[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]





UNDERCOVER STOREFRONT OPERATIONS: CONTINUED OVERSIGHT OF ATF'S RECKLESS 
                        INVESTIGATIVE TECHNIQUES

=======================================================================

                                HEARING

                               before the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 2, 2014

                               __________

                           Serial No. 113-151

                               __________

Printed for the use of the Committee on Oversight and Government Reform



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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee       CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania         JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          MATTHEW A. CARTWRIGHT, 
TREY GOWDY, South Carolina               Pennsylvania
BLAKE FARENTHOLD, Texas              TAMMY DUCKWORTH, Illinois
DOC HASTINGS, Washington             ROBIN L. KELLY, Illinois
CYNTHIA M. LUMMIS, Wyoming           DANNY K. DAVIS, Illinois
ROB WOODALL, Georgia                 PETER WELCH, Vermont
THOMAS MASSIE, Kentucky              TONY CARDENAS, California
DOUG COLLINS, Georgia                STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina         MICHELLE LUJAN GRISHAM, New Mexico
KERRY L. BENTIVOLIO, Michigan        Vacancy
RON DeSANTIS, Florida

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                    Stephen Castor, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                 
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on April 2, 2014....................................     1

                               WITNESSES

B. Todd Jones, Director, Bureau of Alcohol, Tobacco, Firearms and 
  Explosives
    Oral Statement...............................................     5
    Written Statement............................................     8

                                APPENDIX

Opening Statement of Chairman Issa...............................    58
Opening Statement of Rep. Cummings...............................    62
April 1, 2014, letter to the committee by the Federal Law 
  Enforcement Officers Association, submitted by Rep. Cummings...    64
April 1, 2014 letter to ATF from Josephine Terry, submitted by 
  Chairman Issa..................................................    66
December 12, 2013, letter to Attorney General Holder from The 
  Arc, submitted by Chairman Issa................................    69
U.S. DOJ ``Report on Operation Fearless and Related Matters,'' 
  submitted by Rep. Chaffetz.....................................    73
April 1, 2014, letter to Chairman Issa from U.S. DOJ, submitted 
  by Rep. Gosar..................................................    78
Follow up questions and answers from U.S. DOJ....................    83

 
UNDERCOVER STOREFRONT OPERATIONS: CONTINUED OVERSIGHT OF ATF'S RECKLESS 
                        INVESTIGATIVE TECHNIQUES

                              ----------                              


                       Wednesday, April 2, 2014,

                  House of Representatives,
      Committee on Oversight and Government Reform,
                                           Washington, D.C.
    The committee met, pursuant to notice, at 9:30 a.m. in room 
2154, Rayburn House Office Building, the Honorable Darrell Issa 
[chairman of the committee], presiding.
    Present: Representatives Issa, Mica, Turner, Jordan, 
Chaffetz, Amash, Gosar, Meehan, DesJarlais, Farenthold, Massie, 
Collins, Meadows, Bentivolio, DeSantis, Cummings, Maloney, 
Norton, Tierney, Clay, Connolly, Speier, Duckworth, Kelly, and 
Grisham.
    Staff Present: Jen Barblan, Majority Senior Counsel; Molly 
Boyl, Majority Deputy General Counsel and Parliamentarian; 
Lawrence J. Brady, Majority Staff Director; Lawrence J. Brady, 
Majority Staff Director; Ashley H. Callen, Majority Deputy 
Chief Counsel for Investigations; Sharon Casey, Majority Senior 
Assistant Clerk; Steve Castor, Majority General Counsel; John 
Cuaderes, Majority Deputy Staff Director; Carlton Davis, 
Majority Senior Counsel; Adam P. Fromm, Majority Director of 
Member Services and Committee Operations; Linda Good, Majority 
Chief Clerk; Tyler Grimm, Majority Senior Professional Staff 
Member; Christopher Hixon, Majority Chief Counsel for 
Oversight; Mark D. Marin, Majority Deputy Staff Director for 
Oversight; Ashok M. Pinto; Majority Chief Counsel, 
Investigations; Andrew Rezendes, Majority Counsel; Laura Rush, 
Majority Deputy Chief Clerk; Jessica Seale, Majority Digital 
Director; Jonathan J. Skladany, Majority Deputy General 
Counsel; Peter Warren, Majority Legislative Policy Director; 
Rebecca Watkins, Majority Communications Director; Aryele 
Bradford, Minority Press Secretary; Jennifer Hoffman, Minority 
Communications Director; Peter Kenny, Minority Counsel; Elisa 
LaNier, Minority Director of Operations; Juan McCullum, 
Minority Clerk; Dave Rapallo, Minority Staff Director; and 
Valerie Shen, Minority Counsel.
    Chairman Issa. The committee will come to order.
    The Oversight Committee exists to secure two fundamental 
principles. First, Americans have the right to know that the 
money Washington takes from them is well spent. Second, 
Americans deserve an efficient and effective government that 
works for them.
    Our duty on the Oversight and Government Reform Committee 
is to protect these rights. Our solemn responsibility is to 
hold government accountable to taxpayers because taxpayers have 
a right to know what they are getting from the government.
    Our job is to work tirelessly in partnership with citizen 
watchdogs to deliver the facts to the American people and bring 
genuine reform to the Federal bureaucracy.
    Without objection, the Chair is authorized to declare 
recesses of the committee at any time.
    Today's witness, Mr. B. Todd Jones, took over as the head 
of the ATFE as Acting Director and later as the first Director 
in the wake of Operation Fast and Furious and the scandal that 
surrounded it.
    His mission was to change the culture at ATF and move the 
agency in the right direction. This was no small task. Two and 
a half years into his tenure, it is safe to say the ATF still 
has a long way to go.
    Just over a year ago in Milwaukee, the Milwaukee Journal 
Sentinel reported on Operation Fearless, an undercover, 
storefront operation conducted by the Alcohol, Tobacco and 
Firearms in Milwaukee, Wisconsin during the Director's tenure.
    Everything about Operation Fearless was wrong. ATF agents 
allowed convicted felons to leave the store armed and 
dangerous. Three weapons, including a machine gun, I repeat, 
not a semiautomatic weapon often called a machine gun, a 
machine gun was stolen from an ATF vehicle.
    The storefront was burglarized and $39,000 worth of 
merchandise was stolen all because the ATF neglected to install 
an alarm system. ATF exploited a mentally handicapped person 
with an IQ in the mid 50s to assist in the storefront operation 
and then arrested this poor limited capacity individual for his 
involvement.
    When we learned about this, Chairman Goodlatte, Chairman 
Sensenbrenner, Senate Ranking Member Grassley and I immediately 
wrote the ATF requesting more information. Only after receiving 
our letter did the Director that day order an internal review, 
even though ATF management was aware of all the operation 
problems.
    In April 2013, ATF briefed committee staff on this 
operation. ATF assured us that the botched operation was ``an 
isolated incident.'' In December 2013, however, we learned that 
ATF mismanaged similar undercover operations across the country 
stretching from Portland, Oregon to Albuquerque to Wichita to 
Atlanta to Pensacola, Florida.
    These other storefront operations followed an incredibly 
reckless pattern. Agents allowed felons to leave the store with 
weapons, agents exploited mentally handicapped people and 
agents failed to take precautions to protect the stores from 
theft.
    ATF's dangerous tactics may actually be increasing crime in 
your neighborhood. When ATF undertook these operations they do 
not inspire public confidence. Rather, they make America wonder 
if ATF is a reliable partner to keep the streets safe.
    The Milwaukee operation, Fearless, was part of the ATF's 
Monitored Case Program. The Monitored Case Program was created 
after Operation Fast and Furious to ensure careful oversight of 
field operations from ATF headquarters. Unfortunately, it is 
clear that in the case of Operation Fearless, the Monitored 
Case Program failed and failed miserably.
    Today's hearing will explore whether other cases are 
slipping through the cracks at ATF even though Monitored Case 
programs exist to prevent just that. Effective leadership 
requires accountability. Accountability ensures that mistakes 
are not repeated.
    Three years after the death of Border Patrol Agent Brian 
Terry, ATF has yet to fire anybody for their roles in Operation 
Fast and Furious. I personally find that inexcusable. Today, we 
will learn whether ATF has held any employees accountable for 
dangerous, mismanaged Operation Fearless.
    We have been down this path before. ATF has promised to 
change its culture, implement new policies and procedures and 
hold agents accountable for their actions. What good are these 
new policies and procedures if they too fail? What good are 
promises of accountability if the accountability never occurs? 
What message does it send to the hard working ATF agents who 
get it right? You can be reckless and jeopardize public safety 
in furtherance of your investigation but you will not be 
disciplined or certainly not fired.
    The Director now faces the difficult task of moving the 
agency forward from its most recent scandal and hopefully, 
finally, restoring integrity to the ATF.
    I now recognize the Ranking Member for his opening 
statement.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    I would like to welcome today's witness, the Honorable B. 
Todd Jones, who was confirmed and sworn in last summer as the 
Director of the Bureau of Alcohol, Tobacco, Firearms and 
Explosives.
    For seven years, since 2006, the ATF did not have a Senate-
confirmed Director. I welcomed Director Jones' confirmation and 
I know he has been extremely busy addressing many of the 
Bureau's problems and challenges that he inherited.
    ATF plays a critical role in enforcing our Nations firearms 
laws and combating illegal firearms trafficking and other 
crimes. Its agents, investigators and support staff work to 
protect the American people from gun violence that has ravaged 
communities across the country and, as a matter of fact, has 
ravaged the very community that I have lived in for the last 32 
years.
    ATF personnel played a key role in responding to the Navy 
Yard shooting, the Boston Marathon bombing, the Sandy Hook 
tragedy and the Aurora movie theater attacks. In the words of 
Chairman Issa, I want to thank all of those ATF agents publicly 
right now who get it right.
    Given the inherent dangers associated with conducting 
operations that target violent criminal organizations, the ATF 
must take on a certain degree of risk. Our hearing today is 
focused on ensuring that the Bureau properly manages this risk 
while protecting the safety of its personnel and especially the 
surrounding communities.
    Today, we will hear about one type of operation, the 
undercover storefront. The ATF officials explained that the 
Bureau has used this investigative technique successfully over 
many years. By working deep inside communities that are being 
terrorized by violent gangs and drug cartels, ATF agents 
contend that they have been able to make a significant 
difference for the residents of these various neighborhoods.
    I am hoping that during his testimony this morning the 
Director will explain to us exactly what is so special about 
these types of programs and why are they required to get to 
certain types of problems.
    Over the last year, however, there have been numerous 
allegations involving storefront operations in several cities. 
In January 2013, the Milwaukee Journal Sentinel reported that 
an undercover storefront operation in Milwaukee purchased 
weapons at above market prices, including weapons that were 
recently purchased at retail outlets.
    It also reported that three ATF-issued firearms were stolen 
from the trunk of an agent's vehicle, including an automatic 
weapon that was never recovered. It was also reported that some 
defendants were incorrectly identified and charged and that the 
operation netted primarily low level individuals on firearms 
and drug charges.
    Last December, the Journal Sentinel highlighted additional 
allegations in five cities: Albuquerque, Atlanta, Pensacola, 
Portland and Wichita. According to these reports, some of these 
operations allegedly targeted individuals with mental 
disabilities. One operation was located near a school and some 
others allowed felons to leave the premises with firearms they 
brought into the store.
    I understand that as soon as these press reports came out, 
then Acting Director Jones order the Bureau's Office of 
Professional Responsibility and Security Operations to fully 
investigate these allegations. Last March, this office issued a 
detailed report that found many deficiencies with these 
operations.
    According to the report, ``These deficiencies caused a loss 
of property, created risk to the public and officer safety and 
led to the improper arrest of four individuals.'' The report 
found that ``The absence of comprehensive written guidelines 
and best practices for the operation of an under cover 
storefront was a contributing factor in many of the 
deficiencies in Operation Fearless.''
    It also found that the primary cause of deficiencies not 
being identified and corrected was the failure of the case 
agent and the first-line supervisors to report those problems.
    I am hopeful that Director Jones will address the issue of 
accountability and the issue of people reporting up. We found 
in Fast and Furious there were some issues with that. The 
question becomes has that been corrected.
    In response to these findings, Director Jones and ATF 
prepared a comprehensive manual incorporating lessons learned 
from the Milwaukee operation and best practices from many other 
successful storefront operations. The Bureau will also require 
a personal briefing between agents and ATF headquarters, as 
well as on-site inspections of the storefronts.
    As I close, I hope that the committee will hear more today 
about ATF's responses to the serious allegations, the reforms 
that ATF has implemented and additional measures ATF can take 
to have safety in high risk operations.
    ATF certainly has had its share of problems over the years. 
Our focus today should be one ensuring that the agency 
continues its path towards reform. I understand the Department 
of Justice Inspector General is also investigating the 
Milwaukee operation and I hope we can obtain the results of 
that review soon as well.
    Finally, Mr. Chairman, I ask unanimous consent to place in 
the record a letter sent to the committee yesterday from the 
Federal Law Enforcement Officers Association.
    Chairman Issa. Without objection, so ordered.
    Mr. Cummings. I yield, Mr. Chairman.
    Chairman Issa. The gentleman yields back.
    Members may have seven days in which to submit opening 
statements for the record.
    I now ask unanimous consent that the letter sent yesterday 
to ATF by Brian Terry's family be placed in the record. Without 
objection, so ordered.
    Chairman Issa. I would ask that Mr. Jones also be provided 
a copy if he doesn't already have it.
    Mr. Mica. Personal privilege.
    Chairman Issa. The gentleman is recognized.
    Mr. Mica. I want to introduce a very, very special guest, 
somebody who is read about in the history books, who is my 
guest today. The gentleman sitting back here is Joe Kittinger, 
who held the record of a man jumping from space. He has had 
almost every honor you can imagine nationally and 
internationally, a part of the National Aviation Hall of Fame. 
Joe is here with his wife, Sherri. Joe, raise your hand so 
everyone can see you. Thank you for being with us today.
    Chairman Issa. I thank the gentleman.
    We now welcome our witness, the Honorable B. Todd Jones, 
the first full Director of the Bureau of Alcohol, Tobacco, 
Firearms and Explosives.
    Pursuant to committee rules, I ask the witness to please 
rise and take the oath.
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    [Witness responds in the affirmative.]
    Chairman Issa. Mr. Jones, you are a returning witness, so 
you know the routine. We won't shut off the clock but hopefully 
you will use close to the five minutes.
    The gentleman is recognized.

