By Donna Smith and Richard Cowan
WASHINGTON (Reuters) - In the classic Washington investigation at the highest levels of power, it is never the original offense that leads to trouble. It is who knew what and who said what that powers the probe and brings forth the cry of cover-up.
That script is being followed almost to the letter in the drama that continues this week as the Republican-controlled House of Representatives prepares for a possible vote on contempt of Congress charges against the highest law enforcement official in the country, Attorney General Eric Holder.
It began as a congressional probe of Operation "Fast and Furious," a botched effort by the Justice Department's Bureau of Alcohol, Tobacco and Firearms to trace illegal gun trafficking to Mexican drug cartels.
But now it is about a letter from the Justice Department to members of Congress dated February 4, 2011 denying the operation's existence.
The denial was vehement but, it turned out, inaccurate, as the department conceded when it formally withdrew the letter on December 11, 2011.
The Justice Department "obstructed the investigation" for nearly a year, said Darrell Issa, chairman of the House Oversight and Government Reform Committee. What the committee now wants to know is how and when officials knew the February 4 letter was wrong and why it took so long for them to retract it.
The subpoena the committee issued last week was largely for post-February 4 documents that might shed light on those questions. The claim of executive privilege invoked by President Barack Obama at the request of his attorney general covers those very same papers.
Holder says he has turned over thousands of pages pertaining to the Fast and Furious operation, but deliberations among officials after February 4 are off limits.
The contempt vote could be avoided or postponed if Holder relents, Republicans on the committee say.
For all the script's familiarity, the conflict is potentially explosive for both sides.
If high-ranking officials in the Justice Department are shown to have knowingly misinformed Congress or to have held back information central to the probe, they could be forced to resign or even be prosecuted
If the Republicans come up empty-handed, they will be subject to accusations that at a time of economic distress and gridlock on critical issues, they burned up time and energy in partisan pursuit of the president.
Either way, it is a scandal in a presidential election year.
What makes matters worse for the Justice Department is that it did not come forward on its own to withdraw the February 4 letter.
Even as former Assistant Attorney General Ronald Weich wrote that letter, congressional investigators were hearing from whistleblowers that the assertion was false and that guns bought with ATF investigators watching were being allowed to "walk" to the border and beyond.
OBSTRUCTION OR FISHING EXPEDITION?
"If there was obstruction (of a congressional investigation), we want to know about it," said a Senate Republican aide who asked not to be identified
Democrats accuse Republicans of going on a "fishing expedition" in trying to gain access to documents that have nothing to do with the conduct of operation Fast and Furious.
In invoking executive privilege over those documents, the administration argues that it is protecting confidential conversations that any administration needs to function.
The administration notes it provided Congress with several thousand pages of documents and other information that give lawmakers a full picture of why the misleading February 4 letter was produced and what went wrong in the ill-fated border operation - one that appears to have contributed to the death of a federal law enforcement agent.
The blame, those documents suggest, is with a federal prosecutor's office in Arizona and law enforcement agents there who conceived and directed Fast and Furious. High-level Justice officials say they relied on them for the information that led to the erroneous February 4, 2011 letter.
"False," Weich wrote in that February letter of Grassley's contention just days earlier that the Justice Department's Bureau of Alcohol, Tobacco, Firearms and Explosives sanctioned the sale of hundreds of assault weapons to "straw purchasers" of guns. Those front men, Grassley argued, transported the weapons into Mexico, where U.S. officials lost track of them as they fell into the hands of violent, gun-toting drug cartels.
On May 2, 2011, Weich wrote Grassley again, telling him that Operation Fast and Furious did not knowingly permit straw buyers to "walk" guns into Mexico.
In an administration swipe at Grassley, Weich also admonished the senior Republican on the Senate Judiciary Committee that only the chairman, a Democrat, was authorized to make inquiries.
But three days later, as anger was growing over revelations that one of the Fast and Furious guns had been found at the scene of U.S. Border patrol agent Brian Terry's murder in late 2010, the Justice Department began to back-pedal amid press reports about what whistleblowers were telling congressional investigators.
