Issa cites 'gunwalking' case based on plan floated by 'Furious' whistleblower

For the first time since Congress began investigating Operation Fast and Furious more than a year ago, a top lawmaker on Sunday publicly acknowledged another botched "gunwalking" investigation -- which Fast and Furious' chief whistleblower conducted and was involved in proposing.

This comes as more information about the case is increasingly likely to be released. It is known that the documents being demanded by the House Oversight and Government Reform Committee include discussions about whistleblowers, and those documents could include internal Justice Department emails about the case mentioned Sunday. In addition, the Justice Department inspector general's own report on Fast and Furious is expected to cite the separate investigation.

Rep. Darrell Issa, R-Calif., in bringing up the case by name unprompted, was inadvertently pre-empting what could come to light in a possible document dump. In coming forward, whistleblower John Dodson claimed Fast and Furious was the work of stubborn ATF supervisors run amok. But lawyers for those Arizona supervisors have said Dodson's role in the other "gunwalking" case undercuts his credibility as a key witness against Fast and Furious. Those trying to protect the Justice Department -- and Attorney General Eric Holder from contempt proceedings -- could make the same argument.

Despite vowing to "deliver the facts to the American people" over who thought "gunwalking" was a "good idea," neither Republicans nor Democrats had ever noted in repeated hearings, reports or interviews the case in which Alcohol, Tobacco, Firearms and Explosives agent Dodson drafted and forwarded a request to "walk" guns just months before he ignited a national controversy over such tactics.

Issa, the House committee's chairman, and Sen. Charles Grassley, R-Iowa, have repeatedly cited the disclosure of "a document" related to Dodson as evidence Justice Department officials sought to "smear" him.

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Issa's report supporting a contempt vote against Holder said some of the documents he's now seeking "would include those relating to actions the Department took to silence or retaliate against Fast and Furious whistleblowers." During a Senate hearing in November, Grassley said documents were leaked "in an attempt to smear one of the ATF whistleblowers."

The Justice Department's inspector general is reportedly looking at whether that amounted to a crime.

But neither lawmaker had previously discussed the case or mentioned it by name in public -- though they've known about it for some time, according to Republican staffers.

Republican staff also noted that this case involved five weapons, claiming they were not being trafficked to Mexican drug cartels but were being sold by the suspected straw purchaser on an online retail site.

In a statement to Fox News, a committee spokesman defended Dodson's role: "The committee has known for nearly a year that Justice officials were trying various efforts to retaliate against him for blowing the whistle on Operation Fast and Furious. The deeply unfortunate efforts to smear him are, unfortunately, part of what has been described to investigators as a 'retaliatory culture' within ATF."

The spokesman described Dodson as "upfront and remorseful about his involvement in the gunwalking that took place in Operation Fast and Furious," but said that in this case, "Dodson has long been adamant with congressional investigators that his involvement in writing a proposal for the Fernandez case was done at the direction of his supervisor, ATF Group Supervisor David Voth."

Voth was also the supervisor in Fast and Furious, and the spokesman noted he's been "scrutinized" as a result of Dodson's testimony. The spokesman backed Dodson in saying the evidence "supports Dodson's contention that his actions occurred as a result of orders given to him."

The document in question, a proposal obtained by Fox News, asked ATF supervisors in Phoenix to "allow this investigation to proceed" by authorizing Dodson to deliver firearms to suspected gun-smuggler Isaias Fernandez. By the time of the proposal, Dodson had been introduced -- in an undercover capacity -- to Fernandez, who said he would pay $100 for each AK-style pistol Dodson could obtain from a licensed gun-dealer.

"The logic employed is that by authorizing the 'walking' of a small amount of firearms that, ultimately, we can cease the trafficking of a significant number," said the proposal Dodson emailed. "It is believed that if this request be authorized, the benefits would far outweigh any that could be derived from the arrest of individuals on such minor violations as (lying on forms) and potentially provide invaluable, otherwise unattainable, information into the workings of an active/ongoing (firearms trafficking organization)."

On ABC's "This Week" on Sunday, when he was reminded that "gunwalking" cases such as "Operation Wide Receiver" and the "Medrano case" took place under the Bush administration, Issa jumped in to add, "And the Fernandez case, too."

But the "Fernandez case" was not a Bush-era investigation. It was proposed and executed in the spring of 2010, at the same time Fast and Furious was well underway.

