[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
BUREAU OF ALCOHOL, TOBACCO, FIREARMS AND EXPLOSIVES' USE OF STOREFRONT
OPERATIONS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON CRIME, TERRORISM,
HOMELAND SECURITY, AND INVESTIGATIONS
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
FEBRUARY 27, 2014
__________
Serial No. 113-68
__________
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://judiciary.house.gov
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COMMITTEE ON THE JUDICIARY
BOB GOODLATTE, Virginia, Chairman
F. JAMES SENSENBRENNER, Jr., JOHN CONYERS, Jr., Michigan
Wisconsin JERROLD NADLER, New York
HOWARD COBLE, North Carolina ROBERT C. ``BOBBY'' SCOTT,
LAMAR SMITH, Texas Virginia
STEVE CHABOT, Ohio ZOE LOFGREN, California
SPENCER BACHUS, Alabama SHEILA JACKSON LEE, Texas
DARRELL E. ISSA, California STEVE COHEN, Tennessee
J. RANDY FORBES, Virginia HENRY C. ``HANK'' JOHNSON, Jr.,
STEVE KING, Iowa Georgia
TRENT FRANKS, Arizona PEDRO R. PIERLUISI, Puerto Rico
LOUIE GOHMERT, Texas JUDY CHU, California
JIM JORDAN, Ohio TED DEUTCH, Florida
TED POE, Texas LUIS V. GUTIERREZ, Illinois
JASON CHAFFETZ, Utah KAREN BASS, California
TOM MARINO, Pennsylvania CEDRIC RICHMOND, Louisiana
TREY GOWDY, South Carolina SUZAN DelBENE, Washington
RAUL LABRADOR, Idaho JOE GARCIA, Florida
BLAKE FARENTHOLD, Texas HAKEEM JEFFRIES, New York
GEORGE HOLDING, North Carolina DAVID N. CICILLINE, Rhode Island
DOUG COLLINS, Georgia
RON DeSANTIS, Florida
JASON T. SMITH, Missouri
[Vacant]
Shelley Husband, Chief of Staff & General Counsel
Perry Apelbaum, Minority Staff Director & Chief Counsel
------
Subcommittee on Crime, Terrorism, Homeland Security, and Investigations
F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
LOUIE GOHMERT, Texas, Vice-Chairman
HOWARD COBLE, North Carolina ROBERT C. ``BOBBY'' SCOTT,
SPENCER BACHUS, Alabama Virginia
J. RANDY FORBES, Virginia PEDRO R. PIERLUISI, Puerto Rico
TRENT FRANKS, Arizona JUDY CHU, California
JASON CHAFFETZ, Utah LUIS V. GUTIERREZ, Illinois
TREY GOWDY, South Carolina KAREN BASS, California
RAUL LABRADOR, Idaho CEDRIC RICHMOND, Louisiana
Caroline Lynch, Chief Counsel
C O N T E N T S
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FEBRUARY 27, 2014
Page
OPENING STATEMENTS
The Honorable F. James Sensenbrenner, Jr., a Representative in
Congress from the State of Wisconsin, and Chairman,
Subcommittee on Crime, Terrorism, Homeland Security, and
Investigations................................................. 1
The Honorable Robert C. ``Bobby'' Scott, a Representative in
Congress from the State of Virginia, and Ranking Member,
Subcommittee on Crime, Terrorism, Homeland Security, and
Investigations................................................. 3
The Honorable Bob Goodlatte, a Representative in Congress from
the State of Virginia, and Chairman, Committee on the Judiciary 4
WITNESS
Thomas E. Brandon, Deputy Director, Bureau of Alcohol, Tobacco,
Firearms, and Explosives
Oral Testimony................................................. 7
Prepared Statement............................................. 9
APPENDIX
Material Submitted for the Hearing Record
Response to Questions for the Record from the Bureau of Alcohol,
Tobacco, Firearms, and Explosives.............................. 24
BUREAU OF ALCOHOL, TOBACCO, FIREARMS AND EXPLOSIVES' USE OF STOREFRONT
OPERATIONS
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THURSDAY, FEBRUARY 27, 2014
House of Representatives
Subcommittee on Crime, Terrorism,
Homeland Security, and Investigations
Committee on the Judiciary
Washington, DC.
The Subcommittee met, pursuant to call, at 10 a.m., in room
2141, Rayburn Office Building, the Honorable F. James
Sensenbrenner, Jr. (Chairman of the Subcommittee) presiding.
Present: Representatives Sensenbrenner, Goodlatte, Coble,
Gowdy, Conyers, Scott, and Chu.
Staff present: (Majority) Allison Halataei, Parliamentarian
& General Counsel; Jason Cervenak, Counsel; Alicia Church,
Clerk; (Minority) Joe Graupensperger, Counsel.
Mr. Sensenbrenner. The Subcommittee on Crime, Terrorism,
Homeland Security, and Investigations will come to order.
Without objection, the Chair is authorized to declare
recesses of the Subcommittee at any time.
I will recognize myself for 5 minutes for an opening
statement.
I want to welcome everyone to today's hearing on ``The
Bureau of Alcohol, Tobacco, Firearms and Explosives' Use of
Storefront Operations.''
A little over a year ago, The Milwaukee Journal Sentinel
published a very disturbing article concerning an undercover
storefront operation run by the BATF&E in Milwaukee. To say
that the operation was extremely flawed would be a vast
understatement. It certainly was the Keystone Cops in
operation. The operation was an abysmal failure that put on the
street a stolen fully automatic M-4 rifle as well as other
stolen firearms and numerous other failures.
