Congressional Inquiries Turn To Houston Over Gun Trafficking Investigation

By Robert Arnold - Investigative Reporter

HOUSTON - For weeks, congressional leaders have grilled officials with the Bureau of Alcohol, Tobacco, Firearms and Explosives about an operation in Arizona called "Fast and Furious." Now, some of those pointed questions are focusing on a gun trafficking investigation conducted by the ATF's Houston office.

According to testimony before the House Oversight and Government Reform Committee, agents involved in Fast and Furious allowed Mexican drug cartel recruits to buy guns in the United States with the hopes of following the buyers and weapons back to key cartel and smuggling operations. The operation, called "reckless" by some congressional leaders, was aimed at curbing guns bought in the U.S. from reaching the hands of cartel members in Mexico.

"It got people killed," said U.S. Rep. Darrell Issa, a Republican congressman from California and chairman of the House's Oversight Committee who has been critical of the ATF's operation.

A congressional report showed hundreds of the guns slipped through the cracks during the investigation. A joint staff report prepared for the House Oversight Committee and Senate Committee on the Judiciary claimed some of the Fast and Furious guns wound up in Mexico, some guns were found at crime scenes in the United States and hundreds more are missing.

The report read that Fast and Furious ended when guns that were part of the operation were found at the murder of border patrol agent Brian Terry.

Now, congressional leaders want to know if similar problems happened in Houston during an investigation done under the auspices of an ATF initiative called "Gunrunner." The operation targeted "straw buyers" in border states recruited to legally purchase handguns and high-powered rifles only to hand the weapons over to members of the drug cartels.

"The ATF agents encouraged them to go through with the sales," said Houston attorney Dick DeGuerin, who represents Carter's Country, the largest independent gun retailer in our region.

DeGuerin said starting in 2006, Houston ATF agents asked Carter's Country for help by alerting agents when a suspicious gun buyer tried to purchase multiple weapons. DeGuerin referred to this effort as a "stall and call."

"Stall the purchaser, call the ATF, let an ATF agent come out and watch the sale so they could follow it," DeGuerin said.

"Did the ATF always show up?" asked Local 2 Investigator Robert Arnold.

"No, they didn't," DeGuerin said.

DeGuerin claimed there were at least six instances when agents did not show up when store employees alerted the ATF to a suspicious gun buyer. Yet, DeGuerin said the ATF still told employees to let the sales go through.

"So they went through with the sale, reported it and who knows what happened," said DeGuerin.

Officials with the ATF's Houston Office declined Local 2's request for an on-camera interview. However, during a face-to-face meeting with Arnold, an ATF spokesperson denied agreeing to such an arrangement, citing a lack of manpower to respond to every call about a suspicious gun buyer.

An ATF spokesperson also told Local 2 the Bureau has always asked for the cooperation of firearms dealers.

"They're one of our best sources of information on suspicious gun purchases," the spokesperson said. However, ATF officials conceded Carter's Country may have "misconstrued" the bureau's request for help in reporting suspicious sales as a request to allow suspicious sales to go through so the ATF could track the buyer later. ATF officials said they never asked anyone to perform a "stall and call."

"They did (the sales) because they were asked to do so by the ATF," DeGuerin argued.

The Houston operation led to the arrest and conviction of more than 20 so-called "straw buyers" purchasing weapons for the drug cartels.

In a criminal complaint filed in Houston federal court, ATF agents wrote the discovery of these "straw buyers" came during a routine audit of gun sales in January 2007, which revealed a suspicious pattern of certain individuals making multiple purchases of high-powered rifles and handguns.

In the criminal complaint, ATF agents noted some weapons purchased at Carter's Country stores in 2006 were eventually found at murder scenes and gun battles in Mexico. ATF officials pointed out these gun sales were made prior to the start of the Houston investigation. The criminal complaint credited Carter's Country with alerting the ATF to one of these suspicious gun buyers.

DeGuerin flatly denies the ATF's version of events, saying Carter's Country routinely supplied the ATF with tips about suspicious gun buys starting in 2006.

