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Documents obtained by CBS News show that the Bureau of Alcohol Tobacco, Firearms and Explosives (ATF) discussed using their covert operation "Fast and Furious" to argue for controversial new rules about gun sales.
PICTURES: ATF "Gunwalking" scandal timeline

In Fast and Furious, ATF secretly encouraged gun dealers to sell to suspected traffickers for Mexican drug cartels to go after the "big fish." But ATF whistleblowers told CBS News and Congress it was a dangerous practice called "gunwalking," and it put thousands of weapons on the street. Many were used in violent crimes in Mexico. Two were found at the murder scene of a U.S. Border Patrol agent.


ATF officials didn't intend to publicly disclose their own role in letting Mexican cartels obtain the weapons, but emails show they discussed using the sales, including sales encouraged by ATF, to justify a new gun regulation called "Demand Letter 3". That would require some U.S. gun shops to report the sale of multiple rifles or "long guns." Demand Letter 3 was so named because it would be the third ATF program demanding gun dealers report tracing information.


On July 14, 2010 after ATF headquarters in Washington D.C. received an update on Fast and Furious, ATF Field Ops Assistant Director Mark Chait emailed Bill Newell, ATF's Phoenix Special Agent in Charge of Fast and Furious:


"Bill - can you see if these guns were all purchased from the same (licensed gun dealer) and at one time. We are looking at anecdotal cases to support a demand letter on long gun multiple sales. Thanks."

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On Jan. 4, 2011, as ATF prepared a press conference to announce arrests in Fast and Furious, Newell saw it as "(A)nother time to address Multiple Sale on Long Guns issue." And a day after the press conference, Chait emailed Newell: "Bill--well done yesterday... (I)n light of our request for Demand letter 3, this case could be a strong supporting factor if we can determine how many multiple sales of long guns occurred during the course of this case."


This revelation angers gun rights advocates. Larry Keane, a spokesman for National Shooting Sports Foundation, a gun industry trade group, calls the discussion of Fast and Furious to argue for Demand Letter 3 "disappointing and ironic." Keane says it's "deeply troubling" if sales made by gun dealers "voluntarily cooperating with ATF's flawed 'Operation Fast & Furious' were going to be used by some individuals within ATF to justify imposing a multiple sales reporting requirement for rifles."



The Gun Dealers' Quandary


Several gun dealers who cooperated with ATF told CBS News and Congressional investigators they only went through with suspicious sales because ATF asked them to.


Sometimes it was against the gun dealer's own best judgment.

Read the email


In April, 2010 a licensed gun dealer cooperating with ATF was increasingly concerned about selling so many guns. "We just want to make sure we are cooperating with ATF and that we are not viewed as selling to the bad guys," writes the gun dealer to ATF Phoenix officials, "(W)e were hoping to put together something like a letter of understanding to alleviate concerns of some type of recourse against us down the road for selling these items."


Read the email

ATF's group supervisor on Fast and Furious David Voth assures the gun dealer there's nothing to worry about. "We (ATF) are continually monitoring these suspects using a variety of investigative techniques which I cannot go into detail."


Two months later, the same gun dealer grew more agitated.


"I wanted to make sure that none of the firearms that were sold per our conversation with you and various ATF agents could or would ever end up south of the border or in the hands of the bad guys. I guess I am looking for a bit of reassurance that the guns are not getting south or in the wrong hands...I want to help ATF with its investigation but not at the risk of agents (sic) safety because I have some very close friends that are US Border Patrol agents in southern AZ as well as my concern for all the agents (sic) safety that protect our country."


"It's like ATF created or added to the problem so they could be the solution to it and pat themselves on the back," says one law enforcement source familiar with the facts. "It's a circular way of thinking."


The Justice Department and ATF declined to comment. ATF officials mentioned in this report did not respond to requests from CBS News to speak with them.


The "Demand Letter 3" Debate


The two sides in the gun debate have long clashed over whether gun dealers should have to report multiple rifle sales. On one side, ATF officials argue that a large number of semi-automatic, high-caliber rifles from the U.S. are being used by violent cartels in Mexico. They believe more reporting requirements would help ATF crack down. On the other side, gun rights advocates say that's unconstitutional, and would not make a difference in Mexican cartel crimes.


Two earlier Demand Letters were initiated in 2000 and affected a relatively small number of gun shops. Demand Letter 3 was to be much more sweeping, affecting 8,500 firearms dealers in four southwest border states: Arizona, California, New Mexico and Texas. ATF chose those states because they "have a significant number of crime guns traced back to them from Mexico." The reporting requirements were to apply if a gun dealer sells two or more long guns to a single person within five business days, and only if the guns are semi-automatic, greater than .22 caliber and can be fitted with a detachable magazine.


On April 25, 2011, ATF announced plans to implement Demand Letter 3. The National Shooting Sports Foundation is suing the ATF to stop the new rules. It calls the regulation an illegal attempt to enforce a law Congress never passed. ATF counters that it has reasonably targeted guns used most often to "commit violent crimes in Mexico, especially by drug gangs."


Reaction


Sen. Charles Grassley, R-Iowa, is investigating Fast and Furious, as well as the alleged use of the case to advance gun regulations. "There's plenty of evidence showing that this administration planned to use the tragedies of Fast and Furious as rationale to further their goals of a long gun reporting requirement. But, we've learned from our investigation that reporting multiple long gun sales would do nothing to stop the flow of firearms to known straw purchasers because many Federal Firearms Dealers are already voluntarily reporting suspicious transactions. It's pretty clear that the problem isn't lack of burdensome reporting requirements."


On July 12, 2011, Sen. Grassley and Rep. Darrell Issa, R-Calif., wrote Attorney General Eric Holder, whose Justice Department oversees ATF. They asked Holder whether officials in his agency discussed how "Fast and Furious could be used to justify additional regulatory authorities." So far, they have not received a response. CBS News asked the Justice Department for comment and context on ATF emails about Fast and Furious and Demand Letter 3, but officials declined to speak with us.


"In light of the evidence, the Justice Department's refusal to answer questions about the role Operation Fast and Furious was supposed to play in advancing new firearms regulations is simply unacceptable," Rep. Issa told CBS News.