In an effort to catch Mexican drug lords, the federal agency responsible for regulating the gun industry and cracking down on gun crime allowed thousands of weapons to pass into Mexico and fall into the hands of criminals, according to a report by CBS News and other outlets this week. 

A senior agent with the Bureau of Alcohol, Tobacco, Firearms and Explosives—better known as the ATF—told CBS and the Center for Public Integrity that ATF supervisors instructed agents to not intercept weapons made in suspicious sales, but to monitor them to see where the weapons ended up. CBS reported that a number of unnamed agents have made similar allegations.

ATF's acting director has said that the agency will convene a panel to review its strategies for stopping the flow of firearms, but he did not comment to CBS on specifics about the allegations. ATF officials did acknowledge to CPI that there has been a larger shift in the organization’s strategy to go after the drug rings seeking the weapons instead of pursuing the low-level buyers involved in smuggling them:

Mark Chait, ATF’s assistant director in charge of field operations, told the Center he personally decided to change the strategy in September 2010 after years of futile efforts to interdict guns from small-time straw buyers with little hope of dismantling major drug trafficking organizations in Mexico.

The ATF whistleblower, John Dodson, told CBS that the strategy to monitor weapons purchased by suspected smugglers instead of seizing them was approved all the way up to the Justice Department and was kept secret from the government of Mexico. The Justice Department—of which ATF is a division—has denied the allegations. In a letter to Sen. Chuck Grassley, it stated that ATF “makes every effort” to prevent arms smuggling into Mexico and has never sanctioned or “knowingly allowed” sales to straw purchasers who then smuggled the guns across the border.

Recent incidents of violence against U.S. Border Patrol agents suggest that intentionally or otherwise, U.S. guns are still falling into the wrong hands. Last month, two U.S. Border Patrol agents were shot in Mexico with an AK-47 smuggled from Texas. One of those agents died. In December, another Border Patrol agent was killed near the Mexico border. Two guns were found at the scene of the killing, both purchased by a suspected gun smuggler who ATF had reportedly been monitoring but had taken no action against. According to the Los Angeles Times and CPI, hundreds of these weapons have still not been recovered.

The ATF has historically had fairly limited powers when it comes to cracking down on the trade of illicit guns, even domestically. As we’ve noted, it faces strong opposition by the pro-gun lobby, which has fought measures that would expose gun dealers or strengthen the agency’s reach. From our previous story:

[The agency] has gone without a permanent director for four years. The Obama administration, while stating its commitment to doing “all that we can” to stop the flow of U.S. weapons to Mexican drug cartels, waited more than a year and half to even nominate a director—and when a nominee was named, the National Rifle Association was quick to opposethe nomination.

The agency is still without a director.

Mexican President Felipe Calderon last month criticized the efforts of U.S. agencies working to combat the cartels, calling them “notoriously insufficient.” Calderon met with President Obama yesterday, who said that the U.S. has to do its part and “take responsibility” in fighting the drug wars.

The Justice Department’s inspector general has been asked to investigate the recent allegations about the ATF’s strategy. ATF’s public affairs officer sent an internal memo on Thursday asking the agency’s press officers to “proactively push positive stories” to counter the recent “negative coverage,” CBS reported.