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BUREAU OF ALCOHOL, TOBACCO, FIREARMS AND 

EXPLOSIVES’ USE OF STOREFRONT OPERATIONS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON CRIME, TERRORISM, 

HOMELAND SECURITY, AND INVESTIGATIONS 

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

FEBRUARY 27, 2014 

Serial No. 113–68 

Printed for the use of the Committee on the Judiciary 

( 

Available via the World Wide Web: http://judiciary.house.gov 
(II) 

COMMITTEE ON THE JUDICIARY 

BOB GOODLATTE, Virginia, Chairman 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

LAMAR SMITH, Texas 

STEVE CHABOT, Ohio 

SPENCER BACHUS, Alabama 

DARRELL E. ISSA, California 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TOM MARINO, Pennsylvania 

TREY GOWDY, South Carolina 

RAU ́ L LABRADOR, Idaho 

BLAKE FARENTHOLD, Texas 

GEORGE HOLDING, North Carolina 

DOUG COLLINS, Georgia 

RON DeSANTIS, Florida 

JASON T. SMITH, Missouri 

[Vacant] 

JOHN CONYERS, JR., Michigan 

JERROLD NADLER, New York 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO R. PIERLUISI, Puerto Rico 

JUDY CHU, California 

TED DEUTCH, Florida 

LUIS V. GUTIERREZ, Illinois 

KAREN BASS, California 

CEDRIC RICHMOND, Louisiana 

SUZAN DelBENE, Washington 

JOE GARCIA, Florida 

HAKEEM JEFFRIES, New York 

DAVID N. CICILLINE, Rhode Island 

SHELLEY HUSBAND, Chief of Staff & General Counsel 

PERRY APELBAUM, Minority Staff Director & Chief Counsel 

SUBCOMMITTEE ON CRIME, TERRORISM, HOMELAND SECURITY, AND INVESTIGATIONS

F. JAMES SENSENBRENNER, JR., Wisconsin, Chairman 

LOUIE GOHMERT, Texas, Vice-Chairman 

HOWARD COBLE, North Carolina 

SPENCER BACHUS, Alabama 

J. RANDY FORBES, Virginia 

TRENT FRANKS, Arizona 

JASON CHAFFETZ, Utah 

TREY GOWDY, South Carolina 

RAU ́ L LABRADOR, Idaho 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

PEDRO R. PIERLUISI, Puerto Rico 

JUDY CHU, California 

LUIS V. GUTIERREZ, Illinois 

KAREN BASS, California 

CEDRIC RICHMOND, Louisiana 

CAROLINE LYNCH, Chief Counsel 
(III) 

C O N T E N T S 

FEBRUARY 27, 2014 

Page 

OPENING STATEMENTS 

The Honorable F. James Sensenbrenner, Jr., a Representative in Congress 

from the State of Wisconsin, and Chairman, Subcommittee on Crime, Terrorism, Homeland Security, and Investigations ................................................ 1 

The Honorable Robert C. ‘‘Bobby’’ Scott, a Representative in Congress from 

the State of Virginia, and Ranking Member, Subcommittee on Crime, Terrorism, Homeland Security, and Investigations ................................................ 3 

The Honorable Bob Goodlatte, a Representative in Congress from the State 

of Virginia, and Chairman, Committee on the Judiciary ................................. 4 

WITNESS 

Thomas E. Brandon, Deputy Director, Bureau of Alcohol, Tobacco, Firearms, 

and Explosives 

Oral Testimony ..................................................................................................... 7 

Prepared Statement ............................................................................................. 9 

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Response to Questions for the Record from the Bureau of Alcohol, Tobacco, 

Firearms, and Explosives .................................................................................... 24 

(1) 

BUREAU OF ALCOHOL, TOBACCO, FIREARMS 

AND EXPLOSIVES’ USE OF STOREFRONT OPERATIONS 

THURSDAY, FEBRUARY 27, 2014 

HOUSE OF REPRESENTATIVES

SUBCOMMITTEE ON CRIME, TERRORISM, HOMELAND SECURITY, AND INVESTIGATIONS

COMMITTEE ON THE JUDICIARY

Washington, DC. 

The Subcommittee met, pursuant to call, at 10 a.m., in room 

2141, Rayburn Office Building, the Honorable F. James Sensenbrenner, Jr. (Chairman of the Subcommittee) presiding. 

Present: Representatives Sensenbrenner, Goodlatte, Coble, 

Gowdy, Conyers, Scott, and Chu. 

Staff present: (Majority) Allison Halataei, Parliamentarian & 

General Counsel; Jason Cervenak, Counsel; Alicia Church, Clerk; 

(Minority) Joe Graupensperger, Counsel. 

Mr. SENSENBRENNER. The Subcommittee on Crime, Terrorism, 

Homeland Security, and Investigations will come to order. 

Without objection, the Chair is authorized to declare recesses of 

the Subcommittee at any time. 

I will recognize myself for 5 minutes for an opening statement. 

I want to welcome everyone to today’s hearing on ‘‘The Bureau 

of Alcohol, Tobacco, Firearms and Explosives’ Use of Storefront Operations.’’ 

A little over a year ago, The Milwaukee Journal Sentinel published a very disturbing article concerning an undercover storefront 

operation run by the BATF&E in Milwaukee. To say that the operation was extremely flawed would be a vast understatement. It certainly was the Keystone Cops in operation. The operation was an 

abysmal failure that put on the street a stolen fully automatic M4 rifle as well as other stolen firearms and numerous other failures. 

The operation began in Milwaukee in early 2012, more than 3 

months after Todd Jones took over as Acting Director of ATF and 

more than a year after the failed Operation Fast and Furious was 

exposed. The operation began when ATF agents opened ‘‘Fearless 

Distributing’’ in a rented property in the Riverwest neighborhood 

of Milwaukee. Soon thereafter, they hired a brain-damaged individual with an IQ of 54 to promote the business by distributing fli-
2 

ers. They also pressured this individual to facilitate gun and drug 

buys for the operation. 