   STATEMENT OF B. TODD JONES, DIRECTOR, BUREAU OF ALCOHOL, 
                TOBACCO, FIREARMS AND EXPLOSIVES

    Mr. Jones. Chairman Issa, Ranking Member Cummings and 
members of the committee, thank you for the opportunity to 
appear today.
    I am pleased to be here to discuss the progress ATF has 
made in implementing reform and to discuss our undercover 
storefront operations.
    As you all know, ATF's principal mission is to protect our 
communities from violent criminals who engage in acts of arson, 
criminally misused explosives and illegally possessed and used 
firearms. We accomplish this mission through both the 
enforcement of the criminal law and regulation of the firearms 
and explosives industries.
    When violent crime shakes our Nation, ATF is there to work 
side by side with our law enforcement partners providing our 
specialized skills, tools and experience. As was mentioned, in 
the past two years alone, ATF has provided crucial support to 
our federal and local partners in the investigation of the 
Boston Marathon bombing and the horrific mass shootings in 
Aurora, Colorado, Newtown, Connecticut and the Washington Navy 
Yard.
    Equally important though, we work with these partners to 
address the less visible, but no less devastating daily 
violence that plagues our cities and towns, large and small. 
Across the country, ATF pursues the most violent criminals, 
particularly those who engage in organized gang violence or 
illegally supply those gangs with firearms.
    A few of these successes are highlighted in the full 
written statement we have submitted.
    Our agents put their lives on the line on a daily basis. As 
they investigate our Nation's most violent criminals, they must 
make difficult and often instantaneous decisions every day, 
constantly balancing public safety, their own safety and the 
integrity of the operation.
    Of all the activities undertaken by ATF agents in the 
field, none is more risk laden or potentially more valuable 
than under cover work. ATF agents working under cover have 
infiltrated and brought down notorious motorcycle and street 
gangs, thwarted murder for hire plots and removed thousands of 
guns from the hands of criminals.
    The committee has asked that I address one under-cover 
tactic in particular, the use of storefront operations. A 
storefront operation is a valuable investigative technique in 
which the under cover law enforcement officers or agents 
operate a business that is calculated to identify and 
proactively intervene with criminals and criminal activity in 
high crime areas and hot spots. They are also conducted as 
joint operations with other federal, State and local law 
enforcement agencies and prosecutors.
    ATF conducted 37 storefronts between 2009 and 2013. ATF had 
one storefront active in 2013 and currently we have no active 
storefront operations.
    Storefronts are staff, equipment and resource intensive and 
require significant planning and coordination. The success of 
the storefront is also dependent upon a strong partnership and 
ongoing collaboration with our local law enforcement partners.
    The storefronts to be discussed here today identified and 
built cases against criminals and would be criminals in each 
and every location. As a result of our storefront operations in 
Albuquerque, Atlanta, Milwaukee, Pensacola, Portland and 
Wichita, over 250 defendants have been convicted and over 1,300 
firearms recovered.
    These defendants have over 350 previous felony convictions. 
These convictions and the firearms recoveries undoubtedly made 
the communities and the people who live there safer.
    I acknowledge, Mr. Chairman and members of the committee, 
that there were deficiencies in our execution and management of 
some past activities in certain storefronts, but I want to 
assure you that public safety is the utmost importance to me 
and our current team at ATF.
    We recognize that storefronts and other under cover 
operations require stringent oversight in all facets of 
planning and execution. We have put in place several policy and 
operational changes, created a tighter process for the 
authorization, management, oversight and review of under cover 
operations, including storefronts.
    As an organization, we are committed to learning from the 
past and using some of those hard learned lessons to improve, 
adapt and ensure we do not repeat the mistakes of our 
predecessors.
    In addition to our own efforts, ATF has and will continue 
to cooperate with all inspector general reviews and 
investigations. Some of the specific reforms we have instituted 
pursuant to our own initiatives are outlined in our written 
submission, but the important point is putting policy into 
practice. That is what we have been working on very hard for 
the last several years.
    It is one thing to put policies on paper but another thing 
to make them real and put them into practice. All ATF 
employees, including me, are accountable for their actions and 
must act at all times with professionalism, integrity and 
commitment to the agency's vital public safety mission.
    While I firmly believe we are on the right path, I am also 
realistic, Mr. Chairman, and recognize that meaningful change 
takes time.
    Mr. Chairman and members of the committee, I want to 
conclude by saying that ATF is proud to be at the front line 
against violent crime that we are recognized across the country 
for our expertise and take great pride in our successes that 
reduce gun violence and remove violent offenders from the 
streets.
    I am humbled by the exceptional work done every day by ATF 
special agents, industry investigators and the support staff in 
combating violent crime. In the face of sustained criticism 
over the last several years, the dedicated men and women of ATF 
have continued day in and day out to work tirelessly to enhance 
the safety for all Americans. They and their families have my 
deepest gratitude for their sacrifices that this often 
thankless work requires. I am honored to be here today to 
represent ATF.
    Thank you for your interest. I am sure you have questions 
which I will do my best to address.
    [Prepared statement of Mr. Jones follows:]
    
