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ATF lost track of 420m cigarettes

WASHINGTON — Government agents acting without authorization conducted dozens of undercover investigations of illegal tobacco sales, misused some of $162 million in profits from the stings, and lost track of at least 420 million cigarettes, the Justice Department's inspector general said Wednesday.

In one case, agents for the Bureau of Alcohol, Tobacco, Firearms and Explosives sold $15 million in cigarettes and turned over $4.9 million in profits from the sales to a confidential informant — even though the agency did not properly account for the deal.

The ATF's newly appointed director, B. Todd Jones, said the audit covered only selected, ''historical'' ATF investigations between 2006 and 2011, and said the agency had tightened its internal guidelines since then.

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The audit described widespread lack of ATF oversight and inadequate paperwork in the agency's ''churning investigations,'' undercover operations that use proceeds from illicit cigarette sales to pay for the ATF's costs. The audit came as a new blow to an agency still reeling from congressional inquiries into its flawed handling of the Operation Fast and Furious weapons tracking probes in Mexico.

''ATF's guidance regarding churning investigations lacked breadth and specificity, and managers at ATF headquarters as well as managers and special agents at ATF field offices often disregarded it,'' Inspector General Michael E. Horowitz wrote in the 53-page audit.

Horowitz recommended tightened ATF procedures for documenting, tracking, and reviewing proceeds from its undercover tobacco stings.

Jones said the agency has adopted most of those guidelines. While accepting responsibility for ''management and oversight lapses that allowed those deficiencies to develop,'' he insisted that ''the report's findings do not reflect current ATF policy or practice.''

In a written response, Horowitz approved the ATF's moves in April 2013 to tighten its standards. Horowitz cautioned that his office ''has not been provided evidence to verify the sufficiency of actions taken.''

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Associated Press