By Jeremy Pelofsky
WASHINGTON (Reuters) - The Obama administration announced on Tuesday a major shake-up of the U.S. agency that botched an attempt to track weapons smuggled to drug cartels in Mexico after guns were allowed to flow freely over the border.
Kenneth Melson, who has been acting director of the Bureau of Alcohol, Tobacco, Firearms and Explosives since 2009, was reassigned after admitting mistakes in the sting operation meant to try to crack down on weapons reaching violent drug gangs from U.S. gun stores.
In further fallout from the operation, the U.S. attorney for Arizona, Dennis Burke, has resigned effective immediately after acknowledging mistakes in the operation. The lead prosecutor on the case, Emory Hurley, has also been reassigned, an Obama administration official said.
Another administration official said the shake-up at ATF was a chance for a "fresh start given everything they've gone through lately."
The sting operation, dubbed "Fast and Furious," has spawned congressional and internal Justice Department probes and put the Obama administration on the defensive about whether dangerous weapons were knowingly allowed to cross the border.
Authorities had hoped they would be able to follow the guns to cartel leaders, but ATF agents did not track the weapons after they were transferred from the initial buyer to others who smuggled them across the border. Some agents have testified that they were not allowed to continue the pursuit.
Attorney General Eric Holder and Melson both issued statements but steered clear of any comments about the controversy. Holder has referred the entire matter to the department's inspector general for an investigation.
Melson will be reassigned to the Justice Department's Office of Legal Policy as an adviser on forensic science, the Justice Department said.
The U.S. attorney for Minnesota, Todd Jones, will serve as acting ATF director starting on Wednesday.
U.S. ATTORNEY ADMITS MISTAKES
Burke was interviewed by congressional investigators on August 18 and said he was unaware of the tactical details of the sting and acknowledged that he and his team made mistakes, including not adequately supervising the case.
"It should not have been done the way it was done, and I want to take responsibility for that, and I'm not falling on a sword or trying to cover for anyone else," Burke told them, according to excerpts of his testimony released by Democrats on the House of Representatives Committee on Oversight.
Mexican authorities have complained bitterly about the flow of guns from the United States across the border, where gangs have battled with each other and with Mexican authorities, straining ties between the two countries.
Some 42,000 have died since 2006 as a result of the turf wars. The congressional investigation has turned up evidence that guns sold in the sting have been found at numerous crime scenes in the United States and Mexico.
U.S. Border Patrol agent Brian Terry died in a December 2010 shootout on the American side of the border and two guns found there have been traced to the sting. It is not known if those guns were used to fire the fatal shots.
Some of the weapons recovered at crime scenes include powerful AK-47s and .50 caliber rifles.
Republicans in the U.S. Congress have been demanding the Obama administration explain who knew what and when about the ATF program, which was conceived of and run out of the agency's Phoenix division.
"There are still many questions to be answered about what happened in Operation Fast and Furious and who else bears responsibility," said Republican Representative Darrell Issa, chairman of the House Oversight Committee.
For years the ATF has been without a director confirmed by the U.S. Senate. The position has been the source of tension between advocates and opponents of gun control.
President Barack Obama has nominated Andrew Traver of the agency's Chicago office to the job, but the gun industry has opposed him. Melson is a career federal employee.
Obama will need to nominate someone to fill the U.S. Attorney's post. Burke previously served as chief of staff to Janet Napolitano when she was Arizona governor.
Melson was interviewed on July 4 by congressional investigators. At that time he acknowledged mistakes had been made and other law enforcement agencies had had critical information they did not share about their targets.
(Additional reporting by Steve Holland, editing by Jackie Frank and Todd Eastham)