Allegations suggest racketeering involving agency informants
WASHINGTON – Today, House Oversight and Government Reform Committee Chairman Jason Chaffetz (R-UT) sent a letter to the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) requesting documents and a briefing on management of informant programs and undercover operations.
New allegations surfaced in The New York Times, of an operation purportedly run by ATF informants, but “not authorized under Justice Department rules,” through which the informants trafficked cigarettes and pocketed the proceeds.
Excerpts from the letter:
“The funds generated by this operation, according to the report, are then put into a ‘management account’ used to finance additional investigative activity. This ‘management account’ is ‘an off-the-books way to finance undercover investigations and pay informants without the usual cumbersome paperwork and close oversight.’
“According to the report, the two informants admitted in court documents to ‘receiving more than $1 million apiece,’ though it is unclear whether ‘that was profit or reimbursement for expenses paid on behalf of the government.’ …
“The OIG’s report made recommendations to strengthen oversight over income-generating operations, while detailing additional examples of the ATF’s shortcomings in requiring documentation for churning operations. …
“The New York Times story raises questions whether the ATF heeded the OIG’s four-year-old recommendations. The story reports that, after the paper made inquiries about the ATF informants’ actions in summer 2016, the Department disclosed this operation to the OIG, and that office ‘expressed serious concerns’ and has begun investigating. Making matters worse, the tobacco farmers-who allege they were defrauded by those working on behalf of the ATF-are now being pursued for the informants’ failure to pay taxes on their own profiteering…”
Full text of the letter can be viewed here.
In November 2016, the committee held a hearing and learned a different federal agency failed to conduct adequate oversight over its confidential informants, including lacking adequate controls over funds paid to those sources.