|ATF’s 5,000 employees perform the dual responsibilities of enforcing federal criminal laws and regulating the firearms and explosives industries. ATF investigates violent crimes involving firearms and explosives, acts of arson, and illegal trafficking of alcohol and tobacco products. ATF also provides training and support to its federal, state, local, and international law enforcement partners and works in 25 field divisions with representation throughout the United States, Puerto Rico, U.S. Virgin Islands, and Guam. Foreign offices are located in Mexico, Canada, Colombia, and representatives in France, the Netherlands, Iraq, and El Salvador.|
The OIG’s Evaluation and Inspections Division examined ATF’s plans to expand Project Gunrunner, ATF’s national initiative to reduce firearms trafficking to Mexico. Mexican drug cartels often use weapons from the United States to control lucrative drug trafficking corridors along the Southwest border. To support and expand Project Gunrunner, ATF received $10 million from the Recovery Act and an additional $11.9 million in FY 2009 appropriations and supplemental funding.
Our review concluded that aspects of the project’s expansion plans will enhance ATF’s ability to combat firearms trafficking, but some planned activities do not appear to represent the best use of resources to reduce firearms trafficking. ATF plans to expand Project Gunrunner by establishing new Gunrunner teams in McAllen, Texas; El Centro, California; and Las Cruces, New Mexico; with a satellite office in Roswell, New Mexico. In addition, four ATF agents will be located in Ciudad Juarez and Tijuana, Mexico, to provide support to the government of Mexico. Although ATF’s decision to place new Project Gunrunner staff in McAllen, El Centro, Juarez, and Tijuana appeared sound, we questioned placing Gunrunner teams in Las Cruces and Roswell because ATF crime gun and workload data showed that these sites do not have large amounts of firearms trafficking or crime that is linked to Mexican cartels.
Firearms Trafficking Corridors and Planned ATF Gunrunner
Team Locations Along the Southwest Border
|Note: Not to scale.
Source: OIG map based on descriptions of the corridors in ATF, “Southwest Border Initiative: Project Gunrunner” (June 2007).
The OIG also found that ATF has hired an insufficient number of personnel proficient in Spanish for the new Gunrunner teams, which could pose significant safety and operational challenges. While ATF has implemented several Spanish language training pilot programs and has also made efforts to hire staff with proficiency in Spanish, we recommended improved training and hiring to ensure effective operations and personnel safety on the new Gunrunner teams.
The OIG determined that program measures ATF developed are insufficient to fully evaluate the impact the new Gunrunner teams will have on its ability to combat firearms trafficking and related violence along the Southwest border. We recommended that ATF develop more specific program measures to accurately assess Project Gunrunner’s impact on cross-border firearms trafficking.
While ATF concurred with the majority of our recommendations, it disagreed with our recommendation to reconsider whether to place new Gunrunner personnel in Las Cruces and Roswell. ATF responded that it believed the establishment of these offices was justifiable, stating, among other things, that having field offices in those locations was essential to combat firearms trafficking. We continue to disagree based on our analysis of crime gun trace and firearms trafficking workload data as well as our interviews with ATF field office staff and other federal, state, and local law enforcement officials, which indicate that Las Cruces and Roswell do not represent the best strategic use of resources. We concluded that it would make more sense for ATF to use the resources to combat firearms trafficking problems elsewhere along the Southwest border.
A forthcoming OIG report will examine the overall implementation and impact of Project Gunrunner.
The OIG’s Evaluation and Inspections Division examined ATF’s efforts to investigate the diversion of tobacco from the legal distribution system. Our report found that the rate of tobacco diversion has increased significantly in recent years, resulting in the loss of several billion dollars in federal and state tax revenue. We concluded that ATF should take steps to strengthen its diversion enforcement program.
