The truth about the Fast and Furious scandal
A Fortune investigation reveals that the ATF never intentionally allowed guns to fall into the hands of Mexican drug cartels. How the world came to believe just the opposite is a tale of rivalry, murder, and political bloodlust.
FORTUNE -- In the annals of impossible assignments, Dave Voth's ranked high. In 2009 the federal Bureau of Alcohol, Tobacco, Firearms and Explosives promoted Voth to lead Phoenix Group VII, one of seven new ATF groups along the Southwest border tasked with stopping guns from being trafficked into Mexico's vicious drug war.
Some call it the "parade of ants"; others the "river of iron." The Mexican government has estimated that 2,000 weapons are smuggled daily from the U.S. into Mexico. The ATF is hobbled in its effort to stop this flow. No federal statute outlaws firearms trafficking, so agents must build cases using a patchwork of often toothless laws. For six years, due to Beltway politics, the bureau has gone without permanent leadership, neutered in its fight for funding and authority. The National Rifle Association has so successfully opposed a comprehensive electronic database of gun sales that the ATF's congressional appropriation explicitly prohibits establishing one.
Voth, 39, was a good choice for a Sisyphean task. Strapping and sandy-haired, the former Marine is cool-headed and punctilious to a fault. In 2009 the ATF named him outstanding law-enforcement employee of the year for dismantling two violent street gangs in Minneapolis. He was the "hardest working federal agent I've come across," says John Biederman, a sergeant with the Minneapolis Police Department. But as Voth left to become the group supervisor of Phoenix Group VII, a friend warned him: "You're destined to fail."
Voth's mandate was to stop gun traffickers in Arizona, the state ranked by the gun-control advocacy group Legal Community Against Violence as having the nation's "weakest gun violence prevention laws." Just 200 miles from Mexico, which prohibits gun sales, the Phoenix area is home to 853 federally licensed firearms dealers. Billboards advertise volume discounts for multiple purchases.
Customers can legally buy as many weapons as they want in Arizona as long as they're 18 or older and pass a criminal background check. There are no waiting periods and no need for permits, and buyers are allowed to resell the guns. "In Arizona," says Voth, "someone buying three guns is like someone buying a sandwich."
By 2009 the Sinaloa drug cartel had made Phoenix its gun supermarket and recruited young Americans as its designated shoppers or straw purchasers. Voth and his agents began investigating a group of buyers, some not even old enough to buy beer, whose members were plunking down as much as $20,000 in cash to purchase up to 20 semiautomatics at a time, and then delivering the weapons to others.
The agents faced numerous obstacles in what they dubbed the Fast and Furious case. (They named it after the street-racing movie because the suspects drag raced cars together.) Their greatest difficulty by far, however, was convincing prosecutors that they had sufficient grounds to seize guns and arrest straw purchasers. By June 2010 the agents had sent the U.S. Attorney's office a list of 31 suspects they wanted to arrest, with 46 pages outlining their illegal acts. But for the next seven months prosecutors did not indict a single suspect.
On Dec. 14, 2010, a tragic event rewrote the narrative of the investigation. In a remote stretch of Peck Canyon, Ariz., Mexican bandits attacked an elite U.S. Border Patrol unit and killed an agent named Brian Terry. The attackers fled, leaving behind two semiautomatic rifles. A trace of the guns' serial numbers revealed that the weapons had been purchased 11 months earlier at a Phoenix-area gun store by a Fast and Furious suspect.
Ten weeks later, an ATF agent named John Dodson, whom Voth had supervised, made startling allegations on the CBS Evening News. He charged that his supervisors had intentionally allowed American firearms to be trafficked—a tactic known as "walking guns"—to Mexican drug cartels. Dodson claimed that supervisors repeatedly ordered him not to seize weapons because they wanted to track the guns into the hands of criminal ringleaders. The program showed internal e-mails from Voth, which purportedly revealed agents locked in a dispute over the deadly strategy. The guns permitted to flow to criminals, the program charged, played a role in Terry's death.
After the CBS broadcast, Fast and Furious erupted as a major scandal for the Obama administration. The story has become a fixture on Fox News and the subject of numerous reports in media outlets from CNN to the New York Times. The furor has prompted repeated congressional hearings—with U.S. Attorney General Eric Holder testifying multiple times—dueling reports from congressional committees, and an ongoing investigation by the Justice Department's inspector general. It has led to the resignations of the acting ATF chief, the U.S. Attorney in Arizona, and his chief criminal prosecutor.
