Attorney General Eric Holder faced sharp questions from congressional Republicans Tuesday about a controversial gun-trafficking case that was the subject of an iWatch News investigation this spring. But Holder firmly rebuffed requests to oust a Justice Department official involved in overseeing the case.

The venue for these pointed exchanges was a Senate Judiciary Committee hearing about “Operation Fast and Furious,” an ill-conceived anti-gun-trafficking probe conducted by the Justice Department’s Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The gun investigation allowed thousands of weapons to fall into the hands of Mexican drug cartels.

As the Center for Public Integrity’s iWatch News reported in March, federal prosecutors and the ATF permitted some 2,000 guns to be purchased and retained by suspected “straw” buyers with the expectation they might cross the border and even be used in crimes while the case was being built. The bureau had previously been criticized for focusing on lowly straw buyers rather than high-level traffickers.

ATF officials were hoping to follow the guns in hopes of making cases against higher-level traffickers. The decision was met by strong objections from some front-line agents who feared they were allowing military-style weapons to “walk” into the hands of drug lords and gun runners, internal agency memos show.

As the United States commemorated the 10^th anniversary of the 9/11 attacks, terrorism experts stepped up warnings that authorities must look beyond the usual sources of terror, to the lone wolves stirring with anger and seeking out big-impact weapons.

Isolated and underestimated, lone wolves might go unnoticed even as they try to get chemical, biological, radiological and nuclear weapons – collectively known as CBRN – that can spread terror and spark psychological chaos.

Anders Breivik is the latest of the lone wolves and a point of concern among terrorism experts. His devastating attack in Norway in July spurred researchers to mine his 1,500-page treatise in search of evidence that unconventional, free-agent terrorists may now have greater potential to inflict damage and ignite panic.

Breivik’s manifesto was more than just the ramblings of a lone nut.

“Dismissing Breivik’s “[weapons of mass destruction] idea” as unrealistic is dangerous and overlooks important nuances that give his warnings about greater weapons added validity. Moreover, his writings might spur other extremists, according to a little-noticed report from the Washington, D.C.-based Federation of American Scientists.

Acknowledging the threat

U.S. Homeland Security Secretary Janet Napolitano, in an interview on ABC News last week, said one of the biggest challenges she had seen as DHS secretary, “is movement toward the home-grown violent extremist. The person who, for whatever reason, decides to attack his fellow citizens,

She warned citizens to be vigilant of “the lone actor that we may not know about, who may already be in the United States and so it requires us to be vigilant and the public be vigilant.”

The fallout from a controversial federal probe that allowed weapons to be smuggled into Mexico dramatically intensified Tuesday with the reassignment of the acting director of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the resignation of the Phoenix U.S. attorney who oversaw the operation.

Acting ATF Director Kenneth Melson, who himself criticized the so-called Fast and Furious investigation for allowing so many weapons to cross the border, will take a less visible job, as senior adviser on forensic science policy issues at the Justice Department.

There was no word on the future of Dennis Burke, who resigned suddenly as U.S. attorney for the District of Arizona. In addition, Assistant U.S. Attorney Emory Hurley, who worked on the case, was reportedly reassigned within the Phoenix federal prosecutor’s office.

Melson will be replaced as acting ATF director by B. Todd Jones, the U.S. Attorney in Minnesota and the chair of the Attorney General Advisory Committee, which counsels Attorney General Eric Holder on policy, management and operational issues. Jones will continue to serve as a U.S. Attorney even after he becomes the ATF acting director on Wednesday, the Justice Department said.

Melson, a former U.S. attorney and Justice Department official, took over as acting director in April 2009.

The Fast and Furious operation has been the source of turmoil since it was revealed earlier this year that ATF agents spent 15 months watching men suspected of working for a Mexican drug cartel buy firearms at Arizona gun shops without making arrests. The suspects bought nearly 2,000 firearms, approximately 200 of which were later recovered from crime scenes in Mexico.

The Coast Guard’s chronic overspending and mismanagement of its Deepwater fleet modernization program mean that it’s time for Congress to withhold funding unless the service submits prompt quarterly reports assessing the risks of all its major projects, the Government Accountability Office says.

The Deepwater project to build new ships and aircraft could wind up $5 billion over its $24.2 billion baseline budget, but that may be only the tip of the iceberg, the GAO said. That’s because the Coast Guard has yet to revise its cost estimate for a new offshore patrol cutter, and to incorporate extra costs and schedule changes.  A $24.2 billion cost baseline set in 2007 for Deepwater is “no longer… achievable“ and the reliability of cost estimates is in question, the report said.

“Congress should consider enacting a permanent statutory provision that requires the Coast Guard to submit a quarterly report within 15 days of the start of each fiscal quarter on all major Coast Guard acquisition projects and require the report to rank for each project the top five risks,” the GAO said. To ensure timely reports, Congress could withhold the Coast Guard’s acquisition budget until “after the 15th day of any quarter of any fiscal year until the report is submitted.”

In 2007, the Coast Guard took back managing the Deepwater project from Northrop Grumman and Lockheed Martin, saying it had relied too heavily on contractors to do the work of the government. The Coast Guard then set a $24.2 billion cost baseline, which an earlier GAO study found was exceeded by $3.8 billion as of last year.