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    Chairman Issa. Thank you, Director Jones.
    I too want to reiterate the importance of the work that the 
men and women of the ATF do and how much we appreciate the many 
who take the risk to do the right thing in the right way.
    Let me go through a couple of questions. No surprise, the 
first one is a little related to Fast and Furious. Everybody at 
the Department of Justice, from yourself to the Attorney 
General, is living under the specter of Fast and Furious and 
how it discredited the men and women who do these jobs 
otherwise right.
    To make the record clear, was anyone fired as a result of 
Fast and Furious?
    Mr. Jones. Mr. Chairman, I can say publicly in this forum 
that everyone involved with ATF and the chain of command has 
either been disciplined or is no longer with the agency.
    Chairman Issa. Okay, but the answer of fired is no, is that 
correct? Say yes or no.
    Mr. Jones. As a result of the Inspector General's report, 
the answer is no.
    Chairman Issa. No one was fired, some chose to retire, so 
let us go to a particular individual of interest, William 
Newell. The IG recommended he be removed but in a settlement, 
we have learned he was demoted from SES to GS-13. Did you 
approve that settlement?
    Mr. Jones. Mr. Chairman, we provided to the committee in 
great detail a confidential document of the processes we 
followed internally following the release of the IG's report. 
It outlines with some particularity all of the individuals that 
were identified in that report and the actions taken.
    I am not at liberty in this public forum to get into 
details.
    Chairman Issa. Director, you are here pursuant to a 
subpoena specifically because Congress does not afford you that 
choice on the Privacy Act by the statute itself. More 
importantly, we know what occurred. My question simply was one 
that you can answer and has nothing to do with privacy. Did you 
make that decision?
    Mr. Jones. The process at ATF involves a professional 
responsibility board.
    Chairman Issa. Director, I understand. I am only asking did 
you influence or have an input into that call of his not being 
fired, his continuing to draw a paycheck and eventually retire 
at his high pay as an SES?
    Mr. Jones. I did not.
    Chairman Issa. You did not. Did your number two have that 
influence?
    Mr. Jones. The process involves the Bureau deciding 
official and the ultimate decision-maker is the Deputy Director 
with appeal to me should the employee not be satisfied.
    Chairman Issa. But the employee was satisfied and number 
two made the call, is that fair to say for the public record?
    Mr. Jones. That is fair to say.
    Chairman Issa. Similarly, the Professional Review Board 
proposed that Hope McAllister receive a 14-day suspension, 
which I consider pretty minor. This was reduced to a letter of 
reprimand. Would that also have gone through your deputy?
    Mr. Jones. Again, Mr. Chairman, the process is pretty well 
delineated in terms of the rights of the employees to grieve 
and the ultimate decision being made with my involvement with 
the Senior Executive Service being a little different than 
anyone who is not a member of the SES ranks.
    Chairman Issa. The Professional Review Board proposed that 
David Voth be demoted to a non-supervisorial special agent 
position. In settlement, he was demoted. Again, that would have 
been the same process you are alluding to?
    Mr. Jones. It was the process and it was followed.
    Chairman Issa. So McAllister, Voth and Newell, none were 
fired, all received certainly less than what the American 
people would expect.
    Let me move on to the five separate undercover storefront 
operations with the Milwaukee one being the best known.
    At this point, I am going to ask unanimous consent that the 
letter dated December 12, 2013 from the organization and 
nonprofit called ARC for people with intellectual and 
developmental disabilities addressed to the Attorney General be 
placed in the record along with excerpts from their website. 
Without objection, so ordered.
    Chairman Issa. I am going to read to you Director Jones, 
something from that letter in which Attorney General Holder 
they say decides that it is appalling and unfortunate. They 
say, speaking of the intellectually disabled, people with low 
IQs, ``They typically have limited if any understanding about 
their involvement in crime or the consequences of being 
involved in a crime. With few options for or opportunities to 
build safe relationships, their strong need to be accepted by 
peers in their own communities can create a unique 
vulnerability that people without IDD do not experience.''
    Have you become familiar with the effects that agents can 
have by buddying up to people with IQs in the 50s as a result 
of these operations?
    Mr. Jones. I think it is important to point out that we not 
target the developmentally disabled. When we run an undercover 
operation, we have very limited control over who comes in the 
door. I can tell you that my review of the circumstances, I 
have met with ARC and talked with them about the concerns with 
enhanced training, but all of these issues that have been 
identified in the media with respect to developmentally 
disabled individuals being targeted are the result of defense 
pleadings during the process.
    I am a former prosecutor. Oftentimes in investigations, the 
criminal investigators have no idea what the individual's 
intellectual capacity is.
    Chairman Issa. But your agents worked with these people 
including, at least one individual who had to be tutored, I 
understand, through what a machine gun was so they could send 
him out to buy one so they could then arrest him.
    Director, we have had a good relationship, you have a big 
job but I am going to ask you one closing question. Are you 
actually telling us that it is just an accident that your 
people managed to find people with extremely low IQs? These are 
people who are barely functional, who clearly demonstrate their 
special needs and limitations, very, very limited people.
    In the 70s and 80s, you might say he is just not the 
brightest ball; in the 50s and 60s, these are people severely 
handicapped who just want to buddy up, who really exhibit a 
type of behavior that most people in America are somewhat 
familiar with, even if it doesn't enter their lives.
    You are saying that your agents don't look for these people 
who are so vulnerable they can just buddy up and get them to do 
these things? Are you saying that under oath here today?
    Mr. Jones. No, I am not saying that.
    Chairman Issa. So your agents do target people with low IQs 
because they are susceptible, exactly as this letter say, to 
the kind of influence and what is most appalling to us is after 
they use these people often in dangerous positions, they then 
in many cases arrested the same people they had put in and 
talked into doing these crimes, is that correct?
    Mr. Jones. No, that's not correct.
    Chairman Issa. That is what the Milwaukee Sentinel says and 
it is what the evidence seems to show.
    I am going to let all of us continue on and hopefully I 
will come back to you.
    Mr. Cummings?
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Picking up where the Chairman left off, we had admitted 
evidence into the record earlier, this letter from the Federal 
Law Enforcement Officers Association, Jon Adler is the national 
president.
    This morning when I was reading this, there was a paragraph 
which kind of struck me because I too am very sensitive to what 
the Chairman just asked about, people with low IQs, having my 
own experience in my own family.
    This is what Mr. Adler said, and I wonder if you agree with 
this. In this letter, he says, ``It has been alleged that ATF 
targeted and exploited the mentally and incapacitated to 
facilitate storefront connections to perspective criminals. 
That is beyond absurd and no one in the field administers 
impromptu, Jeopardy-style quizzes to assess the IQ of 
perspective criminal elements. Prisons are occupied by 
criminals with IQs ranging from moron to genius.
    ``Anyone experienced in law enforcement will tell you that 
the former is the most difficult to use as a cooperator. 
Furthermore, criminal elements don't provide their Myers Briggs 
assessments to law enforcement and agents are left with making 
a variety of critical assessments of those they are dealing 
with in real time, including threat levels and safety issues.''
    ``Nonetheless, neither the ATF nor any federal law 
enforcement component is in the practice of exploiting mentally 
incapacitated individuals.''
    I didn't say that. Mr. Adler, the National President, said 
that. Do you agree with that? Do you have any issue with what 
he said there?
    Mr. Jones. Thank you for the opportunity to further explain 
some of the things the Chair was talking about.
    We do not target developmentally disabled or mentally 
challenged individuals. We target criminal behavior. When you 
are running an uncover storefront operation with all of the 
bells and whistles to make sure you can maintain the integrity 
of the operation, you have all kinds of individuals walking in 
the door. You have no idea.
    I think it is interesting to note that the media reports 
about this targeting of individuals really is based primarily 
on defense motions that were filed and the culling of the 
public record and there is no awareness by the special agent at 
that time. All of these individuals were brought to trial and 
all of them raised claims in the context of sentencing advocacy 
about their intellectual capacity. That is not unusual.
    I have been a defense lawyer too but that is after the 
fact, after someone has pled guilty. None of them claimed they 
were incompetent to stand trial.
    That is not to excuse the sensitivity involved and the 
enhanced training that may be involved not only with the 
developmentally disabled but people with mental illness. There 
was an article today in the New York Times that talked about 
the challenges to law enforcement, State, federal and local, 
and particularly with ATF doing violent crimes type of 
operations where we are having interactions with people on the 
street much like State and local law enforcement officials.
    It is a huge challenge for individuals who are in a law 
enforcement capacity to make determinations about someone's 
mental illness or their mental capacity.
    Mr. Cummings. Director, I would like to ask you about the 
specific action you took when you became of these allegations. 
When the Milwaukee Journal Sentinel published its first story 
in January 2013, you directed ATF's Office of Professional 
Responsibility and Security Operations to conduct an 
investigation, is that right?
    Mr. Jones. That is correct. I gave them 30 days.
    Mr. Cummings. Had you known about it before then?
    Mr. Jones. I had two indicators before that. One was some 
indication that a storefront in the St. Paul Field Division had 
been burglarized. That storefront closed down in September and 
it had been burglarized. I do have recollection about seeing 
the storefront being burglarized.
    I also had an indicator in the report about the stolen 
weapons but that was the extent of the red flags that were 
going off. I think the third thing was when we did see that 
there were landlord tenant issues in part flagged in the 
Milwaukee Journal Sentinel about how we left the storefront, 
that is when we dispatched internal affairs to go out and do a 
deep dive and look at what was going on in Milwaukee.
    Mr. Cummings. I think the Chairman would be interested in 
hearing this also. I said it in my opening statement. Can you 
explain what is so unique about the storefronts and what 
problems does it get to that you have to bring that kind of 
operation into play?
    Mr. Jones. It is an undercover technique that really is 
designed to do several things. One is to gather intelligence in 
the area that you locate the store, gather intelligence about 
crime gun trafficking, about criminal activity, it is also an 
opportunity to remove crime guns from the streets. That is in 
an ideal world but it is primarily an information, intelligence 
gathering technique and it is an opportunity to remove crime 
guns from the street.
    Mr. Cummings. In Baltimore where we have had a pretty high 
crime rate and had cooperation from ATF and many other 
agencies, one of the things I have always thought about and am 
concerned about, I live where The Wire was filmed, you talked 
about intelligence. If there is a drug operation going on and--
using this hypothetically--fighting each other for territory, 
how do you get information to prevent a murder?
    Would this kind of operation be helpful then? People look 
at murder rates in cities, but the question is how would police 
even know? Would this kind of operation go to that, too?
    Mr. Jones. This is just a tool in the toolbox. There are 
other things that we do, other undercover types of operations. 
There is Title III telephone intercepts and then there is the 
good old fashioned investigation where people take information, 
they pull the threads, they use confidential informants and 
build a case brick by brick. That takes information.
    Mr. Cummings. The Chairman talked about this. We have an 
agency that has been under the microscope, that has been highly 
criticized and it is also an agency that didn't have a 
permanent director for years. This was an agency that some 
would like to see disappear.
    It seems to me that one of the problems that I saw in Fast 
and Furious was that information did not filter up to the top. 
What is new now? What have you done to address that so that 
when you come before us, you can be held accountable?
    We were in situations before where the top people knew 
nothing about what was going on down below. I was curious to 
where we are now with that and did we learn anything from that, 
did we learn anything from these storefront situations. When 
you pulled together your recommendations for how you do 
business now, how is that different, if at all?
    Mr. Jones. A lot has changed. As I mentioned in my opening 
remarks, change takes time. One of the things I believe is 
really important to understand is the list that is required to 
turn policy and procedure into practice.
    When I came on as Acting Director in September 2011, the 
Monitor Case Program had been on paper in July 2011. It was a 
paper program, those were the fundamentals. We took a lot of 
action with the pen right out of the blocks.
    In addition to the pen, you need the people. You need to 
get the right people in the right spots, you need to construct 
a team and you need to emphasize the focus over and over again, 
that this has to be real. This has all taken place in an 
environment over the last several years and we have had 
tremendous turnover in the organization and a very challenging 
budget environment. We are grateful that we do have a fiscal 
year 2014 budget so that we can plan.
    This is an organization, as you pointed out, that had not 
had continuous leadership. Now, between acting and being 
confirmed, I have 30 months on the job. I very much have the 
blocks beat. I own it for good or bad. When something is wrong, 
I am going to take action to fix it.
    Those remedial steps don't always happen overnight. We have 
been working very hard with our team to make sure we are 
learning from mistakes, that some of the systemic challenges 
that were pointed out in the OIG Fast and Furious Report are 
fixed and they stick.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Chairman Issa. Thank you.
    I now recognize the gentleman from Ohio.
    Mr. Jordan. Thank you, Mr. Chairman.
    Mr. Jones, are you familiar with the name Catherine 
Engelbrecht?
    Mr. Jones. I think that is an individual--yes.
    Mr. Jordan. Are you familiar with the fact that she 
testified in front of this committee eight weeks ago and her 
testimony under oath was that in 16 years of operating her 
business, the only interaction she had with the Federal 
Government was filing her annual tax returns. She filed for tax 
exempt status for two organizations she was involved in 
creating, True the Vote and Kingstreet Patriots and then just 
all kinds of interaction with the Federal Government.
    OSHA visits her place of business. That never happened in 
the first 16 years but then OSHA visits her place of business 
twice. The IRS audits both her personal and business records 
for two years. The FBI pays her six visits, two in person and 
four on the phone. Another organization, your organization, 
pays her two visits as well.
    I sent you a letter six weeks ago asking for documents 
relating to the visit ATF made to Ms. Englebrecht's place of 
business and you have yet to respond to us. Is there a reason 
why you cannot get us those documents?
    Mr. Jones. I can check into what the delay is in the 
response.
    Mr. Jordan. It has been six weeks, Mr. Jones. It would seem 
to me to be a pretty simple search. You put the name 
Englebrecht in your computers, come up with the documents and 
get them to Chairman Issa and myself.
    Mr. Jones. I understand that Ms. Englebrecht's interaction 
with us--I cannot speak for any of the other federal agencies--
involved a license request, a qualification inspection and then 
a follow up.
    Mr. Jordan. She had that license for 12 years. Why did you 
suddenly decide to go visit her. The previous 12 years you 
never had any interaction with her, then you visit her in 
February 2012 and April 2013. Why did you visit her on those 
dates? Why did you visit her twice in 13 months when for the 
first 12 years, you never paid her any visits?
    Mr. Jones. Congressman, I will get back to you on the 
letter.
    Mr. Jordan. Let me read what the Inspector General's report 
said about how ATF goes out and looks at federal firearms 
licensees compliance inspections. It says you look for a high 
risk indicator. Is that true?
    Mr. Jones. That is one of the factors.
    Mr. Jordan. High risk indicators says this: such as a high 
number of guns used in crime scenes traced back to the 
licensee, numerous multiple sales by a federal firearms 
licensee to a single individual, thefts or losses of firearms, 
location in a high crime area, tips from State or local law 
enforcement agencies, do you know if you had any of those 
circumstances or any of those indicators or any of those 
present before you went to visit Ms. Englebrecht?
    Mr. Jones. I don't have information sufficient in front of 
me to answer that.
    Mr. Jordan. I can tell you, none of them were and yet you 
show up. In 12 years, no one ever heard from ATF in 12 years 
and then suddenly, she applies for tax exempt status and you 
knock on her door twice in 13 months.
    Mr. Jones. Congressman, I wish I had better answers.
    Mr. Jordan. This is a pretty important issue. It has been 
front and center in the news for over a year now. I do too.
    Imagine what this lady felt like. She gets the full weight 
of the Federal Government coming down on her, her family and 
her business and all she is trying to do is get a tax exempt 
status that had been routine for 15 years. Suddenly, the 
Federal Government is saying no, no, no, you are not going to 
get that tax exempt status and we are going to send four 
federal agencies out to harass you, including yours.
    Mr. Jones. Congressman, it is unfortunate that you and Ms. 
Englebrecht think it is harassment. From our perspective, it is 
part of our regulatory function.
    Mr. Jordan. Don't you think it is unusual that four federal 
agencies visited her in that short time frame?
    Mr. Jones. I cannot speak for other agencies other than 
ATF.
    Mr. Jordan. Let me ask you this. Did anyone at the White 
House encourage ATF to pay Ms. Englebrecht a visit in Dallas, 
Texas?
    Mr. Jones. No.
    Mr. Jordan. Did any other federal agency talk to you or 
anyone at ATF and encourage you to inspect and visit Ms. 
Englebrecht?
    Mr. Jones. No.
    Mr. Jordan. Did any member of Congress contact you or 
anyone at ATF and encourage you to go out and visit and inspect 
Ms. Englebrecht's federal firearms license?
    Mr. Jones. Not to my knowledge.
    Mr. Jordan. No knowledge of anyone contacting you at all?
    Mr. Jones. No.
    Mr. Jordan. Have you talked to any other federal agency 
about what you learned or discovered when you visited Ms. 
Englebrecht's place of business?
    Mr. Jones. Not to my knowledge.
    Mr. Jordan. What did you discover when you visited there in 
February 2012 and April 2013?
    Mr. Jones. It was a qualification inspection. I have no 
idea based on what I have.
    Mr. Jordan. Were there any citations, any problems, any 
fines, anything that you discovered?
    Mr. Jones. I don't know.
    Mr. Jordan. Our standing is there is not. We talked with 
Ms. Englebrecht. In fact, we had her sit in that same chair and 
answer questions from this committee.
    Let me ask one other question. Did Tom Perez have any input 
into your agency's determination to go inspect and investigate 
Ms. Englebrecht's place of business?
    Mr. Jones. No.
    Mr. Jordan. Mr. Chairman, I yield back.
    Chairman Issa. Would the gentleman yield?
    Mr. Jordan. I would be happy to yield.
    Chairman Issa. I also signed onto that letter and was 
disappointed we did not receive further answers before this 
hearing.
    I will say that in light of the deliberate and verified 
targeting of conservative groups by Lois Lerner and the IRS, we 
cannot take coincidence, things which occur which appear to be 
linked to somebody's application as a conservative for an IRS 
application. There were leaks from the IRS of names of 