"The ATF agents told personnel at Carter's Country to complete, that is go through with, questionable sales that otherwise those folks would have said, 'No we're not going to do that,'" said DeGuerin.

ATF officials said they have no authority to order any firearms dealer to either accept or deny a legal sale.

Still, DeGuerin said Carter's Country continued calling ATF agents with reports of suspicious gun buyers until 2010.

"They got notified they were under investigation, and that's what pulled the plug," said DeGuerin, referring to a federal grand jury investigation launched by the U.S. Attorney's Office in Houston.

DeGuerin said despite years of supplying tips to the ATF, Carter's Country employees were accused of "being in league with, in other words, conspiring with the straw purchasers and it simply wasn't true."

DeGuerin prepared a chart that responded to investigators' questions about 16 specific gun sales that took place during the ATF's Houston operation.

"On each and every one of them, we had the date and time and the manner in which the ATF had been notified," said DeGuerin, who allowed Local 2 to view the chart. DeGuerin declined to allow Local 2 to copy the chart, citing personal information of Carter's Country employees.

DeGuerin said at his insistence, the U.S. Attorney's Office and an ATF agent involved in the investigation met with him and Carter's Country's owners. DeGuerin said during the meeting, he presented the chart of information regarding the 16 suspicious gun sales. DeGuerin said "pretty promptly" after that meeting he received a letter from the U.S. Attorney's Office stating the investigation into Carter's Country was being dropped.

"I don't believe the ATF agents involved or even their supervisors were being honest with the U.S. Attorney's Office," said DeGuerin. "They tried to cooperate with ATF. It got them nothing except attorney's fees and a tarnished reputation for these people that have been in business for 50 years."

When asked about that meeting, ATF officials said they had not seen the chart and had not been able to obtain a copy.

However, an ATF spokesperson told Local 2 they never denied Carter's Country had always been extremely cooperative with the ATF before and during the Houston investigation.

"They constantly provided us information, but sometimes the information would come in one hour after a sale and sometimes the information would come in seven days after a sale. There was one time during the investigation they called us in enough time to actually get an agent to a store in time to track the buyer," the spokesperson told Local 2.

ATF officials did admit the federal investigation soured its relationship with Carter's Country and "damaged the reputation" of the ATF's Houston office with other gun dealers in the area.

In addition to the meeting, ATF officials provided Local 2 with a written statement in response to direct questions as to whether the tactics being scrutinized in Arizona were used during the Houston investigation.

"It is the priority of the ATF Houston Field Division to stop all firearms trafficking to Mexico. We have never knowingly allowed firearms to be diverted to Mexico and we work closely with licensed dealers to prevent this from happening," wrote an ATF spokesperson.

DeGuerin said this was not the end of the questions. DeGuerin said he and Carter's Country owner, Bill Carter, traveled to Washington, D.C., at the request of congressional staffers and attorneys looking into the Fast and Furious operation.

DeGuerin said Carter recounted his relationship with the ATF during the Houston investigation. DeGuerin said he also gave attorneys for the "minority and majority" a copy of the same chart he shared with the U.S. Attorney's Office.

Local 2 requested to speak with congressional leaders regarding the allegations lodged by Carter's Country.

A spokesperson for the House Oversight Committee sent Local 2 the following written statement.

"Anytime guns are put into the hands of known criminals is clearly a catastrophe. What happened in Houston was an egregiously reckless act. Unfortunately, people pay with their lives when the basic foundation of the ATF rulebook -- don?t let guns walk -- is disregarded in favor of controversial methods. Going forward, we?re expecting the Justice Department to provide our Committee with the information we need to conduct our investigation."

Iowa Republican Sen. Charles Grassley, ranking member of the Senate committee on the Judiciary sent a separate statement to Local 2.

"Knowingly allowing guns to be purchased by straw buyers and then transferred to third parties is wrong no matter how you cut it. Whether it?s one or 1,800, the ATF?s actions in Houston and Phoenix were reckless and ill-advised. The Justice Department and the ATF need to come clean, accept responsibility, and provide honest, straightforward answers from here on out."

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