On May 29, Mexican federal police in four helicopters attacked a drug cartel in a mountain redoubt. They were rebuffed by heavy fire, including from a massive .50 caliber rifle.

A bullet hole left in one helicopter's plate glass window is one exhibit in an exhaustive House Committee on Oversight and Government Reform report released Tuesday showing the breadth of a high-stakes, unprecedented, and, ultimately, ill-advised US scheme called "Operation Fast and Furious."

The .50 caliber bullet hole, the report says, likely came from a gun trafficked via Fast and Furious, an operation to allow nearly 2,000 arms to leave US gunshops via certain traffickers who the US government had identified and thought it could track. The idea was to trace these "straw buyers" to key cartel figures in an attempt to score major gun busts to prove the US was serious about stopping arms trafficking across the border.

Instead, the report alleges that the operation – which one US official has called "a perfect storm of idiocy" – likely allowed hundreds of powerful guns to cross into Mexico, possibly changing the outcome of cartel battles with Mexican police, leading to the deaths of many Mexicans and one federal agent, Border Patrol Agent Brian Terry, and damaging diplomatic relations between the US and Mexico.

The Fast and Furious scandal is still playing out, with hearings in the House Oversight Committee Tuesday. Chairman Rep. Darrell Issa (R) of California says he is intent on finding out how high in the Obama administration knowledge of the operation went.

The report, "Fueling Cartel Violence," backs reports that leaders in the federal Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) were aware of the operation. But it also names several key Department of Justice officials, such as Assistant Attorney General Lanny Breuer, as "clearly" being aware of the operation – a charge that the Obama administration denies.

According to whistleblowers and key witnesses, however, the real lesson behind Fast and Furious, a two-year operation that ended in January 2011, is how "groupthink" clouded decision-making at the highest levels of government, causing an agency to go against its basic instincts – which is to not allow arms to be trafficked illegally – and consequently contribute, not detract, from border violence.

"These guns weren't going for a positive cause, they were going for a negative cause," ATF attaché Carlos Canino told the congressional oversight committee. "The ATF armed the [Sinaloa] cartel. It's disgusting."

Despite repeated pushback from some agents and the attaché office in Mexico City, ATF Acting Director Kenneth Melson assessed it as "a good operation," the report says. According to witnesses, Assistant Attorney General Breuer appeared to cite Fast and Furious in meetings with Mexican officials, saying the US had a major gun-interdiction effort underway out of Phoenix, the report adds.

Where the guns went

The plan was to trace the guns through straw buyers to major cartels, to then build cases and make arrests. But early on, it became evident that tracking the guns had become a problem and that hundreds had made their way across the border and disappeared into cartel gun caches. According to the report, Fast and Furious guns made their way to three prominent Mexican cartels: Sinaloa, El Teo and La Familia.

Those within ATF who raised concerns about the fundamental flaw in the strategy were rebuffed or simply kept in the dark, Daniel Kumor, the ATF's international affairs chief, told congressional investigators.

At least one witness cited in the report contended knowledge of the tactics in Fast and Furious was widespread in ATF and Justice: "It was common knowledge that they were going down there to be crime guns."

The report names main Justice Department trial attorney Joe Cooley as saying the movement of vast numbers of guns to Mexico was "an acceptable practice." Mr. Cooley was Breuer's main contact with Fast and Furious, according to the report.

The Justice Department has maintained that it never knowingly allowed guns to "walk" to Mexico.

In the report, at least one higher-up fought back against accusations that field officers and ATF attachés in Mexico were raising concerns about the program. Asked if his reports raised concerns about the operation, Bill McMahon, deputy field operations director for ATF, told Congress: "Not that I can remember."

So far, nobody at the Justice Department has publicly acknowledged a role in the case, and President Obama has said neither he nor Attorney General Eric Holder knew anything about it until the story broke after the murder of Brian Terry in a Sonora, Ariz., gun battle in December 2010. President Obama has ordered the Justice Department inspector general to investigate.

On Tuesday, the Justice Department fought back against the report's characterizations of Breuer's involvement.

"The Committee’s report promotes unsubstantiated theories by selectively releasing excerpts of transcripts while ignoring testimony and other information," writes spokeswoman Tracy Schmaler in an e-mail. "For whatever reason, the leadership of the Committee chose not to release witness testimony that makes clear that operational details relating to this investigation were unknown to senior Department of Justice officials."

In previous testimony, Acting Director Melson, said the strategy was not "intended to allow the guns to go to suspected straw purchasers without any good faith belief that you could recover those weapons."

But he also suggested that the field agents had wide latitude. The agents, not the supervisors, "do the tactical stuff," Melson said. ATF Acting Deputy Director William Hoover added in his testimony that there was no reason for Justice officials to be aware of the tactics, "because I certainly didn't brief them on the techniques being employed in Fast and Furious."

International fallout

The fallout from the operation has taken its toll on lives and diplomatic relations, say congressional investigators.

In October, 2010, cartel members kidnapped Mario Gonzalez Rodriguez, the brother of Chihuahua Attorney General Patricia Gonzalez Rodriguez. A few days later, police found Mr. Rodriguez's body in a shallow grave. Shortly thereafter, police engaged cartel members in a gun fight, from which several guns were recovered. Two were traced to Operation Fast and Furious.

When Mr. Canino confronted other ATF officials about the need to inform the Mexican government about the link, he says he got "zero instructions," and that "every time I mentioned it, guys started looking at their cellphones, silence in the room."

Eight months after the murder, Canino finally told Mexican Attorney General Maricela Morales about the link. "Hijole" (oh my), she said.