contributors, including a constituent of the Ranking Member, 
that were damaging and appear to be deliberate.
    I hope you understand that when we see a pattern by an 
agency and then we see coincidences, it is our committee's 
requirement to fully explore what appear to be unusual 
anomalies. We are not accusing you of anything but we do need 
the specifics of both classified and unclassified, if 
necessary, so that we can understand how such an anomaly 
occurred.
    Mr. Jordan. Mr. Jones, can you give us a date when you can 
get those documents to the Chairman and myself and the entire 
committee?
    Mr. Jones. We will work with staff and your staff to figure 
out the specifics.
    Mr. Jordan. Sooner or later? Is it going to be as soon as 
next week?
    Mr. Jones. As soon as we can.
    Mr. Jordan. Thank you, Mr. Chairman.
    Chairman Issa. I only want your commitment that you will 
provide them.
    Mr. Jones. I have been cooperative with both your staffs 
and committee members in providing information as quickly as we 
can. I hope you understand there is a process. I do know that 
we have to get better answering the mail.
    We have worked very hard and have changed some of our 
processes to get better in answering the mail because we know 
you need information and we have it but we also have a certain 
process and level of sensitivity.
    Mr. Jordan. Mr. Chairman, again, this is simple. This is 
one individual, Catherine Englebrecht and the documents 
relating to why after 12 years of never showing up at her 
place, why you decided to go twice in 13 months. Any document 
that has Englebrecht mentioned in it, we want that information. 
That is a pretty simple search.
    I think you can have it to us in a week, a day maybe, but 
here we are six weeks later and you are telling us we will try 
to do it as soon we possibly can. We heard that last week from 
John Thomson at the IRS. He told us two years.
    Chairman Issa. I thank the gentleman.
    We now go to the gentleman from Virginia, Mr. Connolly.
    Mr. Connolly. Thank you, Mr. Chairman.
    Welcome, Director Jones. We are so glad you are in place 
and confirmed after seven years of Acting Director at the ATF 
and we finally have a confirmed Director. Thank you.
    I think it is quite notable that in your brief tenure, you 
have already made a huge change. As I understand it, 23 field 
special agents in charge, out of 25, are new under your 
leadership; 38 new headquarters senior executives are new under 
your leadership; to say nothing of looking at the storefront 
operations and making reforms there.
    You can look up Ms. Englebrecht. I remember that hearing 
too. She seemed to think that it was outrageous that the 
government was out to get her because she wasn't notified of an 
OSHA inspection at her manufacturing plant. Of course the 
statute is clear, that would actually be a violation of law if 
OSHA had given advance notice of when they were coming.
    She was found to have nine serious violations. She was not 
inspected for a period of time. We only have 2,200 OSHA 
inspectors for 8 million workplaces. It is not unusual that 
there can be a gap of as much as 20 years before a firm might 
actually be inspected.
    She settled, by the way. The original fine was $24,850 and 
she settled for $14,910, so other than that, the government is 
out to get her.
    Director Jones, did you volunteer to come and testify 
before this committee?
    Mr. Jones. I appear with an invite from the Chair.
    Mr. Connolly. Were you subpoenaed to come here?
    Mr. Jones. I believe there was a subpoena issued but I was 
coming before the subpoena was issued.
    Mr. Connolly. So you are not here as an unwilling witness?
    Mr. Jones. No. I look forward to answer your questions.
    Mr. Connolly. The Chairman has alleged ATF has not been 
cooperative in this investigation, so let me go through that.
    On April 15, ATF provided committee staff with a briefing 
by an Assistant Director with operational knowledge of the 
Milwaukee operation. Is that correct?
    Mr. Jones. After Internal Affairs did their report with a 
30 day turnaround, I believe they finished in March and we had 
a briefing because of some of the confidentiality issues.
    Mr. Connolly. On April 15?
    Mr. Jones. On April 15.
    Mr. Connolly. You were certainly cooperative with that?
    Mr. Jones. Yes, sir.
    Mr. Connolly. At the briefing, your staff provided an 
overview of the detailed report that you ordered from the 
Office of Professional Responsibility and Security Operations. 
Is that right?
    Mr. Jones. Yes, sir.
    Mr. Connolly. On April 30th, the Department of Justice 
provided additional information in response to the committee's 
request answering questions about the operation and your 
knowledge of it. Is that right?
    Mr. Jones. That is my understanding.
    Mr. Connolly. The Department provided documents in response 
to the committee's request including ATF's policies for the 
storage of firearms and vehicles and for conducting a 
storefront operation. Is that correct?
    Mr. Jones. Yes.
    Mr. Connolly. On May 31, the Department provided additional 
information, including steps ATF had taken for improvements to 
planning and oversight over undercover storefront operations. 
Is that correct?
    Mr. Jones. Yes, sir.
    Mr. Connolly. You did not provide the report from the 
Office of Professional Responsibility at that time. Is that 
correct?
    Mr. Jones. I believe that is correct, although it has 
been----
    Mr. Connolly. Don't jump ahead of me. At that time, you did 
not provide it?
    Mr. Jones. That is correct.
    Mr. Connolly. The reason you didn't provide it was
    Mr. Jones. We were fixing things.
    Mr. Connolly. And you were in the middle of a criminal 
investigation?
    Mr. Jones. Yes, we were.
    Mr. Connolly. You didn't want to compromise that criminal 
investigation, that would be a bad thing and the outlandish 
risk that somebody in this committee might leak it or use it?
    Mr. Jones. Once we produce information that could 
compromise a criminal investigation, there is always 
sensitivity when we have parallel investigations and requests 
outstanding from Congress, from the Inspector General and their 
active criminal investigations.
    Mr. Connolly. That report has now been provided to the 
committee, is that correct?
    Mr. Jones. With some redactions, yes.
    Mr. Connolly. On March 19, the Chairman issued the 
subpoena. In his letter to you, he accused you of ``a complete 
lack of cooperation with the committee's investigation.'' He 
stated, ``not once have you or your staff responded to any of 
these letters and produced even a single document.'' Is that an 
accurate statement of your relationship with this committee?
    Mr. Jones. I would hope that our relationship is 
appropriate and professional and that the information that we 
provide is done in a timely manner.
    Mr. Connolly. But the fact is, Director Jones, you and your 
staff have made yourselves available to this committee and you 
have produced documents, including the one we just talked 
about, is that correct?
    Mr. Jones. Yes, sir.
    Mr. Connolly. So it is not accurate to say you have not 
produced a single document or that you have been completely 
uncooperative with this investigation or is it?
    Mr. Jones. That is not accurate, sir.
    Mr. Connolly. I thank you and I thank you for your service, 
Director Jones. We wish you all the success.
    Thank you. I yield back.
    Chairman Issa. Mr. Connolly, would you like to take the 
witness stand? You seem to be not only good at giving 
testimony, but you are very good at getting Mr. Jones to give 
known answers.
    Mr. Connolly. Mr. Chairman, I have learned from the best.
    Chairman Issa. I have never been able to get Mr. Jones to 
answer something yes or no but you are a master and I 
congratulate you.
    Mr. Connolly. I thank the Chair.
    Chairman Issa. Thank you.
    We now go to the gentleman from Utah, Mr. Chaffetz.
    Mr. Chaffetz. Thank you, Mr. Chairman.
    Director, thank you for being here. Congratulations on 
being appointed and confirmed. We need you in this position and 
wish you nothing but the best.
    Mr. Jones. Thank you.
    Mr. Chaffetz. We want to thank the men and women who serve 
on the front lines in very difficult situations dealing with 
nefarious characters and God bless them for the work they do.
    I would ask unanimous consent to enter into the record an 
Office of Professional Responsibility and Security Operations 
Report on Operation Fearless dated March 21, 2013, simply the 
executive summary on pages 14 and 15.
    Chairman Issa. Without objection, so ordered.
    Mr. Chaffetz. Thank you.
    Director, is it safe to say that the analysis to take away 
from Fast and Furious was that it was fatally flawed and 
disastrous, how would you characterize what happened with Fast 
and Furious, in just a word or two?
    Mr. Jones. Fast and Furious?
    Mr. Chaffetz. Yes.
    Mr. Jones. That is why I am here. It was a lack of 
oversight and a leadership failure.
    Mr. Chaffetz. If you look at what happened on Operation 
Fearless, how would you characterize it?
    Mr. Jones. It was on a smaller scale because there is no 
comparison between Fast and Furious and what happened in 
Fearless. I am not excusing the things in our internal affairs 
report and we have taken remedial action to fix those things 
like we have every time we have identified them.
    Mr. Chaffetz. It was flawed as well, too, correct?
    Mr. Jones. It was flawed, there were mistakes that were 
made. It did result in prosecutions, it did result in guns 
coming off the street.
    Mr. Chaffetz. But it is certainly not the poster child of 
what it should be doing and certainly not the fix we hoped it 
would be.
    Mr. Jones. No. That operation had its flaws.
    Chairman Issa. Would the gentleman yield?
    Didn't it also result in a machine gun going on the street 
that has never been found, a yes or no would be good, like Mr. 
Connolly?
    Mr. Jones. Context is important too, Mr. Chair. I think it 
is important to note that the agent's vehicle was broken into 
between noon and three o'clock and the safe was broken into. It 
was unfortunate and weapons were lost, there were some 
recovered and there are some weapons that are still out there.
    Chairman Issa. Thank you.
    Mr. Chaffetz. Do you recall when Bernard, otherwise known 
as B.J. Zapor, was appointed as the special agent in charge of 
the Phoenix office?
    Mr. Jones. I believe last year Mr. Zapor moved to the 
Phoenix office. He was the Deputy Assistant Director of the 
Central but he moved to be Special Agent in Charge of the 
Phoenix Field Division.
    Mr. Chaffetz. What I find curious, Director, that here we 
have the Phoenix office probably the highest profile on the 
heels of Fast and Furious and yet this same person was in 
charge of an office that was executing on Operation Fearless.
    Here you have an interim report dated March 21, 16 
fundamental deficiencies, and you take the person who is in 
charge of one of those offices and put him in charge of 
Phoenix.
    Mr. Jones. Congressman, unlike Fast and Furious, there were 
very poor communications going on between the SAC in St. Paul 
and what was happening in Milwaukee.
    Mr. Chaffetz. But you took Mr. Milanowski who supervised 
the Milwaukee office and you put him in Phoenix as well.
    Mr. Jones. I sure did.
    Mr. Chaffetz. Why do you do that? If this thing is so 
flawed, you agree that it was flawed. With Operation Fearless, 
you took the people who were overseeing the Milwaukee 
operation, the SAC and then the person in charge of the 
Milwaukee office and they get to go to Phoenix. You have to 
clean that place up.
    I don't understand how we take two people responsible for 
that and put them in charge of Phoenix. I don't see the 
accountability, I don't see anybody getting fired. We are 
taking mentally handicapped people and putting tattoos on their 
necks. We have missing weapons. We have locations opening in 
proximity to schools in violation of the law. We have stolen 
agent weapons. We have an agent whose personal contact 
information was left in one of these offices.
    We are enticing people across State lines to engage in 
prostitution type things. I could go on for ten minutes listing 
the allegations. Where is the accountability?
    Mr. Jones. You have aggregated a lot of information without 
the opportunity to talk about some of those things in 
specifics. I can tell you that the individuals that were in the 
St. Paul division and the movements that were made were made 
for very good reasons based on their records of performance. 
That is not to excuse the mistakes made in Fearless.
    Mr. Chaffetz. You don't have anyone more qualified than Mr. 
Zapor and Mr. Milanowski to oversee probably the most critical 
office on the heels of Fast and Furious after you have an 
internal report dated March 21 with 16 deficiencies listed. You 
don't have anyone better than that to go and run that office?
    Mr. Jones. There is solid leadership in the Phoenix field 
division and a lot of oversight down there.
    Mr. Chaffetz. So you have total confidence in Mr. Zapor and 
Mr. Milanowski?
    Mr. Jones. I do.
    Mr. Chaffetz. Thank you.
    Chairman Issa. Director, you said context was important. 
Would you let everyone understand what the gentleman inferred 
about the tattoo on the severely disabled person?
    Mr. Jones. If you are talking about Operation Kraken in 
Portland, Oregon. I think it is important to note that the 
issue with respect to competency did not arise until the case 
morphed into litigation mode and defense counsel brought up the 
issue of intellectual capacity.
    I think with respect to the tattoo, that was a mistake.
    Chairman Issa. Context is important. Just tell the story so 
everyone on the dais knows because not everyone knows and 
certainly the public doesn't know, what the agents did and what 
the judge did.
    Mr. Jones. There as an individual, as I understand it, in 
Operation Kraken who on their own volition got a tattoo that 
was the logo for the storefront store and subsequently was 
reimbursed by the storefront in the undercover mode. That is my 
understanding.
    Chairman Issa. The judge's understanding was that the 
individual was talked into getting a tattoo which was basically 
bought by your agents. The judge ordered that you pay to have 
it re moved. Isn't that correct?
    Mr. Jones. That's correct.
    Chairman Issa. Thank you.
    We will now go to the gentlelady from Illinois, Ms. 
Duckworth.
    Ms. Duckworth. Thank you, Mr. Chairman.
    Thank you, Director Jones, for being here.
    I am going to assume that when you come across processes 
and procedures within the agency that are substandard or sub 
par that you would be committed to investigating them and 
perhaps coming up with better procedures. Is that correct?
    Mr. Jones. That is correct.
    Ms. Duckworth. Let us talk about what we have been talking 
this morning, the involvement of persons with developmental and 
mental disabilities.
    I am deeply, deeply concerned this has happened. I 
understand your statement that many of these persons are not 
being recruited by your agents but, in fact, are people they 
come across in the course of doing their jobs.
    What training do your agents have with how to deal with 
persons with developmental and mental disabilities once they 
encounter them?
    Mr. Jones. That was the topic of discussion with ARC and 
that is something we are looking at. Unfortunately, one of the 
things that happened in a poor budget environment is training. 
Training is not what it should be and I think not unique to 
ATF.
    When you talk about developmentally disabled or people with 
mental illness, there is not enough training of law enforcement 
officers to recognize and deal with in situations of stress or 
in undercover operations about how to deal and not deal with 
individuals. It is a very difficult challenge because 
oftentimes you cannot tell on the surface whether or not 
somebody has issues of that nature.
    Ms. Duckworth. Have you conducted an internal investigation 
into this issue?
    Mr. Jones. The general issue, no. We have talked internally 
about developing better training regimes for folks, 
particularly in the undercover setting.
    Ms. Duckworth. What about in the particular case of the 
individuals who were enticed into participating, the case of 
the individual who had the tattoo, the case of the gentleman 
with the IQ in the mid-50s?
    If your IQ is in the mid-50s, it is very clear that you are 
developmentally disabled. Have you done a formal investigation 
into those instances?
    Mr. Jones. Other than the Milwaukee operation, all of these 
other storefronts identified in the media that are of concern 
predated my arrival, so my level of knowledge about some of 
those instances is not as deep.
    I do know that the Inspector General has for review some of 
those storefront operations. We will work with them once they 
peal back the layers of the onion about the circumstances. 
Again, the media reports are not as wholesome with respect to 
the whole store.
    A lot of the issues that have been raised about peoples' 
mental capacity only came to light during the trial process and 
sometimes in the sentencing process as part of mitigation for 
the sentencing.
    This is not a circumstance where there are people who are 
obviously challenged walking into the storefront operation. 
These are after the fact knowledge that we learn of based 
primarily on the assertion of defense counsel.
    Ms. Duckworth. You don't think that your agents dealing 
with an IQ in the 50s knew he was developmentally disabled?
    Mr. Jones. To be honest with you, I don't know what they 
thought. I have never met the individual. I don't know other 
than the fact that they were competent to stand trial, they 
pled guilty, they were sentenced for criminal conduct and 
during the sentencing process, issues were raised about their 
intellectual capacity.
    Ms. Duckworth. People with far higher IQs than 50 can also 
be intimidated in the trial process to confess just through the 
stress situation.
    My question to you is, is there an IG investigation that is 
looking into this issue, correct?
    Mr. Jones. Part of what the Inspector General at the 
Department of Justice is looking into is this set of 
storefronts and looking at the details as to what happened 
when, and why.
    Ms. Duckworth. Leadership starts from the top. What 
commitment have you made personally to pursue this particular 
issue whether it is to figure out what the situation was, to 
figure out what kind of training can be done even on a limited 
budget basis?
    I am sure ARC would probably be willing to cooperate with 
you to provide some of that training or at least help you 
structure something. What commitment have you made to show the 
entire agency that this is important to you and is something 
that is not acceptable conduct among your agents?
    Mr. Jones. We have met with ARC. We are in discussions with 
them about developing an appropriate training package. We have 
put out word through our internal processes about situational 
awareness on the issue, but it really is on the go forward a 
matter of enhancing the level of knowledge and understanding to 
the agents who are out there as to what they need to be on the 
look out for and how to deal with situations like that. It is a 
training issue and we are working on that.
    Ms. Duckworth. I am out of time, Mr. Chairman.
    Chairman Issa. The gentlelady yields back.
    We will now go to the gentleman from Florida, Mr. Mica.
    Mr. Mica. Thank you, Mr. Chairman.
    Director Jones, I have a couple of questions about the 
operation in general. How long did this go on?
    Mr. Jones. Which operation?
    Mr. Mica. The storefronts? How long were the storefront 
operations going on?
    Mr. Jones. It depends on the storefront.
    Mr. Mica. The whole program. How many did you have, 30 
some?
    Mr. Jones. Thirty-seven storefronts between 2009 and 2013.
    Mr. Mica. That would be about a four or five year period 
that this operation went on.
    We have referred to some of the worse, egregious incidents 
that took place in Milwaukee. I think there were seven places 
that were cited at least in the report I have, Portland, 
Phoenix, Albuquerque, Wichita, Atlanta and Pensacola, all of 
which had botched operations. Is that sort of a given?
    Mr. Jones. I wouldn't describe them as botched. The one I 
have the most knowledge of was Milwaukee.
    Mr. Mica. Each of them had names. We have gone from Fast 
and Furious. I guess Milwaukee was given Operation Fearless. I 
think it should be renamed Operation Fearless and Brainless 
from what we have heard here today. Some of the things that 
went on are astounding.
    How much money did they spend in this program, can you tell 
me, during the four or five years, a million, half a million, 
any idea? Can you provide the committee with the amount?
    Mr. Jones. I believe some documents we have produced do 
give some indication as to the cost.
    Mr. Mica. There were 36 of these storefronts, 7 had 
horrible experiences. It doesn't sound like Wichita had an 
exactly glorious operation. A known criminal came in with two 
AK-47s and we only bought one. He was a known felon and was let 
out on the street with the one that wasn't purchased. Are you 
aware of that case?
    Mr. Jones. I do have some knowledge.
    Mr. Mica. AK-47, we bought one. I am told we paid such a 
high price. I want to find out how much we paid for these, that 
actually where we had these operations, we had little crime 
waves. I heard you could get these weapons purchased at a 
