Documents Raise New Concerns About ATF Gunrunning Probes Prior to 'Fast and Furious'

Newly disclosed documents reveal there was a second Arizona-based investigation during the Bush administration in which the Bureau of Alcohol, Tobacco, Firearms and Explosives allegedly let guns "walk" as a way to target weapons-trafficking suspects -- a practice now fueling controversy in the Obama administration.

"This is a major investigation with huge political implications and great potential if all goes well," an ATF official in Washington, William Hoover, wrote in late 2007. "We must also be very prepared if it doesn’t go well!'

Nearly four years later, the Obama administration is learning that lesson, as pressure grows over "Operation Fast and Furious." Launched in Arizona in late 2009, the investigation planned to follow gun purchasers in hopes that suspects would lead them to the heads of Mexican cartels. But high-powered weapons tied to the investigation ended up at crime scenes in Mexico and the United States, including the murder of Border Patrol Agent Brian Terry late last year. Republicans on Capitol Hill are now leading a congressional investigation into the matter.

According to a law enforcement source, the suspects in the 2007 investigation bought more than 200 weapons, though emails indicate the purchases of only dozens were witnessed by ATF officials. By contrast, suspects identified in "Fast and Furious" purchased nearly 2,000 weapons over several months, with ATF officials being notified in time to watch 350 weapons being purchased, according to at least one ATF official.

The 2007 investigation, led by many of the same officials as those involved with "Fast and Furious," got off to a bumpy start when Mexican authorities failed to interdict the weapons, despite being told they were heading their way.

After several suspects purchased 19 weapons at a Phoenix gun store in late 2007, ATF agents conducted surveillance on the gun store and watched as the same suspects purchased more weapons. Mexican authorities were notified "for a possible controlled delivery of these weapons southbound to the" border, and ATF officials stayed on the phone with a Mexican official "until the suspect vehicle crossed," according to emails. But then Mexican authorities allegedly dropped the ball.

"ATF agents observed this vehicle commit to the border and reach the Mexican side until it could no longer be seen," ATF agent Hope MacAllister, the lead investigator on the "Fast and Furious" investigation, said in an email dated Sept. 28, 2007. "We, the ATF [in Mexico] did not get a response from the Mexican side until 20 minutes later, who then informed us that they did not see the vehicle cross."

In the aftermath of that mix-up, emails show confusion over how to proceed and who, if anyone, had approved further steps. At one point, ATF investigators in Arizona called Justice Department officials in Washington for further guidance. It's unclear from emails if Justice Department officials ever responded.

"Have we discussed the strategy with the US Attorney’s Office re: letting the guns walk?" Hoover asked William Newell, the head of the ATF office in Phoenix, in an email dated Oct. 4, 2007. "Do we have this approval in writing? Have we discussed and thought through the consequences of same? Are we tracking south of the border? .. Did we find out why [Mexican authorities] missed the hand off of the vehicle?"

Newell acknowledged Hoover had "reservations," but told him to "rest assured that this will go down as planned," with the "full approval" of the U.S. Attorney's Office and as allowed by U.S. agreements with Mexico.

In a separate email, Newell blamed Hoover's reservations on misinformation from another ATF official, saying Hoover's understanding of the investigation came "via an inaccurate email drafted late on a Friday afternoon before a 3-day weekend."

Still, Hoover ultimately said, "I do not want any firearms to go South until further notice. ... I will not allow this case to go forward until we have written documentation from the US Attorney’s Office [regarding] full and complete buy-in."

On Oct. 6, 2007, Newell told colleagues he had decided to end the investigation.

"I think we both understand the extremely positive potential for a case such as this but at this point I'm so frustrated with this whole mess I'm shutting the case down and any further attempts to do something similar," Newell said in an email. "We're done trying to pursue new and innovative initiatives -- it's not worth the hassle."

Two suspects were ultimately indicted on weapons-trafficking charges in April 2009.

Asked about the emails, an attorney representing Newell, Paul Pelletier, said the 2007 case did not involve "gun-walking," something he has insisted is also true about "Fast and Furious."

The 2007 case involved a “controlled delivery,” whereas “gun-walking” suggests allowing guns to go to a prohibited person with no controls, according to Pelletier, a former Justice Department official now with the firm Mintz Levin in Washington. He said the problem of guns being trafficked to Mexico is so vast that the 2007 case and "Fast and Furious" were not exacerbating it, they were trying to solve it.

"If you want to stop the problem, you’ve got to take reasonable chances," Pelletier said of the 2007 case. "They didn’t think they were taking chances, because they watched it go to the border and the Mexicans were supposed to watch on the other side of the border. … We're not contributing to the problem, we actually have a chance to solve the problem,"

As for "Fast and Furious," Pelletier said, "Monday morning quarterbacks will suggest that the government had enough evidence to prove that some of these people were straw purchasers, but unless the U.S. attorney agrees, they’re not going to authorize the arrest. What are you supposed to do?"

Attorney General Eric Holder has said "Fast and Furious" employed "flawed tactics," and he directed the Justice Department's inspector to look into the matter. Still, in a recent letter to critics on Capitol Hill leading a congressional investigation into "Fast and Furious," Holder made a point of noting those "flawed tactics" were also used "in an investigation conducted during the prior Administration."

Holder was referring to "Operation Wide Receiver." From 2006 to about the end of 2007, investigators "permitted guns to be transferred to suspected gun traffickers and had not interdicted them," according to a current Justice Department official.

The investigation was initiated after ATF "received information about a suspicious purchase of firearms," the official said. But the controversial tactics were only discovered in 2009 after prosecutors began reviewing the case for possible prosecution, resulting in two sets of indictments, according to the official.

Recently, the newly assigned ATF head, B. Todd Jones, said "everything is under review" in the way of investigative practices and processes at the agency.

"We've got to hit the reset button and move forward," he said.

Newell, meanwhile, has been reassigned to ATF headquarters in Washington.