The operation began in Milwaukee in early 2012, more than 3
months after Todd Jones took over as Acting Director of ATF and
more than a year after the failed Operation Fast and Furious
was exposed. The operation began when ATF agents opened
``Fearless Distributing'' in a rented property in the Riverwest
neighborhood of Milwaukee. Soon thereafter, they hired a brain-
damaged individual with an IQ of 54 to promote the business by
distributing fliers. They also pressured this individual to
facilitate gun and drug buys for the operation.
The agents proceeded to conduct various gun and drug buys
through the storefront. The agents paid quite a premium for the
firearms. In one case, a defendant purchased a rifle for $700
from Gander Mountain and turned around and sold it to the ATF
agents a few hours later for $2,000. One has to wonder if this
firearm would have even been out on the street if it were not
for the enticing deals being offered by ATF.
From there, the operation went from bad to worse. ATF
agents allowed an armed felon to leave the store. The operation
was burglarized, losing more than $35,000 in merchandise. ATF
damaged a rented building and refused to fix it or compensate
the landlord. They left behind law enforcement-sensitive
documents that included the names, vehicles and phone numbers
of undercover agents. They had their government-owned guns,
including a machine gun, stolen from an agent's vehicle. The
automatic rifle has never been recovered.
ATF would like to point out in their testimony that this
operation and others like it led to a number of arrests and
convictions. I think it is important to take a look at these
arrests and conviction numbers. In the botched Milwaukee
operation, an analysis by the Milwaukee Journal Sentinel found
that of the 34 cases charged in state and Federal court in
Milwaukee, 16 of the defendants--nearly half--ended up with no
incarceration. Eight cases were dismissed because the agents
arrested the wrong people or the prosecutor could not go to
trial because the lead ATF agent could not be called to
testify. The other eight defendants received probation or
stayed or deferred sentences.
The Journal Sentinel also found that of the 26 cases that
resulted in conviction, the median sentence was about 2 years
behind bars. Very few of the cases involved individuals with
violent criminal records. Most had drug or nonviolent offenses
such as burglary. In fact, one of the prosecutors in the case
admitted that the flawed operation was not ``the best use of
resources.'' He even indicated that it failed to catch the
violent offender it was designed to take off the street.
Even more disturbing are the recent revelations that these
same tactics were used in various cities across the country. In
Albuquerque, agents gave a brain-damaged drug addict with
little knowledge of weapons a ``tutorial'' on machine guns,
hoping that he could find them one. And in Portland, Oregon,
ATF agents paid $150 to a mentally disabled individual to get a
large tattoo of a squid on his neck smoking pot to promote
their phony storefront operation. This does not appear to be
one operation gone bad but a systemic problem plaguing the ATF.
After Operation Fast and Furious, we were told numerous
times that changes were coming to the ATF under the new
leadership. I certainly hope this operation and others like it
are not indicative of those changes, because they are not
changes for the better at all. I intend to continue to
vigorously oversee ATF until I am confident that the public
knows the whole truth and that the agency's mismanagement has
been corrected.
I welcome our witness today and look forward to hearing his
testimony.
And now I recognize the gentleman from Virginia, Mr. Scott,
for his opening statement.
Mr. Scott. Thank you, Mr. Chairman. I appreciate you
calling the hearing today.
Today the Subcommittee will examine one of our most
important but often neglected Federal law enforcement agencies,
the ATF. The ATF has a multifaceted mission, and today we are
here to hear testimony about the past use of storefront
operations as a tactic to pursue that mission.
Press accounts, I.G. reports and inquiries by this
Committee have revealed missteps and poor judgment with several
of the storefront operations in recent years in places such as
Milwaukee, Wisconsin; Portland, Oregon; Pensacola, Florida;
Albuquerque, New Mexico; and Wichita, Kansas. Undercover
operations of these storefronts involve incidents that were
both embarrassing and at times dangerous to public safety, such
as placing one operation in close proximity to a school.
Of course, undercover operations by their very nature
involve a precarious and unique type of engagement with
criminals in order to discover their crimes and uncover various
levels of their organizations. However, such operations which
often engage the general public and may impact the rights of
citizens generally can be subject to excesses and abuse.
Therefore, it is critical that we examine the policies and
procedures governing such operations and that we question those
managing the investigations.
Management situation at the ATF has been uncertain during
much of the period in which these operations were conducted. In
2005, Congress transferred the law enforcement functions of the
ATF, which had since its inception been part of the Department
of Treasury, to the Department of Justice and required the
appointment of a director to be subject to Senate confirmation.
Between 2006 and July of last year, the ATF had five acting
directors. During that time, the Senate was unable to confirm
the nominees of both President Bush and President Obama, at
least partly due to opposition from those who would like to
weaken the agency generally from regulating the firearms
industry.
While Todd Jones had been serving as acting director since
2011, he was formally nominated in January last year for the
permanent position and confirmed in July. It appears that
Director Jones has begun the type of leadership and stability
at the ATF which has been sorely lacking. Early in his tenure
as Acting Director he recognized the serious management and
policy issues confronting the ATF. He took action to replace
two-thirds of the top supervisors in Washington and began to
implement the Monitored Case Program, which had been initiated
just prior to his arrival at the agency.
Under his leadership, oversight and approval of the
undercover operations has become much more rigorous. And while
we have to wait until after this hearing and the pending
examination by the Department of Justice I.G. before we arrive
at a comprehensive set of conclusions about these issues, I
want to emphasize that we still need an effective and
accountable ATF.
Furthermore, I believe it is long overdue for this
Committee to consider legislation to strengthen our firearms
laws, although I recognize there will be a difference of
opinion on what approach to take. However, I hope that we will
all agree that we need to work together to support and
reinforce this agency so that it can enforce whatever our
firearm laws may be, as well as implement its other missions as
effectively as possible.
Thank you, Mr. Chairman. I yield back.
Mr. Sensenbrenner. I thank the gentleman from Virginia.