higher than black market rate, so ATF was buying them at a high 
rate and we had little crime sprees.
    I have asked the staff to also look at these different 
operations but there was a spike in crime in those 
neighborhoods. Are you aware of that?
    Mr. Jones. I know one of the indicators we have in terms of 
monitoring and making sure a storefront is operating, is it 
manufacturing crime.
    Mr. Mica. I am interested in the results. How many weapons 
were seized in the whole program, do you know, or purchased, 
not seized?
    Mr. Jones. I think in the six operations that are of 
particular interest to the committee, including Fearless, that 
were approximately 1,300 weapons taken off the street.
    Mr. Mica. I would like to see for the whole period of time 
what number of weapons.
    You said there were some indictments, how many indictments 
and arrests?
    Mr. Jones. We can get that specific information back to 
you.
    Mr. Mica. I would think that would be the first thing you 
would tell the committee, how many arrests there were, the cost 
of the operation, how many indictments--do you know how many 
indictments we had?
    Mr. Jones. In the six storefronts under discussion, 250 
defendants were convicted, over 1,300 firearms were recovered 
and the defendants had over 350 prior felonies. These are 
oftentimes not first time offenders.
    In Milwaukee, there were 16 federal defendants and 10 State 
defendants and 150 firearms. In Pensacola, which was February 
to October 2011, 78 defendants convicted, 275 firearms 
recovered.
    Mr. Mica. I am told the operations also had such a bad 
reputation that when the FBI was contacted about participating 
that they shied away or denied a cooperative effort with ATF. 
Are you aware of that?
    Mr. Jones. I don't have sufficient knowledge to know why 
that happened. I am not going to speculate as to what occurred 
to have our federal law enforcement partners pull out on that.
    I do know there were concerns expressed about data 
deconfliction and certain investigative concerns but I am not 
in a position to explain anything.
    Mr. Mica. It sounds like the whole thing went haywire. 
Again, I would like to see for the record how much it cost and 
what the results were for the whole period of time.
    I yield back.
    Chairman Issa. The gentleman yields back.
    We now go to the gentleman from Massachusetts, Mr. Tierney.
    Mr. Tierney. Thank you, Mr. Chairman.
    Director Jones, thank you for being here today to give us 
your perspective as the Director and formerly, the Acting 
Director, as a former US attorney and as a former prosecutor as 
well. I think that is helpful for us.
    I understand in many of these cases, it was local law 
enforcement that asked the ATF agency to set up these 
undercover storefront operations in their communities, is that 
correct?
    Mr. Jones. My understanding is that in all of those 
operations, there was to varying degrees local law enforcement 
involvement.
    Mr. Tierney. For example, in Milwaukee both federal and 
local law enforcement requested the agency's assistance. They 
wanted to target violent crime and gang crime and that is what 
led them to set up that particular storefront, correct?
    Mr. Jones. Yes, sir.
    Mr. Tierney. I think everyone knows that gun violence is a 
daily challenge in many of our communities. Can you tell us why 
a local law enforcement agency would make that type of request?
    Mr. Jones. Oftentimes, it is a resource issue. Sometimes it 
is the collaborative nature of ATF's relationship with State 
and local law enforcement. We have excellent relations with 
State and locals across the country and we partner with them on 
much of the work we do in cities large and small. That 
partnership is very important to us.
    Mr. Tierney. In your experience, how severe can the gun 
problem be in local communities where ATF is requested to 
assist?
    Mr. Jones. That varies. Over the last couple of years, we 
have tried to be more focused in our resources by dedicating 
resources to those places experiencing either in the short or 
long term higher levels of gun violence but I think the 
partnership we have with local law enforcement is critical to 
our being successful.
    Mr. Tierney. In the wake of all the horrific gun violence 
we have experienced in this country, the President developed a 
series of proposals that were aimed at reducing gun violence 
without infringing on the rights of lawful gun owners. They 
would provide law enforcement additional tools to prevent and 
prosecute gun crimes.
    Last year, a bipartisan group of the Congress, 100 Democrat 
and Republican members lead by Representatives Meehan, Maloney, 
Rigell and Ranking Member Cummings, introduced the Gun 
Trafficking Prevention Act of 2013. That was a bill that would 
have made firearms trafficking a federal crime for the first 
time and impose stronger penalties for straw purchases. Can you 
explain what straw purchases are?
    Mr. Jones. Straw purchasing essentially is making a 
misrepresentation on Form 4473 when you purchase a firearm 
legally that you are purchasing it for yourself.
    Mr. Tierney. When, in fact, you might be purchasing it for 
a convicted felon or somebody else who is prohibited from 
owning a gun?
    Mr. Jones. Yes, sir.
    Mr. Tierney. That bill would have made those penalties 
stronger. It was supported by law enforcement around the 
country, was based on previous testimony from ATF agents who 
came before the Congress and told us how helpful it would be to 
finally create a federal offense for firearms trafficking.
    Do you believe that would have been one useful tool in 
fighting gun violence?
    Mr. Jones. As a former prosecutor and as now the Director 
of the law enforcement agency responsible for enforcing the Gun 
Control Act, having a more fulsome federal firearms trafficking 
statute would be very helpful in constructing cases and doing 
investigations.
    Mr. Tierney. Can you talk a little bit about how ATF 
mission could be better accomplished by the adoption or 
strengthening of laws that would help reduce gun violence? Are 
there other ways we could be of assistance?
    Mr. Jones. I don't want to step out of my lane because of 
course Congress makes the law, we enforce the law and there is 
lots of input into it. I can give you the perspective of a 
former prosecutor and someone who now works with ATF that there 
are things that could be different.
    At the same time, I don't want to get into advocacy mode 
that is inappropriate.
    Mr. Tierney. I respect that and I don't want to put you in 
that position.
    Let me close by saying we have that Gun Trafficking 
Prevention Act of 2013 that is a bipartisan proposal. It has 
been supported by law enforcement across the country. Perhaps 
in one of our future hearings, rather than delving into 
conspiracy theories, we could talk about why that legislation 
hasn't been brought forward and passed.
    With that, I yield back my time.
    Chairman Issa. I thank the gentleman for yielding back.
    We now go to the gentleman from Texas, Mr. Farenthold.
    Mr. Farenthold. Thank you, Chairman Issa.
    Director Jones, thank you for being here. I know that is an 
uncomfortable seat sometimes. We may rename it the hot seat.
    I want to step back and get a big picture idea. Can you 
refresh my memory? What was the stated goal of your storefront 
operations?
    Mr. Jones. It is a business calculated to identify and 
proactively intervene with criminals and criminal activity in 
high crime areas.
    Mr. Farenthold. You open these storefronts and attempt to 
buy back guns from criminals?
    Mr. Jones. That is a piece of it. Its primary value is 
intelligence gathering. Oftentimes the storefronts are wired 
for video and audio, people make admissions, we can identify 
them, and we can run criminal histories to see if they are 
prohibited on some occasions.
    It is designed to attract a certain criminal element so 
that we can gather intelligence as to what is happening outside 
of the storefront.
    Mr. Farenthold. A normal goal of law enforcement is to move 
up the chain. Rather than getting the petty street criminal, 
you want to move up the chain to more serious offenders. That 
is normal operation for law enforcement, isn't it?
    Mr. Jones. Sometimes. If you are interested in sort of an 
enterprise theory of investigation to take out a whole gang, 
but sometimes you are talking about a single trigger puller who 
has a reputation in the community of just being a bad actor.
    Mr. Farenthold. We had testimony in this committee about 
Operation Fast and Furious that what they were really after was 
taking down a drug lord in Mexico or abroad. What concerns me 
is, are we developing a mentality where we are after the more 
serious offenders, damned the consequences?
    We saw in Fast and Furious we let guns walk across the 
border with tragic results. In this we see ATF encouraging 
people to saw off a shotgun, having to train someone in what an 
automatic weapon is.
    Shouldn't we be focused on getting the job done? When we 
start going beyond that, it is like we get in trouble.
    Mr. Jones. I think it is important that storefront 
operations, the ones we are talking about and the many others 
that are highly successful, are just a tool in a toolbox that 
we have. They are not the end all to be all. There are other 
undercover operations.
    Mr. Farenthold. I remain concerned that it is the Rudy 
Giuliani theory, if we fix the broken windows, the big stuff 
starts to take care of itself. Are we going for big headlines 
and big busts that may go forward with a political agenda or 
can we get down to the nitty gritty?
    In a speech, you said, ``It was time for the ATF to bring 
our A game to protect the American people and public from 
violent crime and on my watch, that is what we are going to 
do.'' Was Operation Fearless your A game?
    Mr. Jones. No, it wasn't the A game and we could do better. 
I freely admit that. We have learned lessons from Fearless. One 
of the reasons we dispatched internal affairs is to peal back 
the onion and see what went wrong, validate some of the things 
that worked and know what didn't work.
    I think it is significant to note that we hit the pause 
button on storefronts until we can get them right. Now, if we 
can't do them right, we don't do them. If we can't do them 
right, we don't them. If they are not sited right, if they are 
not resourced right, if they are not staffed right, if there 
isn't an intelligence purpose for it other than to generate 
numbers, we are not doing them.
    Mr. Farenthold. As we go forward, we have been having 
trouble from the Attorney General in getting Fast and Furious 
information. Are you willing to work hard with this committee 
to make sure we get to the bottom of these things so they don't 
happen again?
    Mr. Jones. I have read the Fast and Furious OIG report 
several times, including the last couple of weeks, and I fully 
understand some of the systemic issues. That is my challenge. 
There is ongoing litigation.
    Mr. Farenthold. We just cannot let this happen again.
    I have one other quick question that a constituent wanted 
me to ask you. We are getting reports of trouble with imports 
of 7N6 Russian surplus ammunition, yet we are not seeing 
anything from your agency about this. Are you planning on 
implementing a new policy on that? I know that is kind of out 
in left field.
    Mr. Jones. It is kind of out in left field. Brownsville is 
wonderful, by the way, but we will look into that if you will 
give us more context.
    Mr. Farenthold. We will get with you.
    I am out of time. I will yield back.
    Chairman Issa. The gentlelady from Illinois, Ms. Kelly.
    Ms. Kelly. Thank you, Director Jones.
    As we assess the problems in Milwaukee, I would like to 
know how this investigative technique has been used in other 
cities to target violent crime. You stated in your testimony 
that since 2009, ATF has conducted 37 undercover storefronts.
    Did the use of undercover storefronts only begin in 2009?
    Mr. Jones. No. It is an investigative technique that really 
has its genesis going back as far as 20 years in south Florida 
during the height of the trafficking in Florida. We have very 
good people to do it. They are not always in the right place to 
do it and make sure it is done right. We have had very 
successful storefronts around the country.
    Ms. Kelly. This technique has been used under other 
administrations like the Bush Administration?
    Mr. Jones. I think the administration and the politics has 
less to do with it than the public safety value of using this 
as an undercover technique. It has been used for a long time.
    Ms. Kelly. How do you measure the success of these 
operations?
    Mr. Jones. I think one measurement of success is the people 
who end up coming into court. There were some successful 
operations in other parts of the country that did identify and 
end in conviction for very long sentences of armed career 
criminals, people with extensive records.
    There have been instances where storefronts have brought in 
people who are on the cusp of committing egregious acts of 
violence. I think the intelligence value and the way that 
people have been brought in, the trigger pullers and the 
traffickers of crime guns get pulled into this and giving us an 
opportunity to build a case around that person, eventually 
indicting them and hopefully sending them to prison.
    Ms. Kelly. It is my understanding that the Pensacola police 
chief made a very strong statement about the outcome of an 
operation you did there in 2011, ``The value of this operation 
is immeasurable and we may never know how many lives this may 
have saved.'' Do you agree with the police chief that the 
undercover operation might have saved lives?
    Mr. Jones. I do agree with the police chief. It is very 
difficult to talk about the what if circumstance, but we do 
know there was good work done at a very fundamental level and 
trigger pullers and traffickers were pulled off the street and 
into the criminal justice system.
    Ms. Kelly. We already talked about some of the other places 
where storefront operations occurred. Are you satisfied with 
the results in Albuquerque, Atlanta and some of the places we 
talked about, Portland and Wichita?
    Mr. Jones. Again, I have deeper knowledge about some rather 
than others, but I do know that all of these operations 
resulted in criminals going to jail in the end and making the 
community safer.
    Ms. Kelly. Also, we talked a lot about the storefronts, but 
what other tools are in the toolbox to get illegal firearms off 
the street and out of the hands of violent criminals?
    Mr. Jones. One of the things we are doing particularly in 
Chicago is developing firearms trafficking techniques to see 
the flow in the black market of firearms. The crime gun pool is 
very deep and it is quite a challenge, doing things from the 
trafficking, following the gun, identifying FFLs who may be 
supplying crime guns, identifying individual traffickers in the 
black market who may be supplying crime guns
    We have worked real hard with folks in the northern 
districts of Illinois and in the northern districts of Indiana 
to study the firearms trafficking patterns and trying to 
intervene to cut off, to the extent we can, the supply and also 
make sure those engaged in unlicensed dealing, people selling 
guns on the black market, get our full attention so we can at 
least drain a little bit out of the crime gun pool.
    Ms. Kelly. Representing that area, I am very glad to hear 
that. When I was a State legislator, that was the first bill I 
passed, dealing with straw purchases, so I know how very 
important that is.
    Thank you so much. I yield back.
    Chairman Issa. The gentlelady yields back.
    We now go to the gentleman from North Carolina, Mr. 
Meadows.
    Mr. Meadows. Thank you, Mr. Chairman.
    Mr. Jones, in your testimony, I know we are highlighting 
the six different storefront operations today but I think you 
said ``other highly successful storefront operations.'' What 
are the other highly successful storefront operations?
    Mr. Jones. The one that immediately comes to mind--I do not 
want to overstep because some of these are still in the moment.
    Mr. Meadows. According to your testimony, there are no 
active storefronts right now, so I don't know that we would be 
putting anyone in jeopardy.
    Mr. Jones. Once they close down and it goes into 
prosecution mode.
    Mr. Meadows. What are the other highly successful ones?
    Mr. Jones. The one that immediately comes to mind, because 
I just saw a recommendation for an award, is Smoking Guns II in 
Miami Gardens in the southern district of Florida. That was 
very successful in taking out--
    Mr. Meadows. What is successful? How do you define success?
    Mr. Jones. Identifying a deadly armed criminal group 
engaged in both firearms trafficking and drug trafficking in 
south Florida.
    Mr. Meadows. Do you have storefront operations in Chicago?
    Mr. Jones. We don't have any current storefront.
    Mr. Meadows. Have you had them in Chicago?
    Mr. Jones. As I sit here today, I cannot definitively say.
    Mr. Meadows. I don't think you have. How about in Los 
Angeles? Have you had in the city of Los Angeles storefront 
operations?
    Mr. Jones. Again, I can't off the top of my head say that 
we have never had or have not had a storefront in Los Angeles.
    Mr. Meadows. Did you prepare to come and provide testimony 
today?
    Mr. Jones. Yes, I did.
    Mr. Meadows. Wouldn't you assume some of that, out of the 
37 storefront operations, that you would be able to figure out 
which ones you have actually had or not?
    Mr. Jones. My focus was on the ones----
    Mr. Meadows. I know where your focus was. In your testimony 
you talked about 37. You say today you can't tell me whether 
you had one in Los Angeles, Chicago or New York. Have you have 
any storefront operations in any of those three cities?
    Mr. Jones. Without certainty, right here now, I can't say.
    Mr. Meadows. What is your best guess?
    Mr. Jones. I don't like to guess when I am sitting here 
under oath.
    Mr. Meadows. You have staffers behind you. Do they know if 
you have had any storefront operations in any of those three 
cities? I don't believe you have but have you had any?
    Mr. Jones. We will find out.
    Mr. Meadows. Under what matrix do you decide where to put 
storefront operations?
    Mr. Jones. Primarily by the intelligence needs and the 
commitment of locals to work with us.
    Mr. Meadows. You are saying in those three cities, you 
might not have had the commitment of locals to work with you?
    Mr. Jones. It is a technique that we use on occasion but it 
is not the only technique that we use.
    Mr. Meadows. Let me tell you the reason I ask. Those three, 
according to the Center for Disease Control Prevention, 
according to their report, are the top three cities in terms of 
gun-related violence. Yet you don't seem to have storefront 
operations in the very top three in our Nation in terms of gun-
related violence.
    The President even talks about Chicago. Yet you don't have 
operations there. Why would that be?
    Mr. Jones. Because we are using other types of 
investigative techniques in those major metropolitan areas 
where the dynamics on the ground and the opportunities to 
identify bad guys are a lot different than in smaller venues.
    Mr. Meadows. That is exactly what I thought you would say. 
There is not a direct correlation between storefront operations 
and gun related violence is what you are saying.
    Mr. Jones. Depending on the venue you open, if you pick the 
right spot, yes.
    Mr. Meadows. Those are the top three, you have no 
storefront operations, so there is not a direct correlation in 
terms of selling out of a storefront versus the number of 
deaths that happen according to gun-related violence? There is 
no empirical evidence that would suggest that?
    Mr. Jones. It is a technique.
    Mr. Meadows. I understand technique. Is there any empirical 
data or evidence to that effect because where you are placing 
these would suggest there is not.
    Mr. Jones. We have placed them all around the country.
    Mr. Meadows. Why didn't you place them in the top three 
gun-related, violent, murder capitals of our country? Why 
wouldn't you place them there? If there was a direct 
correlation, why wouldn't you place them there?
    Mr. Jones. One thing that immediately comes to mind is in 
those larger urban areas, you have very difficult deconfliction 
issues going on because a lot of people are playing in the same 
territory. There are safety risks involved with this type of 
undercover technique, both in terms of maintaining its 
integrity, sharing information.
    Mr. Meadows. If the Chairman will indulge this last 
question?
    Chairman Issa. Briefly.
    Mr. Meadows. Is it easier for an ATF agent to blend in in 
Wichita, Kansas than it is in New York City?
    Chairman Issa. I am not sure if he can.
    Mr. Jones. I can't answer that. In some of these 
storefronts, we bring in undercovers from different parts of 
the country. One reason we don't often have local law 
enforcement in an undercover capacity in a place like Milwaukee 
where they weren't behind the counter is because they work in 
Milwaukee and may run into somebody they have arrested.
    Maintaining the integrity of the undercover operation does 
sometimes require bringing in people from out of town because 
they are not known.
    Chairman Issa. Thank you.
    At this time, we go the gentlelady from California, Ms. 
Speier.
    Ms. Speier. Mr. Chairman, thank you.
    Thank you, Director Jones.
    I think this hearing helps me solidify is the importance of 
