House Oversight Committee Chairman Rep. Darrell Issa, California Republican, is threatening to begin contempt proceedings if the Justice Department doesn’t start providing documents about the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Project Gunrunner and Operation Fast and Furious. But what’s the controversy about? And what could the documents show?

In Project Gunrunner, ATF allowed American guns – including AK-47 assault rifles and military-grade, .50 caliber sniper rifles – to be smuggled into Mexico and sold to drug cartels, with the goal of tracking the weapons after they’ve been used.

The project began during the Bush administration in Laredo, Texas, in 2005 as a trial, morphing into a national program in 2006. The guns were sold and tracked electronically, giving law enforcement agents valuable intelligence on where the weapons went and who had them.

During the Bush years, no guns were allowed to cross the border into Mexico. When President Obama took office in 2009, things changed. Obama’s ATF continued Project Gunrunner, but made a crucial decision to allow guns to be “walked” into Mexico, eventually ending up in the hands of Mexican drug cartels.

The results, in at least one instance, were tragic. Two AK-47s ATF officials were tracking were found at the scene of U.S. border agent Brian Terry’s murder.

Suspected firearms trafficker Jaime Avila, who bought the two Project Gunrunner AK-47s found at the scene of the murder, was arrested shortly afterwards on gun crimes. But no one has been charged with Terry’s murder.

Controversy erupted after a CBS News investigation unveiled Project Gunrunner publicly, and two GOP lawmakers, Issa and Sen. Chuck Grassley, began investigating.

Previously public documents Issa packaged with the Wednesday letter to ATF show people involved in Project Gunrunner, including the gun stores who participated, were fearful about the impact of allowing such powerful weapons into the hands of criminals, even if they were being tracked.

One key figure is ATF agent David Voth. Voth helped coax reluctant U.S. gun dealers to continue selling thousands of powerful guns as part of Project Gunrunner, assuring them the program would eventually help stop gun trafficking.

But even Voth expressed alarm to superiors. An April 2, 2010 email from Voth to two other ATF officials listed the number of murders over the past several months in Mexico, highlighting the rampant drug violence there.

“Our subjects purchased 359 firearms during the month of March alone, to include numerous Barrett .50 caliber rifles,” Voth wrote, “we have a sense of urgency with regards to this investigation.”

The subpoenaed documents could show who made the fateful decisions to allow assault weapons and military-grade sniper rifles to be “walked” into Mexico.

Issa says given the structure of the Justice Department, the decisions were likely made by top-ranking officials, potentially even Attorney General Eric Holder himself.

Meanwhile, Issa also has document requests pending at the State Department, which could have also played a key role.

ATF is so-far resisting the document demands, saying the information could imperil ongoing criminal investigations. But Issa is threatening contempt proceedings if the administration does not comply and says the objection is spurious.