More federal agencies implicated in gun-trafficking controversy

The embattled head of the federal Bureau of Alcohol, Tobacco and Firearms has told congressional investigators that the FBI and Drug Enforcement Administration kept his agency “in the dark” about their dealings with Mexican drug cartel figures linked to a controversial gun-trafficking investigation.

Kenneth Melson, the ATF’s acting director, has been under pressure to resign over the agency’s handling of the gun-trafficking operation, known as Fast and Furious. But in two days of meetings with investigators, Melson disclosed that other law enforcement agencies had a connection to the operation. His statements sharply ratcheted up the affair, and strongly suggested that House and Senate investigations, as well as an internal review by the Justice Department, will widen.

“Our investigation has clearly expanded,” one source close to the investigation said Wednesday. “We know now it was not something limited to just a small group of ATF agents in Arizona.”

Under Fast and Furious, the ATF allowed straw purchases of weapons -- in which a person buys guns on behalf of someone else who cannot legally buy them -- ostensibly to trace the guns back to Mexican drug cartels. The agency lost track of the guns, and many were found at the scene of crimes in Mexico, including two that were recovered at the site of a U.S. Border Patrol agent’s killing.

According to Melson, some of the Mexican drug cartel leaders being targeted were paid informants working for the FBI and DEA. Those agencies never shared that crucial information with the ATF, he said, telling investigators that if ATF agents had known of the relationships, the agency might have ended the investigation much earlier.

Melson was to have met with investigators on July 13 accompanied by ATF and Justice Department attorneys. Instead, he met with them Sunday and over the Fourth of July holiday and brought his personal lawyer along.

Rep. Darrell Issa (R-Vista) and Sen. Charles E. Grassley (R-Iowa), told Atty. Gen. Eric H. Holder Jr. in a letter Tuesday that “this whole misguided operation might have been cut short if not for catastrophic failures to share key information.”

Ronald Welch, assistant attorney general for legislative affairs, responded Wednesday to the Issa-Grassley letter by saying Justice Department officials were still discussing how to provide any “sensitive law enforcement information” regarding the FBI and the DEA to congressional investigators. Without specifically acknowledging that cartel leaders were paid informants, he said their main focus is “how best to protect ongoing investigations.”

“Like you,” he told them, “the department is deeply interested in understanding the facts surrounding Operation Fast and Furious.”

Mexican authorities have long complained that most of the guns that fuel the drug wars there are purchased in the U.S.

On Wednesday, Mexican federal police released a videotaped interrogation with recently captured Jesus Rejon Aguilar, an alleged founder of the Zetas gang there who is wanted in the slaying of a U.S. immigration agent in Mexico. He brazenly told them that “all the weapons are bought in the United States” and that “even the American government itself was selling the weapons.”

He added, “Whatever you want, you can get.”

Issa and Grassley said that over the holiday weekend Melson “was candid in admitting mistakes that his agency made.”

They said he told them he personally reviewed hundreds of documents about Fast and Furious and became “sick to his stomach when he obtained those documents and learned the full story.”

Melson said ATF agents had witnessed the transfer of weapons from straw purchasers to others “without following the guns any further,” contradicting statements by the Justice Department that they did follow through.

Sources both on Capitol Hill and at the ATF said Melson did not volunteer the information about the FBI and DEA informants. Rather, they said, he “corroborated” it when congressional investigators told him other sources have said the FBI and DEA had a role in why Fast and Furious continued for months.

Issa and Grassley were clearly upset over the revelation.

“The evidence we have gathered raises the disturbing possibility that the Justice Department not only allowed criminals to smuggle weapons but that taxpayer dollars from other agencies may have financed those engaging in such activities,” they said in their letter to Holder.

“According to Acting Director Melson, he became aware of this startling possibility only after the murder of Border Patrol Agent Brian Terry and the indictments of the straw purchasers.” Terry was killed when a gun battle erupted in December along a smuggling route in Arizona near the border with Mexico.

Melson’s attorney, Richard Cullen, a former federal prosecutor and state attorney general in Virginia, declined in an interview Wednesday to elaborate except to say that the letter accurately reflects Melson’s comments to the investigators.

Cullen said Melson volunteered to speak with the committee because “he was anxious to get the facts out about the program.” He added that no one “in the leadership” at the Justice Department has told him to resign.

“He just wants the facts to be known by people in authority,” Cullen said. “He’s eager to be as cooperative in any official inquiry as he possibly can.”

Sources said the congressional investigators “confronted” Melson with evidence that the FBI and DEA were not cooperating with the ATF, and it was at that point that “Mr. Melson’s responses tended to corroborate what others had said.”

They said investigators have “very real indications from several sources” that some of the cartel leaders the ATF was trying to identify through Fast and Furious were “already known” to the other agencies and apparently had “been paid as informants.”

Finally, Melson said, ATF agents along the U.S.-Mexico border realized that the FBI and DEA were running separate operations and that it “could have a material impact on Fast and Furious.” Melson said he notified his superiors of this problem in April.

The congressional leaders also noted the pressure Melson has felt to resign, and they warned Holder not to make Melson the sole “fall guy” in Fast and Furious.

richard.serrano@latimes.com