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ATF: Lost Guns, Cigarettes, and Credibility

We learn ATF employed the same crime-facilitating strategy behind Fast and Furious with illegal smokes.

by
Shoshana Bryen

Bio

October 2, 2013 - 3:00 pm
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The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) had a great idea: facilitate the sale of weapons to gun runners near the Mexican border, then follow the guns to the higher echelon of criminals in Mexico. American and Mexican authorities would arrest the kingpins. Foolproof?

No. Project Gunrunner began in 2005 as an effort to use electronic tracking to trace guns sold illegally in Mexico and the Caribbean. It led to Fast and Furious (2009-11), Wide Receiver (2006-2007), the Hernandez case (2007), and the Medrano case (2008). In these latter operations, rather than create an intelligence trail with the eTrace software, the U.S. simply let straw buyers purchase guns to transport to Mexico. Mexican authorities were not notified. In the case of Fast and Furious, the ATF attaché at the U.S. Embassy in Mexico City was not notified.

The ATF Phoenix office facilitated the movement of more than 2,500 weapons, and promptly lost track of them. Some 195 Fast and Furious guns have been recovered from crime scenes in Mexico. Nearly 270 have been recovered at crime scenes in the U.S., including the two recovered at the scene of the murder of U.S. Customs and border agent Brian Terry. The 2011 death of Immigration and Customs Enforcement agent Jaime Zapata may have been the result of these guns as well.

It wasn’t a great idea. Now, we know the ATF has applied the same “strategy” to illegal cigarettes.

The ATF made profits of $162 million from stings — but they lost an estimated 420 million cigarettes worth more than $15 million between 2006 and 2011. Through a system of “churning operations,” ATF used profits from one sting to finance the next set of operations. ATF used informants to handle the cigarettes (one informant received a staggering $4.9 million in “expenses”). The operations were done without proper approval according to the Justice Department’s internal watchdog arm. The informants were paid without receipts. With so much money unaccounted for, is it possible that some ATF agents were also paid without proper approval and receipts?

Illicit cigarette sales cost states billions in tax revenue. New York State adds $4.35 to each pack and New York City another $1.50, so 21 million packs — 2.1 million cartons — represents tremendous money.

But lost tax revenue is only part of the story; terrorist financing is another.

According to Police Chief Magazine, terrorist groups including Hamas, Hezbollah, the PKK, and the IRA have made millions by selling cigarettes and sending the money to the Middle East (or to Ireland). In 2004, Mohammed Hammoud was convicted of funneling $7.9 million to Hezbollah and sentenced to 155 years in prison, one of several cases that year involving money laundered to Hamas, Hezbollah, and al-Qaeda. Despite these available historical examples, in 2006 ATF decided to facilitate illegal sales.

In 2008, Republican members of the House Homeland Security Committee published a report detailing the relationships between terror groups and traffickers. A pack of cigarettes that retailed for $8 at the time in high-tax states such as New York and New Jersey would cost only $4 in Virginia or North Carolina. The profit from a standard stolen truckload of 1,500 cartons would be worth approximately $60,000. An anti-tobacco group estimated that five percent of all cigarette sales in North America were illegal.

That ATF might have been one of the profiteers was not present in the report.

In 2009, U.S. Customs conducted the largest cigarette bust in its history — 200 million stolen cigarettes worth more than $20 million. How many of those came from ATF? There’s no way to know. More than twice that many were “lost” by the agency. 

Comments are closed.

Top Rated Comments   
"The ATF Phoenix office facilitated the movement of more than 2,500 weapons, and promptly lost track of them. "

That is not correct. They did not "lose track" of them. They never made any attempt to track them. There was never any mechanism in place that would have tracked them.

That's a big difference, the difference between mere incompetence (losing track) and evil intent.
1 year ago
1 year ago Link To Comment
So ATF lost the Tobacco and Firearms. Maybe because they were drinking all the Alcohol?
1 year ago
1 year ago Link To Comment
All Comments   (15)
All Comments   (15)
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This black market in cigarettes has been created by the anti smoking Nazis, who have raised tobacco taxes to excessive levels, levels so high that a black market has become profitable. You cant raise taxes on anything too high without adverse consequences. We have now reached that level in many states with excessively high tobacco taxes.
1 year ago
1 year ago Link To Comment
ATF has always been a bit of a cowboy operation. Nothing they do/ screw up is much of a surprise, but if they've reached the point they're making a profit, it's time to make some changes.
1 year ago
1 year ago Link To Comment
These are the signs of a government that has grown so large that it out grew itself. We keep hearing of things that get to big to fail, well our government has got so big it cannot succeed.
1 year ago
1 year ago Link To Comment
Ugh. Get off the cigarette issue, already. Our tax dollars at work ... or down the drain.

[edited to change "cigarettes" to "cigarette issue"]
1 year ago
1 year ago Link To Comment
another government failred program brought to you by those that want to run health care and control your medical records
1 year ago
1 year ago Link To Comment
"The ATF Phoenix office facilitated the movement of more than 2,500 weapons, and promptly lost track of them. "

That is not correct. They did not "lose track" of them. They never made any attempt to track them. There was never any mechanism in place that would have tracked them.

That's a big difference, the difference between mere incompetence (losing track) and evil intent.
1 year ago
1 year ago Link To Comment
"With so much money unaccounted for, is it possible that some ATF agents were also paid without proper approval and receipts?"

You'd have to be BATFit crazy to not suspect so.
1 year ago
1 year ago Link To Comment
So, just how big is a load of 420 million stickies?
420 million cigs @ 20 cigs/pack --> 21 million cartons
21 million ctn @ 50 ctn/case --> 420,000 cs
420,000 cs @ 1000 cs/40' container --> 420 containers
typical freight train is ~100 cars; if double stacked... they've lost two full length freight trains of smokes. Unbelievable.
1 year ago
1 year ago Link To Comment
whoops! Failed on that Fermi problem.... Missed a step:

So, just how big is a load of 420 million stickies?
420 million cigs @ 200 cigs/carton --> 2.1 million ctn
2.1 million ctn @ 50 ctn/case --> 42,000 cs
42,000 cs @ 1000 cs/40' container --> 42 containers
typical freight train is ~100 cars; if double stacked, 21 units
they've lost 1/4 full length freight trains of smokes.
Still quite a haul. roughly 33 semi-loads.
1 year ago
1 year ago Link To Comment
So ATF lost the Tobacco and Firearms. Maybe because they were drinking all the Alcohol?
1 year ago
1 year ago Link To Comment
I am still furious about Fast & Furious. Twenty Five Hundred separate violations of the Arms Export Control Act each one of which is punishable by up to 20 years imprisonment of fine up to $1,000.000.

It is possible that ATF got an exemption. If a US law enforcement agency wants to involve itself in the sale of weapons purchased from US gun dealers for export purposes–sales that may be part of an legitimate enforcement or military operation–that agency must apply to the State Department for an exemption from the licensing requirements normally imposed on the commercial sale and export of such weapons. High-level signatures are required from the Departments of State, Defense, Justice, and Treasury.

So either somebody deserves to go to jail for a very long time or there is a piece of paper somewhere with some very interesting signatures on it.
1 year ago
1 year ago Link To Comment
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