Conservatives have pummeled the Obama administration, and especially Holder, for more than a year. "Who authorized this program that was so felony stupid that it got people killed?" Rep. Darrell Issa (R-Calif.), chairman of the House Committee on Oversight and Government Reform, demanded to know in a hearing in June 2011. He has charged the Justice Department, which oversees the ATF, with having "blood on their hands." Issa and more than 100 other Republican members of Congress have demanded Holder's resignation.
The conflict has escalated dramatically in the past ten days. On June 20, in a day of political brinkmanship, Issa's committee voted along party lines, 23 to 17, to hold Holder in contempt of Congress for allegedly failing to turn over certain subpoenaed documents, which the Justice Department contended could not be released because they related to ongoing criminal investigations. The vote came hours after President Obama asserted executive privilege to block the release of the documents. Holder now faces a vote by the full House of Representatives this week on the contempt motion (though negotiations over the documents continue). Assuming a vote occurs, it will be the first against an attorney general in U.S. history.
As political pressure has mounted, ATF and Justice Department officials have reversed themselves. After initially supporting Group VII agents and denying the allegations, they have since agreed that the ATF purposefully chose not to interdict guns it lawfully could have seized. Holder testified in December that "the use of this misguided tactic is inexcusable, and it must never happen again."
There's the rub. Quite simply, there's a fundamental misconception at the heart of the Fast and Furious scandal. Nobody disputes that suspected straw purchasers under surveillance by the ATF repeatedly bought guns that eventually fell into criminal hands. Issa and others charge that the ATF intentionally allowed guns to walk as an operational tactic. But five law-enforcement agents directly involved in Fast and Furious tell Fortune that the ATF had no such tactic. They insist they never purposefully allowed guns to be illegally trafficked. Just the opposite: They say they seized weapons whenever they could but were hamstrung by prosecutors and weak laws, which stymied them at every turn.
Indeed, a six-month Fortune investigation reveals that the public case alleging that Voth and his colleagues walked guns is replete with distortions, errors, partial truths, and even some outright lies. Fortune reviewed more than 2,000 pages of confidential ATF documents and interviewed 39 people, including seven law-enforcement agents with direct knowledge of the case. Several, including Voth, are speaking out for the first time.
How Fast and Furious reached the headlines is a strange and unsettling saga, one that reveals a lot about politics and media today. It's a story that starts with a grudge, specifically Dodson's anger at Voth. After the terrible murder of agent Terry, Dodson made complaints that were then amplified, first by right-wing bloggers, then by CBS. Rep. Issa and other politicians then seized those elements to score points against the Obama administration, which, for its part, has capitulated in an apparent effort to avoid a rhetorical battle over gun control in the run-up to the presidential election. (A Justice Department spokesperson denies this and asserts that the department is not drawing conclusions until the inspector general's report is submitted.) "Republican senators are whipping up the country into a psychotic frenzy with these reports that are patently false," says Linda Wallace, a special agent with the Internal Revenue Service's criminal investigation unit who was assigned to the Fast and Furious team (and recently retired from the IRS). A self-described gun-rights supporter, Wallace has not been criticized by Issa's committee.
The ATF's accusers seem untroubled by evidence that the policy they have pilloried didn't actually exist. "It gets back to something basic for me," says Sen. Charles Grassley (R-Iowa). "Terry was murdered, and guns from this operation were found at his murder site." A spokesman for Issa denies that politics has played a role in the congressman's actions and says "multiple individuals across the Justice Department's component agencies share responsibility for the failure that occurred in Operation Fast and Furious." Issa's spokesman asserts that even if ATF agents followed prosecutors' directives, "the practice is nonetheless gun walking." Attorneys for Dodson declined to comment on the record.
For its part, the ATF would not answer specific questions, citing ongoing investigations. But a spokesperson for the agency provided a written statement noting that the "ATF did not exercise proper oversight, planning or judgment in executing this case. We at ATF have accepted responsibility and have taken appropriate and decisive action to insure that these errors in oversight and judgment never occur again." The statement asserted that the "ATF has clarified its firearms transfer policy to focus on interdiction or early intervention to prevent the criminal acquisition, trafficking and misuse of firearms," and it cited changes in coordination and oversight at the ATF. Irony abounds when it comes to the Fast and Furious scandal. But the ultimate irony is this: Republicans who support the National Rifle Association and its attempts to weaken gun laws are lambasting ATF agents for not seizing enough weapons—ones that, in this case, prosecutors deemed to be legal.