I now recognize the other gentleman from Virginia, the
Chair of the full Committee, Mr. Goodlatte, for an opening
statement.
Mr. Goodlatte. Thank you.
I want to thank Chairman Sensenbrenner for holding today's
hearing on the ``Bureau of Alcohol, Tobacco, Firearms, and
Explosives' Use of Storefront Operations.''
Last year, after a series of articles published in the
Milwaukee Journal Sentinel outlining the problems associated
with ATF's failed storefront operation in Milwaukee known as
Fearless Distributers, I along with Chairmen Issa and
Sensenbrenner and Senator Grassley drafted a letter to the ATF
Director, Todd Jones. In that letter, we asked the Director to
reveal the details of the flawed operation. In response to that
inquiry, ATF officials provided a briefing to congressional
staff and Members on April 15, 2013. Additionally, the
Department of Justice provided a written response on April
30th, 2013.
In the response from the Department of Justice, they
acknowledge that Director Jones is ultimately responsible for
all ATF Operations, yet claim he was not aware of this
operation, which began 4 months after he assumed his duties at
ATF, until January of 2013, a full year after it began.
Throughout the duration of Operation Fearless, Director Jones
had opportunities to be made aware of the systemic problems
afflicting the operation in Milwaukee. We have heard Chairman
Sensenbrenner outline the numerous issues with Operation
Fearless, so there is no need to recount them here.
What I would like to find out is at what point does the ATF
believe the Director should become aware of such a flawed
operation? One would think that the theft of three ATF
firearms, including a fully automatic rifle, would trigger a
reaction from the Director. But even if that somehow failed to
get his attention, the burglary of an undercover storefront
where nearly $40,000 in merchandise was stolen would surely
rise to the level of the Director's office.
Well, one would think so, but according to the response
from the Department of Justice, Director Jones was not made
aware of the serious questions about the manner in which
Operation Fearless was conducted until he was informed that a
reporter for the Milwaukee Journal Sentinel had inquired about
the operation. I believe this calls into question either the
information that Director Jones' subordinates are giving him or
the level of involvement to which Director Jones is willing to
engage. I do not expect Director Jones to be involved in the
minute details of every operation being run by the ATF.
However, when issues such as these arise, I expect swift and
immediate action to take place.
Perhaps equally as disturbing as the lack of executive
oversight of this flawed operation is the lack of candor that
ATF exhibited when briefing Congress on Operation Fearless last
April. The information ATF conveyed regarding Operation
Fearless left the impression that the problems were an isolated
incident.
However, according to another Milwaukee Journal Sentinel
article in December of 2013, the problems facing the storefront
operation in Milwaukee were not isolated. In fact, at around
the same time Operation Fearless was being conducted, there
were five other flawed storefront operations taking place in
Portland, Oregon; Wichita, Kansas; Pensacola, Florida; Atlanta,
Georgia; and Albuquerque, New Mexico. In an almost identical
fashion, each of these operations suffered from a lack of
supervision and control.
Just last week, the Department of Justice's Inspector
General announced that it will initiate an investigation that
will examine the systemic deficiencies of these storefront
operations.
Like many, I question whether these operations attracted
more crime than they prevented. I look forward to hearing from
today's witness and I am committed to getting to the bottom of
these serious problems and ensuring that they do not happen
again.
Thank you, Mr. Chairman.
Mr. Sensenbrenner. I thank the Chairman of the full
Committee for his statement.
Without objection, other Members' opening statements will
be made a part of the record.
And also without objection, the Chair will be authorized to
declare recesses during votes on the House floor.
Our one witness today is Thomas E. Brandon, who was
appointed Deputy Director of the Bureau of Alcohol, Tobacco,
Firearms, and Explosives in October 2011. He is responsible for
leading an agency of men and women charged with enforcing laws
and regulations relating to firearms, explosives, arson, and
alcohol and tobacco trafficking.
Prior to being appointed Deputy Director, Mr. Brandon
served as the Special Agent in Charge of the Phoenix Field
Division, directing operations for field operations of the ATF
in Arizona and New Mexico. He began his ATF career as a special
agent in Detroit. He served in many management positions,
including Special Agent in Charge and Assistant Special Agent
in Charge of the Detroit Field Division, Supervisory Special
Agent of the Detroit Arson and Explosives Enforcement Group,
Special Agent with the Office of Inspection in Washington,
Supervisory Special Agent of the Achilles Enforcement Group in
Los Angeles, and the Division Intelligence Officer with the
Phoenix, Arizona Field Division. Mr. Brandon also held the
position of Chief of the ATF's National Academy in Glynco,
Georgia.
Mr. Brandon proudly served in the United States Marine
Corps from 1978 to 1982. He earned his Bachelor of Science in
Business Administration from Oakland University in Rochester,
Michigan.
Mr. Brandon, before you begin to testify, I will swear you
in. Please rise, raise your right hand.
[Witness sworn.]
Mr. Sensenbrenner. Thank you, Mr. Brandon.
Mr. Scott. Mr. Chairman?
Mr. Sensenbrenner. Yes?
Mr. Scott. Can I ask Mr. Conyers be recognized for a
unanimous consent request?
Mr. Sensenbrenner. Certainly.
The gentleman from Michigan.
Mr. Conyers. Thank you very much. I just wanted to observe
that today, Mr. Chairman and Mr. Scott, we are conducting a
hearing about the instances of poor decisions, and I have
several observations about the situation and where we should go
from here.
But overall, we must keep in mind the important mission of
ATF to protect us from gun traffickers who fuel violence on our
streets every day.
The engagement of undercover agents with the public
sometimes creates situations that are physically dangerous or
are threatening to our civil liberties, and underground
operations therefore, of course, require strict guidelines and
careful oversight. But we have learned that the ATF's
storefront undercover operations did not have proper oversight
and were poorly managed.
