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Exclusive: Fast and Furious IG report slams ATF Phoenix personnel

ATF seal over rifles and handguns

(CBS News) The Inspector General (IG) draft report on Fast and Furious heaps blame on the Phoenix-based staff of the Bureau of Alcohol, Tobacco and Firearms (ATF) according to those familiar with the document.

A year and a half in the making, the report examines Operation Fast and Furious, which began under the Obama administration, and the smaller Operation Wide Receiver which started under the Bush administration and was prosecuted under the Obama administration. In both cases, ATF agents allowed guns to "walk" or fall into the hands of Mexican drug cartels. The idea was to see where the guns ended up and catch a "big fish" of a cartel.

The IG's report is expected to be publicly released in the next few weeks.

Those familiar with the contents say ATF Phoenix officials shoulder much blame, including then-Special Agent in Charge Bill Newell, the lead Fast and Furious case agent Hope MacAllister, and group supervisor David Voth.

Since the controversy was first exposed, a divide has developed between the ATF staff in Phoenix who oversaw and implemented Fast and Furious; and their supervisors at ATF headquarters and the Justice Department. The Phoenix officials say higher-ups approved of the case. But the higher-ups say it was all the brainchild of rogue ATF officials in Phoenix.

Phoenix ATF officials tell CBS News that higher-level officials were integral in shifting focus away from arresting ground level gun buyers, to "a cartel focused strategy" that allowed guns hit the streets in an attempt to make a bigger case. They say the idea was codified in the September 2010 ATF document "Project Gunrunner-A Cartel Focused Strategy." The document refers to using the tactic of "limited or delayed interdiction" of guns, while cautioning that such investigations "must be closely monitored."

When that document was published, Fast and Furious was already ten months old, and hundreds of weapons had fallen into the hands of traffickers for Mexican drug cartels with no arrests. Fast and Furious weapons were turning up at crime scenes across Mexico. Two would later be found at the murder scene of Border Patrol agent Brian Terry.

As alleged proof that they had the blessing of their superiors, ATF officials in Phoenix point to regular briefings provided headquarters and the Justice Department's National Drug Intelligence Center. Agents from Immigration and Customs Enforcement (ICE), the Drug Enforcement Administration (DEA), and the Internal Revenue Service (IRS) had agents working the case. The Justice Department also approved seven wiretaps in Fast and Furious. However, then-head of ATF Kenneth Melson and officials at the Justice Department say they never intended for agents to allow guns to walk, and didn't know it was happening. They also say they either didn't read written briefings submitted about the case, or that the briefings and affidavits didn't reveal the controversial strategy being used. Homeland Security chief Janet Napolitano, who oversees ICE, also says she knew nothing of the case.

Documents released during the course of the investigation show the head of the Justice Department's criminal division, Lanny Breuer, learned that ATF had let guns walk --even as the Justice Department was denying that had ever happened. When those documents were made public last November, Breuer issued a statement saying he regretted not alerting others in Justice Department leadership. Breuer also signed off on the Fast and Furious wiretaps.

Also sharing blame in the IG report are then-US Attorney Dennis Burke and his lead deputy on Fast and Furious, Emory Hurley and Melson. Melson and Burke resigned a year ago and Hurley was reassigned.

At the beginning of the Congressional investigation into Fast and Furious, the Justice Department issued a letter to Congress denying there had been any gunwalking. The Justice Department then retracted the denial almost a year later. Congress subpoenaed internal documents regarding the denial and retraction, but Attorney General Eric Holder said Congress had no right to them and the White House invoked executive privilege. That led to Congress finding Holder in contempt June 28. The House Oversight Committee has filed a civil lawsuit in federal court asking a judge to enforce the Congressional subpoena.

Internal emails revealed that ATF's Newell communicated with then-White House National Security Staffer Kevin O'Reilly about Fast and Furious. The White House has refused to make O'Reilly available for interview by Congressional investigators saying O'Reilly didn't know about "any of the inappropriate investigative tactics at issue... let alone any decision to allow guns to 'walk.'"

Other alleged gunwalking operations in the past few years include "Too Hot to Handle" in Dallas, "Castaway" in Tampa, and cases in Evansville, Indiana; Columbus, New Mexico; and Houston, Texas.

The draft IG report was provided to the Justice Department last Tuesday. As a matter of procedure, those who are criticized are offered the chance to view excerpts of IG reports and submit comments before the final report is released to the public.

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