The agents proceeded to conduct various gun and drug buys 

through the storefront. The agents paid quite a premium for the 

firearms. In one case, a defendant purchased a rifle for $700 from 

Gander Mountain and turned around and sold it to the ATF agents 

a few hours later for $2,000. One has to wonder if this firearm 

would have even been out on the street if it were not for the enticing deals being offered by ATF. 

From there, the operation went from bad to worse. ATF agents 

allowed an armed felon to leave the store. The operation was burglarized, losing more than $35,000 in merchandise. ATF damaged 

a rented building and refused to fix it or compensate the landlord. 

They left behind law enforcement-sensitive documents that included the names, vehicles and phone numbers of undercover 

agents. They had their government-owned guns, including a machine gun, stolen from an agent’s vehicle. The automatic rifle has 

never been recovered. 

ATF would like to point out in their testimony that this operation and others like it led to a number of arrests and convictions. 

I think it is important to take a look at these arrests and conviction numbers. In the botched Milwaukee operation, an analysis by 

the Milwaukee Journal Sentinel found that of the 34 cases charged 

in state and Federal court in Milwaukee, 16 of the defendants— 

nearly half—ended up with no incarceration. Eight cases were dismissed because the agents arrested the wrong people or the prosecutor could not go to trial because the lead ATF agent could not 

be called to testify. The other eight defendants received probation 

or stayed or deferred sentences. 

The Journal Sentinel also found that of the 26 cases that resulted in conviction, the median sentence was about 2 years behind 

bars. Very few of the cases involved individuals with violent criminal records. Most had drug or nonviolent offenses such as burglary. 

In fact, one of the prosecutors in the case admitted that the flawed 

operation was not ‘‘the best use of resources.’’ He even indicated 

that it failed to catch the violent offender it was designed to take 

off the street. 

Even more disturbing are the recent revelations that these same 

tactics were used in various cities across the country. In Albuquerque, agents gave a brain-damaged drug addict with little 

knowledge of weapons a ‘‘tutorial’’ on machine guns, hoping that he 

could find them one. And in Portland, Oregon, ATF agents paid 

$150 to a mentally disabled individual to get a large tattoo of a 

squid on his neck smoking pot to promote their phony storefront 

operation. This does not appear to be one operation gone bad but 

a systemic problem plaguing the ATF. 

After Operation Fast and Furious, we were told numerous times 

that changes were coming to the ATF under the new leadership. 

I certainly hope this operation and others like it are not indicative 

of those changes, because they are not changes for the better at all. 

I intend to continue to vigorously oversee ATF until I am confident 

that the public knows the whole truth and that the agency’s mismanagement has been corrected. 
3 

I welcome our witness today and look forward to hearing his testimony. 

And now I recognize the gentleman from Virginia, Mr. Scott, for 

his opening statement. 

Mr. SCOTT. Thank you, Mr. Chairman. I appreciate you calling 

the hearing today. 

Today the Subcommittee will examine one of our most important 

but often neglected Federal law enforcement agencies, the ATF. 

The ATF has a multifaceted mission, and today we are here to hear 

testimony about the past use of storefront operations as a tactic to 

pursue that mission. 

Press accounts, I.G. reports and inquiries by this Committee 

have revealed missteps and poor judgment with several of the 

storefront operations in recent years in places such as Milwaukee, 

Wisconsin; Portland, Oregon; Pensacola, Florida; Albuquerque, 

New Mexico; and Wichita, Kansas. Undercover operations of these 

storefronts involve incidents that were both embarrassing and at 

times dangerous to public safety, such as placing one operation in 

close proximity to a school. 

Of course, undercover operations by their very nature involve a 

precarious and unique type of engagement with criminals in order 

to discover their crimes and uncover various levels of their organizations. However, such operations which often engage the general 

public and may impact the rights of citizens generally can be subject to excesses and abuse. Therefore, it is critical that we examine 

the policies and procedures governing such operations and that we 

question those managing the investigations. 

Management situation at the ATF has been uncertain during 

much of the period in which these operations were conducted. In 

2005, Congress transferred the law enforcement functions of the 

ATF, which had since its inception been part of the Department of 

Treasury, to the Department of Justice and required the appointment of a director to be subject to Senate confirmation. 

Between 2006 and July of last year, the ATF had five acting directors. During that time, the Senate was unable to confirm the 

nominees of both President Bush and President Obama, at least 

partly due to opposition from those who would like to weaken the 

agency generally from regulating the firearms industry. 

While Todd Jones had been serving as acting director since 2011, 

he was formally nominated in January last year for the permanent 

position and confirmed in July. It appears that Director Jones has 

begun the type of leadership and stability at the ATF which has 

been sorely lacking. Early in his tenure as Acting Director he recognized the serious management and policy issues confronting the 

ATF. He took action to replace two-thirds of the top supervisors in 

Washington and began to implement the Monitored Case Program, 

which had been initiated just prior to his arrival at the agency. 

Under his leadership, oversight and approval of the undercover 

operations has become much more rigorous. And while we have to 

wait until after this hearing and the pending examination by the 

Department of Justice I.G. before we arrive at a comprehensive set 

of conclusions about these issues, I want to emphasize that we still 

need an effective and accountable ATF. 
4 

Furthermore, I believe it is long overdue for this Committee to 

consider legislation to strengthen our firearms laws, although I recognize there will be a difference of opinion on what approach to 

take. However, I hope that we will all agree that we need to work 

together to support and reinforce this agency so that it can enforce 

whatever our firearm laws may be, as well as implement its other 

missions as effectively as possible. 

Thank you, Mr. Chairman. I yield back. 

Mr. SENSENBRENNER. I thank the gentleman from Virginia. 

I now recognize the other gentleman from Virginia, the Chair of 

the full Committee, Mr. Goodlatte, for an opening statement. 

Mr. GOODLATTE. Thank you. 

