The Bureau of Alcohol, Tobacco, Firearms and
Explosives (ATF): Budget and Operations
for FY2011

William J. Krouse
Specialist in Domestic Security and Crime Policy
January 6, 2011
Congressional Research Service
7-5700
www.crs.gov
R41206
CRS Report for Congress
P
repared for Members and Committees of Congress

ATF Budget and Operations for FY2011

Summary
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) is the lead federal law
enforcement agency charged with administering and enforcing federal laws related to the
manufacture, importation, and distribution of firearms and explosives. Congress transferred ATF’s
enforcement and regulatory functions for firearms and explosives from the Department of the
Treasury to the Department of Justice (DOJ) as part of the Homeland Security Act (P.L. 107-296).
ATF is also responsible for investigating arson cases with a federal nexus, as well as criminal
violations of federal laws governing the manufacture, importation, and distribution of alcohol and
tobacco. Congress authorized appropriations for ATF in the Department of Justice Authorization
Act of 2005 (P.L. 109-162) for FY2006 through FY2009; however, the 111th Congress did not
consider legislation to reauthorize annual appropriations for DOJ or ATF.
For three fiscal years, FY2008 through FY2010, Congress has provided about $49 million in
program increases to address firearms trafficking. About $43 million of this funding has been
allocated to Project Gunrunner, an ATF initiative to reduce gun trafficking across the Southwest
border, or other projects to assist the government of Mexico. In the 110th Congress, the House
passed a bill (H.R. 6028) that would have authorized appropriations over three years, for FY2008
through FY2010, of $73.5 million to increase ATF resources dedicated to stemming illegal gun
trafficking into Mexico. In the 111th Congress, bills with similar authorizations were introduced
(S. 205, H.R. 495, H.R. 1448, and H.R. 1867).
For FY2011, the Administration requested $1.163 billion for ATF, an increase of 3.8% over the
agency’s FY2010 appropriation ($1.121 billion). For Project Gunrunner, the request included
$11.8 million to annualize 37 positions that were previously funded by the American Recovery
and Reinvestment Act (P.L. 111-5). It also included $1.2 million to enable ATF to coordinate state
and local law enforcement efforts in the event of a national emergency and, thus, fulfill the
Attorney General’s Emergency Support Function #13 obligations under the National Response
Framework. The FY2011 request assumed $35.2 million and 46 FTE positions in base
adjustments, less offsets and other reductions. The Senate Appropriations Committee reported a
bill that would have matched the FY2011 request (S. 3636), but no further action was taken on
that bill. In the absence of an enacted CJS appropriations bill, Congress has passed a series of
continuing resolutions, the most recent of which funds ATF at its FY2010 enacted level through
March 4, 2011 (P.L. 111-322). Congress also provided ATF with $37.5 million in supplemental
FY2010 appropriations for Project Gunrunner (P.L. 111-230).
In March 2010, the House Commerce-Justice-State Appropriations Subcommittee held a hearing
on the ATF FY2011 budget submission. Members of the subcommittee raised questions about gun
trafficking on the Southwest border, regulatory backlogs, violent crime impact teams, and inter-
agency coordination on gang violence. Congress passed and the President signed into law the
Prevent All Cigarette Trafficking Act (P.L. 111-154). This act grants ATF greater authority to
inspect the businesses and records of “cigarette deliverers.” In addition, under the Mérida
Initiative, ATF released a Spanish-language version of its firearms trace request software (e-Trace
4.0) to Mexico, Guatemala, and Costa Rica, and established a U.S.-Mexico ballistic information
exchange capability. Also of note, in November 2010, the DOJ Office of the Inspector General
(OIG) released an updated report on ATF’s Project Gunrunner, which recommended among other
things that ATF work with DOJ to require federally licensed gun dealers to report multiple long
gun sales. In addition, the OIG released reports on ATF’s efforts to investigate contraband
cigarette trafficking, and on ATF’s concurrent jurisdiction with the Federal Bureau of
Investigation for explosives-related investigations. This report complements CRS Report
RL34514, The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF): Budget and
Operations for FY2008, FY2009, and FY2010
, and will be updated as needed.
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ATF Budget and Operations for FY2011

