House Republicans seized on a report on a law enforcement operation that allowed guns to illegally flow into Mexico as an example of failures at the Justice Department.

The report issued yesterday shows a “breach of trust” by those involved in Operation Fast and Furious, including law enforcement and Justice Department officials, said House Oversight and Government Committee Chairman Darrell Issa at a hearing today in Washington.

Issa said his committee will continue to pursue its investigation, including a civil complaint filed in August seeking to compel Attorney General Eric Holder to release documents sought by the panel.

Issa criticized Holder for waiting to discipline employees involved in the operation and said 14 officials referred by the inspector general for possible disciplinary action should “find appropriate new occupations.”

“Operation Fast and Furious is a poster child for what you don’t do with deadly weapons,” Issa said at a hearing with Justice Department Inspector General Michael E. Horowitz.

President Barack Obama said today that the inspector general’s report confirmed that Holder didn’t know details about the operation. Responding to a question at a Univision forum in Florida, Obama said he retains full confidence in Holder.

Management Failures

The 471-page report released by Horowitz yesterday outlined management failures at the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Justice Department, as well as flaws in the program that lost track of about 2,000 guns purchased by straw buyers. ATF is part of the Justice Department.

Two of the guns were found at the scene of the 2010 killing in Arizona of U.S. Border Patrol Agent Brian Terry.

Republicans on the oversight panel asked Horowitz what senior Justice Department officials knew and how the operation could go on without major notice at the department’s top levels.

“How does this go on for so long without somebody saying something is wrong here?” asked Representative Jason Chaffetz, a Utah Republican.

Holder, in a statement yesterday, announced the immediate departure of two officials referred by Horowitz for discipline. Kenneth Melson, the ATF’s former acting director, retired and Jason Weinstein, a deputy assistant attorney general, resigned.

Alerting Officials

Assistant Attorney General Lanny Breuer and former Acting Deputy Attorney General Gary Grindler, also among the 14 officials referred by the report, will not face disciplinary action, according to a Justice Department official with knowledge of the matter who asked for anonymity. The official wasn’t authorized to speak publicly.

Breuer said last year he regretted not doing more to alert senior Justice Department officials when he learned about a similar gun operation that began during President George W. Bush’s administration. Breuer was admonished last year for failing to alert his superiors and no further action will be taken, the Justice Department official said.

“We were troubled by his decision to not tell the attorney general about it because they have authority over the ATF; he does not,” Horowitz said.

No action was deemed necessary for Grindler, now Holder’s chief of staff, who relied on a Federal Bureau of Investigation probe into the guns found at the scene of Terry’s killing, the official said.

First Major Report

Horowitz, confirmed in March, was lauded by lawmakers of both political parties for his first major report. He said his office was responsible for making referrals for discipline and it is “up to the attorney general to decide what, if any, discipline should be imposed.”

Republican lawmakers, led by Senator Charles Grassley of Iowa and Issa of California, have battled with the Justice Department for months for details of the program, testimony and documents as they attempted to trace how high up the failures reached.

More than 100 House lawmakers called for Holder’s resignation as a result of the operation and the department’s refusal to give certain documents to congressional investigators looking into the program. The House in June found Holder in contempt of Congress for his refusal to provide certain documents after Obama asserted executive privilege.

Holder’s Oversight

Republicans have faulted Holder’s oversight of Fast and Furious and his responses to lawmakers’ queries about it. Holder wasn’t found in the report to have known about the operation until early 2011, when lawmakers began to probe its fallout. Democrats on the committee pointed to that conclusion today’s hearing.

“This attorney general, while not perfect, was not guilty of the things that people on this committee and others in the press have accused him of,” said Representative Stephen Lynch, a Massachusetts Democrat.

Holder criticized the lawmakers conducting their own probe into the operation yesterday, saying it was “unfortunate that some were so quick to make baseless allegations before they possessed the facts.”

Representative Elijah Cummings of Maryland, the top Democrat on the panel, echoed Holder’s criticism today, saying “public accusations were sometimes made before the search for evidence even occurred.”