Story highlights ATF whistleblower calls botched probe "egregious"

Inspector general's report refers 14 for discipline; 2 already out

ATF will "get off the mat again and keep swinging," acting chief says

Firearms traced to the probe were at the site of the killing of Border Patrol agent Brian Terry

More than a dozen Justice Department and Bureau of Alcohol, Tobacco, Firearms and Explosives officials faced punishment Wednesday after a long-awaited report on the botched gun probe known as " Operation Fast and Furious ."

That probe and a previous investigation were marked by "a series of misguided strategies, tactics, errors in judgment and management failures" that allowed hundreds of weapons to reach Mexican drug cartels, the Justice Department's independent inspector general concluded.

Within minutes of the report's release, Justice announced rthat former acting ATF chief Kenneth Melson was retiring and another official, Deputy Assistant Attorney General Jason Weinstein, had resigned.

Weinstein and Melson were among 14 people who "bore a share of responsibility for ATF's knowing failure in both these operations to interdict firearms illegally destined for Mexico, and for doing so without adequately taking into account the danger to public safety that flowed from this risky strategy," the report states. Weinstein failed to pass along key information about the flawed tactics being used in Fast and Furious, while Melson and other ATF officials didn't properly supervise the probe, the report states.

The report referred them and another 12 officials in Washington and the ATF and U.S. attorney's offices in Phoenix to Justice officials to determine "whether discipline or other administrative action" was required.

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"Fast and Furious" became public after guns traced to the probe turned up at the scene of a Border Patrol agent's December 2010 killing. The resulting investigations discovered similar tactics in a 2006-2007 operation dubbed "Wide Receiver," also run out of Phoenix.

Revelations that ATF agents watched suspected gun traffickers cross into Mexico with weapons purchased at U.S. gun shops outraged lawmakers. Larry Alt, one of the ATF agents who blew the whistle on the operation, told CNN that it was "egregious" that agents were watching people transfer guns to people who were handing them over to the cartels, "and we were not taking an enforcement action."

"I would say that the persons responsible for this case ... at the field level, the division level, and the headquarters level and as far as it went into the Department of Justice, should be held accountable for any decision that they made that allowed these guns to go out on the street unmonitored," Alt said.

Making matters worse, the Justice Department initially denied guns were being allowed to "walk" across the border, only to have to formally retract that statement in December 2011. The controversy forced Melson out at ATF, but he remained in another post at Justice until Wednesday.

Acting ATF Director B. Todd Jones, meanwhile, said his agency "accepts full responsibility" for failing to oversee the Arizona probes.

"This hurts. This hurts people here," Jones told reporters. But he added that the ATF has been tightening up its procedures and won't shy away from tough operations.

"All we can do is get off the mat again and keep swinging," he said.

The controversy fueled Republican accusations of a cover-up by the Obama administration and led to an unprecedented vote to hold Attorney General Eric Holder in contempt of Congress.

The report found that Holder was not informed of the controversial ATF operation until 2011, after Border Patrol Agent Brian Terry was killed. In a written statement on the findings, Holder said the inspector-general's report upholds "what I, and other Justice Department officials, have said for many months now" -- that the tactics used pre-dated the Obama administration and that Justice Department leaders didn't try to hide the facts from lawmakers.

"It is unfortunate that some were so quick to make baseless accusations before they possessed the facts about these operations -- accusations that turned out to be without foundation and that have caused a great deal of unnecessary harm and confusion," Holder said. "I hope today's report acts as a reminder of the dangers of adopting as fact unsubstantiated conclusions before an investigation of the circumstances is completed."

But Iowa Republican Sen. Chuck Grassley, who brought ATF whistleblower complaints to the department's attention in early 2011, said the report "reaffirms virtually everything" that congressional investigators turned up.

"It's clear that both the ATF and the Justice Department failed to provide meaningful oversight of Operation Fast and Furious," Grassley said in a written statement. Those agencies "ignored warnings from employees" and refused to acknowledge how bad the problem was until after months of congressional pressure, he said.

And Grassley said the report inaccurately lets Assistant Attorney General Lanny Breuer "off the hook" regarding a February 2011 letter to Congress that denied guns were being allowed to cross the border. Along with the statement, Grassley released e-mails he said contradict the report.

Breuer acknowledged last November he had learned that guns were allowed to "walk" to Mexico, and apologized for not informing other senior Justice Department officials. The February 2011 letter to Grassley was later retracted by Justice officials.

Wednesday's report criticized Breuer and another top official, Gary Grindler, who was acting deputy attorney general when the events took place, for failing to pass along information to the attorney general and other top officials. But they remain with the department.

A standoff over internal Justice documents erupted after the Obama administration said it was asserting executive privilege in the Fast and Furious case to shield documents that include internal deliberations traditionally protected from outside eyes.

That prompted the House of Representatives to vote a civil contempt charge against Holder -- the first time a Justice Department chief has been held in contempt by Congress. Democrats protested the vote vehemently as being purely political, and the citation passed along party lines.

The House took the issue to court, where it is expected to linger until well beyond November's presidential election.

Some of the documents the White House withheld under the privilege claim were included in the report. Grassley said that inclusion "proves that this subset of documents could have been released earlier," and the president "was merely thumbing his nose at Congress" before the contempt vote.

Rep. Darrell Issa, who pushed for the contempt vote against Holder as chairman of the House Oversight and Government Affairs Committee, the report shows "widespread failures" and "a near-total disregard for public safety."

"Attorney General Holder has clearly known about these unacceptable failures, yet has failed to take appropriate action for over a year and a half," added Issa, R-California.

Holder had said he was awaiting the report to determine what actions to take against individuals involved in the case. But he has promised Congress that such "gun walking" of weapons into Mexico would never again be allowed.

Issa called on President Barack Obama to "step up and provide accountability" for the program. And Inspector General Michael Horowitz, whose office produced the report, is scheduled to appear before Issa's committee on Thursday.