Contents
Recent Developments.................................................................................................................. 1
ATF Mission ............................................................................................................................... 2
ATF Appropriations .................................................................................................................... 3
ATF Budget Structure ........................................................................................................... 3
Administration’s FY2011 Request ......................................................................................... 4
Funding and Staffing, FY1999-FY2010................................................................................. 6
Regulatory Backlogs ................................................................................................................... 8
Firearms Budget Program ........................................................................................................... 9
Violent Crime and Gangs ...................................................................................................... 9
Compliance Inspections of Licensed Gun Dealers ............................................................... 11
Southwest Border Gun Trafficking ...................................................................................... 12
Project Gunrunner ......................................................................................................... 13
Electronic Trace Submission System ............................................................................. 15
DOJ OIG Report, Mexican Trace Data, and Multiple Long Gun Sales ........................... 16
Related Legislation in the 110th and 111th Congresses .................................................... 17
Arson and Explosives Budget Program...................................................................................... 18
Safe Explosives Act ............................................................................................................ 18
ATF and FBI Concurrent Jurisdiction over Explosives Investigations .................................. 19
Alcohol and Tobacco Budget Program ...................................................................................... 20
Alcohol Diversion............................................................................................................... 21
Tobacco Diversion .............................................................................................................. 21
Related Legislation in the 110th and 111th Congresses .......................................................... 22

Figures
Figure 1. ATF Appropriations ...................................................................................................... 4

Tables
Table 1. ATF Appropriations for Salaries and Expenses (S&E) and Construction Line
Item Appropriations Accounts, FY2010 Enacted Compared to FY2011 Request ....................... 5
Table 2. ATF Appropriations, FY1999-FY2010 ........................................................................... 6
Table A-1. ATF Authorizations Compared to Appropriations ..................................................... 24

Appendixes
Appendix. Authorizations Compared to Appropriations ............................................................. 24

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Contacts
Author Contact Information ...................................................................................................... 25

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his report provides an overview of the Bureau of Alcohol, Tobacco, Firearms and
Explosives (ATF) budget and operations. This report chronicles congressional action on
T the FY2011 Commerce, Justice, Science (CJS), and Related Agencies Appropriations bills,
as well as any FY2010 supplemental appropriations bills, that provide funding for ATF.
Recent Developments
In February 2010, the Department of Justice (DOJ) released the ATF Congressional Budget
Submission, Fiscal Year 2011
.1 In March 2010, the House CJS subcommittee held a hearing on
the ATF FY2011 budget submission. Members of the subcommittee raised questions about gun
trafficking on the Southwest border, regulatory backlogs, violent crime impact teams, and inter-
agency coordination on gang violence. On July 22, 2010, the Senate Appropriations Committee
reported its FY2011 CJS appropriations bill (S. 3636; S.Rept. 111-229). This measure would have
provided ATF with $1.163 billion for FY2011, matching the Administration’s request. However,
no further action was taken on this measure. In the absence of an enacted CJS appropriations bill,
Congress has passed continuing resolutions, which the President has signed into law (P.L. 111-
242, P.L. 111-290, P.L. 111-317, P.L. 111-322). The most recent continuing resolution funds those
federal agencies, including ATF, that have not received an enacted FY2011 appropriation through
March 4, 2011, at their FY2010 enacted level.
Also, on June 22, 2010, the Administration requested an FY2010 supplemental appropriation of
$39.1 million for ATF to increase Southwest border gun trafficking investigations. The House
Appropriations Committee included this amount in the Emergency Border Security Supplemental
Appropriations Act, 2010 (H.R. 5875), and the House passed this measure on July 28, 2010. The
Senate passed its version of H.R. 5875 (adopting the text of S. 3721 as a substitute amendment)
on August 5, 2010. The Senate-passed version of H.R. 5875 included $37.5 million for ATF. On
August 9, the House introduced a new border security supplemental bill (H.R. 6080), which was
subsequently passed by the House on August 10. H.R. 6080 contains identical language to
Senate-passed H.R. 5875. Reportedly, the House took up the bill with a new number to avoid a
dispute related to its constitutional obligation to originate all revenue measures.2 This dispute
arose with the addition of funding provisions in Senate-passed H.R. 5875 that were not included
in the House-passed version. On August 12, the Senate passed H.R. 6080. On August 13, 2010,
the President signed H.R. 6080 into law (P.L. 111-230). It provided ATF with an additional $37.5
million for Project Gunrunner.
In addition, Congress passed and President Obama signed into law the Prevent All Cigarette
Trafficking Act (P.L. 111-154). This act grants ATF greater authority to inspect the businesses and
records of “cigarette deliverers.” In addition, under the Mérida Initiative, ATF released a Spanish-
language version of its firearms trace request software (e-Trace 4.0) to Mexico, Guatemala, and
Costa Rica, and established a U.S.-Mexico ballistic evidence exchange capability under the
National Integrated Ballistic Imaging Network (NIBIN) program.3