having another hearing to talk about storefronts in general, 
Mr. Chairman. I don't know about you but I want to know how 
much money we are spending on this kind of activity. Mr. Jones, 
maybe you can tell us. How much do you budget for storefronts a 
year?
    Mr. Jones. We don't budget for storefronts. We budget for 
operations. In looking at some of the basic information on 
this, there is the cost of the site.
    Ms. Speier. We need to find out how much you spend. You 
have 37 of these storefronts. I certainly would like and 
probably the Chair as well documentation to tell us how much 
was spent on these storefronts and what was recovered as a 
result.
    I was with our U.S. attorney this morning who said you 
actually had a very successful one in Gilroy, California called 
Operation Garlic Press. Where do you come up with these clever 
names?
    Chairman Issa. Gilroy and garlic, that is not all that 
clever.
    Ms. Speier. It is about taking advantage of the fact that 
it is the garlic capital of the world.
    She indicated to me that there were some 92 persons that 
were charged or at least found to be gun running. I think we 
need to have a better sense and a better accountability of how 
much money is being spent on each of these operations and why 
certain areas are picked and others are not.
    Chairman Issa. Would the gentlelady suspend for a moment?
    Ms. Speier. I certainly will. Just give me extra time.
    Chairman Issa. Director Jones, there has been a series of 
questions on a bipartisan basis. Maybe to cut short the need 
for those questions, would you agree to prepare a secure 
briefing for the committee that would include essentially what 
Ms. Speier is talking about but expanding on cost, all of the 
operations and obviously because the earlier briefing we had 
alleged there was only one in Milwaukee that was flawed and now 
we have similar situations in others, a more expansive ability 
to answer questions on the good, the bad and the ugly, if you 
will of these various operations around the country?
    Is that something you could give us a timeline and commit 
to that we would make the committee available?
    Mr. Jones. I think it would be of value to educate because 
I think these storefronts in particular are the ones that had 
issues but as Congresswoman Speier says, there have been some 
successful storefronts. They are a valid technique.
    I think it would be of value. We can work with staff to get 
that in the appropriate venue because again, we always have law 
enforcement sensitive, we have techniques and don't want to 
inadvertently educate bad guys.
    Chairman Issa. I would appreciate it. Today's hearing, Ms. 
Speier and I are both aware, is on some flaws that you are 
working on but I think it would be helpful. We would probably 
bring this room into a secure mode and a time to be arranged if 
your folks before the end of the hearing can give us an 
estimate, we will make that time available in a few weeks.
    Ms. Speier, thank you. It was time to ask the question. The 
gentlelady's time fully continues.
    Ms. Speier. Thank you.
    I also want to alert you to a program called Operation 
Lipstick that started in Boston. It is a program focused on 
women. Since more than 50 percent of gun trafficking cases 
involve straw purchases, and guns purchased by women are two 
times as likely to be used to commit a crime, they are working 
in the communities to try and get the word out to women who 
tend to be the girlfriends and wives to go in and buy the guns, 
that they become accomplices of crime as well. I think it is 
one of the kinds of activities that we should be looking at as 
well.
    I also want to point out that you have the ability to 
recommend to the President that he no longer allow the 
importation of Russian bullets or assault weapons. George H.W. 
Bush did that by Executive Order. It was enhanced by President 
Clinton. It expired under President George W. Bush. So the 
importation of the guns and bullets continues.
    We have a case in California where a State senator was 
willing, for a campaign donation, to provide an SEI undercover 
agent with guns and shoulder missiles from the Philippines. We 
have some other areas we can look at and I hope you will take 
that into account.
    The Milwaukee Journal Sentinel suggested that the ATF 
storefront operation was actually generating crime. I would 
like for you to respond to that allegation.
    Mr. Jones. That is a concern when we design a storefront 
operation. We need to have indicators, for example, from the 
local police department as to whether or not there has been a 
spike in burglaries. For example, we know there were issues 
with respect to folks who purchased weapons and then resold 
them.
    That is always a phenomena that you have to maintain a 
certain level of risk to make sure that is not happening.
    Ms. Speier. Let me ask you this. Were they actually selling 
or purchasing guns for sky high prices?
    Mr. Jones. From what I have seen, the prices were 
comparable to the black market price. The price that we paid in 
these operations for a gun really is not what is listed at 
lawful FFL; it is a black market gun. These are crime guns, so 
there is value on them. If it has an obliterated serial number, 
for example, it has great value.
    Ms. Speier. For clarification, were any of these firearms 
that were purchased and sold at those storefronts?
    Mr. Jones. No.
    Ms. Speier. I think that is very important.
    Mr. Jones. We do not sell. It is one way. We buy the 
weapons. We do not sell the weapons.
    Ms. Speier. Thank you.
    My time has expired.
    Chairman Issa. I thank the gentlelady.
    We now go to the gentleman from Michigan, Mr. Bentivolio.
    Mr. Bentivolio. Thank you very much, Mr. Chairman, Ranking 
Member Cummings and distinguished members of the committee.
    As we all know, one ``aw, shucks'' can wipe out a thousand 
``attaboys.'' In my experience working with ATF over the years, 
it has always been professional, brave and valiant, but after 
reading this testimony, I cannot even get my head around what 
happened in this case.
    When I was preparing for this hearing yesterday, I actually 
thought my staff was playing an April Fool's joke on me. The 
operation could not have been this botched; this investigation 
could not have been this mishandled. I am not sure where to 
even begin.
    I do know I have a frame of mind right now after reading 
and hearing this testimony. I would join any member of Congress 
who sponsors a bill to keep guns out of the hands of ATF 
agents. With that in mind, I have just a few questions.
    ATF agents recruited mentally handicapped people or people 
with an IQ in the 50s to assist with this operation. Later 
these individuals were arrested for their involvement. I taught 
special education when I was a teacher and was surrounded by 
these kids. They are some of the best, most caring and nicest 
people who try their best and want to please. I am appalled 
that you would use these individuals like this and then arrest 
them later.
    Does ATF even regret using these individuals in this way?
    Mr. Jones. Hindsight is 20/20, Congressman. There are 
lessons to be learned. As I mentioned earlier, there are 
opportunities for us to do better in terms of situational 
awareness training and making sure we do it right.
    Mr. Bentivolio. In my experience, there is a difference in 
individuals with low IQ. It is pretty easy to spot. You would 
think anyone with any life experience could just ask the simple 
question, is this the person we should be using for this 
operation. You are going to discontinue using individuals in 
this way that have this low IQ?
    Mr. Jones. To the extent we know that up front at that 
stage, in an investigation, of course.
    Mr. Bentivolio. Has ATF apologized to any of these 
individuals?
    Mr. Jones. I know the person in particular from the 
Portland operation, we have had some interaction with them but 
many of the individuals are in the custody of the Bureau of 
Prisons, unfortunately, so the opportunity for interaction is 
limited.
    Mr. Bentivolio. In the storefront location in New Mexico, 
ATF agents gave lessons in how to identify a machine gun. At 
the location in Kansas, ATF agents told a man how to saw off 
the end of a shotgun. Is it normal for ATF agents to teach 
heroin addicts and drug dealers how to tell the difference 
between a machine gun and a semiautomatic weapon?
    Mr. Jones. I think it is important to note that when these 
ATF agents are in an undercover capacity, they have to go into 
role unless you want to blow the integrity of the operation. 
Again, you have to make decisions about the cost benefit 
analysis.
    Mr. Bentivolio. Talking about your decisions, earlier you 
mentioned that before you go into any operation, you do a risk 
analysis. Did I hear that correctly? You evaluate the risk?
    Mr. Jones. Yes, sir.
    Mr. Bentivolio. Was one of those highly successful 
operations in a storefront the one located within 1,000 feet of 
a middle school? If, that's the case, why wasn't a risk 
analysis done for that? Why would you put one of these 
storefront operations where you have criminals coming in with 
these guns and rifles within 1,000 feet of a middle school?
    Mr. Jones. If I am correct in my recollection, I think the 
case you are discussing is the Portland operation. It was sited 
poorly in terms of its proximity to a school. Current state is 
making sure the location is not only secure, but you avoid 
situations like that. That is after the fact.
    Mr. Bentivolio. So you have an ongoing?
    Mr. Jones. Three years ago.
    Mr. Bentivolio. After action review, what went right, what 
went wrong and how could we do better?
    Mr. Jones. Yes.
    Mr. Bentivolio. You have a policy in place applying those 
things you have learned for future operations?
    Mr. Jones. Yes, sir, already in place.
    Mr. Bentivolio. Seems like once again you are learning the 
lessons of how not to do an operation on a regular basis.
    Thank you. I yield back.
    Chairman Issa. I thank the gentleman.
    We now go to the gentleman from Missouri, Mr. Clay.
    Mr. Clay. Thank you, Mr. Chairman.
    Let me thank also for conducting this hearing to allow me 
to publicly thank Director Jones and the men and women of ATF 
for putting their lives on the line on a daily basis to protect 
communities throughout this country.
    One example I would like to share with my colleagues is the 
storefront operation conducted in my hometown of St. Louis, 
Missouri. The St. Louis and East St. Louis metropolitan area is 
consistently ranked in the top five most dangerous cities in 
overall violent crime.
    Director Jones, in your testimony, you highlighted that in 
April through July 2013, ATF led a 15 week surge including a 
storefront operation to reduce violent crime in my district. 
According to several news outlets and other accounts, this 
surge was successful. Let me repeat for my colleagues, this 
surge was successful.
    The storefront operation was successful, resulting in 159 
defendants being charged of which 78 percent were previously 
convicted felons. In addition, 267 firearms and significant 
quantities of illegal narcotics were taken into ATF custody.
    This enforcement action had a significant impact on violent 
crime as an analysis by the St. Louis City Police Department 
comparing crime statistics from January through July 2012 to 
statistics for the same time frame in 2013 revealed that murder 
was down 15.7 percent, robbery was down 22.3 percent; and 
aggravated assault was down 22.6 percent.
    Director, my first question is, in enforcement actions like 
this one in St. Louis, how much of a priority does ATF place on 
working cooperatively with local law enforcement to address 
public safety and law and how important is it to reducing 
violent crime?
    Mr. Jones. I think it is absolutely critical. The 
opportunity we had last year to work an enhanced enforcement 
operation in St. Louis was probably one of the better 
operations we have done in my tenure because we brought the 
full package.
    We brought in experts who know how to do a storefront; we 
brought in experts who did undercover. We worked very closely 
not only with the St. Louis Police Department but also the East 
St. Louis Police Department.
    I think it is an example of the pivot that we have made on 
two things: having a focus, a unified effort with our State and 
locals in getting the resources we need to the spot. 
Unfortunately, what we did in St. Louis cannot be replicated 
all around the country and it is one of the things we have 
moved to with the mobility model so we can bring access from 
around the country to do it and do it right or not do it at 
all. That is particularly important when we do undercover 
operations.
    Mr. Clay. That is why I take this opportunity to say thank 
you to you and the men and women of the ATF speaking on behalf 
of my constituents who want to live in a safer environment, who 
want their neighborhoods cleaned up, who want those illegal 
weapons taken off the streets.
    What is the impact of violent crime on the youth and people 
of color in a city like St. Louis and what success is ATF 
having in disrupting and dismantling gang violence in areas 
that you target?
    Mr. Jones. Unfortunately, there are pockets of violent gun 
crime that increasingly are involving younger individuals. I 
call it more disorganized crime. It is blocks, turf and it is 
ingrained. The challenges are in St. Louis, Memphis, Chicago.
    There are areas around the country where we are working 
very closely to do two things, identify traffickers so we can 
disrupt the crime gun pool and identify the worse of the worse 
in terms of the trigger pullers who are often not only teaching 
downstream a culture of violence but also perpetrating violence 
themselves. It is the armed career criminals in these 
communities who are of particular interest to us.
    Mr. Clay. Thank you so much.
    Mr. Chairman, we should be supporting these efforts and not 
trying to conduct witch hunts.
    Chairman Issa. I am sure the gentleman knows we are not. 
Would the gentleman yield to the Ranking Member?
    Mr. Clay. Certainly.
    Mr. Cummings. Thank you, Mr. Clay. I am glad you mentioned 
that.
    I thought I would go back to what the Chairman said earlier 
with regard to the briefing you are going to give us. In light 
of what Mr. Clay just said, I think it is extremely important 
that we give out some of the good stuff that is happening.
    I can tell you living where I live, many feel sometimes 
like they are in a terror zone and it is hard. Trying to get to 
the very people Mr. Clay talked about is so very, very 
important. If the ATF has a way of doing it right, I am glad 
you said what you said, do it right or not at all, it sounds 
like the kind of tool that would be very, very helpful in 
neighborhoods like the one I live in.
    I am really looking forward to that and I am looking 
forward to all the changes you are making to make sure you get 
it right. I hope we will have that briefing very soon.
    Thank you.
    Chairman Issa. I thank the gentleman.
    We now go to the gentleman from Florida, Mr. DeSantis.
    Mr. DeSantis. Thank you, Mr. Chairman.
    Welcome, Director.
    In August 2013, you were sworn in, is that correct?
    Mr. Jones. Time flies. I think it was August.
    Mr. DeSantis. I mention that because I am going to ask 
about some of the issues my colleague from Ohio, Mr. Jordan, 
asked in terms of ATF's visit to this woman in Texas.
    I just want to clarify whatever happened during those 
instances happened before you came onboard. At this point we 
are asking you, in terms of responding to Mr. Jordan's letter, 
to be transparent about what happened. If nothing sinister 
happened, nothing sinister happened.
    We are in a situation where this woman applied for tax 
exempt status for two conservative leaning groups. After having 
never had any interaction with law enforcement for 20 years, 
she was visited by the IRS, OSHA, FBI, ATF and Texas' version 
of the EPA.
    This committee has been consumed with dealing with 
targeting done by the Internal Revenue Service. We have had 
high officials in the IRS who have refused to testify and we 
have had trouble getting documents. I hope you will be a force 
for transparency.
    I understand they had a license for 12 years. Basically, it 
is a precision metal cutting company. They did the firearms 
license, thinking maybe we will do firearm parts at some point. 
They never actually manufactured any firearms parts. Even 
though they had a license for a while, ATF audited them in 
February 2012. Do you know the reason why that audit took 
place?
    Mr. Jones. Now that I have had an opportunity to look at 
the timeline, my understanding is that Ms. Englebrecht's 
business was issued a Plan B firearms license by ATF in October 
2009. In February 2012, they had a routine compliance 
inspection. There were some minor recordkeeping errors and a 
warning letter was issued. Then in April 2013, we conducted a 
follow up inspection and there were no violations, over a 
period between 2009 and 2013, as simple as it sounds, 
coincidence and explanations, irrespective of what other 
agencies were doing.
    Mr. DeSantis. I understand that.
    How common is it that given they were not involved in 
firearms manufacturing at all, I understand they had the 
license thinking they may do it, devoting the resources to 
auditing them versus using resources in other areas. I would 
imagine you guys have limited resources and know you cannot 
possibly deal with every issue out there, what went into or do 
you know what went into the decision to focus those two visits 
on Englebrecht Enterprises given that they weren't even 
manufacturing any firearm parts vis a vis doing that in other 
areas that may have been more pressing in terms of the threat 
they posed to the public?
    Mr. Jones. I think there are two things to keep in mind. 
The investigative function, the regulatory function, we have 
approximately 700 investigators around the country and 
thousands of licensees both FFLs and FELs and they do have a 
punchlist.
    If you read the IG report, you know sometimes we have 
things fall behind simply because of the volume. We have 
discretionary time when we can focus on naughty FFLs, those few 
that are naughty and then there is the nondiscretionary time.
    A 2009 FFL license issued after a qualification inspection 
and coming down for a routine compliance inspection within 12 
years, I am not sure which field position would cover that but 
I know both Dallas and Houston field divisions have a pretty 
vibrant inspection schedule because of the number of licensees 
down there.
    Mr. DeSantis. You would definitely state that it would be 
inappropriate if her filing for tax exempt status for 
conservative leaning organizations influenced ATF in any way, 
you would admit that would be totally inappropriate if 
something like that were to happen?
    Mr. Jones. That is not part of our practice. We have our 
hands full trying to keep up with the volume of inspections 
required, qualifications, follow up compliance and people work 
very hard on the inspections front. They are doing the best 
they can. That is not into the mix of who ends up on the 
compliance inspection.
    Mr. DeSantis. I appreciate your time today. I would just 
reiterate the Chairman and Mr. Jordan, if you could just get us 
answers to that letter in due time, we would really appreciate 
that.
    I yield back. Thank you.
    Chairman Issa. I thank the gentleman.
    We now go to the gentlelady from New York, Mrs. Maloney.
    Mrs. Maloney. I thank the Chairman and Ranking Member for 
holding this hearing.
    Director Jones, welcome.
    I know the nature of today's hearing is about ATF's 
undercover storefront operations but we have never had the 
Director of the ATF before. I would like to ask you some 
questions related to ATF hearings we have held before 
specifically on the problem of gun trafficking.
    In 2001, the House Oversight Committee had one of your 
special agents, Peter Forcelli. I asked him whether criminal 
penalties were so weak that federal prosecutors are discouraged 
from pursuing cases involving the so-called straw purchasers, 
those who buy guns and sell to known felons and others who 
legally cannot have them.
    He testified in his written and oral statement that the 
current straw purchasing laws ``are toothless.'' That is what 
he said. He further said that existing gun laws do not provide 
law enforcement officials the tools they need to successfully 
stop the flow of illegal guns to Mexico. He also testified that 
in his view, Operation Fast and Furious was a partial 
consequence of these deficiencies.
    It is an issue of great concern in the country. Ms. Speier 
mentioned the lipstick cases where they are trying to inform 
women but shortly after Sandy Hook, in western New York in 
2012, a week or two afterwards, there was a terrible case where 
a prior felon was released and a straw purchaser got him a 
bunch of guns.
    He then put his house on fire and when the police and fire 
department came to put the fire out, he mowed them down, shot 
them. Certainly if this woman had known there would be real 
penalties, I doubt she would have been out there buying guns 
for him.
    These agents testified in that hearing that don't even 
bother to prosecute or refer for prosecution because the 
penalties are so weak that you are not even doing anything. It 
is almost not worth the time of law enforcement.
    In response to that, I offered a bill that made trafficking 
in guns a felony. I find it almost unbelievable that 
trafficking in illegal guns is not a felony. It increases the 