I want to thank Chairman Sensenbrenner for holding today’s 

hearing on the ‘‘Bureau of Alcohol, Tobacco, Firearms, and Explosives’ Use of Storefront Operations.’’ 

Last year, after a series of articles published in the Milwaukee 

Journal Sentinel outlining the problems associated with ATF’s 

failed storefront operation in Milwaukee known as Fearless 

Distributers, I along with Chairmen Issa and Sensenbrenner and 

Senator Grassley drafted a letter to the ATF Director, Todd Jones. 

In that letter, we asked the Director to reveal the details of the 

flawed operation. In response to that inquiry, ATF officials provided a briefing to congressional staff and Members on April 15, 

2013. Additionally, the Department of Justice provided a written 

response on April 30th, 2013. 

In the response from the Department of Justice, they acknowledge that Director Jones is ultimately responsible for all ATF Operations, yet claim he was not aware of this operation, which began 

4 months after he assumed his duties at ATF, until January of 

2013, a full year after it began. Throughout the duration of Operation Fearless, Director Jones had opportunities to be made aware 

of the systemic problems afflicting the operation in Milwaukee. We 

have heard Chairman Sensenbrenner outline the numerous issues 

with Operation Fearless, so there is no need to recount them here. 

What I would like to find out is at what point does the ATF believe the Director should become aware of such a flawed operation? 

One would think that the theft of three ATF firearms, including a 

fully automatic rifle, would trigger a reaction from the Director. 

But even if that somehow failed to get his attention, the burglary 

of an undercover storefront where nearly $40,000 in merchandise 

was stolen would surely rise to the level of the Director’s office. 

Well, one would think so, but according to the response from the 

Department of Justice, Director Jones was not made aware of the 

serious questions about the manner in which Operation Fearless 

was conducted until he was informed that a reporter for the Milwaukee Journal Sentinel had inquired about the operation. I believe this calls into question either the information that Director 

Jones’ subordinates are giving him or the level of involvement to 

which Director Jones is willing to engage. I do not expect Director 

Jones to be involved in the minute details of every operation being 

run by the ATF. However, when issues such as these arise, I expect 

swift and immediate action to take place. 

Perhaps equally as disturbing as the lack of executive oversight 

of this flawed operation is the lack of candor that ATF exhibited 
5 

when briefing Congress on Operation Fearless last April. The information ATF conveyed regarding Operation Fearless left the impression that the problems were an isolated incident. 

However, according to another Milwaukee Journal Sentinel article in December of 2013, the problems facing the storefront operation in Milwaukee were not isolated. In fact, at around the same 

time Operation Fearless was being conducted, there were five other 

flawed storefront operations taking place in Portland, Oregon; 

Wichita, Kansas; Pensacola, Florida; Atlanta, Georgia; and Albuquerque, New Mexico. In an almost identical fashion, each of these 

operations suffered from a lack of supervision and control. 

Just last week, the Department of Justice’s Inspector General announced that it will initiate an investigation that will examine the 

systemic deficiencies of these storefront operations. 

Like many, I question whether these operations attracted more 

crime than they prevented. I look forward to hearing from today’s 

witness and I am committed to getting to the bottom of these serious problems and ensuring that they do not happen again. 

Thank you, Mr. Chairman. 

Mr. SENSENBRENNER. I thank the Chairman of the full Committee for his statement. 

Without objection, other Members’ opening statements will be 

made a part of the record. 

And also without objection, the Chair will be authorized to declare recesses during votes on the House floor. 

Our one witness today is Thomas E. Brandon, who was appointed Deputy Director of the Bureau of Alcohol, Tobacco, Firearms, and Explosives in October 2011. He is responsible for leading 

an agency of men and women charged with enforcing laws and regulations relating to firearms, explosives, arson, and alcohol and tobacco trafficking. 

Prior to being appointed Deputy Director, Mr. Brandon served as 

the Special Agent in Charge of the Phoenix Field Division, directing operations for field operations of the ATF in Arizona and New 

Mexico. He began his ATF career as a special agent in Detroit. He 

served in many management positions, including Special Agent in 

Charge and Assistant Special Agent in Charge of the Detroit Field 

Division, Supervisory Special Agent of the Detroit Arson and Explosives Enforcement Group, Special Agent with the Office of Inspection in Washington, Supervisory Special Agent of the Achilles 

Enforcement Group in Los Angeles, and the Division Intelligence 

Officer with the Phoenix, Arizona Field Division. Mr. Brandon also 

held the position of Chief of the ATF’s National Academy in 

Glynco, Georgia. 

Mr. Brandon proudly served in the United States Marine Corps 

from 1978 to 1982. He earned his Bachelor of Science in Business 

Administration from Oakland University in Rochester, Michigan. 

Mr. Brandon, before you begin to testify, I will swear you in. 

Please rise, raise your right hand. 

[Witness sworn.] 

Mr. SENSENBRENNER. Thank you, Mr. Brandon. 

Mr. SCOTT. Mr. Chairman? 

Mr. SENSENBRENNER. Yes? 
6 

Mr. SCOTT. Can I ask Mr. Conyers be recognized for a unanimous 

consent request? 

Mr. SENSENBRENNER. Certainly. 

The gentleman from Michigan. 

Mr. CONYERS. Thank you very much. I just wanted to observe 

that today, Mr. Chairman and Mr. Scott, we are conducting a hearing about the instances of poor decisions, and I have several observations about the situation and where we should go from here. 

But overall, we must keep in mind the important mission of ATF 

to protect us from gun traffickers who fuel violence on our streets 

every day. 

The engagement of undercover agents with the public sometimes 

creates situations that are physically dangerous or are threatening 

to our civil liberties, and underground operations therefore, of 

course, require strict guidelines and careful oversight. But we have 

learned that the ATF’s storefront undercover operations did not 

have proper oversight and were poorly managed. 

The next point is that I am encouraged that the Director of ATF, 

Todd Jones, implemented management and policy changes in 2011 

soon after he was named acting director, and he has continued to 

address management deficiencies since being confirmed by the Senate last year. 