1 Available at http://www.justice.gov/jmd/2011justification/pdf/fy11-atf-justification.pdf.
2 Theo Emery and Edward Epstein, “Border Security Bill Passes in House,” CQ Today, August 10, 2010, online
edition.
3 In the late 1990s, ATF developed NIBIN to enable law enforcement agencies to share computerized images of bullets
and cartridge casings recovered by law enforcement, including crime scene evidence. To capture such images, ATF
also deploys Integrated Ballistic Identification Systems to state and local law enforcement agencies. Those images are
(continued...)
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Furthermore, in the fall of 2009, the DOJ Office of Inspector General (OIG) released three reports
on ATF operations. The first examined Project Gunrunner, an ATF initiative to reduce illegal gun
trafficking from the United States to Mexico.4 The second examined ATF’s efforts to investigate
contraband cigarette trafficking.5 The third examined ATF’s concurrent jurisdiction with the
Federal Bureau of Investigation (FBI) for explosives-related investigations.6 In November 2010,
the OIG released another review of Project Gunrunner, recommending among other things that
ATF ought to work with DOJ to explore options to require multiple long gun sales reporting from
federally licensed gun dealers in the four Southwest border states.7
ATF Mission
Located in DOJ, the ATF is the lead federal law enforcement agency charged with administering
and enforcing federal laws related to the manufacture, importation, and distribution of firearms
and explosives. As part of the Homeland Security Act, Congress transferred ATF’s enforcement
and regulatory functions for firearms and explosives to the DOJ from the Department of the
Treasury (Treasury), adding “explosives” to ATF’s title.8 ATF is also responsible for investigating
arson cases with a federal nexus, as well as criminal violations of federal laws governing the
manufacture, importation, and distribution of alcohol and tobacco. The regulatory aspects of
those alcohol and tobacco laws are the domain of the Tax and Trade Bureau (TTB), which was
established at Treasury following ATF’s transfer to DOJ.9
As a law enforcement agency within the DOJ, ATF’s first priority is preventing terrorist attacks
within the United States.10 ATF is responsible for countering the illegal use and trafficking of

