Police fight pawnshop 'deregulation'

Police chiefs are blasting a proposal by the owner of Pawn America to change the way police track stolen property throughout Minnesota.

Brad Rixmann, owner of the chain, said ordinance changes made in Burnsville could be a model for what he'd like to see statewide.

After a long push by Rixmann, the Burnsville City Council has slashed his pawnshop licensing fee from $10,000 to $100 and ended a $2.50 per-transaction fee the business was paying to help maintain a database of pawnshop information that police share.

And under a new ordinance, fewer kinds of merchandise will be tracked as it is pawned and resold.

Burnsville Police Chief Bob Hawkins and other chiefs are contacting law agencies and policymakers statewide, saying they believe restrictions on Burnsville's investigative capabilities and Rixmann's other suggestions could make stolen property harder to recover.

"Obviously, he had some success in Burnsville, and he was trying to take that on the road and get the same type of arrangements elsewhere in Minnesota and any place else that he's trying to expand," Hawkins said.

Rixmann, however, says the changes won't hamper police, and he said he's long helped law enforcement solve crimes.

He says pawnshops have been unfairly singled out in the second-hand retail industry, and that others should be monitored as well -- as Burnsville is preparing to do soon with some jewelry, camera, antiques and other shops that resell merchandise.

Pawn America has 22 stores, mostly in Minnesota but also in Wisconsin, North Dakota and South Dakota. Rixmann said he'll keep helping police, and that with more kinds of resellers monitored, more crimes can be solved.

"We are doing everything right, and other people are doing things right as well," Rixmann said. "We just all need to work together to advance the ball in the right direction."

Many police leaders aren't convinced. In August, the Dakota County Chiefs of Police Association distributed a letter to governmental leaders, saying the change that Rixmann lobbied for in Burnsville has jeopardized police officers' ability to investigate crimes and shifted tens of thousands of dollars in fees to taxpayers.

Hawkins said the ordinance that took effect July 1 "restricts" pawnshop regulation.

Before the change, Burnsville police tracked just about anything pawned. Now, many items, including sporting goods, are no longer regulated or entered into the monitoring software. The city opted to monitor only goods most likely to be stolen: jewelry, precious metals, firearms, audio-video equipment, office equipment and some power tools.

"In general, there is less regulation of the pawn shops," said Burnsville Police Capt. Eric Werner. "They are reporting fewer transactions, and the expense for the transaction is now borne by the city as opposed to a fee that is passed through the pawnshops or second-hand goods industry to their customers."

How to track property?

Hawkins and others say they were most frustrated about a change Rixmann suggested but Burnsville police fought off. He suggested that the city switch from a database used by Minnesota and Wisconsin police to a private Texas firm that sells software also used to track pawn-shop inventories.

"You had this business coming in, working to eliminate licensing fees and transaction fees -- and then took it upon themselves to write a draft ordinance that eliminated my authority to choose what I thought was the best resource to monitor them," Hawkins said.

Rixmann said he was offering an option that's less costly than the Automated Pawn System (APS), the database of pawn information that police share electronically in Minnesota and Wisconsin. Minneapolis owns the software and bills cities for each transaction, and they in turn typically bill the pawnshops.

Most cities add onto the $1 fee that Minneapolis has been charging. In Burnsville, that added up to $2.50 per transaction, which Rixmann paid. Of that, $1.50 went into the city's general fund. Burnsville recently got the $1 fee dropped to 60 cents -- which the city will now pay to Minneapolis.

APS, developed by Minneapolis police in the 1990s, has helped solve crimes by linking pawned goods to suspects. Hawkins pointed to cases in his city: a 2003 church arson and a 2008 arson that came after a Burnsville man was nearly stabbed and burned to death during a home invasion.

Rixmann wants cities to consider using LeadsOnline, the service based in Dallas. Operating as his governmental liaison in meetings, including with the state public safety officials, has been Dan Kealey, a Burnsville City Council member who works for Pawn America. Kealey recused himself from voting on the issue in his city.

LeadsOnline says on its website that it is the nation's largest online investigation system used to solve crimes, with more than 200 million records used by more than 1,300 law enforcement agencies.

But Hawkins said if Burnsville had switched, its police would have been unable to share information with other Minnesota police agencies, He worried that companies' vulnerable information might not be secure, and that his officers would be able to access less information overall.

"No one here in Minnesota that I know of uses LeadsOnline," said West St. Paul Police Chief Bud Shaver, president of the Dakota County Chiefs of Police Association. "We like APS. We don't want to change APS."

Rixmann said he's long worked to legitimize the pawn industry. He said he's paid a $10,000 licensing fee because of one word -- pawn -- and the stigma that goes with it. He added that he helped Minneapolis police start APS, which he said became a million-dollar industry, and an expense to his business.

Joy Powell • 952-882-9017