penalties on straw purchasing.
    An incredible amount of law enforcement across the country 
came out in support of this legislation. It is bipartisan. An 
NRA member, Scott Rigell, is one of the prime leaders on this, 
as well as Ranking Member Cummings and a former prosecutor from 
Pennsylvania, Representative Meehan, has been very active on 
it.
    It seems to me if we don't give the tools to law 
enforcement their job, the testimony from these agents was we 
don't even bother to prosecute because the penalties are so 
weak, it is not worth our time to pursue it.
    My question is, do you think we should have stronger laws 
and penalties against straw purchasers? Do you think it would 
stop the practice that has been such a terrible problem in our 
country? According to an ATF report in 2000, ``straw purchasing 
is the most common channel of illegal gun trafficking, 
accounting for almost half, 46 percent of all investigations.''
    Do you think stronger penalties would help bring down that 
number? If you could comment on it, I think it is a very 
important issue. Keeping guns out of the hands of criminals 
should be a top priority.
    Law abiding people can own guns. It is not aimed at them. 
It is for criminals, drug dealers, gang dealers.
    Mr. Jones. Congresswoman, I think that is one of our 
focuses in our overall mission. As I mentioned before, a 
federal firearms trafficking statute would be helpful. I know 
there are increasing efforts across the country by U.S. 
attorneys, with whom we work closely, to do more straw 
purchasing or providing a gun to a prohibited person. I know 
that the U.S. Sentencing Commission has recently revised their 
guidelines.
    To get back to your point, a federal firearms trafficking 
statute would be helpful. I would push back a little bit about 
these cases are not being done. I think they are being done by 
U.S. attorneys around the country. The challenge is more 
getting the fact pattern.
    The lipstick phenomenon, a criminal defendant who has no 
criminal history who may be in a relationship with a bad guy 
and ends up in federal court for the first time is different 
from someone who has a pattern of purchasing weapons, doing the 
sort of aggregation and selling them on the black market.
    Mrs. Maloney. The testimony of your agents was that it was 
a slap on the hand or a paper notice. Possibly we should do a 
joint GAO request to find out how straw purchasers are treated 
when they are convicted. That was the point they made. They 
don't try to convict because the penalties are so weak.
    The bill we worked on increases penalties. I believe it is 
supported by your department and other law enforcement. I think 
it is worth looking at. I think a GAO report of what does 
happen to traffickers would help.
    Chairman Issa. I thank the gentlelady.
    We now go to the gentleman from Georgia, Mr. Collins.
    Mr. Collins. Thank you, Mr. Chairman.
    This is an issue for me. I thank you for your service and 
also the military as well.
    As I was growing up one of the things I always found was 
when one officer did something wrong, everything else got tight 
and you were basically assuming that everybody was the same.
    This disturbs me in the sense that the storefront 
operations were overall looked after from DC but handled in the 
agency in the different areas. I am going to concentrate 
specifically on Atlanta because some of your comments today are 
not consistent with actions that happened in Atlanta and I want 
to talk about that.
    Atlanta Blaze, the storefront operation, bought stolen 
goods, including guns stolen from police squad cars. How many 
stolen police weapons did ATF agents in Atlanta recover?
    Mr. Jones. I know a bit about Atlanta Blaze because it is 
one of the historical ones. It is not something that was going 
on when I came onboard.
    Mr. Collins. I understand that but today's hearing title 
was undercover storefront operations involving all of these. I 
would have expected you to have been at least briefed on all 
the ones that were going on especially given the problems that 
existed in many of them.
    Mr. Jones. I do understand that in Atlanta there were some 
weapons that ended coming into the storefront that were the 
result of thefts steps from other police officers.
    Mr. Collins. What did the ATF agents do with the weapons 
when they purchased them and where are those weapons now?
    Mr. Jones. I believe the case is completed. I am not 
certain as I sit here today where the weapons are now.
    Mr. Collins. Are you aware that the Atlanta Police 
Department spent considerable resources interviewing witnesses 
and attempted to recover the weapons because ATF agents did not 
report the guns as recovered? Why didn't the ATF properly 
return the guns to the Atlanta Police Department?
    Mr. Jones. I am not aware of that.
    Mr. Collins. Did you look over these storefront operations 
before coming to testify today?
    Mr. Jones. I spent a lot of time with Fearless, I spent 
less time with the four that occurred before I got onboard at 
ATF.
    Mr. Collins. Knowing that this was overall, I am concerned 
in the sense that this was a storefront and there were multiple 
operations to know this.
    Going back to another one, there was an ATF agent who 
bought one high point pistol stolen from a police car Christmas 
2010. As of November 2013, the Fulton County police department 
still had the firearm listed as stolen. A representative said 
the department had not received any notification that the 
weapon was recovered.
    I will ask the question and I will assume the answer at 
this point, has the agency returned it to Fulton County?
    Mr. Jones. I am not sure.
    Mr. Collins. Has the AFT informed Fulton County that the 
ATF had recovered this weapon?
    Mr. Jones. I am not certain.
    Mr. Collins. This is why I said earlier the interesting 
part to me was that in St. Louis, there seems to be this 
wonderful cooperation between local enforcement and the ATF but 
in Atlanta, there wasn't and right now we are still looking at 
this.
    I will ask another question. Does ATF have a policy about 
notification of other law enforcement agencies when weapons or 
other possessions are obtained by ATF agents either by purchase 
through a storefront operation or otherwise?
    Mr. Jones. I know that we do run traces at a storefront.
    Mr. Collins. That is not what I asked. I asked do you have 
a policy of notifying other agencies when they recover or buy 
stolen police equipment?
    Mr. Jones. I don't want to step out of bounds here and say 
for certain that we do but I would be surprised if we did not 
have a policy about recovering weapons that are traced back to 
a law enforcement.
    Mr. Collins. That is concerning in itself. I am going to 
ask that be made available to my office and the committee as 
soon as possible. That should be an easy find. I wonder if 
there is someone behind you who probably already has that 
information. If you don't have a policy, that needs to change. 
If you do have a policy, I would ask why it is not being 
followed in this situation.
    Talking about the cooperation between agencies in St. Louis 
that my colleague spoke of, why was this run so seemingly 
different in Atlanta where you have other law enforcement 
agencies spending a lot of time trying to track down their own 
weapons when ATF had the weapons? Why is there such a 
disconnect here?
    Mr. Jones. Let me first say we have good working 
relationships with Atlanta and Fulton County and all over 
Georgia.
    A disconnect and an individual circumstance, an isolated 
circumstance about the repording mechanism, going back and 
people looking for weapons and not cooperating, that is 
disappointing to me to hear. I understand your concerns about 
the lack of communication.
    Mr. Collins. I am still concerned about where these weapons 
actually are. You used an interesting word a moment ago. Based 
on the questions about the woman who was investigated, you 
said, you keep a list and you used the word naughty part. It is 
very interesting to me because I think that wording is good 
because it reminded me of the song we're making lists, we're 
checking it twice to see who is naughty or nice and maybe the 
naughty part here was they applied for a C4 permit. That might 
be why they got more scrutiny than they should have.
    This Atlanta operation bothers me. I do want to hear those 
answers and please get those to my office and the committee as 
soon as possible.
    Thank you for your service.
    Chairman Issa. I thank the gentleman.
    We now go to the gentlelady from New Mexico, Ms. Grisham.
    Ms. Grisham. Thank you, Mr. Chairman.
    Director Jones, I appreciate that several times during this 
hearing, you have talked about the problems you are aware of, 
your obligation and efforts with ATF and that these efforts be 
productive and minimize risk to the public and maximize the 
operation and to take responsibility for the things that don't 
work.
    I absolutely appreciate that. Considering as many of us 
have the focus on local operations and that ATF did conduct a 
storefront operation in Albuquerque in 2010, I think I share an 
obligation to the same degree to assure that the problems with 
the Inspector General and the ATF and the public are adequately 
addressed.
    Like many other members here today, I am specifically 
concerned about how our agency interacts with persons with 
mental illness or mentally disabled individuals. I want to get 
right to policies and training.
    It is my understanding that the FBI and local law 
enforcement, in fact I know unequivocally that local law 
enforcement in Albuquerque uses CIT, crisis intervention teams 
and their effort is to calm persons who have a mental illness, 
disorder or an issue in lieu of arresting them. We know that 
minimizes risk frankly on both sides.
    I did a quick search right here in the committee to see how 
easy it is to find what kind of training and policies exist. In 
fact, it is clear that there is substance abuse recognition, 
cultural sensitivity, there is training on developmental 
disorders, personality disorders and I could go on because the 
list I found in a quick search was fairly exhaustive giving me 
the impression that there is a considerable body of training to 
help someone identify when they are dealing with a population 
or individual in this situation.
    I want to know do folks at ATF take part in this training?
    Mr. Jones. As stated before Congresswoman, that is 
something that is really important to us given some of the 
things we have learned over the last year or so. It is not only 
unique to ATF but I think the Albuquerque Police Department and 
police departments around the country are in a position where 
they need to have enhancement about not just people who are 
developmentally disabled but people with mental illness because 
those circumstances, particularly in the work ATF does, where 
you have street level interaction, it is important to have.
    Ms. Grisham. You repeatedly say that what you do is deal 
with sort of conduct, that there is no way to identify an 
individual per se. I also recognize you have to be cautious 
about creating an environment where there is discriminatory in 
every operation.
    You have known for quite some time. These trainings have 
been available and around for a long time, at least a decade. 
That is my personal knowledge in my community. I guess we could 
argue today in a place like Albuquerque they might need some 
significant retooling but did you do that a year and a half 
ago, are you doing that training right now given the 
circumstances?
    Mr. Jones. Absent specific public safety threat, we don't 
target developmentally challenged individuals. As you 
mentioned, we target convicts.
    Ms. Grisham. You are clearly engaged now in a situation 
where you know you have these problems and as a result, it 
seems to me that training is a good thing. Are you engaging ATF 
in these training protocols that clearly exist in like 
operations and for like law enforcement officials in the 
Department of Justice and in local police forces?
    Mr. Jones. We have had discussion about how we integrate 
that into our training.
    Ms. Grisham. But you haven't done it, you are looking at 
it?
    Mr. Jones. The ones that you identified, the sort of 
prepackage, whatever the Los Angeles Police Department has 
done.
    Ms. Grisham. I am going to guess that these are packages, 
if we are going to call them that, I would hope these are 
sophisticated, evidence-based training protocols that exist in 
the Department of Justice that should be readily available for 
a model like ATF. I am flabbergasted that they are not 
available to you and that you are not utilizing them.
    It seems to me you guys don't have any written policies or 
procedures to deal with these issues. I would ask, because my 
time is up, the following. My expectation is that you share a 
role in making sure we have best practices, we mitigate risk 
both to officers and absolutely to the public, that you 
immediately replicate these policies and procedures, make them 
relevant to the operations you are responsible for and you 
bring the evidence that you have a protocol and a program in 
place for training immediately back to this committee for our 
review and discussion.
    I don't understand why that is not the case.
    Chairman Issa. I thank the gentlelady.
    We now go to the gentleman from Arizona, Mr. Gosar.
    Mr. Gosar. Director, thank you for being here.
    What was the ATF like before you were sworn in?
    Mr. Jones. Generally speaking, I had a lot of interaction 
going back 20 years from an AUSA time. ATF was one of those 
organizations I enjoyed working with both as a prosecutor and 
as a US attorney the first and second time.
    I have a lot of respect for the work they did with me 
personally and Minnesota generally. The developments that 
happened in certain field divisions in your part of the world 
is unfortunate.
    Mr. Gosar. That is where I want to go. Wouldn't you agree 
we had some bad habits down in the Phoenix field office?
    Mr. Jones. Sometimes bad things happened.
    Mr. Gosar. You said there were not. There are those of us 
on one side of the law and those on the other side of the law 
have to be held accountable in the same way, wouldn't you 
agree?
    Mr. Jones. Yes.
    Mr. Gosar. Looking at it from the outside--I am a dentist 
and a politician, Mr. Jones, so I look at structure. You have 
to hold people accountable for improper decisions, do you 
agree?
    Mr. Jones. I agree with that, sir.
    Mr. Gosar. There are certain actions that require 
termination?
    Mr. Jones. Depending on the actions, in the government 
setting, yes, there are certain things that would cross that 
line. The public sector has a little bit more structure than 
the private sector in terms of terminating somebody's 
employment.
    Mr. Gosar. The lack of faith from the private sector or our 
constituents is that bureaucrats are not held to the same 
accountability. Would you agree with that?
    Mr. Jones. Not necessarily.
    Mr. Gosar. If you get on main street America, they find 
that bureaucrats have a whole different aspect of 
accountability.
    First, I would like to enter into the record a letter to 
you from Josephine Terry, Brian Terry's mom.
    Chairman Issa. Without objection, so ordered.
    Mr. Gosar. I want to highlight some of the inquisitions 
here.
    You are familiar with Inspector General Michael Horowitz's 
comprehensive report or review of ATF's Operation Fast and 
Furious and related materials, are you not?
    Mr. Jones. I am.
    Mr. Gosar. In that case, and I want to cite for her because 
she does it so eloquently, ``identified several current 
Department of Justice and ATF employees who bore particular 
responsibility for the many mistakes made in Operation Fast and 
Furious. These employees included ATF agents Hope McAllister, 
David Voth, George Gillett, William Newell, Emory Hurley, and 
Michael Morrissey.
    ``I understand these individuals have continued their 
employment with the Department of Justice despite the findings 
of the Inspector General's report.''
    It has come to our attention that the ATF's Professional 
Review Board had previously recommended termination for some of 
these individuals. Is that true?
    Mr. Jones. We provided that information.
    Mr. Gosar. Is that true, yes or no?
    Mr. Jones. That material has been provided.
    Mr. Gosar. Yes or no.
    Mr. Jones. That material has been provided.
    Mr. Gosar. That was a yes, right?
    Mr. Jones. Yes.
    Mr. Gosar. Why weren't these followed through?
    Mr. Jones. I am not quite sure I understand.
    Mr. Gosar. Were there any terminations? For example, let's 
take one, William Newell. Were they then fired?
    Mr. Jones. There are people who have retired, there are 
people who have been disciplined.
    Mr. Gosar. I would like to enter in the record a letter 
from the U.S. Department of Justice to you, Mr. Chairman, dated 
April 1, 2014 outlining summaries.
    Chairman Issa. Without objection, it will be placed in the 
record.
    Mr. Gosar. It doesn't show that. There is no accountability 
for Fast and Furious.
    From the guy who ran his own dental practice on 
accountability, it seems when we come into the place of 
service, the head of the ATF, that it is dysfunctional at least 
when you start looking at the Phoenix office, when you have 
such a quandary with Fast and Furious, we would actually hold 
people accountable.
    This was hardly unaccountable. The Brian Terry family has 
no answers whatsoever, wouldn't you agree?
    Mr. Jones. It is unfortunate that communication has not 
been what it should be in terms of anyone who has lost a person 
in the line of duty.
    Mr. Gosar. I want to highlight it even further because you 
had a conversation with the gentleman from Atlanta.
    The Terry family was talking to Michelle Terwilliger, a 
special FBI agent, about communication and about Atlanta. It 
seems you have problems all the way around in communication 
with other law enforcement officers.
    ``Imagine to the shock, I am learning that the members of 
the ATF field division and the US Attorney's Office in Arizona 
had chosen to keep the important piece of information about one 
of those guns found at the Brian Terry murder was not brought 
forward.'' Once again, a gentleman was talking about Atlanta 
not talking.
    We understand there were problems in Milwaukee with the FBI 
and communications. Does ATF have a problem playing with other 
law enforcement offices?
    Mr. Jones. No.
    Mr. Gosar. My question to Mr. Meadows is why would we want 
to play in Chicago with the highest rate of death with guns, 
why would we want to work with those? It is just an exercise in 
communication.
    Chairman Issa. The gentleman's time has expired but you may 
answer.
    Mr. Jones. We work very closely with federal, State and 
local in Chicago and every place that we are in. Our 
partnerships with both our federal brothers and sisters within 
the department and at the local police level are actually 
critical to our performing our mission. That partnership 
includes communication.
    While it is not perfect across the country and while 
personalities do impact sometimes that level of communication, 
organizationally, that is something we highly value and 
couldn't do our job without that partnership.
    Chairman Issa. I thank the gentleman.
    We now go to the gentlelady from the District of Columbia.
    Ms. Norton. Thank you very much, Mr. Chairman.
    Thank you, Mr. Jones.
    I was at another hearing but I did want to be here to hear 
your testimony and at least ask a question.
    First of all, I commend the ATF for looking to innovative 
risk bearing ways to get at gun running in our society. I am 
going to defer to your expertise. I know this much, thugs 
consistently outsmart law enforcement. We can stay ahead of 
them by tailoring to the location to what you think will work 
there.
    If all we do is second guess without having the available 
expertise, then I am not sure we will get at this. I am not 
going to tell you or wonder why you haven't done one of this 
storefronts and this or that city. I would like to know off the 
record whether there has been any such storefront here in the 
District of Columbia. I would appreciate your writing our 
office on that question.
    We would be a city not unlike Milwaukee. Milwaukee, like 
the District, has declining crime. They had one of these 
storefronts. I don't know if we do but they had one and some 
guns were stolen from an agent's vehicle. That is one of the 
risks that you always have when there is a storefront or for 
that matter, in any area where there are people who want to get 
at guns and use them.
    After the Milwaukee experience, you ordered the Office of 
Professional Responsibility and Security Operations to conduct 
a full investigation. I have seen that report. I am pleased to 
say it pulls no punches.
    I do know that the field agents, in the absence of 
guidance, were trying to put together ways on their own of how 
to run a storefront operation. That bothered me, that there was 
no guidance on something as risky and I think, frankly, worth 
the innovation as one of these operations.
    After that Professional Responsibility report, did you take 
any action in response, Mr. Jones?
    Mr. Jones. We took actions both with respect to reviewing 
how they were operated. We took action with respect to the 
lessons learned both from a resource standpoint, from a 
management standpoint and we took action to try to minimize the 
chance that those issues identified in Milwaukee didn't happen 
again.