(...continued)
uploaded into several regional computer networks under the NIBIN program. For further information, see Daniel L.
Cork et al., Ballistic Imaging, Committee to Assess the Feasibility, Accuracy, and Technical Capability of a National
Ballistic Database
, National Research Council, 2008, p. 133.
4 U.S. Department of Justice, Office of the Inspector General, Evaluation and Inspections Division, Interim Review of
ATF’s Project Gunrunner
, Report Number I-2009-006, September 2009.
5 U.S. Department of Justice, Office of the Inspector General, Evaluations and Inspections Division, The Bureau of
Alcohol, Tobacco, Firearms and Explosives’ Efforts to Prevent the Diversion of Tobacco
, Report Number I-2009-0005,
September 2009.
6 U.S. Department of Justice, Office of the Inspector General, Audit Division, Explosives Investigation Coordination
Between the Federal Bureau of Investigation and the Bureau of Alcohol, Tobacco, Firearms and Explosives
, Audit
Report 10-01, October 2009, 104 pp.
7 U.S. Department of Justice, Office of Inspector General, Evaluation and Inspections Division, Review of ATF’s
Project Gunrunner
, Report Number 1-2011-001, November 2010.
8 P.L. 107-296, 116 Stat. 2135, November 25, 2002.
9 ATF was originally established as a separate bureau in the Department of the Treasury (DOT) in 1972 by Treasury
Department Order No. 120-1. While ATF traces its origins back to the first federal tax on distilled spirits in 1791, its
firearm regulatory responsibilities can largely be traced back to the 1934 National Firearms Act (NFA). As the NFA is
essentially a tax law, it was administered initially by the Department of the Treasury’s Bureau of Internal Revenue
(BIR) and its Miscellaneous Tax Unit. In 1942, the firearm enforcement duties were transferred to BIR’s Alcohol Tax
Unit (ATU). In 1952, the BIR was reorganized and renamed the Internal Revenue Service (IRS) and the firearm and
tobacco programs were transferred to ATU, which was renamed, the Alcohol and Tobacco Tax Division (ATTD).
Following the Gun Control Act of 1968, the ATTD was given responsibility for explosives as well, and was renamed
the Alcohol, Tobacco and Firearms Division (ATFD). See George Thomas Kurian, Editor in Chief, A Historical Guide
to the U.S. Government
, Vicki Herrmann, “Alcohol, Tobacco and Firearms, Bureau of,” (New York, 1998), pp. 39-41.
10 U.S. Department of Justice, Office of the Attorney General, Stewards of the American Dream: FY 2007—FY 2012
Strategic Plan
.
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firearms and explosives, and the criminal diversion of alcohol and tobacco products as an illegal
source of funding for terrorist activities. In criminal investigations, ATF agents have reportedly
uncovered foreign terrorists and their supporters bootlegging cigarettes as part of larger terrorist-
financing operations in the United States.11 With those responsibilities, ATF special agents are
partners on DOJ’s Joint Terrorism Task Forces.12
As shown below, however, the lion’s share of ATF’s resources are allocated to its firearms
compliance and investigations program. While the ATF periodically checks the records of
federally licensed gun dealers, the major focus of the firearms program is the reduction of
firearms-related violence.
ATF Appropriations
For the past three fiscal years, FY2008 through FY2010, Congress provided ATF with about $49
million in program increases to address firearms trafficking, or the diversion of firearms from
legal to illegal markets. Most of this funding has been dedicated to ATF efforts to reduce firearms
trafficking from the United States to Mexico.13 Congress has also provided ATF with nearly $30
million for the construction of a National Center for Explosives Training and Research
(NCETR).14 In the 110th Congress, the House passed a bill (H.R. 6028) that would have
authorized increasing ATF appropriations over three years, for FY2008 through FY2010, by
nearly $74 million to address Southwest border gun trafficking. Similar bills have been
introduced in the 111th Congress. Meanwhile, as a DOJ bureau, the ATF authorization of
appropriations expired for FY2010. Previously, Congress provided annual appropriations
authorizations, for FY2006 through FY2009, in the Department of Justice Authorization Act of
2005 (P.L. 109-162) (see Appendix). The 112th Congress may consider legislation to reauthorize
appropriations for ATF.
ATF Budget Structure
Congress appropriates funding annually for ATF in a salaries and expenses account and, for some,
but not all years, in a construction account. Both accounts are given a line item in the CJS
appropriations bill. With regard to salaries and expenses, the ATF subdivides this account into
three budget decision units:

11 U.S. Department of Justice, Office of the Inspector General, Evaluation and Inspections Division, The Bureau of
Alcohol, Tobacco, Firearm and Explosives’ Efforts to Prevent the Diversion of Tobacco, Report Number I-2009-005
(September 2009), p. 15.
12 U.S. Department of Justice, Office of the Inspector General, The Department of Justice’s Terrorism Task Forces,
Report Number I-2005-007, June 2005.
13 For further information on Operation Gunrunner, see CRS Report R40733, Gun Trafficking and the Southwest
Border
, by Vivian S. Chu and William J. Krouse.
14 NCETR (pronounced “en-SEE-der”) was authorized under section 1114 of the Homeland Security Act of 2002 (P.L.
107-296; 116 Stat. 2280). Although this provision designated Fort A.P. Hill as the location for this center, it has been
established at Redstone Arsenal in Huntsville, AL. At NCETR, ATF is providing explosives-related research and
training to federal, state, local, and international law enforcement personnel. Hence, it is co-located with the FBI
Hazardous Devices School, where the FBI has been providing explosives-related training to federal state, local, and
international law enforcement personnel since the 1980s. In addition, the FBI is relocating the Terrorist Explosive
Device Analytical Center (TEDAC) to Redstone Arsenal. It is located currently in Quantico, VA.
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• firearms compliance and investigations,
• arson and explosives investigations, and
• alcohol and tobacco diversion.
Although Congress does not appropriate monies for the ATF (or any other DOJ agency) by
decision unit, the appropriators often address whether program increases requested specifically by
the Administration are to be provided in report language and more rarely in bill language for the
salaries and expenses account itself. As a consequence, the amounts requested for decision units
are binding in the sense that the appropriators are aware of the increases that were provided in the
annual bureau appropriation and how those increases would affect the decision unit totals. If
funding is shifted from one decision unit to another, statutory budget reprogramming
requirements are usually triggered, under which DOJ and its agencies are required to notify the
appropriations committees about such shifts.15 ATF budget decision units are described in greater
detail below.
Administration’s FY2011 Request
The President’s FY2011 budget request
Figure 1. ATF Appropriations
included $1.163 billion for ATF, an increase
of $42.2 million, or 3.8%, compared to the
FY2010-enacted appropriation of $1.121
billion. Figure 1 shows proposed budget
decision unit allocations accompanying the
FY2011 budget request. Of these programs,
the firearms compliance and investigations
decision unit was allocated the lion’s share of
appropriated funding, about 72%. The arson
and explosives investigations decision unit
and the alcohol and tobacco diversion

decision unit were allocated 26% and 2%,
Source: ATF Congressional Budget Submission, Fiscal
respectively, of the requested appropriation.
Year 2011.
As Table 1 shows, the FY2010 appropriation of $1.121 billion included $1.115 billion for
salaries and expenses and $6 million for construction. The Administration, however, requested no
funding for ATF construction for FY2011. Compared to the $1.115 billion Congress appropriated
for ATF salaries and expenses for FY2010, the Administration’s FY2011 budget request proposed
a net increase of $48.2 million and 86 full-time equivalent (FTE) positions for ATF. This amount
included
• $35.2 million in base adjustments (less certain offsets and other reductions) and
46 FTE positions;16

