2141 Rayburn House Office Building

Statement of F. James Sensenbrenner, Chairman, Subcommittee on Crime, Terrorism, Homeland Security, and Investigations

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 Bureau of Alcohol, Tobacco, Firearms and Explosives in Milwaukee, Wisconsin.  To say that the operation was extremely flawed would be a vast understatement.  The operation was an abysmal failure that put on the street a stolen fully automatic M-4 rifle as well as other stolen firearms among numerous other failures.

The operation began in Milwaukee in early 2012, more than three 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 ever been out on the street if it weren’t for the enticing deals being offered by the 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; and had their government-owned guns, including a machine gun, stolen from an agent's vehicle. The automatic rifle has not 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 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 convictions, the median sentence was about two 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, Assistant U.S. Attorney Franz Schmitz, 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 at various cities across the country.  In Albuquerque, New Mexico, agents gave a brain-damaged drug addict with little knowledge of weapons a "tutorial" on machine guns, hoping 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 marijuana to help promote their phony storefront operation. This doesn’t 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 ATF under the new leadership.  I certainly hope that this operation and the others like it are not indicative of those changes.  I intend to continue to vigorously oversee the ATF until I am confident that the public knows the whole truth and that the agency’s mismanagement has been corrected.





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