living operating along this murky line. He served as a financial adviser to wealthy individuals and had worked for the Luxembourg stock exchange. Glock told Ewert that he was seeking to expand his firearm corporation while minimizing its tax liability.
“I am your man,” Ewert said.
Asked in 1995 during a legal deposition about his relationship with Ewert, Glock explained defensively: “I was not a salesman. I am a technician. I had no experience, no English, so I had to find a partner that helps me to sell the pistol.”
Ewert was not really a salesman or a conventional business partner. Rakish and multilingual, he had connections all over the world. He acquired the sobriquet “Panama Charly” in recognition of his activity in Latin America. He was a financial fixer. At Glock’s request, Ewert set up a web of paper corporations intended to insulate the gun business from government taxing authorities in the United States and Austria, and from American product- liability lawyers who thought about suing a profitable firearm manufacturer. With Ewert’s assistance, Gaston Glock purchased a Panamanian shell called Reofin International. Reofin, in turn, bought Unipatent Holding, a Luxembourg entity that Ewert owned. Unipatent received a 50 percent stake in Glock’s unit in the United States, where the company generated the vast majority of its revenue. Half the wealth from American gun sales ended up flowing to Glock’s putative co-owner, Unipatent, which, in fact, Glock controlled via the paper company in Panama. The complexity, though seemingly gratuitous, made following Glock’s money more difficult.
Ewert also formed shells for Glock in Ireland, Liberia, and Curacao. These corporate entities issued bills for various “services” to Glock headquarters in Austria and to operating units that were established in Latin America and Hong Kong. One effect of the various arms of Glock owning and billing one another was to decrease the profits that had to be reported in Austria and the United States, which are relatively high-tax jurisdictions. Many companies seek to lessen their tax bills in a similar fashion. Tax attorneys at the most prestigious law firms in Manhattan devote their working lives to corporate tax minimization. Whether all of this is accomplished within the letter and spirit of the relevant laws is sometimes a close question.
Vociferously proud of his pistol and its commercial success, Gaston Glock was shy about publicly discussing the maze of shell companies constructed by Ewert. During the 1990s, he was asked repeatedly in the course of civil lawsuits in the United States about the convoluted ownership structure of his companies. He gave answers that, at best, seem uninformative. On various occasions, he testified that he did not own—or did not know who owned— Unipatent, the shell that theoretically controlled fully half of Glock, Inc. In one case, an injury-liability suit called
“Glock, Inc., is owned by Glock Austria and Unipatent,” he responded.
“Do you know who the principals of Unipatent are, who owns the company?”
“I don’t know,” Glock said.
“Do you have any ownership interest in that entity?”
“No.”
In fact, Reofin International owned Unipatent, and Gaston Glock owned Reofin. Glock either suffered from acute and conveniently timed memory loss, or he did not want to share this information with a plaintiffs’ lawyer who might have cause to track down Glock assets. (Since the company rarely suffered a courtroom defeat, the issue was largely academic.)
But Glock did not conceal his relationship with Panama Charly from employees. Executives in Smyrna sometimes addressed corporate correspondence to Ewert as a “director” or “managing director” of Glock GmbH, the Austrian parent company. Ewert occasionally visited the United States to meet with Gaston Glock. At the Smyrna offices, workers referred sneeringly to Ewert behind his back as “the Duke,” because of his aristocratic affectations.
Florian Deltgen, who worked briefly for Glock, Inc., as a sales manager in the late 1990s, was well aware of Ewert’s reputation. An experienced gun industry executive, Deltgen was born in Luxembourg. His father, decades earlier, had retained Ewert as a consultant but soon fired him. “My father realized this man was cheating him,” Deltgen told me. “Everyone in Luxembourg knew Charles Ewert as a thief.” Deltgen, who left Glock, Inc., after a falling-out with Gaston Glock, professed to know nothing firsthand about the Glock-Ewert relationship. He did know this: “If you deal with thieves, they may turn on you.”
As Glock continued to ascend in the American gun industry, the company’s rituals grew more elaborate. Sharon Dillon of the Gold Club was eclipsed by the Dallas Cowboys cheerleaders. For a couple of years in the mid-1990s, the National Football League’s premier sideline sex symbols performed at the Glock SHOT Show party in midriff- baring tops and supershort white hot pants. Invitation-only guests watched the entertainment as they ate thick steaks or two-pound lobsters. The gun industry had not previously witnessed such razzle-dazzle. Chipper and athletic, the Cowgirls brought the crowd to its feet as they high-kicked and shimmied through a floor show backed by loud pop music.
“Gaston Glock was the king of that world,” Robert Ricker, a former NRA lawyer and industry lobbyist, said in an interview before his death from cancer. “The girls, the guns, the money and liquor—and at the center of it all was this Austrian engineer none of us really knew very well.”
In later years, the Glock party took a turn from American heartland-kitsch toward Turkish exotica. Glock imported an Austrian belly dancer as the main attraction at the SHOT Show. The dancer had impressed Glock when he saw her entertain in Vienna. During each of her visits in the late 1990s, she practiced for several days in the basement gym of the Glock residence in the Vinings, which was equipped with a dance bar and wall-length mirror, according to Bereczky.
The Middle Eastern–style diversion drew lusty cheers from the gun crowd. “You’ve got the Turkish harem music, and the spotlight on this belly dancer,” recalled Ricker. “A lot of people didn’t know whether it was a joke, or what. But, hey, it was the Glock party, so you went with it.”
Ricker for a time worked with Richard Feldman at the ASSC, which was eager to ingratiate itself with Gaston Glock. With Jannuzzo’s encouragement, the company agreed to give the trade group $1 for each gun shipped from Smyrna. The annual Glock donation grew to more than $120,000 a year—the largest contribution the ASSC received from any single company, according to Feldman.
Feldman sometimes accompanied Mr. Glock on outings to the Gold Club, where the usually taciturn Austrian was able to unwind. Some of the dancers knew the free-spending magnate by sight, and on a couple of occasions they brought him up on stage for a round of applause. One evening, Glock received a varsity-style Gold Club jacket, which the dancers autographed. On another visit, to celebrate Glock’s birthday, the erotic entertainers invited the gun maker to the stage and then playfully stripped him down to his boxer shorts, dark dress socks, and black shoes, according to Jannuzzo. Far from resisting, Glock helped remove his shirt and slacks, grinning broadly the whole