Republicans sought to move blame for the botched Fast and Furious gun smuggling sting from the Mexican border all the way back up to the White House in a contentious House hearing Tuesday.

While GOP lawmakers were largely unable to get six agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives to name names, the House investigators did manage to produce an email linking the ATF's troubled Phoenix field division to 1600 Pennsylvania Avenue. William Newell, the former ATF special- agent-in-charge of the Phoenix office who helped concoct the Fast and Furious plan, sent an email to Kevin O’Reilly, a long-time friend of his in the White House, detailing his office's plans for explaining ATF's broader border enforcement efforts to the press. O'Reilly was until recently director of North American affairs for the National Security Council. 

“You didn’t get these from me…” Newell wrote on the morning of September 3, 2010. He then went on to explain to O’Reilly the two internal media briefing documents he’d attached about the ATF's border enforcement strategy, known as Gun Runner. By this time the Fast and Furious investigation had already allowed more than a thousand guns to be bought by suspected straw buyers for the Sinoloa Mexican drug cartel.

GOP members of the House Committee on Oversight and Government Reform and a staff report released by the panel tried to tie Fast and Furious not only to the White House and ATF leaders, but also to Justice Department executives. The report said Assistant Attorney General Lanny Breuer was "clearly" aware of Fast and Furious months before it became public. A Justice Department spokeswoman, however, said details of the investigation were unknown to senior Justice officials. 

The Department of Justice announced late Monday that gun dealers in states along the Southwest border will now have to report multiple sales of certain semi-automatic rifles, a controversial regulation that has been sought for months by the Bureau of Alcohol, Tobacco, Firearms and Explosives.  

The rule applies only to semi-automatic rifles greater than .22 caliber and able to accept a detachable magazine, and only to multiple sales of those guns to the same person within a five –day period. Furthermore, the requirement is limited to four border states — Arizona, New Mexico, California and Texas. Federal authorities assert these types of guns are favorites of Mexican drug cartels, and say the cartels are buying them in bulk at U.S. gun stores just over the border. A similar law requiring dealers to report multiple handgun sales nationwide has been in effect for years.  

“This new reporting measure,” Deputy Attorney General James Cole said in a statement, “will improve the ability of [ATF] to detect and disrupt the illegal weapons trafficking networks responsible for diverting firearms from lawful commerce to criminals and criminal organizations.”

ATF had long fought for such a rule. The Justice Department inspector general noted in a report last fall that the “lack of a reporting requirement for multiple sales of long guns…hinders ATF’s ability to disrupt the flow of illegal weapons into Mexico.” Last December the ATF proposed the rule on an emergency basis, but in February the White House’s Office of Management and Budget nixed the effort to expedite the rule. Days after the OMB ruling, the House of Representatives voted overwhelmingly to try to kill the proposed rule.

The Department of Homeland Security might not be fast enough in responding to security threats if it doesn’t improve information sharing among the agencies it oversees, according to a report released by the agency’s inspector general.

When then President George W. Bush announced creation of the department in 2001, its first priority was to “take the strongest possible precautions against terrorism by bringing together the best information and intelligence.”

Nearly 10 years later, there is no department-wide policy about sharing information, which has led to confusion among some of the department’s agencies—including the Secret Service, Federal Emergency Management Agency, Transportation Security Administration and Immigration and Customs Enforcement—about what they can share with each other.

The department’s Office of Intelligence and Analysis is responsible for “establishing a unified, coordinated, and integrated intelligence program for the department,” according to the report. While the office has convened councils, boards and a task force to gather agency heads for discussions of information sharing, it has not yet developed an overarching policy.

The report also indicates that a lack of oversight from the office has led agencies to create their own systems for individual missions that are not necessarily compatible with systems created by other agencies.

Beyond a policy on sharing information with each other, agencies say they’d like the office to serve as a central clearinghouse for intelligence information that analysts could turn to when making decisions.

The report’s recommendations, which are heavily redacted, include calls for a policy that clearly delineates the role of the office and the creation of improved intelligence systems for better sharing of information.

Like many states, Maine depends on the FBI to conduct background checks of people who want to acquire firearms from the state’s federally licensed gun dealers.

And like many states, Maine is a slacker in supplying the records that the FBI depends on to run those checks.

That’s how Raymond Geisel got his guns, including a Glock Model 17 pistol and a semi-automatic version of the AK-47 assault rifle. Geisel had previously been committed to a psychiatric hospital in Bangor, which made him ineligible under federal law to buy or possess a gun. But because state officials had not supplied records of his commitment to the FBI, Geisel passed background checks without being flagged.  

Eventually, the law caught up with Geisel. He was arrested in Miami in August 2008 for making threats against Barack Obama, who was campaigning in south Florida around the same time. Another gun that Geisel had acquired in Maine was subsequently recovered by federal agents in his hotel room, along with a combat-style hatchet, armor-piercing ammo and canisters of tear gas.

The data gap that Geisel exploited should have been closed by now. Four years ago, after the massacre at Virginia Tech exposed gaps in the National Instant Criminal Background Check System (NICS), Congress and the Bush administration took decisive action to shore up the joint state-federal operation, which is supposed to keep guns away from the deranged and the dangerous.