15 The Consolidated Appropriations Act, 2010 (P.L. 111-117, section 505 of the CJS general provisions [123 Stat.
3149-3159]), includes several requirements regarding the reprogramming of funding provided under Division B of the
act. Among other things, these requirements prohibit any reprogramming that proposes to use funds directed for a
specific activity by either the House or Senate Appropriations Committees, unless both Committees are notified 15
days in advance.
16 For most DOJ agencies, the Administration of President George W. Bush had routinely proposed “base adjustments”
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• $11.8 million and 37 FTE positions for Project Gunrunner; and
• and $1.2 million and 3 FTE positions for Emergency Support Function #13.17
Table 1. ATF Appropriations for Salaries and Expenses (S&E) and Construction Line
Item Appropriations Accounts, FY2010 Enacted Compared to FY2011 Request
(Dollars in thousands)
FY2010 Enacteda FY2011
Baseb FY2011
Increasesc FY2011
Request
Decision
Units
Dollars FTEd Dollars FTEd Dollars FTEd Dollars FTEd
Firearms $802,636
3,614
$824,651
3,660
$12,699 40
$837,350
3,700
Arson &
289,841 1,321 302,057 1,321
320
0 302,377 1,321
Explosives
Alcohol &
22, 295
90
23,235
90
24
0
23,259
90
Tobacco
S&E Subtotal
1,114,772
5,025
1,149,943
5,071
13,043
40
1,163,986
5,111
Constructio
6,000 0
0 0 0 0
0 0
n
Total 1,120,772
5,025
1,149,943
5,071
13,043
40
1,163,986
5,111
Source: ATF Congressional Budget Submission, Fiscal Year 2011.
Notes: Amounts may not add to totals due to rounding.
a. The FY2010 enacted amounts do not reflect $37.5 million and 53 FTE positions provided by an emergency
border security supplemental appropriation (P.L. 111-230).
b. The base budget essential y represents an estimated level of resources that ATF would need to provide the
anticipated level of services for the current fiscal year (FY2010) in the next fiscal year (FY2011).
c. FY2011 increases are requested program increases over base. In other words, if appropriated, these
resources will be for new activities and services.

(...continued)
to the number of FTE and permanent positions that were considered “authorized” (funded or appropriated for) as part
of estimating an agency’s base budget, which was a departure from past practices. For FY2010 and FY2011, the
Obama Administration proposed making similar adjustments to the ATF base budget, as described above. The base
budget essentially represents an estimated level of resources that an agency would need to provide the anticipated level
of services for the current fiscal year in the next fiscal year. In the past, base budgets did not include adjustments to the
number of permanent positions, and the number of “authorized” permanent positions was generally static, unless
changed by Congress by increasing or decreasing funding associated with those positions. As happened in the FY2008
budget cycle, the Administration has periodically (about every 10 years) proposed eliminating “hollow” positions, for
which the modular costs and underlying assumptions are no longer sufficient to fund those positions. Authorized or
funded positions are generally displayed by job series in a “Table of Organization” in the agency’s budget submissions
to Congress. The ATF FY2011 proposed budget assumed base adjustments of $41.9 million that were reduced by $6.7
million in non-reoccurring costs and other offsets.
17 Emergency Support Function #13 (ESF #13) falls under the Public Safety and Security Annex to the National
Response Framework (NRF). The NRF sets broad responsibilities and lines of authority for federal agencies in the
event of a national emergency or major disaster. Under the NRF, the Attorney General is responsible for ESF-13, which
entails all hazards law enforcement planning and coordination for the entire United States and its territories. The
Attorney General, in turn, has delegated his responsibility for ESF-13’s implementation to the ATF. For more
information, see CRS Report RL34758, The National Response Framework: Overview and Possible Issues for
Congress
, by Bruce R. Lindsay.
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d. A ful -time equivalent (FTE) position represents the amount of funding necessary to provide for a single
position for an entire year. Not all positions (new, temporary, and part-time) are fully funded for the entire
year. New positions, for example, are often partially funded, as such positions are filled incrementally and at
some point during the fiscal year. Hence, they do not require ful funding for the first year.
The $13.0 million in proposed program increases are broken out by budget decision unit in Table
1
in the “FY2011 Increases” column. The $1.2 million for Emergency Support Function #13 is
spread across all three budget decision units: $854 thousand for firearms, $320 thousand for arson
and explosives, and $24 thousand for alcohol and tobacco. The $35.2 million in base adjustments
and other offsets is the difference between the “FY2010 Enacted” and “FY2011 Base” columns.
Funding and Staffing, FY1999-FY2010
As Table 2 shows, from FY1999 to FY2010, Congress increased ATF appropriations from $541.6
million to nearly $1.121 billion, an increase of 107%. For that time period, the annual percent
growth was 6.8%. With some fluctuation, ATF staffing increased from 3,969 to 5,025 FTE
positions, a 27% increase.18 Since its transfer to DOJ in FY2003, ATF has also reported
permanent positions, in addition to FTE positions.
Table 2. ATF Appropriations, FY1999-FY2010
(Dollars in thousands)
Fiscal Year
Appropriation(s)
Full-Time Equivalent (FTE) Positionsa Permanent
Positions
1999 $541,574b 3,969
N/A
2000 $565,959c 4,221
4,492
2001 $771,143d 4,643
5,049
2002 $854,747e 5,029
5,143
2003 $826,801f 5,111
5,231
2004 $827,289g 4,735h 4,862h
2005 $882,465i 4,885
5,073
2006 $935,817j 5,040
5,128
2007 $988,097k 5,053
5,128
2008 $1,011,597l 4,880m 4,956m
2009 $1,078,215n 4,957
5,008
2010 $1,120,772o 5,025
5,101
Source: CRS presentation of ATF funding and staffing data presented in Department of the Treasury and
Department of Justice budget submissions to Congress for FY2000-FY2011.
Notes: N/A = not applicable
a. A ful -time equivalent (FTE) position represents the amount of funding necessary to provide for a single
position for an entire year. Not all positions (new, temporary, and part-time) are fully funded for the entire
year. New positions, for example, are often partially funded, as such positions are filled incrementally and at
some point during the fiscal year. Hence, they do not require ful funding for the first year.