Prior to that time, ATF endured a period of acting directors when 

the Senate was unable to confirm a permanent director. I am confident that ATF is addressing the shortcomings which led to the 

problems with these operation storefronts, and I look forward to 

hearing from ATF about the changes being implemented. 

And finally, if we are truly interested in reducing gun violence, 

we must act now on legislation to strengthen our gun laws. I am 

not happy that more than a year into this Congress, this ATF oversight hearing is the only hearing even tangentially related to gun 

violence held by this Committee and this Congress, and during this 

time we have had tragic mass shootings in Connecticut, down the 

street in the Navy Yard, and every day in this country 32 people 

are murdered with a firearm. 

So while there is no single solution to gun violence, I urge that 

we adopt legislation to strengthen our gun laws and enact after 

careful consideration H.R. 452, the Gun Trafficking Prevention Act. 

So while we examine some of the storefront operations today, I 

hope we remain focused on finding ways to protect the public from 

the harms this agency was established to combat. 

I thank you for your consideration, Mr. Chairman and Mr. Scott. 

I yield back. Thank you. 

Mr. SENSENBRENNER. Just as a note, we did invite Director 

Jones, and he decided to send Mr. Brandon instead. 

Mr. Brandon, without objection, your full testimony will appear 

in the Committee record. We would ask you to summarize your testimony in 5 minutes. I think you know what the red, yellow and 

green lights all mean, so please proceed. 
7 

TESTIMONY OF THOMAS E. BRANDON, DEPUTY DIRECTOR, BUREAU OF ALCOHOL, TOBACCO, FIREARMS, AND EXPLOSIVES 

Mr. BRANDON. Thank you, Chairman Sensenbrenner, Chairman 

Goodlatte, Ranking Member Scott, Members of the Subcommittee, 

for allowing me to appear here today. 

I am pleased to be here to discuss ATF’s undercover storefront 

operations, including our successes, the actions we have taken to 

address identified issues, and to correct some misunderstandings 

about these operations. 

A storefront operation is an investigative technique in which undercover officers operate a business designed to identify and 

proactively address criminal activity. ATF’s storefront operations 

promote public safety as they target firearms trafficking and illegal 

firearms possession in high-crime areas identified by our fellow 

state and local law enforcement partners and prosecutors. 

Current ATF policy provides that storefront operations are undertaken only in response to requests for the technique by our local 

law enforcement partners. Storefront operation proposals also require written concurrence from the jurisdiction’s chief law enforcement officer. 

As a result of our storefront operations in Albuquerque, Atlanta, 

Milwaukee, Pensacola, Portland and Wichita, there have been 

nearly 300 defendants arrested, 259 convicted, and over 1,300 firearms recovered to date. 

Like any long-term investigative operation, an undercover storefront carries risks. A properly managed operation minimizes those 

risks. ATF recognizes our responsibility to the public to mitigate 

the risks with sound management and professional execution. 

I acknowledge, Mr. Chairman and Members of the Subcommittee, that we could have improved our execution and management of some activities in certain storefronts. We have since implemented new policies and procedures to minimize the risk of such 

deficiencies occurring in the future. 

I want to assure you that public safety is of the utmost importance to Director Jones, me, and our new executive management 

team at ATF. We recognize that storefronts and other undercover 

operations require stringent oversight in all facets of planning and 

execution. Several policy and operational changes have been put in 

place that create a tighter process for the authorization, management, oversight and review of undercover operations. We have also 

made improvements to the Monitored Case Program designed to 

enhance coordination, communication and analysis between field 

and headquarters personnel. We have created an internal storefront manual addressing operational security, location, investigative support, status reviews, and closure of the storefront. 

We have taken reports about our storefront operations very seriously, particularly the allegation that we took advantage of individuals of diminished mental capacity. While we can and will improve 

our interactions with these individuals, let me state emphatically 

that ATF targets criminal conduct and not individuals. 

Additionally, it has been suggested that ATF agents paid higher 

than market prices for firearms during storefront operations. The 

market price for a street gun can vary widely depending on a variety of circumstances, including offender and weapon characteristics 
8 

and the nature of the interactions between the agents and the suspects. Our primary concern is protecting public safety, but we also 

recognize the importance of utilizing resources and taxpayer dollars 

wisely. We must, on occasion, pay above market prices for firearms 

in order to reduce the risk that an individual we believe to pose 

a public threat does not leave the storefront with the firearm. 

Also, we conducted a review of the average prices paid for all 

guns in ATF undercover operations over the last 6 years. Our review indicated we paid less on average for firearms in the abovereferenced storefront operations than in all other undercover operations over the same time period. 

Mr. Chairman and Members of the Subcommittee, I want to conclude by saying that ATF is proud to be at the front line against 

violent crime. 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 proud of the 

exceptional work done every day by ATF special agents, investigators and support staff combatting violent crime. 

I am happy to be here today to answer your questions but need 

to point out limitations on my ability to respond in certain respects. 

As you know, the Office of the Inspector General has announced 

that it is examining several specific storefront operations, and ATF 

is cooperating with the OIG’s review. 

We also are in the process of reviewing large numbers of documents in connection with congressional requests. 

I will answer your questions as well as I can based on my knowledge of the matters discussed here today, but it is important to 

note that our understanding could change as we learn more from 

our ongoing document reviews and the OIG. Thank you. 

[The prepared statement of Mr. Brandon follows:] 
9 
10 
11 
12 
13 

Mr. SENSENBRENNER. Well, thank you very much, Mr. Brandon. 

I guess your last statement disturbs me because the Milwaukee 

operation has been out there for a while, and you knew that somebody would be coming and testifying sooner or later before this 

Subcommittee, and you are still doing a document review. 

Let me ask you first, when did you first know about Operation 

Fearless? 
14 

Mr. BRANDON. It was during the planning for taking the operation down with the enforcement activity for the arrests. I knew 

that there was a storefront in Milwaukee and that there was a 

planned enforcement activity, and I believe that was September or 

October of 2012. 