The next point is that I am encouraged that the Director of
ATF, Todd Jones, implemented management and policy changes in
2011 soon after he was named acting director, and he has
continued to address management deficiencies since being
confirmed by the Senate last year.
Prior to that time, ATF endured a period of acting
directors when the Senate was unable to confirm a permanent
director. I am confident that ATF is addressing the
shortcomings which led to the problems with these operation
storefronts, and I look forward to hearing from ATF about the
changes being implemented.
And finally, if we are truly interested in reducing gun
violence, we must act now on legislation to strengthen our gun
laws. I am not happy that more than a year into this Congress,
this ATF oversight hearing is the only hearing even
tangentially related to gun violence held by this Committee and
this Congress, and during this time we have had tragic mass
shootings in Connecticut, down the street in the Navy Yard, and
every day in this country 32 people are murdered with a
firearm.
So while there is no single solution to gun violence, I
urge that we adopt legislation to strengthen our gun laws and
enact after careful consideration H.R. 452, the Gun Trafficking
Prevention Act.
So while we examine some of the storefront operations
today, I hope we remain focused on finding ways to protect the
public from the harms this agency was established to combat.
I thank you for your consideration, Mr. Chairman and Mr.
Scott. I yield back. Thank you.
Mr. Sensenbrenner. Just as a note, we did invite Director
Jones, and he decided to send Mr. Brandon instead.
Mr. Brandon, without objection, your full testimony will
appear in the Committee record. We would ask you to summarize
your testimony in 5 minutes. I think you know what the red,
yellow and green lights all mean, so please proceed.
TESTIMONY OF THOMAS E. BRANDON, DEPUTY DIRECTOR, BUREAU OF
ALCOHOL, TOBACCO, FIREARMS, AND EXPLOSIVES
Mr. Brandon. Thank you, Chairman Sensenbrenner, Chairman
Goodlatte, Ranking Member Scott, Members of the Subcommittee,
for allowing me to appear here today.
I am pleased to be here to discuss ATF's undercover
storefront operations, including our successes, the actions we
have taken to address identified issues, and to correct some
misunderstandings about these operations.
A storefront operation is an investigative technique in
which undercover officers operate a business designed to
identify and proactively address criminal activity. ATF's
storefront operations promote public safety as they target
firearms trafficking and illegal firearms possession in high-
crime areas identified by our fellow state and local law
enforcement partners and prosecutors.
Current ATF policy provides that storefront operations are
undertaken only in response to requests for the technique by
our local law enforcement partners. Storefront operation
proposals also require written concurrence from the
jurisdiction's chief law enforcement officer.
As a result of our storefront operations in Albuquerque,
Atlanta, Milwaukee, Pensacola, Portland and Wichita, there have
been nearly 300 defendants arrested, 259 convicted, and over
1,300 firearms recovered to date.
Like any long-term investigative operation, an undercover
storefront carries risks. A properly managed operation
minimizes those risks. ATF recognizes our responsibility to the
public to mitigate the risks with sound management and
professional execution.
I acknowledge, Mr. Chairman and Members of the
Subcommittee, that we could have improved our execution and
management of some activities in certain storefronts. We have
since implemented new policies and procedures to minimize the
risk of such deficiencies occurring in the future.
I want to assure you that public safety is of the utmost
importance to Director Jones, me, and our new executive
management team at ATF. We recognize that storefronts and other
undercover operations require stringent oversight in all facets
of planning and execution. Several policy and operational
changes have been put in place that create a tighter process
for the authorization, management, oversight and review of
undercover operations. We have also made improvements to the
Monitored Case Program designed to enhance coordination,
communication and analysis between field and headquarters
personnel. We have created an internal storefront manual
addressing operational security, location, investigative
support, status reviews, and closure of the storefront.
We have taken reports about our storefront operations very
seriously, particularly the allegation that we took advantage
of individuals of diminished mental capacity. While we can and
will improve our interactions with these individuals, let me
state emphatically that ATF targets criminal conduct and not
individuals.
Additionally, it has been suggested that ATF agents paid
higher than market prices for firearms during storefront
operations. The market price for a street gun can vary widely
depending on a variety of circumstances, including offender and
weapon characteristics and the nature of the interactions
between the agents and the suspects. Our primary concern is
protecting public safety, but we also recognize the importance
of utilizing resources and taxpayer dollars wisely. We must, on
occasion, pay above market prices for firearms in order to
reduce the risk that an individual we believe to pose a public
threat does not leave the storefront with the firearm.
Also, we conducted a review of the average prices paid for
all guns in ATF undercover operations over the last 6 years.
Our review indicated we paid less on average for firearms in
the above-referenced storefront operations than in all other
undercover operations over the same time period.
Mr. Chairman and Members of the Subcommittee, I want to
conclude by saying that ATF is proud to be at the front line
against violent crime. We are recognized across the country for
our expertise and take great pride in our successes that reduce
gun violence and remove violent offenders from the streets. I
am proud of the exceptional work done every day by ATF special
agents, investigators and support staff combatting violent
crime.
I am happy to be here today to answer your questions but
need to point out limitations on my ability to respond in
certain respects. As you know, the Office of the Inspector
General has announced that it is examining several specific
storefront operations, and ATF is cooperating with the OIG's
review.
We also are in the process of reviewing large numbers of
documents in connection with congressional requests.
I will answer your questions as well as I can based on my
knowledge of the matters discussed here today, but it is
important to note that our understanding could change as we
learn more from our ongoing document reviews and the OIG. Thank
you.
[The prepared statement of Mr. Brandon follows:]
__________
Mr. Sensenbrenner. Well, thank you very much, Mr. Brandon.
I guess your last statement disturbs me because the
Milwaukee operation has been out there for a while, and you
knew that somebody would be coming and testifying sooner or
later before this Subcommittee, and you are still doing a
document review.