    Ms. Norton. Mr. Jones, there was no written guidance. Did 
you develop a manual or other operations guidance after the 
Milwaukee incident?
    Mr. Jones. That is one of the things that did emerge from 
that, the level of understanding, because we have a cadre of 
experienced agents but sometimes that knowledge is difficult. 
One of the things we have done is generate sort of a best 
practices manual.
    That is separate and apart from what is in our order with 
respect to undercover operations and specifically storefront 
operations. That is more the parameters of what the rules of 
the road are. This secondary document and the follow on 
training, when they are done, is sort of a go by.
    It is law enforcement sensitive but it does talk about the 
things that you should consider, the things that need to be 
considered to successfully operate a storefront. That has been 
memorialized in a storefront operations manual.
    Ms. Norton. I am not sure the committee staff has had an 
opportunity to review this manual. Have you submitted the 
manual?
    Mr. Jones. I believe because of the sensitivity with the 
methodologies that it may have been reviewed. We have had staff 
over to ATF headquarters to look at manuals.
    Ms. Norton. I would appreciate your submitting the manual 
so the committee could take a look at it. I think it would 
help, with some the questions that have been raised, for people 
to know there is written guidance and how that guidance 
proceeds.
    Chairman Issa. If the gentlelady would yield?
    Ms. Norton. Yes, Mr. Chairman.
    Chairman Issa. I would certainly join with you. I do want 
to be careful that manuals that are not available to the 
public, if we take them into the committee as committee 
documents, then they become broadly available normally.
    Ms. Norton. I certainly didn't think they would become 
broadly available because then the thugs would have them.
    Chairman Issa. If the members of your staff would like an 
in camera review and after an in camera review you want 
specific portions to be provided to the committee, I would join 
with you in it but I would prefer that we continue the process 
whenever we have that kind of sensitive information of having 
staff see it and only if we believe we need some portion do we 
request that portion. It is also less burdensome on the agency.
    Mr. Jones. I understand there was an invite to have staff 
come over to our shop and look at it. As the Chair mentioned, 
if anything peaks your interest, we can follow up but there is 
a certain level of sensitivity about an operational manual.
    Ms. Norton. I thank you, Mr. Chairman, and I thank you, Mr. 
Jones.
    I would like my staff to be able to see some of this as 
well because as I said, this is a city that had high gun 
incidents go down and we would be very interested in looking at 
what you are doing with respect to the storefronts.
    As long as my staff could also see that, I would certainly 
understand the admonitions of the Chairman and Mr. Jones.
    Thank you very much, Mr. Chairman.
    Chairman Issa. We will now go to the gentleman from 
Kentucky, Mr. Massie.
    Mr. Massie. Mr. Jones, thank you for coming to testify 
today. It is quite an honor and opportunity to be able to ask 
you questions.
    I am an avid gun collector. I try to convince my wife that 
these are investments but she says how are they investments if 
you are never going to sell them. She has a point but it causes 
me to wonder and also watching some collectors who have been 
prosecuted and arrested but collectors and the firearms dealers 
and the ATF, itself, wouldn't be better served if we had some 
very bright lines drawn between what is a straw purchaser and 
who is not, and also who is and is not a dealer.
    You are kind of left to interpret a very gray area. I have 
always wondered wouldn't it be helpful if Congress defined that 
line a little bit better for you or somebody did between dealer 
and collector, for instance, the number of sales per year?
    Mr. Jones. It is always helpful to have Congress define in 
a statute where certain lines are drawn. It is difficult, on 
occasion, for us with regulatory authority to do that with 
clarity all of the time both because of the process and the 
dynamics as you mentioned.
    Mr. Massie. You think it could be helpful if we did. I just 
think it helps people who want to obey the law to have it drawn 
very brightly. That is something I would advocate for.
    This next question may not seem related to this hearing but 
it is because maybe we can avoid another hearing if I could get 
one question answered.
    Are you familiar with Ares Armor recently raided in 
California? They make 80 percent polymer loaders for AR-15s? 
Are you familiar with them?
    Mr. Jones. I am familiar with that. That is an active 
criminal investigation so I will say up front there are 
limitations about that.
    Mr. Massie. Understood. The search warrant is public and 
that sort of thing so I think we can talk some about it.
    One thing that was requested was a list of their 5,000 
customers. Ares Armor maintains they are not in the business of 
manufacturing firearms. If this is true, then what would 
justify the ATF having a list of their 5,000 customers?
    Mr. Jones. I hope you understand, Mr. Massie, that there 
are certain things that are on the public record particularly 
with the TRO. My understanding is the search warrant is still 
sealed and it is an active criminal investigation.
    Generally speaking, I think in those circumstances where we 
are investigating the potential, this is specific to Ares 
Armor, one of the things of interest for someone who may be 
illegally manufacturing firearms is the list of who they have 
sold them to, not necessarily to look at the list but to see if 
there are witness leads about the circumstances.
    Mr. Massie. That will be up to the court to decide whether 
Ares Armor was manufacturing firearms, not Congress and not the 
ATF.
    Mr. Jones. I think in between there is prosecutors involved 
also.
    Mr. Massie. Right, but the jury gets to decide.
    Mr. Jones. Yes, they do.
    Mr. Massie. If the jury finds they were not manufacturing 
firearms, can we have some assurance from you that list of 
5,000 people they were selling material to won't be kept by the 
ATF?
    Mr. Jones. I think in the normal circumstance of 
investigations that would be something that would migrate into 
a prosecutor's office and at the conclusion of a case.
    Mr. Massie. I would hope the 5,000 names required and if 
Ares was found not to be manufacturing firearms, that would 
destroy that list because the list was otherwise ill gotten.
    A quick question on this particular case in Wichita, 
Kansas. Agents let felons leave the store with guns on at least 
three occasions. One man brought in two AK-47s to sell but 
agents only had enough money to buy one. The man, a felon, was 
allowed to leave with the other AK-47. This was at Bandit 
Trading in Wichita, Kansas, one of the storefronts.
    Why would ATF agents let a felon leave a storefront with an 
AK-47?
    Mr. Jones. I am not certain of all the circumstances but I 
think in an undercover setting, first and foremost, we may not 
know the individual is prohibited until after the fact. Someone 
who comes into the store, even if there is a suspicion that 
they are crime guns, the status of the person selling the gun 
isn't always known.
    Mr. Massie. Do you think the agent should have alerted 
local law enforcement that there was a felon in possession of 
an AK-47?
    Mr. Jones. I think if they had an opportunity with cover 
teams and the right staffing, that the circumstances may 
warrant away from the premises some intervention.
    Mr. Massie. According to my information, this weapon was 
never recovered. Is that true?
    Mr. Jones. I am not certain as I sit here today of all the 
details of that particular circumstance other than the fact 
that there may have been a lack of knowledge about someone 
being prohibited when they tried to sell the weapon.
    Mr. Massie. If you found out your agents knowingly let a 
felon leave the store with an AK-47, would you be concerned?
    Mr. Jones. Yes.
    Mr. Massie. Would you follow up on that for us?
    Mr. Jones. Yes.
    Mr. Massie. Thank you.
    I yield back my time.
    Chairman Issa. I thank the gentleman.
    Director, I am going to be very brief with one quick round 
of questioning.
    Chairman Issa. The Monitored Case Program, the subject 
today, how frequently was Operation Fearless briefed to the ATF 
headquarters, to your knowledge?
    Mr. Jones. We spent a lot of time on the Monitored Case 
Program because one of the recommendations in the IG report on 
Fast and Furious was the lack of communication as to what was 
going on out in the field.
    The Monitored Case Program we have in place isn't the same 
as it was a year ago or two years ago. It has grown and we have 
learned more. I think at the core of it is the push/pull 
dynamic of what comes up and how we get it, and what is pulled 
up and how we get it.
    The circumstance with respect to Operation Fearless was it 
did not migrate up the food chain. It got briefed up and not 
all the information on the ground got briefed to the SAC which 
means it didn't get to the Deputy Assistant Director. That is a 
phenomena we have worked hard to make sure both by looking at 
our own case management system and proactively engaging with 
the special agents in charge about what is coming up.
    Chairman Issa. If I could interpret that accurately that 
would mean that the answer to the question of how frequently 
was headquarters briefed, the answer was you weren't. It didn't 
get to you is what you are saying.
    Mr. Jones. There are a number of cases on the Monitored 
Case Program that I don't get a personal briefing on.
    Chairman Issa. I actually asked about headquarters so I was 
including your deputy.
    Mr. Jones. The Deputy Assistant Directors do, based on 
their region, have regular interaction. Fearless was up to the 
Deputy Assistant Director in terms of the information flow but 
I think the glitch that we learned was what the special agent 
was hearing was positives and not problems.
    Chairman Issa. Is it fair to say that although our 
information shows that Operation Fearless was briefed to 
headquarters nine times, that, in fact, those briefings were 
insufficient to uncover the flaws in Operation Fearless?
    Mr. Jones. Yes.
    Chairman Issa. How often were you briefed on Monitored Case 
programs in a setting in which you knew you were being briefed 
on Monitored cases?
    Mr. Jones. We have monthly meetings.
    Chairman Issa. Essentially in 12 months, 12 times, roughly?
    Mr. Jones. Yes.
    Chairman Issa. Were you ever briefed on Operation Fearless 
separate from the Monitored Case Program in some capacity? Did 
the deputy come in and say I want to talk to you?
    Mr. Jones. Me personally?
    Chairman Issa. Yes, you personally.
    Mr. Jones. No.
    Chairman Issa. No. This is redundant somewhat but did you 
ever meet with anybody at main Justice concerning Operation 
Fearless?
    Mr. Jones. No.
    Chairman Issa. Did you ever meet with anybody at DOJ's 
Criminal Division about Operation Fearless?
    Mr. Jones. In terms of time frame?
    Chairman Issa. If the answer is yes, then the follow up 
would be, when was the first time and what was the subject?
    Mr. Jones. There were discussions with the Justice 
Department and particularly the IG when we launched internal 
affairs to go out there and do the dive but until certain 
issues came to light, no. This was field division, United 
States Attorney's office, Milwaukee Police Department--February 
to September of 2012, so it is not an extended storefront 
operation. It was up and down pretty quickly. Then the concerns 
were brought to light.
    Chairman Issa. Would it be fair to say that your first 
meeting with DOJ, the Criminal Division, would have been after 
the end of Operation Fearless as an ongoing operation?
    Mr. Jones. In terms of the Criminal Division, I don't 
recall any interaction. I briefed up on challenges we were 
having and we talked to the United States attorney about cases 
generated out of that operation.
    Chairman Issa. You didn't talk with anyone at the DAG's 
office or anyone of that sort?
    Mr. Jones. We have regular meetings, sort of here is where 
we are.
    Chairman Issa. Is it possible that in the last 12 or 14 
months, you did have conversations about Operation Fearless 
with DAG?
    Mr. Jones. I think it would be fair to say we have had 
conversations about storefronts generally but I don't recall 
having specifics on this particular operation in Milwaukee.
    Chairman Issa. Final question, I guess, following up on 
that. This has been an area of interest of the Deputy Attorney 
General, the storefronts and the concerns about operations?
    Mr. Jones. Collectively all the DOJ enforcement community, 
US attorneys and the Deputy Attorney General have had a lot of 
discussions about managing risk in the last several years. New 
policies across the board within the Department of Justice are 
applicable to all law enforcement and US attorney offices.
    There have been discussions with the DAG about managed risk 
and information flow generally.
    Chairman Issa. Mr. Cummings, do you have anything?
    Mr. Cummings. Yes.
    Chairman Issa. If you don't mind, I will let you close. We 
will go to Mr. Jordan briefly.
    Mr. Jordan. I thank the gentleman.
    I want to be clear, you were Acting Director of ATF when 
ATF visited Ms. Englebrecht's place of business. You have been 
Acting Director since August of 2011, to my understanding? Have 
you been Acting Director since August 2011?
    Mr. Jones. My first day in that building was I think the 
last day in August.
    Mr. Jordan. You were Acting Director when ATF visited Ms. 
Englebrecht in 2012 and 2013?
    Mr. Jones. Yes.
    Mr. Jordan. I mentioned briefly at the end of my first 
round Mr. Tom Perez. We had a hearing in this committee 
regarding what took place in St. Paul, what we have called the 
quid pro quo.
    I am interested because Mr. Perez was in the Civil Rights 
Division and Ms. Bosserman is the person heading the 
investigation in the IRS. I am curious about your interaction 
with Mr. Perez in your role as US attorney but while you were 
also Acting Director of ATF.
    When he contacted you about the Newell case and the fact 
that you had career attorneys recommending intervention, that 
was subsequently changed and you did not intervene based on 
conversations you had with Mr. Perez. Can you walk me through 
that briefly?
    Mr. Jones. It is more than briefly. I had a lot of 
discussion during my confirmation process about those 
interactions. It is fair to say I have never talked to Mr. 
Perez about anything related to Ms. Englebrecht.
    Mr. Jordan. How did it happen you had career attorneys tell 
you we need to intervene, this is a good case, $62 million 
potential fraud against the Federal Government and then you 
decide not to do that?
    During the hearing we had on this issue in this committee, 
the Democratic witness told us that is highly unusual when you 
have career attorneys recommending you take a certain course of 
action and then it is subsequently changed. How was that 
decision reached? Did you agree with Mr. Perez, did you 
ultimately sign off on it, how was it decided?
    Mr. Jones. That is something beyond the scope of why I am 
here today and I am not really prepared to go into a deep dive 
as to what went on with my experiences as United States 
Attorney.
    Mr. Jordan. I would argue it has a lot to do with this 
committee. We have spent countless hours investigating the IRS 
situation and how Mr. Perez at the Civil Rights Division, how 
Barbara Bosserman gets to be the lead investigator in the 
Justice Department investigation of this. We think Tom Perez is 
involved. I am trying to figure out how this may relate.
    We know Mr. Perez flew to St. Paul, got things changed, we 
know the United States Government did not intervene even though 
there were millions of dollars at stake we could have 
potentially recovered. We know that didn't happen after Tom 
Perez talked to you and after your career attorneys said we 
should intervene. I think it is highly relevant.
    Mr. Jones. I provided a substantial amount of information 
to Senator Grassley's staff on the record that I am sure they 
would share with you transcripts of my prior testimony.
    Mr. Jordan. Mr. Chairman, I yield back.
    Chairman Issa. I thank you.
    We will now go to the Ranking Member.
    Mr. Cummings. Director, first of all, I want to thank you 
for your testimony. It has been very helpful. I think you shed 
a bright light on the good, the bad and the ugly, and I do 
emphasize good. There is a lot of good here. On the other hand, 
as you said, it has to be done right.
    As I was sitting here, I was thinking you can never say 
thank you enough. Again, I say thank you to you and to the ATF. 
Let me tell you why. On Good Friday of last year, I went to 
observe an autopsy of a young African American man who had been 
killed--shot to death by so-called friends. I intentionally 
wanted to go and see an autopsy of a gunshot victim.
    It was interesting when I watched that autopsy they 
apparently shot him in the head right behind the ear and it 
came out over the eye, one bullet. When I looked at the hole, I 
swear it looked to be about half the size of a penny on one 
side but on the other side, it looked like the size of a 
quarter.
    Then they showed me something like a CAT scan of what 
happened when the bullet went through his head and how 
everything just exploded. I followed that case because I was 
curious.
    Then I had the situation with my nephew at Old Dominion who 
was murdered three years ago. Some people came into his room at 
5:00 a.m., a third year honor student at Old Dominion, and 
killed him, blasted his head. Two days later, I went to his 
apartment and his brains and blood were splattered all over the 
walls.
    That is what your folks try to prevent. I want them to know 
that it is so very, very important. They may not get all the 
thanks and they have been through some hell. I know they have. 
We watched the Fast and Furious situation and mistakes were 
clearly made. I was glad to see you come in and that was one 
reason I went to your swearing in because I had so much hope 
for this organization because it is so important.
    I think we need to make sure under all of these 
circumstances that we get it right because I think when 
anything goes wrong, it is wrong but nobody pays a lot of 
attention to the right. The mission must go on.
    There are kids in my neighborhood who tell me they could 
get a gun if they have the money faster than they can get a 
cigarette. That is real. You all have a tough situation to deal 
with but I am so thankful that the ATF exists because if it 
didn't, we would have to invent it.
    The expertise that your people bring, the dedication, I 
don't want what happened with regard to Fast and Furious to 
have a chilling effect on any of them. I want them to 
understand they have a mission that is bigger than they are. It 
is about trying to make sure people are safe and trying to make 
sure they address the issues of guns being in the hands of the 
wrong people doing the wrong thing.
    Again, I want to say thank you. I am looking forward to our 
briefing. I am hoping that the policies that your team has 
brought together now or put in place will address the kind of 
issues that came up in Fast and Furious. I am hoping with 
regard to the storefront situation that things are in place so 
we don't have to go through this kind of situation again.
    I think the best words you could have said, at least music 
to my ears, are that if we cannot do it right, we are not going 
to do it at all. It reminds me of my first trip to Israel many 
years ago. They had a saying which rings in my head. It said, 
if we are not better, we will not be. I thank you for pursuing 
the best.
    The Chairman and I were kind of joking about who wants this 
job but we know that it is the love of country, it is the love 
of trying to make a difference and have an impact in your time 
on this earth. We appreciate it.
    Mr. Jones. With respect to that last comment, I have a lot 
of friends who ask me too but over the last two and a half to 
three years, I have gotten to know this organization. I have 
been to ever field division and met a lot of people outside of 
headquarters, agents, investigators, and support staff. They 
have a great mission and this is really a great organization.
    They understand. We all understand that we have to refill 
that well of credibility because of recent events and mistakes. 
I share with you without any hesitation that the folks at ATF 
are dedicated to a very important mission. It is probably the 
most resilient law enforcement organization I have ever come 
across.
    In the face of a lot of adversity related to both 
enforcement of the Gun Control Act to recent snafus and 
mistakes made and for a lot of different reasons, they are 
tough as nails and are completely dedicated to the mission of 
making our communities safer from gun violence, arson and 
people who would use explosives to hurt folks.
    It is an honor to be at the helm of this organization.
    Mr. Cummings. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Issa. I thank you for your testimony.
    We are going to stand adjourned. If you don't mind, the 
Ranking Member and I would like to see you in the back for a 
couple of minutes.
    Thank you.
    Mr. Jones. Thank you.
    [Whereupon, at 12:20 p.m., the committee was adjourned.]


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