Failure has it rewards at the ATF...

ATF leader who oversaw botched sting
will run Phoenix office



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By John Diedrich of the Journal Sentinel, June 29th 2013

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The ATF leader who oversaw a botched undercover operation in Milwaukee will now be in charge of the agency's embattled Phoenix office, where agents allowed more than 2,000 guns to walk into the hands of suspected criminals through the infamous "Operation Fast and Furious."

Bernard Zapor

Bernard "B.J." Zapor will be reunited in Phoenix with Fred Milanowski, another key figure in Milwaukee's "Operation Fearless," where a Journal Sentinel investigation found agents lost government guns, had their storefront ripped off and arrested at least four of the wrong people.

Zapor was in charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives' St. Paul Field Division, which covers Wisconsin and three other states. In November, shortly after the Milwaukee sting was abruptly shut down, he was promoted to a position in Washington, D.C., supervising eight field divisions.

Officials from the ATF and the U.S. Department of Justice told congressional staffers in April that disciplinary action was under way against Zapor because of the Milwaukee operation. They won't say if Zapor's assignment to Phoenix is punishment.

Zapor has roots in Arizona. He started his career as an agent in Phoenix in 1989 and has family members living in that part of the country. Zapor will be able to retire when he turns 50, in two years. With its proximity to the Mexican border and population, Phoenix is a higher profile field division than St. Paul.

Zapor is well-known to Acting ATF Director B. Todd Jones, who continues to be U.S. attorney in St. Paul, where he and Zapor have served for several years. In August 2011, Zapor told the Star Tribune that Jones' appointment as acting director would "benefit public safety nationally."

Sen. Chuck Grassley

U.S. Sen. Chuck Grassley (R-Iowa) last week questioned putting Zapor in charge of Phoenix, given Zapor's "failed management of Operation Fearless."

"Why would you put him in charge of an office that so clearly needs good leadership?" Grassley wrote in questions to Jones. A vote on Jones' confirmation was delayed last week in the Senate Judiciary Committee.

Jones told Grassley he was unable to answer his questions because of the federal Privacy Act, but confirmed Zapor will lead the Phoenix office.

"I can state I am confident that Mr. Zapor is well qualified to provide strong and effective leadership in Phoenix," Jones wrote.

Zapor and Milanowski are among several people involved in the planning and execution of the Fearless sting who have landed new jobs in the ATF.

Milanowski supervised the Milwaukee ATF office during the planning and initial phases of the Fearless operation, then moved to the Phoenix office last year, in the midst of the sting.

Special Agent Jacqueline Sutton, who was in charge of the operation, has been transferred to ATF headquarters in Washington. And John Schmidt, who supervised the operation in Milwaukee, was transferred to a leadership school, according to sources familiar with the moves.

ATF spokeswoman Ginger Colbrun declined to comment on the personnel moves, including whether they are promotions, citing the Privacy Act. Zapor, Milanowski, Schmidt and Sutton did not return messages for comment.

Guns, drugs targeted

The Fearless operation was intended to bust felons selling guns and drugs in Milwaukee.

Pretending to be a motorcycle gang from New York, undercover agents set up a fake storefront in Milwaukee's Riverwest neighborhood, selling knock-off shoes, clothes and accessories, while pushing to buy guns and drugs from their customers.

The U.S. attorney's office in Milwaukee was briefed on the operation before it began and monitored its progress, typical in federal cases where the local prosecutor works with law enforcement agents as matters progress.

Assistant U.S. Attorney John Manning was the supervising prosecutor, according to sources familiar with the case. Manning, who has left the office to work in corporate law, did not return calls for comment.

When the ATF first proposed the operation, there was skepticism among prosecutors, the sources said. But they agreed to it after being told ATF had success elsewhere in the country with sting storefronts.

FBI agents initially were part of the operation but didn't like the setup and quickly withdrew. The FBI's Milwaukee office has declined to comment on its decision.

Two members of the Milwaukee Police Department, officer Anthony Randazzo and detective Charles Libal, were assigned to the undercover storefront. A Milwaukee police spokesman declined to comment on their role, referring questions to ATF.

The sting itself was approved by a high-level undercover operations group at ATF headquarters in January 2012. It also fell under the agency's Monitored Case Program, a reform enacted in the wake of Operation Fast and Furious to prevent errors and mistakes, but it failed to alert headquarters to problems.