Mr. SENSENBRENNER. Was this before or after the articles started 

appearing in the Milwaukee Journal Sentinel? 

Mr. BRANDON. That was before. 

Mr. SENSENBRENNER. Okay. When did the first article appear in 

the Journal Sentinel? Does anybody know? Was it December? 

Okay. I would like to know why I learned about this from my 

hometown newspaper if the storefront was already being taken 

down prior to the appearance of the first article. After all, I am the 

Chairman of your oversight subcommittee, and it was not in my 

home town but very close to it. 

Mr. BRANDON. Mr. Chairman, personally I want to apologize to 

you for that. This whole process was new to me, dealing with Capitol Hill, and with what I know now, I would have made sure you 

were aware of it. 

Mr. SENSENBRENNER. Surely someone in the shop has been dealing with Capitol Hill because I have been here for a while, and 

again I do not like to hear about people tripping over their shoelaces on the front page of the Sunday paper. 

In December I like to watch Packer games without other things 

on my mind. 

Mr. BRANDON. My family are big Packer fans. But again, to answer your question, sir, you should not have heard about it in the 

newspaper, period. 

Mr. SENSENBRENNER. Okay. When did you learn about the other 

storefront operations? 

Mr. BRANDON. That would be through the newspaper article. 

Mr. SENSENBRENNER. Okay. When were you led to believe that 

Milwaukee was not an isolated incident? 

Mr. BRANDON. That would be through the newspaper article. 

Mr. SENSENBRENNER. You are talking about the Journal Sentinel 

articles? 

Mr. BRANDON. Yes. 

Mr. SENSENBRENNER. All of them? 

Mr. BRANDON. Yes. 

Mr. SENSENBRENNER. When did you become aware of the other 

botched storefront operations, particularly those in Pensacola, Portland, Wichita, and Albuquerque? 

Mr. BRANDON. Mr. Chairman, those five other storefront operations all were initiated before the then acting director, now director, came on board on August 31st. I do know that there was one 

taken down in July of 2011 and another in October of 2011 that 

culminated the enforcement activity of those. But all of them were 

conducted actively prior to acting director, now Director Jones’ arrival to ATF. 

Mr. SENSENBRENNER. Okay. Well, somebody was acting director 

at the time, and in Portland you opened a gun store across the 

street from a middle school which ends up bringing criminals and 

more guns right in the vicinity of a school. That is an amazing lack 

of judgment, at least in my view. How did the location of the Port-
15 

land gun store end up being decided to be right across the street 

from a school? 

Mr. BRANDON. From my briefing, they were looking for a lease 

that would tie them to 1 year as opposed to two. But, Mr. Chairman, I share your concerns, and that was a mistake, and it should 

have never occurred across from a school. They changed the hours 

when they learned of it and made it in the evening so the children 

would not be at school. But bottom line, it should not have happened. We have new reforms now in the storefront manual. There 

is a rigorous review that will prevent that from happening. 

Mr. SENSENBRENNER. Okay. The other thing that seems to be 

somewhat common is that people of diminished mental capacity 

seem to be recruited for one job or the other. We know of at least 

two of them. Is that going to stop, or are we still going to be hiring 

these folks and maybe giving them tattoos at taxpayers’ expense? 

Mr. BRANDON. Mr. Chairman, again, I share your concern very 

personally and heartfelt about people with diminished mental capacity. The ATF targets criminal conduct, not people with low IQs. 

But in the case with the defendant that had the tattoo, they came 

into the storefront wanting to get the tattoo. The undercovers actually were trying to talk them out of it and were saying, hey, let us 

hold off, let us check with our business manager or something, because it is our logo. And then they, in fact, came back into the 

storefront with the tattoo artist and left and got them. So it was 

not something approved. 

But also, ATF, the undercover agents, to enhance their under- cover capacity, gave them each $150. Again, that was not great 

judgment. A Federal judge has ordered us to remove the tattoo. We 

are happy to comply with that. The defendant has had two sessions 

where he was supposed to go. He did not show up. But we remain 

ready to comply with the judge’s order. 

Mr. SENSENBRENNER. It shocks me that it has to become a Federal case to get a tattoo removed. 

The gentleman from Virginia, Mr. Scott. 

Mr. SCOTT. Thank you, Mr. Chairman. 

Mr. Brandon, you indicated that the present process for setting 

up one of these storefront operations involves concurrence with a 

request from the local law enforcement agency? 

Mr. BRANDON. That is correct, sir. 

Mr. SCOTT. What else is in the process? That can not be the only 

thing. 

Mr. BRANDON. No. For any undercover operation for a storefront, 

in this case, to go forward, it has to go before an undercover review 

committee. That was my direction as far as it now includes someone from the Department of Justice, an attorney from the Criminal 

Division who is a voting member on the undercover review committee. That puts us in line with FBI and DEA on their policies. 

And then also the rigorous look at compliance with our standard 

operation and procedures, the storefront manual that I said that 

was published by Assistant Director Ron Turk. 

Mr. SCOTT. Do the people involved in it have any special training, or do they just learn on the job? 

Mr. BRANDON. Well, that is another thing I directed, is that before an undercover storefront operation can go, they have to have 
16 

training from the management team online down to the case 

agents by people that have experience in this, and also have proven 

successes in it. 

Mr. SCOTT. Have you seen a difference in the storefront operations, the sting operations now than in the past? 

Mr. BRANDON. Well, our activity has gone down. Right now we 

have zero, but we have gone to controlled undercover environments, and that is the whole purpose of the storefront. It enhances 

the public safety, the undercover agents’ safety, and also is able to 

get good evidence on audio and video. We keep refining and retooling to enhance getting violent criminals off the street. 

Mr. SCOTT. These incidents we have been reading about have 

clearly been an embarrassment. Have you fixed it so we will not 

have to read about these in the future? 

Mr. BRANDON. Yes. I mean, I would like to put some of them in 

context, but absolutely. We are reforming under Director Jones’ 

leadership, and the oversight from headquarters has been significantly enhanced. 

