House Committee on Oversight and Government Reform (HOGR) Chairman and Utah Republican Rep. Jason Chafetz demanded answers from the Bureau of Alcohol and Tobacco (ATF) after the New York Times reported Thursday ATF informants are trafficking cigarettes and keeping the profits.
Chaffetz wrote to ATF Acting Director Thomas Brandon Wednesday, telling Brandon to provide him documents and a briefing upon learning ATF is allowing its informants to run an unauthorized, undercover cigarette trafficking ring, and place the proceeds in a “management account” to fund future investigative operations. The ring sparked an ongoing federal racketeering lawsuit in 2013, in which tobacco farmers claimed the informants swindled them out of $24 million.
But the DOJ, according to the New York Times, is trying to keep the court proceedings quiet. The reported tobacco ring raises concerns that ATF didn’t fix gaps in informant oversight that the DOJ Inspector General (IG) identified in a 2009 report. The IG calls the use of financial proceeds from one undercover operation to continue that operation, “churning.”
“The OIG’s report made recommendations to strengthen oversight over income-generating operations, while detailing additional examples of the ATF’s shortcomings in requiring documentation for churning operations,” Chaffetz wrote.
“The OIG recommended increased guidance and monitoring for churning operations, improved tracking of tobacco used in diversion investigations, and strengthening confidentiality protections for informants and undercover agents. The New York Times story raises questions whether the ATF heeded the OIG’s four-year-old recommendations.”
The IG began investigating the ring after the New York Times confronted the DOJ about the operation in summer 2016.
The IG has pointed to gaps in informant oversight within DOJ before. The Drug Enforcement Administration (DEA) failed to vet its confidential sources, then tried to hide its lack of vetting. (RELATED: DEA Tried Hiding That Confidential Sources Aren’t Vetted)
ATF has a troubled history with undercover operations. Its botched Fast and Furious gun-walking operation, in which the agency allowed illegal gun sales in an attempt to track Mexican drug cartels, became a blight on President Barack Obama’s presidency. (RELATED: Obama Releases Fast And Furious Records)
Chaffetz gave Brandon until March 10 to deliver a slew of records related to the ATF informants’ management accounts, any investigation into the tobacco ring and the identities of the informants involved.