Federal and state governments estimate that tobacco diversion results in more than $5 billion in lost revenue annually from unpaid excise taxes, with that figure rising as state excise taxes on cigarettes increase. Tobacco diversion is highly profitable because of the disparity among jurisdictions’ cigarette taxes. State excise taxes range from a low of $0.07 per pack in South Carolina to a high of $3.46 per pack in Rhode Island. Some cities or counties impose additional taxes as high as $2 per pack on top of the state excise taxes. By purchasing cigarettes in a low-tax jurisdiction and reselling them in a high-tax jurisdiction, a seller can make a profit of several thousand dollars on just a few cases of cigarettes. ATF investigations have found that some criminal organizations are using the proceeds from tobacco diversion to fund other criminal activities, including drugs, weapons, identity theft, and various types of fraud.
From FY 2004 through FY 2008, tobacco diversion investigations comprised less than 1 percent of ATF’s total caseload, and the Alcohol and Tobacco Diversion Program represented only 2 percent of ATF’s total budget. Even with the small amount of ATF resources devoted to tobacco diversion cases, the value of seizures from its tobacco diversion cases during the same time period made up 46 percent (approximately $106 million) of the total value of seizures (approximately $230 million) from all types of ATF investigations. Moreover, the value of seizures from tobacco diversion cases more than quadrupled from $6.2 million in FY 2004 to $26.6 million in FY 2008.
Assets Seized Through Tobacco Diversion Investigations
FY 2004 – FY 2009
|Fiscal Year||Value of Seizures from All ATF Investigations||Value of Seizures from Tobacco Diversion Investigations||Value of Tobacco Diversion Seizures as a Percentage of All ATF Seizures|
Source: ATF, Consolidated Asset Tracking System
We found that ATF’s efforts to combat tobacco diversion are ad hoc, that ATF lacks a clear understanding of the scope of diversion activity across its field divisions, and that ATF headquarters does not adequately support the field divisions’ diversion investigations. In addition, we determined that ATF has no systematic method to share intelligence or information specifically about diversion activities between the field and headquarters, which adds to ATF’s lack of knowledge of the overall level of diversion activity in the nation.
Our report recognizes that ATF may not be able to assign significant new resources to address the diversion problem due to limited funding and competing priorities. However, we believe that ATF could improve its diversion program without an infusion of new resources. We recommended that ATF ensure that its field offices and headquarters communicate on diversion issues and that diversion investigation intelligence be shared across the agency and with state and local tax and law enforcement agencies. We also concluded that unless ATF has a better understanding of the scope of the diversion problem, it cannot strategically address diversion crime and optimize its limited investigative resources. ATF agreed with all but one of our recommendations.
During this reporting period, the OIG received 230 complaints involving ATF personnel. The most common allegations made against ATF employees were waste, misuse of government property, and theft. The OIG opened 2 cases and referred 15 allegations to ATF’s Office of Professional Responsibility for its review. The majority of the complaints were considered management issues and were provided to ATF for its review and any appropriate action.
At the close of the reporting period, the OIG had eight open criminal or administrative investigations of alleged misconduct related to ATF employees. The criminal investigations include waste, misuse of government property, and theft. The following is an example of a case involving ATF that the OIG’s Investigations Division handled during this reporting period:
- In our March 2009 Semiannual Report to Congress, we reported on an investigation by the OIG’s Dallas Field Office that led to the arrest of an ATF analyst on charges that she exceeded her authorized access to a government computer. OIG investigators determined that the analyst accessed National Crime Information Center computer records concerning her boyfriend, who was a member of the Aryan Brotherhood. In addition, the analyst released details of an imminent undercover operation to the Aryan Brotherhood target of the operation. During this reporting period, the ATF analyst pled guilty and was sentenced to 3 months’ incarceration followed by 1 year supervised release. The ATF analyst resigned from her position as a result of our investigation.
ATF’s National Response Team
ATF’s National Response Team assists federal, state, and local investigators at the scenes of significant fire and explosive incidents by reconstructing the scene, identifying the origin of the fire, conducting interviews, and sifting through debris to obtain evidence related to the fire or explosion. This audit is examining the National Response Team’srole, accomplishments, funding, and effectiveness.