The sting was poorly planned and executed from the start — something ATF investigators acknowledged to congressional staffers after the flaws were exposed by the Journal Sentinel.

The agency's investigation identified at least 11 problem areas with Operation Fearless and found it was "characterized by a lack of consistent, permanent supervision," according to the briefing. The ATF has refused to release the report, even to members of Congress.

But a series of interviews, public records and documents related to congressional inquiries provides a sharper picture of what happened — on the ground in Milwaukee and among those overseeing the effort.

Agent's guns stolen

Shortly after the storefront opened, ATF agents hired a brain-damaged man to ride his bike around town handing out fliers to promote the store. They also asked him to set up gun and drug deals and then turned around and arrested him on federal charges.

On Sept. 13, thieves broke into an undercover agent's SUV and stole three guns, including a machine gun. After the guns were stolen, the ATF failed to capitalize on early leads to find its stolen guns.

The day after the SUV break-in, a man came to the storefront and sold undercover agents one of the stolen ATF guns, but agents let him leave without arresting him.

Shortly after, federal prosecutors in Milwaukee contacted Zapor about the stolen machine gun. The decision was made to shut down the storefront, according a statement issued last week by U.S. Attorney James Santelle.

Zapor delivered the message to close the Fearless store, but that didn't happen.

Apparently, the Milwaukee agents thought Zapor meant they should close the store just for that day, not permanently, according to a briefing ATF officials held with congressional staffers. Zapor failed to ensure his order was followed, Grassley wrote.

The agents continued to run the Fearless store the week of Sept. 17-21.

A prosecutor then ordered that the store close, according to a Sept. 24 email sent by officer Libal and obtained by the Journal Sentinel through an open records request.

"As of this weekend per the AUSA (assistant U.S. attorney), the storefront is closed," Libal wrote in an email to several Milwaukee police supervisors.

After the storefront was shut down, the ATF left it unguarded for weeks. Part of the delay in clearing it out was to allowMilwaukee police commanders to tour the building, according to emails from Libal. A later email noted surveillance cameras were still in the store.

On Oct. 10, Libal wrote that the tour would have to be canceled:

"We just arrived at the shop and it was burglarized. Sorry. We are working out the details now."

Sutton, the agent in charge, had failed to check out the burglar alarm at the building. It was not working. Thieves made off with $40,000 in merchandise, however the police report did not list cameras as being stolen. That same day, an ATF ballistic shield was turned in to a police district station by a citizen.

It is unclear how ATF lost the shield.

Low-level arrests

The goal of the Fearless operation was to target violent offenders responsible for a spate of shootings in Milwaukee in recent years, according to an Aug. 16 email from Randazzo to a supervisor, Capt. Jason Smith.

"Most of these guys are violent guys and we also want to go out with a large bang when this ends that should bring us another group of violent guys that will probably be some of our shooters," he wrote in the email.

Contrary to Randazzo's email, the operation largely failed to nab violent offenders, but primarily rounded up small-time drug dealers and hustlers. Investigators arrested about 30 people, mostly on low-level gun and drug counts. They also arrested four of the wrong people and charged three of them.

One of the prosecutors, Assistant U.S. Attorney Francis Schmitz, said at a sentencing he wished the agents had busted more people with violent records.

One of the most violent offenders targeted was Bobby Ball, who went to the storefront last summer to sell drugs. When agents offered to buy a gun from Ball, a felon, he said his cousin had been shot and he needed the gun for retaliation. Agents allowed Ball to leave the store with the gun, without arresting him.

It's unclear if Ball's gun was later used in any crime. Ball has not been charged in any shootings in Wisconsin after the encounter with the ATF.

Santelle said in the statement the Milwaukee operation has been scrutinized in recent months by his office and law enforcement to learn from the operation and make sure future investigations "are conducted with the highest standards of professionalism, oversight, and accountability."

Internal ATF investigations into Operation Fearless continue, and the Department of Justice inspector general is investigating the Milwaukee operation as part of an examination of the reforms spawned by Fast and Furious.

In a letter to congressional members, a Justice Department official wrote that some ATF personnel have been referred for "remedial action" while others face further investigation by the Internal Affairs Division, possibly resulting in other disciplinary action.

Justice officials told Grassley's staff that Jones was provided summaries of the stolen guns and the storefront burglary but that Jones did not recall reading them.

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