Attorney General Eric Holder and a House chairman, Rep. Darrell Issa, have squared off over the Justice Department's flawed gun-smuggling probe.

Issa, R-Calif., is demanding the department turn over documents about how it handled congressional inquiries after problems with Operation Fast and Furious came to light.

At the start of Thursday's hearing, Issa said the House Oversight and Government Reform Committee will do what is necessary to force the Justice Department to produce the information.

The attorney general says he will consider Issa's demand.

Issa has threatened a contempt of Congress ruling against Holder for failing to turn over the congressionally subpoenaed documents. The lawmaker alleges the Justice Department is engaging in a cover-up.

The Justice Department on Wednesday rejected an assertion by a House committee chairman that top Justice officials are covering up events surrounding a flawed gun-smuggling probe, Operation Fast and Furious.

Rep. Issa made the accusation in a letter threatening to seek a contempt of Congress ruling against Attorney General Eric Holder for failing to turn over congressionally subpoenaed documents that were created after problems with Fast and Furious came to light.

In Fast and Furious, agents lost track of about 1,400 weapons they were tracking after they were sold to low-level straw purchasers believed to be supplying Mexican drug gangs and other criminals. Another 700 firearms connected to suspects in the investigation have been recovered, some from crime scenes in Mexico and the U.S., including a murder scene in Nogales, Ariz., where border agent Brian Terry was slain.

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.

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.

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.

Customs and Border Protection Agent Brian Terry was such a well-organized ex-Marine that even after he was gunned down Dec. 15 outside Rio Rico, Ariz., gifts he had mailed to his family in Michigan arrived in time for Christmas.

Complicating his death in the line of duty is the fact that two guns found at the murder scene were purchased by suspects as part of a controversial federal gun-running investigation that purposely allowed guns to “walk” into the hands of suspected drug traffickers.

Terry was killed by an AK-47 variant similar to the guns recovered, but the murder weapon has not been found. However, a separate weapon that was initially purchased on the same day as the other two matches the forensic profile of the murder weapon. 

Testimony from Terry’s family about the Christmas gifts and other details was the most emotional part of a hearing Wednesday that is part of an ongoing House Oversight Committee investigation of the so-called Fast and Furious operation that knowingly let illegally purchased firearms go.The Bureau of Alcohol, Tobacco, Firearms and Explosives hoped that the guns would eventually lead agents to bigger cases against kingpins in Mexican drug cartels.

"Brian did ultimately come home that Christmas; we buried him not far from the house that he was raised in just prior to Christmas day," Terry's cousin told the hearing, flanked by the slain agent's mother and sister. "We ask that if a government official made a wrong decision that they admit their error and take responsibility for his or her actions."

A proposed rule aimed at helping to curb gun smuggling into Mexico has survived a battle in Congress and could go into effect within two months.

The Bureau of Alcohol, Tobacco, Firearms and Explosives is seeking a pilot program to require gun dealers in California, Texas, New Mexico and Arizona to report multiple sales of certain types of rifles within any five-day span.

The rule is similar to a federal law requiring dealers to report multiple handgun sales nationwide. Authorities hope that they can use the multiple-sale data to track attempts by Mexican drug cartels to smuggle firearms across the border. A Justice Department inspector general’s report last fall said 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.”

The firearms bureau proposed the rule on an emergency basis within days of border patrol agent Brian Terry being shot and killed near the border in Arizona on Dec. 16. The White House’s Office of Management and Budget in February nixed the effort to expedite the rule. Shortly after the OMB ruling, the House of Representatives voted to kill the rule as part of an appropriations bill, but that version of the bill died and the House action on the proposed rule died with it. A Justice Department spokesperson said in March that “we expect this is something that will ultimately be approved.”

The proposal is now in a comment period before it can become final, but sentiment is running strongly in favor of the idea. The ATF says it received 12,700 comments on the proposed rule as of February, with nearly 9,000 of them supporting the idea. Those in support said it was a tool to stop illegal trafficking, the ATF asserted. Those against said it was a waste of time and a burden for gun shops. A spokesman for the ATF said it appears that there were letter-writing campaigns in support of the proposal.

The office of an assistant attorney general  in March 2010 approved a wiretap request for a federal  gunrunning  probe in which agents purposely allowed gun sales to go to straw buyers with the hope that they would uncover criminal activity across the border in Mexico, documents released Wednesday by congressional investigators show.

The approval memo from the office of Lanny Breuer, assistant attorney general for the Justice Department’s criminal division, marks the highest-level Justice Department involvement identified to date in a gun case that President Barack Obama himself has said might have been flawed. The memo says it came from Breuer, but it was actually signed by one of his deputies.

The Center for Public Integrity reported in March that federal agents, with the blessing of federal prosecutors, allowed more than 1,700 weapons to be sold from federal dealers in Arizona to suspected straw buyers for Mexican drug and gun gangs.  More than 300 of those guns were ultimately recovered in criminal activity on both sides of the border.

The revelation has stirred controversy in Mexico and the United States, in part because some front-line agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives opposed letting the weapons “walk” because of fears that might be used in crimes or used to attack U.S. border agents. Some of the gun dealers who continued to sell the weapons had similar concerns. Two guns linked to the investigation, known as “Fast and Furious,” were found near  the scene  of the murder of Border Patrol agent Brian Terry last December, though ATF says they were not the murder weapons.

U.S. Attorney General Eric Holder clashed heatedly with California Republican Darrell Issa Tuesday as a House hearing raised questions about whether a  federal gun trafficking probe that ultimately allowed U.S. - bought guns to reach Mexican cartels might bear some responsibility for the deaths of U.S. agents.  

Issa, chairman of the House Oversight and Government Reform Committee,  has subpoenaed records from the Bureau of Alcohol, Tobacco, Firearms and Explosives regarding the agency’s so-called Fast and Furious gun smuggling investigation.  ATF is a component of the Justice Department.  ATF acknowledges that more than 1,700 firearms were purchased by suspected agents of Mexican drug cartels during the operation.  At least 195 of those guns were later recovered at Mexican crime scenes. ATF said the investigation went on for more than a year in hopes of snaring high-level cartel operatives,  but some front-line bureau agents have gone to Congress to complain about the investigation’s  strategy. 

That strategy  has been especially controversial in part because two guns bought during the investigation were recovered near the scene of the murder of border patrol agent Brian Terry in Arizona last December;  ATF has said that the murder weapon was not a gun from the sting operation.  The agency has also stated that a gun used to kill another border agent – Jaime Zapata – in Mexico in March was not part of the Fast and Furious investigation.

But discussion of the two agents’ deaths engendered an emotional exchange between Issa and Holder. Issa asked whether the House had the right to investigate “whether the Justice Department is basically guilty of allowing weapons to kill Americans” to be sold.