Let me ask you first, when did you first know about
Operation Fearless?
Mr. Brandon. It was during the planning for taking the
operation down with the enforcement activity for the arrests. I
knew that there was a storefront in Milwaukee and that there
was a planned enforcement activity, and I believe that was
September or October of 2012.
Mr. Sensenbrenner. Was this before or after the articles
started appearing in the Milwaukee Journal Sentinel?
Mr. Brandon. That was before.
Mr. Sensenbrenner. Okay. When did the first article appear
in the Journal Sentinel? Does anybody know? Was it December?
Okay. I would like to know why I learned about this from my
hometown newspaper if the storefront was already being taken
down prior to the appearance of the first article. After all, I
am the Chairman of your oversight subcommittee, and it was not
in my home town but very close to it.
Mr. Brandon. Mr. Chairman, personally I want to apologize
to you for that. This whole process was new to me, dealing with
Capitol Hill, and with what I know now, I would have made sure
you were aware of it.
Mr. Sensenbrenner. Surely someone in the shop has been
dealing with Capitol Hill because I have been here for a while,
and again I do not like to hear about people tripping over
their shoelaces on the front page of the Sunday paper.
In December I like to watch Packer games without other
things on my mind.
Mr. Brandon. My family are big Packer fans. But again, to
answer your question, sir, you should not have heard about it
in the newspaper, period.
Mr. Sensenbrenner. Okay. When did you learn about the other
storefront operations?
Mr. Brandon. That would be through the newspaper article.
Mr. Sensenbrenner. Okay. When were you led to believe that
Milwaukee was not an isolated incident?
Mr. Brandon. That would be through the newspaper article.
Mr. Sensenbrenner. You are talking about the Journal
Sentinel articles?
Mr. Brandon. Yes.
Mr. Sensenbrenner. All of them?
Mr. Brandon. Yes.
Mr. Sensenbrenner. When did you become aware of the other
botched storefront operations, particularly those in Pensacola,
Portland, Wichita, and Albuquerque?
Mr. Brandon. Mr. Chairman, those five other storefront
operations all were initiated before the then acting director,
now director, came on board on August 31st. I do know that
there was one taken down in July of 2011 and another in October
of 2011 that culminated the enforcement activity of those. But
all of them were conducted actively prior to acting director,
now Director Jones' arrival to ATF.
Mr. Sensenbrenner. Okay. Well, somebody was acting director
at the time, and in Portland you opened a gun store across the
street from a middle school which ends up bringing criminals
and more guns right in the vicinity of a school. That is an
amazing lack of judgment, at least in my view. How did the
location of the Portland gun store end up being decided to be
right across the street from a school?
Mr. Brandon. From my briefing, they were looking for a
lease that would tie them to 1 year as opposed to two. But, Mr.
Chairman, I share your concerns, and that was a mistake, and it
should have never occurred across from a school. They changed
the hours when they learned of it and made it in the evening so
the children would not be at school. But bottom line, it should
not have happened. We have new reforms now in the storefront
manual. There is a rigorous review that will prevent that from
happening.
Mr. Sensenbrenner. Okay. The other thing that seems to be
somewhat common is that people of diminished mental capacity
seem to be recruited for one job or the other. We know of at
least two of them. Is that going to stop, or are we still going
to be hiring these folks and maybe giving them tattoos at
taxpayers' expense?
Mr. Brandon. Mr. Chairman, again, I share your concern very
personally and heartfelt about people with diminished mental
capacity. The ATF targets criminal conduct, not people with low
IQs. But in the case with the defendant that had the tattoo,
they came into the storefront wanting to get the tattoo. The
undercovers actually were trying to talk them out of it and
were saying, hey, let us hold off, let us check with our
business manager or something, because it is our logo. And then
they, in fact, came back into the storefront with the tattoo
artist and left and got them. So it was not something approved.
But also, ATF, the undercover agents, to enhance their
undercover capacity, gave them each $150. Again, that was not
great judgment. A Federal judge has ordered us to remove the
tattoo. We are happy to comply with that. The defendant has had
two sessions where he was supposed to go. He did not show up.
But we remain ready to comply with the judge's order.
Mr. Sensenbrenner. It shocks me that it has to become a
Federal case to get a tattoo removed.
The gentleman from Virginia, Mr. Scott.
Mr. Scott. Thank you, Mr. Chairman.
Mr. Brandon, you indicated that the present process for
setting up one of these storefront operations involves
concurrence with a request from the local law enforcement
agency?
Mr. Brandon. That is correct, sir.
Mr. Scott. What else is in the process? That can not be the
only thing.
Mr. Brandon. No. For any undercover operation for a
storefront, in this case, to go forward, it has to go before an
undercover review committee. That was my direction as far as it
now includes someone from the Department of Justice, an
attorney from the Criminal Division who is a voting member on
the undercover review committee. That puts us in line with FBI
and DEA on their policies. And then also the rigorous look at
compliance with our standard operation and procedures, the
storefront manual that I said that was published by Assistant
Director Ron Turk.
Mr. Scott. Do the people involved in it have any special
training, or do they just learn on the job?
Mr. Brandon. Well, that is another thing I directed, is
that before an undercover storefront operation can go, they
have to have training from the management team online down to
the case agents by people that have experience in this, and
also have proven successes in it.
Mr. Scott. Have you seen a difference in the storefront
operations, the sting operations now than in the past?
Mr. Brandon. Well, our activity has gone down. Right now we
have zero, but we have gone to controlled undercover
environments, and that is the whole purpose of the storefront.
It enhances the public safety, the undercover agents' safety,
and also is able to get good evidence on audio and video. We
keep refining and retooling to enhance getting violent
criminals off the street.