In an email on May 18, 2010, obtained by Fox News, Dodson told an ATF colleague in Washington, "As it stands -- my (undercover) plan is a Go," adding that ATF policy neither explicitly authorizes nor prohibits "letting guns walk" for "my (undercover) plan."

Days later, Dodson told a federal prosecutor about the scheme to "walk" guns. The prosecutor told Dodson in an email that "as you develop your strategy" higher-ups in the U.S. Attorney's Office must "approve letting the straw purchased guns go."

Then, on May 27, 2010, Dodson sent what appears to be a final -- or near-final -- version of a written proposal to ATF group supervisor David Voth. According to the proposal, "walking 4 to 6" guns "would be a satisfactory amount to allow (agent) Dodson to win the favor of (Fernandez) and secure a higher position within the (firearms trafficking organization)."

"This request is predicated on ATF's previous authorization of allowing firearms to be trafficked ("walked") infurtherence (sic) of investigations which target (organizations) as opposed to individuals," said the proposal, as obtained by Fox News. "Lastly, the spirit of this request is to further represent ATF's position at the pinnacle of Federal Law Enforcement by again accepting the difficult missions and not shying away from the manner and means necessary to meet them."

Voth opposed the idea, he told congressional investigators last year and again more recently.

"I was not comfortable with his proposal because he wanted me to authorize him to provide firearms to a suspected firearms trafficker. I objected to it," Voth said in a sworn declaration submitted to Congress several months ago, an excerpt of which was recently obtained by Fox News.

Last July, he told investigators, "I said (to Dodson) I didn't think I could approve that; that it would require a higher level of approval," according to transcripts obtained by Fox News. "So I set up a meeting with (Assistant Special Agent in Charge Jim) Needles, at which time Mr. Dodson made the proposal."

As for Needles, the second-in-command of ATF's Arizona division, he told congressional investigators in November that he approved Dodson's plan because Dodson and another ATF agent believed the only way they were going to nab Fernandez was through "gunwalking" tactics, Fox News recently learned.

In a letter accompanying Voth's declaration to Congress, an attorney representing him, Joshua Levy, said Voth first learned the Fernandez investigation might include "gunwalking" on May 24, 2010, when Dodson emailed Voth about his earlier conversation with the federal prosecutor.

But Republican staffers involved in the congressional probe into Fast and Furious say there is "clear conflict" over who actually suggested and supported "walking" guns in the Fernandez case.

According to Dodson, he had long been pushing for an alternative to Fast and Furious, believing an undercover operation would have "greater operational control," one Republican staffer said. So when Voth heard that a confidential informant could introduce Dodson to Fernandez, Voth praised the idea and instructed Dodson to write up a proposal, according to Dodson's account as relayed by another source.

"Dodson objected, but reluctantly followed orders," one Republican staffer said.

In questioning Voth's account, a Republican staffer said the fact that Voth sent the written proposal up the chain of command illustrates Voth's support for it because he could have easily demanded revisions, prevented it from going to Needles, or otherwise documented his objections.

Republican staffers also cited a letter Voth signed on June 1, 2010, asking a gun dealer in Arizona to sell pistols to Dodson for "his official duties." Signing that letter is "inconsistent" with Voth's claims that he "objected" to Dodson's plan, according to one Republican staffer.

Nevertheless, Dodson ended up delivering six AK-style pistols to Fernandez that day, and those weapons were never recovered. As with Fast and Furious, the reasons for that failure are in dispute.

The ATF office in Phoenix launched "Fast and Furious" in 2009, hoping to follow suspected "straw purchasers" to the higher-ups of gun-smuggling organizations. But the operation's targets bought nearly 2,000 weapons over several months, and high-powered weapons tied to the investigation ended up at crime scenes in Mexico and the United States, including the December 2010 murder of Border Patrol Agent Brian Terry.

Testifying under oath last year to Issa's committee, Dodson said he unsuccessfully tried to raise concerns internally over "gunwalking" and "cannot begin to think of how the risk of letting guns fall into the hands of known criminals could possibly advance any legitimate law enforcement interest."

As part of its own investigation, the Justice Department's inspector general has questioned law enforcement officials about the Fernandez case, Fox News was told.

Levy declined to comment. Dodson has repeatedly declined to weigh in on the matter, and he did not respond to an email sent late Sunday.

In March 2011, Grassley released several ATF documents, including a heavily-redacted "Report of Investigation" now known to be from the Fernandez case. At the time, though, Grassley described the documents as "evidence in support of" whistleblower allegations over Fast and Furious.