18 These staffing amounts do not reflect FTE positions provided for law enforcement availability pay (LEAP), overtime
pay, or FTE positions funded with reimbursable resources.
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b. For FY1999, an appropriation of $541.6 million was provided in the Omnibus Consolidated and Emergency
Supplemental Appropriations Act, 1999 (P.L. 105-277). This amount, however, does not reflect $14.5
million in Y2K emergency funding that was transferred to ATF for FY1999.
c. For FY2000, an appropriation of $566.0 million was provided in the Treasury and General Government Act,
2000 (P.L. 106-58). This amount, however, does not reflect a transfer of $40.9 million from the Violent
Crime Reduction Trust Fund, nor the effect of a $1.2 million rescission under the Consolidated
Appropriations Act, 2000 (P.L. 106-113).
d. For FY2001, an appropriation of $768.7 million was provided in the FY2001Omnibus Appropriations Act
(P.L. 106-554), $4.1 million in the FY2001 Transportation Appropriations Act (P.L. 106-346), and a
rescission of $1.7 million under P.L. 106-554.
e. For FY2002, an appropriation of $823.3 million was provided in the FY2002 Treasury Appropriations Act
(P.L. 107-67) and $31.4 million in the FY2002 Emergency Supplemental Appropriations Act (P.L. 107-117).
f.
For FY2003, an appropriation of $886.4 million was provided in the Consolidated Appropriations
Resolution, 2003 (P.L. 108-7). Under the Homeland Security Act of 2002 (P.L. 107-296), however, most of
ATF was transferred to DOJ. Reflecting that transfer and the fact that part of ATF remained at Department
of the Treasury as the Alcohol and Tobacco Tax and Trade Bureau (TTB), the FY2003 appropriation for
ATF was $826.8 million, according to DOJ budget documents.
g. For FY2004, an appropriation of $836.1 million was provided by the Consolidated Appropriations Act, 2004
(P.L. 108-199). House Appropriations Committee tables showed the FY2004 ATF appropriation as $827.3
million (H.Rept. 108-576. p. 154).
h. The decrease of 376 FTE positions and 369 permanent positions for FY2004, as compared with FY2003,
reflects TTB funding and staffing that remained at Treasury.
i.
For FY2005, an appropriation of $886.4 million was provided in the Consolidated Appropriations Act, 2005
(P.L. 108-447). With rescissions, this amount was reduced to $878.5 million. Congress also provided ATF
with $4.0 million in the Emergency Supplemental Appropriations Act for Defense, the Global War on
Terror, and Tsunami Relief, 2005 (P.L. 109-13).
j.
For FY2006, an appropriation of $911.8 million was provided in the Science, State, Justice, Commerce, and
Related Agencies Appropriations Act, 2006 (P.L. 109-108). Congress also provided ATF with $20 million in
the Department of Defense Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of
Mexico, and Pandemic Influenza Act (P.L. 109-148) and $4 million in the Emergency Supplemental
Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery (P.L. 109-234).
k. For FY2007, an appropriation of $984.1 million was provided in the Continuing Resolution Act, 2007 (P.L.
110-5). Congress also provided ATF with a supplemental of $4.0 million in the Troop Readiness, Veterans’
Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 (P.L. 110-28).
l.