The Justice Department's position eroded further in June, 2011, when Weich testified to Congress that there were "serious questions about how ATF conducted this operation." Furthermore, he said, "We're not clinging to the statements" in the February 4 letter.
But it would take the Justice Department until December to formally withdraw the February 4 letter. On December 2, 2011, Deputy Attorney General James M. Cole informed Issa and Grassley that "facts have come to light during the course of this investigation that indicate that the February 4 letter contains inaccuracies."
POLITICALLY CHARGED ATMOSPHERE
Partisanship already was running high between the White House and Republicans in Congress over issues ranging from government spending to healthcare reform. If there was any question about the tailspin of inter-party relations at the dawn of the small-government Tea Party era, Senate Republican leader Mitch McConnell declared late in 2010 that his main mission was to help defeat Obama.
And so the Justice Department's complete reversal on Fast and Furious only stoked Republican suspicions of a cover-up.
Conservative bloggers and others suggested it was part of an administration back-door effort to impose new regulations on the sale of assault rifles and other "long-guns" - a contention that Democrats dismiss.
Indeed, the National Rifle Association in a statement supporting the vote to hold Holder in contempt of Congress accused the White House of using the Fast and Furious program to advance its gun control agenda.
The Republican leadership has worried that the Fast and Furious controversy could detract from election-year efforts to focus public attention on the ailing U.S. economy, and holding Obama responsible for it.
But Issa is aggressive and partisan. Last July 4, as downtown Washington was filling with tourists coming to see a nighttime fireworks display celebrating America's 235th birthday, Issa convened a private session in a Capitol Hill office to get testimony from ATF Acting Director Kenneth Melson.
That interview focused on wiretap requests ATF had sought for the straw purchasers and investigative reports related to Fast and Furious.
In it, Melson testified that he had discovered in March that ATF agents had been instructed to allow the guns to "walk" - meaning to flow unfettered, even if they went into Mexico. Investigators say Melson passed that information along to Justice officials. They want to know how far up the chain of command Melson's information went.
The White House executive privilege claim has put all post-February 4, 2011 documents off limits. Republicans argue they need those emails and other correspondence to corroborate Melson's testimony and determine who at Justice saw them.
Some also note that Holder was willing to turn over some "deliberative" documents before the committee resorted to a subpoena.
In a hearing before Issa's committee on February 2, 2012, Holder said the department had made "wholesale deliberative material available" on the February 4th letter. "I am not sure I know any Attorney General who has ever done that before to that degree, and I thought it was the appropriate thing, given the inaccuracies that were contained in that letter."
Democrats complain that Issa has shifted his focus from investigating how Fast and Furious went wrong to a look into how the Justice Department has communicated with Congress.
"The only reason they want these post February 4 documents is because they (Republicans) haven't gotten dirt on anyone at main Justice or the White House," a House Democratic aide said.
At the same time, Democrats argue, Issa and his fellow Republicans are turning a blind eye toward a similar "gun walking" operation that took place during the George W. Bush administration.
In its report accompanying the contempt resolution, Issa's panel said it wants to know who had information about and approved the tactics in Fast and Furious and whether high-level Obama appointees were involved.
"Documents that whistleblowers have provided to the committee indicate that those officials were the senior officials in the Justice Criminal Division, (Assistant Attorney General) Lanny Breuer and one of his top deputies, Jason Weinstein," the panel's report said.
Among the details Republicans think they might learn by looking at the post-February 4 documents are how much Breuer or Weinstein knew about Fast and Furious when they approved wiretaps of straw purchasers' telephones - or whether they failed to adequately read relevant documents before signing the wiretap applications.
That is another problem for officials at the Justice Department. Technically, at least, ranking department officials are by law supposed to review any wiretap requests. If they did not, they can be portrayed as careless stewards of the law, or worse. If they did, and if the requests included details of the operation, they have even more serious explaining ahead of them.
Democrats counter that any high-level Justice Department officials who may have approved those wiretaps used the same accepted procedures that other administrations have long employed. At that high level, they say, the details of a law enforcement operation are not being reviewed. That is the responsibility of officials on the scene.
(Editing by Fred Barbash; Desking by Vicki Allen)
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