Mr. SCOTT. Now, are there any problems with enforcing—do we 

need to have any legislation to help you enforce your gun laws, like 

background loopholes, including the gun show? 

Mr. BRANDON. Sir, we enforce the laws that you give us, and we 

will continue to do so. 

Mr. SCOTT. How does the gun show loophole and other loopholes 

in the background check hurt your ability to keep guns out of the 

hands of people who should not have them? 

Mr. BRANDON. Well, in general, the purpose of a storefront operation is to absorb the black market supply of guns on the street. 

It is never to go after people and firearms in legal commerce. 

Mr. SCOTT. What kind of statutes are available to help in preventing gun trafficking? 

Mr. BRANDON. Again, I think it is well known, but we use the 

laws we enforce to address violent crime, and we will continue to 

do so, and if you give us new laws, we will apply them accordingly. 

Mr. SCOTT. What about a straw purchase where someone buys a 

firearm on behalf of someone else? Are the laws strong enough in 

that area? 

Mr. BRANDON. Again, I just leave it up to us for enforcing it. It 

has been well known that that is viewed as being a soft penalty 

for those things. But again, we just investigate the criminal activity. 

Mr. SCOTT. What is the penalty now for someone who purchases 

a firearm on behalf of someone else? 

Mr. BRANDON. I believe under the Gun Control Act it can go up 

to 10 years, but under the sentencing guidelines it is usually a very 

minor thing and it is usually a minimal sentence. 

Mr. SCOTT. One of the high-profile cases involving ATF was the 

Boston Marathon bombing. A lot of agencies were involved. Was 

there a problem in coordinating your efforts? 

Mr. BRANDON. No. In fact, I remember where I was in the Detroit airport when I learned of that, and I immediately contacted 

my counterpart, Sean Joyce, who is the deputy director of the FBI, 

and I said, hey, this is clearly in my view an act of terrorism, but 

any and all resources are available to ATF to work collaboratively 
17 

with the FBI. The FBI drew on our resources, and we had a very 

good working relationship to share our expertise with explosives 

and post-blast incidents. 

Mr. SCOTT. Thank you, Mr. Chairman. 

Mr. SENSENBRENNER. Thank you. 

The gentleman from Virginia, Mr. Goodlatte. 

Mr. GOODLATTE. Thank you, Mr. Chairman. 

Mr. Brandon, welcome. I also want to thank you for meeting me 

in Front Royal, Virginia last year to visit your canine training facility, which is an impressive operation, and you do good work in 

making sure that law enforcement agencies around the world have 

dogs capable of detecting explosives and firearms and so on. So, 

thank you for that. 

I do want to focus, however, on what happened in Milwaukee. 

When this program began in January of 2012, Director Jones was 

also serving as U.S. Attorney for Minnesota. In fact, he served as 

both ATF Director and U.S. Attorney for much of 2012; is that not 

correct? 

Mr. BRANDON. That would be correct. 

Mr. GOODLATTE. How many days per week was Director Jones in 

the ATF office? 

Mr. BRANDON. He would arrive on Monday morning, flying in 

from Minnesota, and then I believe fly out late Thursday evening. 

Mr. GOODLATTE. And this was every week? 

Mr. BRANDON. Yes. 

Mr. GOODLATTE. What percentage of his time would you say was 

dedicated to ATF business? 

Mr. BRANDON. Well, he was doing double duty. I mean, the man 

was working I would say 18, 16, 17 hours a day. So he was fully 

committed to being the director, acting director. 

Mr. GOODLATTE. Well, jobs like these and jobs of Members of 

Congress are definitely double-duty jobs. I mean, all of us work 80, 

90 hours a week as well, for one job. So do you think the director 

of the ATF should be a part-time position where you are responsible for carrying out another, clearly full-time operation as the 

U.S. Attorney for the entire state of Minnesota? 

Mr. BRANDON. No. I think we were happy that he was confirmed 

as our director. 

Mr. GOODLATTE. Given all of the controversy that was surrounding the ATF at the time, do you not think the agency needed 

a full-time director? 

Mr. BRANDON. Yes. It was needed, but he was fully engaged. 

Mr. GOODLATTE. Why did the ATF fail to disclose to Congress the 

numerous other flawed storefront operations when they provided 

briefings in April of last year? 

Mr. BRANDON. Mr. Chairman, I share your concern on that. The 

assistant director, Michael Gleysteen of Office of Professional Responsibility and Security Operations, the briefing was just for Milwaukee and was delivered in that context. 

Mr. GOODLATTE. We were given the impression as a part of that 

briefing that Operation Fearless was an isolated incident. 

Mr. BRANDON. I am unaware of that impression, but I knew that 

the goal was to deliver the information. In fact, that investigation, 

when I learned of it, I brought Michael Gleysteen into my office 
18 

and talked to him and it was kind of a culture change in ATF. I 

said, hey, get down to the bottom of this, and he had a team there 

flying overnight, and it was a programmatic review of how the investigation was conducted. I know that his intention in delivering 

that briefing was solely on Milwaukee. 

Mr. GOODLATTE. All right. Well, let us expand it beyond Milwaukee, which is what this hearing is about today. 

In your testimony, you claim that the ATF conducted 37 storefront operations between 2009 and 2013. We know of at least six 

operations that had serious problems associated with them. Right 

now, are you prepared to tell us that these were the only six operations with serious problems? 

Mr. BRANDON. Mr. Chairman, I know the OIG is looking at some 

of those storefronts. So with the information I have right now, I 

would say that. 

Mr. GOODLATTE. Would you call a program where one in six operations has significant problems a successful one? 

Mr. BRANDON. Well, I do. I mean, putting this into context, there 

were deficiencies, like I said in my opening statement, with some 

of these storefronts, but there have been many successes. It still remains a viable investigative technique when managed well. 

Mr. GOODLATTE. Right. That last part is key, though, adequate 

supervision, right? 

