The Audi TT coupe is a quick little sports car that handles well -- particularly the automatic version, thanks to a computer-assisted transmission that downshifts around the turns, revs up the engine and is almost like having a tiny race-car driver under the hood.

"It's sort of freaky, in a way," says Gary Bryan, a broker at Auto Source car dealership. "To drive it is fun."

The tranny is so fun and freaky that when a man stopped by the Centennial lot in February to look at the car, Bryan asked an employee in the finance department with a penchant for Audis to come over and explain the technology. The associate agreed to sit in the passenger seat while the shopper took the car out for a spin, so Bryan slapped a dealer's license plate on the back of the TT and reminded the potential buyer -- again -- that only he could negotiate the car's price. The finance employee was simply along for the ride.

But before the TT was even off the lot, the driver pulled the car over and ordered Bryan's associate to place his hands on the dashboard. The man was handcuffed and placed under arrest for selling a vehicle without a license.

The "buyer" was an undercover agent from Colorado's Auto Industry Division, out trying to bust auto-dealer employees operating without licenses. Several other agents packing guns also descended on the lot, Bryan remembers, asking questions and looking at records, reminding everyone that Colorado law requires anyone at a dealership who may profit from the sale of a vehicle to have an AID-approved license before negotiating a vehicle's price. Violation of the law is considered a Class 1 misdemeanor and is punishable by six to eighteen months in jail and/or a fine of between $500 and $5,000.

Bryan had seen investigators from the state come by before, but this was the first time he'd spotted them carrying weapons. "Why would a guy investigating a dealer need glocks and handcuffs?" he asks. "We're not hard-core criminals."

At least seven of the division's dozen investigators carry weapons, says David Dechant, senior director of enforcement for the Colorado Department of Revenue, which oversees AID. But Mary Marvin, who worked at the division for 32 years -- several of them as chief investigator -- before she retired in May 2005, reports that she never packed heat or even carried handcuffs. "You really don't need to walk into places like that with weapons," Marvin says. "They're businessmen. Are there some bad guys out there? Yeah, but there are bad guys in every profession."

Investigators typically watch for things like odometer fraud, salvage fraud, title fraud and unlicensed activities, as well as misleading advertising. On occasion, dealers have been investigated for more serious criminal activity -- a lot in Pueblo was suspected of selling illegal firearms and another of selling stolen cars -- but those instances are few and far between. So far this year, AID agents have issued 150 summons -- up from sixteen in 2002, a jump that Dechant attributes to a new division director and a new senior agent in charge of investigations, who replaced Marvin.

"We have taken our job duties quite seriously and pursued violations where we have seen them," says Dechant. "Whether or not they saw them before, I can't answer that."

If agents packing heat seem more common these days, he adds, that could be because AID has hired more investigators with law-enforcement backgrounds. Since they are legally allowed to carry weapons, Dechant says, many of the investigators are choosing to do so. But he believes that agents were also armed when they visited auto lots under Marvin's watch.

"They'd better have not been carrying weapons when I was there," Marvin responds, adding that there was a department policy against it. Though Dechant says he can't find evidence of that policy, former AID director Kirk Martelon confirms that it existed. "We didn't carry firearms, that was the policy," he says. And Martelon should know: One of his last acts before retiring in 2002 was lobbying the state legislature to pass a measure that classified AID investigators as peace officers, allowing them to issue citations and summonses -- and to carry weapons.

Still, Marvin says she didn't see guns during her last few years at AID, and she assumed that stance would continue after she retired. So when she started a business consulting with car dealerships to help them stay in compliance with state law, she never expected to hear about glocks and raids. "There's a lot of unrest," Marvin says. "The Auto Industry Division is more of an aggressive agency at this point. The education and the training part isn't there anymore; it's strictly enforcement. Everyone needs education and training to be in compliance with any law, and I think it's the state's responsibility to provide that, especially if you're going to license people."

Dechant denies that the education component has fallen off, but several local auto-industry groups say they have concerns over AID policy changes in the last eighteen months -- particularly the gun-toting investigators. "We just think it's the exception versus the rule that an investigator at the Auto Industry Division would need to pack heat when visiting a car dealer," says Tim Jackson, president of the Colorado Automobile Dealers Association, which represents 252 new-car dealers in the state. "Car dealerships are safe places. We don't need that extra intimidation, and it doesn't help to diffuse any kind of situation that they'd be dealing with at a lot."

That's a sentiment echoed by Jon Kroneberger, executive director of the Colorado Independent Automobile Dealers Association, which has represented independent used-car dealers across the state for the past 65 years. "I think it's a general consensus that nobody wants to see them carrying guns," he says.

Prior to joining the CIADA, Kroneberger spent four years on the Motor Vehicle Dealer Board, which consists of nine members appointed by the governor, three representatives each from new- and used-car dealerships, and three people from the public sector. The board formulates policy for Colorado car dealerships, including standards for approving or denying licenses and sanctioning dealers who are proven to be out of compliance. "It's an incredible process," Kroneberger says. "It's like the supreme court of the auto industry."

Kroneberger and Jackson's groups took their concerns to both AID and the Motor Vehicle Dealer Board. Earlier this year, they asked the Department of Regulatory Agencies to consider whether AID investigators should carry guns as part of the MVDB's sunset review that was conducted by DORA this fall. (Every state regulatory board goes through an evaluation, or sunset review, every ten years.) But DORA didn't take up the question of weapons. That's because the review looked only at the MVDB, Dechant says, and not AID policies.

Although charges against the Auto Source employee were dropped and the case dismissed from an Arapahoe County court for lack of evidence, Bryan would like to see AID rethink its policies. He doesn't want to see a repeat performance at Auto Source's new Denver location. "The investigator knew there was no compensation prior to issuing the summons," Bryan said. "No compensation, no crime."

Car dealerships are seeing more guns coming onto their lots -- carried not by thieves, but by state inspectors. They want that policy holstered.

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