Inside the Scrutiny of the ATF Over Operation 'Fast and Furious'

This is a rush transcript from "On the Record," June 15, 2011. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: OK, listen carefully to this question. Did the United States government help arm Mexican drug cartels? This question, were those weapons used in murders? Right now the ATF is under extreme scrutiny. Three agents are testifying before Congress. And Congress is demanding answers to what is Operation "Fast and Furious," and why did it backfire allowing thousands of weapons to get into the wrong hands?

ATF supervisory special agent Peter Forcelli joins us. Good evening, sir. Tell me first of all, what is Operation "Fast and Furious"?

PETER FORCELLI, ATF SUPERVISORY SPECIAL AGENT: Good evening, Greta. Operation "Fast and Furious" was one case initiated in the Phoenix feel division. It's one investigation that targeted several individuals who were trafficking firearms into Mexico.

VAN SUSTEREN: Why are they making the allegation the government was looking the other way to weapons get into the wrong hands?

FORCELLI: What happened is that ATF agents were out in the street, observing persons buying firearms and made no efforts to interdict the firearms. ATF made a mistake. This is a failure in leadership, something that should have been taken ahold of.

VAN SUSTEREN: How high up was this operation authorized?

FORCELLI: Highest levels in the phoenix field division. I don't know who the ultimate decision-makers were. This is a failure in leadership at all levels within ATF. And whoever was briefed at the top. This should have been roped in much sooner than it was.

VAN SUSTEREN: Does the chain of command go up to the attorney general of the United States? I'm not saying he knew anything, but is that ultimately the top one?

FORCELLI: The attorney general of the United States oversees all of the Department of Justice, and ATF is a branch. What he knows about this case, obviously, I can't speak to that.

VAN SUSTEREN: I wasn't suggesting, I was trying to understand the structure. What ended "Fast and Furious"?

FORCELLI: They made arrests in January. I wasn't involved in the investigation. I supervise a group also located in Phoenix. My understanding is there are ongoing prosecutions.

VAN SUSTEREN: There was a death of a border agent. Does that have anything to do with it?

FORCELLI: I know Agent Terry was murdered with a weapon, and two guns traced by operation fast and furious were found in the proximity of the murder scene.

VAN SUSTEREN: These are weapons that we would have been watching?

FORCELLI: I don't know at what point those weapons were purchased.

VAN SUSTEREN: Do you worry that this was a complete botched operation, that these were two weapons that the United States was essentially tracking that ended up at the murder scene of a border agent?

FORCELLI: Absolutely. I'm a career police officer. I was a New York city police officer. I've been with ATF for 10 years. Proud to serve, fine men and women doing great cases everyday this is not how we operate. Our job is to prevent guns from going into the hands of criminals. We are understaffed. And I can make all the excuses as to why this happened. The reality is, we did not do our job if we allowed guns to be sold to be trafficked to individuals that we knew were going to use them in the drug war.

VAN SUSTEREN: Were you told to look the other way?

FORCELLI: I wasn't involved in that operation. My understanding that others were.

VAN SUSTEREN: To let the guns flow?

FORCELLI: Gather intelligence not interdict weapons. You lose the opportunity to do things the old fashioned way, shoe leather police work.

VAN SUSTEREN: I know how hard the ATF does work. Thank you, sir.

FORCELLI: Thank you.