So right now you say you are down to zero. What are your future 

plans going forward? Because it seems to me that the technique, 

which is not a new one, has not been used exclusively by ATF. I 

am familiar with other operations in other places at other times 

used by law enforcement to deal with fencing of stolen goods and 

other things that have successfully led to a lot of good prosecutions. 

They are difficult to maintain for a long period of time, and they 

do require very significant supervision. What are the ATF’s plans 

moving forward? 

Mr. BRANDON. Mr. Goodlatte, again, I share your concerns. Some 

of the reforms have been with the ATF’s storefront manual. What 

happened here is I know from being a career ATF agent over 25 

years, you had earnest, hard-working undercover ATF agents having successes in various states, and the policy was lacking for this 

undercover activity. It is now in place. From my observation of this, 

that is how—— 

Mr. GOODLATTE. The policy is in place, but there are no operations in place. What are your future plans? 

Mr. BRANDON. Well, we are receptive to the storefront investigative technique. My observation is just because they are so resource 

intensive, and then getting them all prosecuted, the cases, there is 

an ebb and flow of activity because the divisions are staffed to a 

certain level. Lately we have been under-staffed in many divisions. 

So I could picture it picking up as we bring on new people and get 

them properly trained. 

Mr. GOODLATTE. Thank you, Mr. Chairman. 

Mr. SENSENBRENNER. The gentleman from Michigan, Mr. Conyers, the Chairman Emeritus of the Committee. 

Mr. CONYERS. Thank you, Mr. Chairman. 

Deputy Director Brandon, the vast majority of licensed gun dealers seem to abide by the law, but a small percentage of dealers vio-
19 

late the law and supply a disproportionate amount of guns used in 

crime. 

Now, is it not correct that the ATF is generally limited to inspecting gun dealers to once per year? 

Mr. BRANDON. That would be correct, sir. 

Mr. CONYERS. And due to resource constraints, how frequently 

are most dealers actually inspected? 

Mr. BRANDON. I recall I think it is once every 7 years. 

Mr. CONYERS. Well, that is, to me, a very important consideration in this discussion this morning. 

Is the ATF allowed to require gun dealers to physically check 

their inventory against their records, which would, of course, help 

deal with instances of missing guns and the successful tracing of 

guns used in crime? 

Mr. BRANDON. Congressman, they are not required. 

Mr. CONYERS. Well, then the natural question that follows is why 

not? 

Mr. BRANDON. We are prohibited from requiring that. 

Mr. CONYERS. Prohibited by whom? 

Mr. BRANDON. It is in the appropriations, I believe. 

Mr. CONYERS. Well, I think I am going to have to have staff research this because I am not sure if that is correct or not. 

Is that correct? 

Okay. Staff assures me that that is a correct response. 

If a gun dealer is found to have committed serious violations and 

is in jeopardy of losing their Federal license, is it not true that they 

may transfer their license to a store employee or a family member 

so that the business may continue operating without accountability 

for the violations? 

Mr. BRANDON. Congressman, that is handled on a case-by-case 

basis, and I do know of licensees trying to do that. 

Mr. CONYERS. Well, I am hopeful that that will be looked into 

carefully here on the Committee and by you and the operation 

itself. I think that is an important consideration. 

Thank you, Mr. Chairman. That ends my questioning of the witness. 

Mr. SENSENBRENNER. Well, thank you very much. 

The gentleman from North Carolina, Mr. Coble. 

Mr. COBLE. Thank you, Mr. Chairman. 

Mr. Brandon, good to have you with us. Let me combine or consolidate three or four questions into one, Mr. Brandon. How many 

firearms have been stolen from ATF agents’ vehicles over the past, 

say, two or 3 years? 

Mr. BRANDON. I do not know the exact number, sir, but I would 

be happy to take that back and get the answer for you. 

Mr. COBLE. That would be fine if you could do that. And also, I 

would like to know how many were fully automatic. And if any firearms stolen from ATF agents’ vehicles particularly fully automatic 

firearms, which individuals at headquarters would be notified? 

Mr. BRANDON. I was notified of the incident in Milwaukee when 

the rifle that belonged to a special response team member who was 

also doing the undercover. That firearm was stored in an SUV that 

was alarmed and locked, and also in a vault that is bolted to the 

car, or to the SUV in this case. The people that broke into the vehi-
20 

cle, it was in broad daylight, parked in an area that had pedestrian 

traffic. But that would be the one instance, to answer your question, sir, that I know of, of an automatic firearm, in this case a 

three-round burst, that was stolen. 

Mr. COBLE. And if you could get back to us about the total number that was stolen, I would be appreciative to you for that. 

Mr. BRANDON. Yes, sir. 

Mr. COBLE. I am told, and I do not recall who told me or where 

I read it, but that one individual purchased a firearm for a few 

hundred dollars at Gander Mountain and turned around and sold 

it to the ATF for a couple of thousand dollars a few short hours 

later. Are you familiar with this? 

Mr. BRANDON. Yes, sir. 

Mr. COBLE. Elaborate a little bit more, if you will. 

Mr. BRANDON. Sure. Again, that was a concern to me, and also 

it is part of the reforms in the storefront manual. The firearms 

were not being traced when they were purchased because they 

were afraid to alert and compromise the undercover location 

through the trace process. We have methods to be able to trace it 

but not alert the firearms dealer so that we could be aware if there 

is any type of trend that people are going into a licensee, buying 

it, and turning around and bringing it to us. But the reform is in 

the storefront manual to address that. 

Mr. COBLE. I thank you, sir. 

I yield back, Mr. Chairman. 

Mr. SENSENBRENNER. Thank you very much. 

The gentleman from South Carolina, Mr. Gowdy. 

Mr. GOWDY. Thank you, Mr. Chairman. 

Special Agent Brandon, I was told this morning by my friend of 

20 years, Special Agent C.J. Hyman, that you are a good person 

and a stand-up guy. So I am going to ask the same questions that 

I was going to ask, but I will ask them in a different tone of voice 

given C.J. Hyman vouching for you. 