Mr. Scott. These incidents we have been reading about have
clearly been an embarrassment. Have you fixed it so we will not
have to read about these in the future?
Mr. Brandon. Yes. I mean, I would like to put some of them
in context, but absolutely. We are reforming under Director
Jones' leadership, and the oversight from headquarters has been
significantly enhanced.
Mr. Scott. Now, are there any problems with enforcing--do
we need to have any legislation to help you enforce your gun
laws, like background loopholes, including the gun show?
Mr. Brandon. Sir, we enforce the laws that you give us, and
we will continue to do so.
Mr. Scott. How does the gun show loophole and other
loopholes in the background check hurt your ability to keep
guns out of the hands of people who should not have them?
Mr. Brandon. Well, in general, the purpose of a storefront
operation is to absorb the black market supply of guns on the
street. It is never to go after people and firearms in legal
commerce.
Mr. Scott. What kind of statutes are available to help in
preventing gun trafficking?
Mr. Brandon. Again, I think it is well known, but we use
the laws we enforce to address violent crime, and we will
continue to do so, and if you give us new laws, we will apply
them accordingly.
Mr. Scott. What about a straw purchase where someone buys a
firearm on behalf of someone else? Are the laws strong enough
in that area?
Mr. Brandon. Again, I just leave it up to us for enforcing
it. It has been well known that that is viewed as being a soft
penalty for those things. But again, we just investigate the
criminal activity.
Mr. Scott. What is the penalty now for someone who
purchases a firearm on behalf of someone else?
Mr. Brandon. I believe under the Gun Control Act it can go
up to 10 years, but under the sentencing guidelines it is
usually a very minor thing and it is usually a minimal
sentence.
Mr. Scott. One of the high-profile cases involving ATF was
the Boston Marathon bombing. A lot of agencies were involved.
Was there a problem in coordinating your efforts?
Mr. Brandon. No. In fact, I remember where I was in the
Detroit airport when I learned of that, and I immediately
contacted my counterpart, Sean Joyce, who is the deputy
director of the FBI, and I said, hey, this is clearly in my
view an act of terrorism, but any and all resources are
available to ATF to work collaboratively with the FBI. The FBI
drew on our resources, and we had a very good working
relationship to share our expertise with explosives and post-
blast incidents.
Mr. Scott. Thank you, Mr. Chairman.
Mr. Sensenbrenner. Thank you.
The gentleman from Virginia, Mr. Goodlatte.
Mr. Goodlatte. Thank you, Mr. Chairman.
Mr. Brandon, welcome. I also want to thank you for meeting
me in Front Royal, Virginia last year to visit your canine
training facility, which is an impressive operation, and you do
good work in making sure that law enforcement agencies around
the world have dogs capable of detecting explosives and
firearms and so on. So, thank you for that.
I do want to focus, however, on what happened in Milwaukee.
When this program began in January of 2012, Director Jones was
also serving as U.S. Attorney for Minnesota. In fact, he served
as both ATF Director and U.S. Attorney for much of 2012; is
that not correct?
Mr. Brandon. That would be correct.
Mr. Goodlatte. How many days per week was Director Jones in
the ATF office?
Mr. Brandon. He would arrive on Monday morning, flying in
from Minnesota, and then I believe fly out late Thursday
evening.
Mr. Goodlatte. And this was every week?
Mr. Brandon. Yes.
Mr. Goodlatte. What percentage of his time would you say
was dedicated to ATF business?
Mr. Brandon. Well, he was doing double duty. I mean, the
man was working I would say 18, 16, 17 hours a day. So he was
fully committed to being the director, acting director.
Mr. Goodlatte. Well, jobs like these and jobs of Members of
Congress are definitely double-duty jobs. I mean, all of us
work 80, 90 hours a week as well, for one job. So do you think
the director of the ATF should be a part-time position where
you are responsible for carrying out another, clearly full-time
operation as the U.S. Attorney for the entire state of
Minnesota?
Mr. Brandon. No. I think we were happy that he was
confirmed as our director.
Mr. Goodlatte. Given all of the controversy that was
surrounding the ATF at the time, do you not think the agency
needed a full-time director?
Mr. Brandon. Yes. It was needed, but he was fully engaged.
Mr. Goodlatte. Why did the ATF fail to disclose to Congress
the numerous other flawed storefront operations when they
provided briefings in April of last year?
Mr. Brandon. Mr. Chairman, I share your concern on that.
The assistant director, Michael Gleysteen of Office of
Professional Responsibility and Security Operations, the
briefing was just for Milwaukee and was delivered in that
context.
Mr. Goodlatte. We were given the impression as a part of
that briefing that Operation Fearless was an isolated incident.
Mr. Brandon. I am unaware of that impression, but I knew
that the goal was to deliver the information. In fact, that
investigation, when I learned of it, I brought Michael
Gleysteen into my office and talked to him and it was kind of a
culture change in ATF. I said, hey, get down to the bottom of
this, and he had a team there flying overnight, and it was a
programmatic review of how the investigation was conducted. I
know that his intention in delivering that briefing was solely
on Milwaukee.
Mr. Goodlatte. All right. Well, let us expand it beyond
Milwaukee, which is what this hearing is about today.
In your testimony, you claim that the ATF conducted 37
storefront operations between 2009 and 2013. We know of at
least six operations that had serious problems associated with
them. Right now, are you prepared to tell us that these were
the only six operations with serious problems?
Mr. Brandon. Mr. Chairman, I know the OIG is looking at
some of those storefronts. So with the information I have right
now, I would say that.
Mr. Goodlatte. Would you call a program where one in six
operations has significant problems a successful one?
Mr. Brandon. Well, I do. I mean, putting this into context,
there were deficiencies, like I said in my opening statement,
with some of these storefronts, but there have been many
successes. It still remains a viable investigative technique
when managed well.
Mr. Goodlatte. Right. That last part is key, though,
adequate supervision, right?
So right now you say you are down to zero. What are your
future plans going forward? Because it seems to me that the
technique, which is not a new one, has not been used
exclusively by ATF. I am familiar with other operations in
other places at other times used by law enforcement to deal
with fencing of stolen goods and other things that have
successfully led to a lot of good prosecutions. They are
difficult to maintain for a long period of time, and they do
require very significant supervision. What are the ATF's plans
moving forward?
Mr. Brandon. Mr. Goodlatte, again, I share your concerns.
Some of the reforms have been with the ATF's storefront manual.
What happened here is I know from being a career ATF agent over
25 years, you had earnest, hard-working undercover ATF agents
having successes in various states, and the policy was lacking
for this undercover activity. It is now in place. From my
observation of this, that is how----
Mr. Goodlatte. The policy is in place, but there are no
operations in place. What are your future plans?
Mr. Brandon. Well, we are receptive to the storefront
investigative technique. My observation is just because they
are so resource intensive, and then getting them all
prosecuted, the cases, there is an ebb and flow of activity
because the divisions are staffed to a certain level. Lately we
have been under-staffed in many divisions. So I could picture
it picking up as we bring on new people and get them properly
trained.
Mr. Goodlatte. Thank you, Mr. Chairman.
Mr. Sensenbrenner. The gentleman from Michigan, Mr.
Conyers, the Chairman Emeritus of the Committee.
Mr. Conyers. Thank you, Mr. Chairman.
Deputy Director Brandon, the vast majority of licensed gun
dealers seem to abide by the law, but a small percentage of
dealers violate the law and supply a disproportionate amount of
guns used in crime.
Now, is it not correct that the ATF is generally limited to
inspecting gun dealers to once per year?
Mr. Brandon. That would be correct, sir.
Mr. Conyers. And due to resource constraints, how
frequently are most dealers actually inspected?
Mr. Brandon. I recall I think it is once every 7 years.
Mr. Conyers. Well, that is, to me, a very important
consideration in this discussion this morning.
Is the ATF allowed to require gun dealers to physically
check their inventory against their records, which would, of
course, help deal with instances of missing guns and the
successful tracing of guns used in crime?
Mr. Brandon. Congressman, they are not required.
Mr. Conyers. Well, then the natural question that follows
is why not?
Mr. Brandon. We are prohibited from requiring that.
Mr. Conyers. Prohibited by whom?
Mr. Brandon. It is in the appropriations, I believe.
Mr. Conyers. Well, I think I am going to have to have staff
research this because I am not sure if that is correct or not.
Is that correct?
Okay. Staff assures me that that is a correct response.
If a gun dealer is found to have committed serious
violations and is in jeopardy of losing their Federal license,
is it not true that they may transfer their license to a store
employee or a family member so that the business may continue
operating without accountability for the violations?
Mr. Brandon. Congressman, that is handled on a case-by-case
basis, and I do know of licensees trying to do that.
Mr. Conyers. Well, I am hopeful that that will be looked
into carefully here on the Committee and by you and the
operation itself. I think that is an important consideration.
Thank you, Mr. Chairman. That ends my questioning of the
witness.
Mr. Sensenbrenner. Well, thank you very much.
The gentleman from North Carolina, Mr. Coble.
Mr. Coble. Thank you, Mr. Chairman.
Mr. Brandon, good to have you with us. Let me combine or
consolidate three or four questions into one, Mr. Brandon. How
many firearms have been stolen from ATF agents' vehicles over
the past, say, two or 3 years?
Mr. Brandon. I do not know the exact number, sir, but I
would be happy to take that back and get the answer for you.
Mr. Coble. That would be fine if you could do that. And
also, I would like to know how many were fully automatic. And
if any firearms stolen from ATF agents' vehicles particularly
fully automatic firearms, which individuals at headquarters
would be notified?
Mr. Brandon. I was notified of the incident in Milwaukee
when the rifle that belonged to a special response team member
who was also doing the undercover. That firearm was stored in
an SUV that was alarmed and locked, and also in a vault that is
bolted to the car, or to the SUV in this case. The people that
broke into the vehicle, it was in broad daylight, parked in an
area that had pedestrian traffic. But that would be the one
instance, to answer your question, sir, that I know of, of an
automatic firearm, in this case a three-round burst, that was
stolen.
Mr. Coble. And if you could get back to us about the total
number that was stolen, I would be appreciative to you for
that.
Mr. Brandon. Yes, sir.
Mr. Coble. I am told, and I do not recall who told me or
where I read it, but that one individual purchased a firearm
for a few hundred dollars at Gander Mountain and turned around
and sold it to the ATF for a couple of thousand dollars a few
short hours later. Are you familiar with this?
Mr. Brandon. Yes, sir.
Mr. Coble. Elaborate a little bit more, if you will.
Mr. Brandon. Sure. Again, that was a concern to me, and
also it is part of the reforms in the storefront manual. The
firearms were not being traced when they were purchased because
they were afraid to alert and compromise the undercover
location through the trace process. We have methods to be able
to trace it but not alert the firearms dealer so that we could
be aware if there is any type of trend that people are going
into a licensee, buying it, and turning around and bringing it
to us. But the reform is in the storefront manual to address
that.
Mr. Coble. I thank you, sir.
I yield back, Mr. Chairman.
Mr. Sensenbrenner. Thank you very much.
The gentleman from South Carolina, Mr. Gowdy.
Mr. Gowdy. Thank you, Mr. Chairman.
Special Agent Brandon, I was told this morning by my friend
of 20 years, Special Agent C.J. Hyman, that you are a good
person and a stand-up guy. So I am going to ask the same
questions that I was going to ask, but I will ask them in a
different tone of voice given C.J. Hyman vouching for you.