I want to start by asking you this. They had a very successful 

storefront operation in Greenville, South Carolina, led by Special 

Agent C.J. Hyman and a prosecutor by the name of Lance Crick. 

Why not get those guys to come do training? It should not be that 

tough to run a storefront operation the way that Chairman Goodlatte and Chairman Sensenbrenner and Mr. Scott and others would 

expect it to be run. 

So when you have a group that has done it successfully, my advice to you—you do not have to take it—get C.J. and Lance to come 

to Glynco or wherever and train your folks on how to do it the right 

way. 

Mr. BRANDON. Congressman, again, it is a pleasure meeting you 

here. and C.J. spoke highly of you, and I think the world of him. 

But your point we already incorporate in the storefront manual. 

That was an obvious thing of, hey, why do not we have a mentoring 

process of people who have been successful where we have done 

them all around the country and teach that. So now that is part 

of our standard operation procedures. I agree completely with you. 

Mr. GOWDY. I am, by far, the worst lawyer on this panel, but I 

do not think even I indicted someone who had the alibi of being in 
21 

prison at the time the crime was committed. If I did, I do not recall 

doing that. How does that happen? 

Mr. BRANDON. I am unfamiliar with the example you are stating. 

Mr. GOWDY. There was a report that one of the folks arrested or 

indicted was actually in prison at the time the alleged crime was 

committed, which is a really good alibi. 

Mr. BRANDON. I have to agree with you. 

Mr. GOWDY. Well, if you do not know, then it is not fair to ask 

you about it. 

Mr. BRANDON. I do know about the things in Milwaukee where 

there were four instances. Again, I was not pleased when I heard 

this. It is addressed in the storefront manual, proper identification. 

This goes back to that operation, not having an outside cover team. 

That was a deficiency. It should have been, because then you would 

follow the people away. I know the experience of some of you as 

prosecutors, that you do it to identify them without compromising 

the storefront. 

So in complete candor, that is how I tracked it down, and there 

were deficiencies. I will add, not that it minimizes anything, the 

people were not jail, you know booked and jailed, when they questioned them saying, hey, I am not that guy, they were taken to the 

command post, and then when it was confirmed, they were released and driven back to their homes. So I agree with you, there 

is no justification for that. 

Mr. GOWDY. Well, my colleagues have done such a good job of 

asking you about the storefront operations, I want to switch gears 

in the little bit of time we have left. 

Mr. Conyers, the Ranking Member from Michigan, asked again 

about additional gun legislation, and I had a group of moms come 

and meet with me in Greenville last week, actually, incredibly conscientious moms who wanted to meet with me about closing whatever loopholes remain with respect to background checks. 

It just strikes me, as an old, washed-up prosecutor, that before 

we talk about new weapons in your arsenal, it is fair to ask how 

are we doing enforcing the ones that we already have. You can not 

do it this morning, and you may not be able to do it in a month, 

but at some point it would help me, and I presume other Members 

of the Judiciary, to see a list of referrals from local law enforcement. 

924(e) is a perfect example. That is a mandatory minimum 15 

years. I mean, even for a Department of Justice that does not like 

mandatory minimums, that is a big hit. 

So how many referrals from locals did we not accept? How many 

did the AUSA decline prosecution on? We could do it with 924(e)s, 

we could do it with 924(c)s. I know lying and buying cases do not 

carry a lot of bang for the buck, but let us fix that part of it. If 

that is why we are not prosecuting lying and buying cases or current background check failures, let us fix that. Let us make it 

where it is more attractive to your agents to investigate those 

cases, or more attractive to the prosecutors to prosecute them. 

But at some point it would be helpful to us to know whether you 

are getting the referrals from local law enforcement and not investigating or not adopting the case, or whether you are and working 

them up and the prosecutors are declining to prosecute it. That 
22 

would be helpful to me. If we are going to discuss new weapons, 

I would really like to know how we are doing with the ones that 

we currently have. 

And with that, give my best to the agents in Greenville. 

Mr. BRANDON. Congressman, I agree with you, and I will take 

that back to the Department. I just want to add that in Milwaukee, 

there were four 924(e) defendants in the Milwaukee storefront. And 

as a career guy, those are great cases, great targets. 

Mr. SENSENBRENNER. I thank the gentleman from South Carolina. 

There are a couple of loose ends that I would like to ask you, Mr. 

Brandon, to provide the Subcommittee with some more information. The information that I received indicate that there are about 

60,000 Federal firearms licensees, and ATF has got about 500 inspectors. Now, if there is an inspection that is taking place once 

every 7 years, that means that those 500 people do an average of 

18 inspections a year. Certainly, we want to make sure that the inspections are done in an adequate and timely and frequent-enough 

manner. 

So can you provide the information on how many active inspectors there are, and can you also have some kind of a log on how 

often or how much of their time the inspectors actually do inspecting? 

Mr. BRANDON. Yes, Chairman, I will take those back to the Department and get you the specific numbers. But again, to put it in 

context, as far as inspections through the trace process, we 

prioritize. If a number of crime guns are being traced to a specific 

FFL, in the interest of public safety those will be inspected more 

frequently. 

Mr. SENSENBRENNER. I understand that. But there seems to be 

a disconnect on the numbers on that, and we are going to need to 

have the numbers to make a determination on that. 

The other point I would like to make is we are going to have 

somebody from the ATF back, hopefully Mr. Jones or you or both 

of you, after the Inspector General’s report on storefront operations, largely to see how many of the recommendations of the Inspector General, whatever they may be, will end up being adopted; 

and if not, why not; and if they are not being fully implemented, 

why not. So be advised; we will see you again. 

Mr. BRANDON. It has been a pleasure, sir. 

Mr. SENSENBRENNER. Thank you very much. 

And with that, without objection, the Subcommittee hearing is 

adjourned. 

[Whereupon, at 10:53 a.m., the Subcommittee was adjourned.] 
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