I want to start by asking you this. They had a very
successful storefront operation in Greenville, South Carolina,
led by Special Agent C.J. Hyman and a prosecutor by the name of
Lance Crick. Why not get those guys to come do training? It
should not be that tough to run a storefront operation the way
that Chairman Goodlatte and Chairman Sensenbrenner and Mr.
Scott and others would expect it to be run.
So when you have a group that has done it successfully, my
advice to you--you do not have to take it--get C.J. and Lance
to come to Glynco or wherever and train your folks on how to do
it the right way.
Mr. Brandon. Congressman, again, it is a pleasure meeting
you here. and C.J. spoke highly of you, and I think the world
of him.
But your point we already incorporate in the storefront
manual. That was an obvious thing of, hey, why do not we have a
mentoring process of people who have been successful where we
have done them all around the country and teach that. So now
that is part of our standard operation procedures. I agree
completely with you.
Mr. Gowdy. I am, by far, the worst lawyer on this panel,
but I do not think even I indicted someone who had the alibi of
being in prison at the time the crime was committed. If I did,
I do not recall doing that. How does that happen?
Mr. Brandon. I am unfamiliar with the example you are
stating.
Mr. Gowdy. There was a report that one of the folks
arrested or indicted was actually in prison at the time the
alleged crime was committed, which is a really good alibi.
Mr. Brandon. I have to agree with you.
Mr. Gowdy. Well, if you do not know, then it is not fair to
ask you about it.
Mr. Brandon. I do know about the things in Milwaukee where
there were four instances. Again, I was not pleased when I
heard this. It is addressed in the storefront manual, proper
identification. This goes back to that operation, not having an
outside cover team. That was a deficiency. It should have been,
because then you would follow the people away. I know the
experience of some of you as prosecutors, that you do it to
identify them without compromising the storefront.
So in complete candor, that is how I tracked it down, and
there were deficiencies. I will add, not that it minimizes
anything, the people were not jail, you know booked and jailed,
when they questioned them saying, hey, I am not that guy, they
were taken to the command post, and then when it was confirmed,
they were released and driven back to their homes. So I agree
with you, there is no justification for that.
Mr. Gowdy. Well, my colleagues have done such a good job of
asking you about the storefront operations, I want to switch
gears in the little bit of time we have left.
Mr. Conyers, the Ranking Member from Michigan, asked again
about additional gun legislation, and I had a group of moms
come and meet with me in Greenville last week, actually,
incredibly conscientious moms who wanted to meet with me about
closing whatever loopholes remain with respect to background
checks.
It just strikes me, as an old, washed-up prosecutor, that
before we talk about new weapons in your arsenal, it is fair to
ask how are we doing enforcing the ones that we already have.
You can not do it this morning, and you may not be able to do
it in a month, but at some point it would help me, and I
presume other Members of the Judiciary, to see a list of
referrals from local law enforcement.
924(e) is a perfect example. That is a mandatory minimum 15
years. I mean, even for a Department of Justice that does not
like mandatory minimums, that is a big hit.
So how many referrals from locals did we not accept? How
many did the AUSA decline prosecution on? We could do it with
924(e)s, we could do it with 924(c)s. I know lying and buying
cases do not carry a lot of bang for the buck, but let us fix
that part of it. If that is why we are not prosecuting lying
and buying cases or current background check failures, let us
fix that. Let us make it where it is more attractive to your
agents to investigate those cases, or more attractive to the
prosecutors to prosecute them.
But at some point it would be helpful to us to know whether
you are getting the referrals from local law enforcement and
not investigating or not adopting the case, or whether you are
and working them up and the prosecutors are declining to
prosecute it. That would be helpful to me. If we are going to
discuss new weapons, I would really like to know how we are
doing with the ones that we currently have.
And with that, give my best to the agents in Greenville.
Mr. Brandon. Congressman, I agree with you, and I will take
that back to the Department. I just want to add that in
Milwaukee, there were four 924(e) defendants in the Milwaukee
storefront. And as a career guy, those are great cases, great
targets.
Mr. Sensenbrenner. I thank the gentleman from South
Carolina.
There are a couple of loose ends that I would like to ask
you, Mr. Brandon, to provide the Subcommittee with some more
information. The information that I received indicate that
there are about 60,000 Federal firearms licensees, and ATF has
got about 500 inspectors. Now, if there is an inspection that
is taking place once every 7 years, that means that those 500
people do an average of 18 inspections a year. Certainly, we
want to make sure that the inspections are done in an adequate
and timely and frequent-enough manner.
So can you provide the information on how many active
inspectors there are, and can you also have some kind of a log
on how often or how much of their time the inspectors actually
do inspecting?
Mr. Brandon. Yes, Chairman, I will take those back to the
Department and get you the specific numbers. But again, to put
it in context, as far as inspections through the trace process,
we prioritize. If a number of crime guns are being traced to a
specific FFL, in the interest of public safety those will be
inspected more frequently.
Mr. Sensenbrenner. I understand that. But there seems to be
a disconnect on the numbers on that, and we are going to need
to have the numbers to make a determination on that.
The other point I would like to make is we are going to
have somebody from the ATF back, hopefully Mr. Jones or you or
both of you, after the Inspector General's report on storefront
operations, largely to see how many of the recommendations of
the Inspector General, whatever they may be, will end up being
adopted; and if not, why not; and if they are not being fully
implemented, why not. So be advised; we will see you again.
Mr. Brandon. It has been a pleasure, sir.
Mr. Sensenbrenner. Thank you very much.
And with that, without objection, the Subcommittee hearing
is adjourned.
[Whereupon, at 10:53 a.m., the Subcommittee was adjourned.]
A P P E N D I X
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Material Submitted for the Hearing Record