For FY2008, appropriations of $984.1 million for salaries and expenses and $23.5 million for construction
were provided in the Consolidated Appropriations Act, 2008 (P.L. 110-161). Congress also provided ATF
with $4.0 million in the Supplemental Appropriations Act, 2008 (P.L. 110-252).
m. The decrease of 173 FTE positions and 172 permanent positions for FY2008, as compared with FY2007,
reflects adjustments to base and other technical adjustments to the ATF budget that were made to
eliminate “hollow” or “unfunded” positions.
n. For FY2009, an appropriation of $1.054 billion was provided in the Omnibus Appropriations Act, 2009 (P.L.
111-8). Congress also provided ATF with $24.0 million in supplemental appropriations, of which $10.0
million was provided under the American Recovery and Reinvestment Act, 2009 (P.L. 111-5) and $14.0
million under the Supplemental Appropriations Act, 2009 (P.L. 111-32).
o. For FY2010, under the Consolidated Appropriations Act, 2010 (P.L. 111-117), Congress provided ATF with
$1.021 billion. This amount included $6 million for construction. This amount does not reflect the $37.5
million (53 FTE, and 105 positions) provided under the FY2010 border security emergency supplemental
appropriation (P.L. 111-230).
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The FY2010 appropriation funds 5,101 permanent positions, including 2,485 special agents
(SAs), 834 industry operations investigators (IOIs, formerly inspectors) and investigative research
specialists (IRIs), and 1,782 “other” positions.19 In addition, as has been the case in recent years,
55 ATF permanent positions (54 SAs and one other position) are to be funded through
reimbursable resources.20
Regulatory Backlogs
On March 4, 2010, the House CJS Appropriations Subcommittee held a hearing on the
Administration’s FY2011 ATF budget request.21 As in past hearings, the subcommittee chair,
Representative Alan Mollohan, observed that the request did not include any additional positions
dedicated to regulation writers, despite a regulatory backlog.22 He observed that 15 of 16 ATF
positions previously associated with such duties had remained at Treasury, following ATF’s
transfer to DOJ in January 2003.23 (With the exception of two positions, those positions have not
been backfilled.) If ATF previously needed anywhere near 16 positions for such purposes,
Representative Mollohan asked rhetorically, was not the ATF request “woefully inadequate?”24
ATF Deputy Director Kenneth Melson25 did not comment on the regulatory backlog, but
conceded that the agency needed additional “regulation writers.”26

19 U.S. Department of Justice, ATF Congressional Budget Submission, Fiscal Year 2011, Exhibit I—Detail of
Permanent Positions by Category.
20 Ibid.
21 U.S. Congress, House Committee on Appropriations, Subcommittee on Commerce, Justice, Science, and Related
Agencies, Hearing on President Obama’s Fiscal Year 2011 Budget Request for the Bureau of Alcohol, Tobacco,
Firearms, and Explosives
, 111th Congress, 2nd Session, March 4, 2010 (CQ Congressional Transcripts).
22 In the conference report accompanying the Consolidated Appropriations Act, 2010, conferees expressed their
concern generally with regulatory backlogs at DOJ agencies, and particularly at the ATF. Conferees noted, “While
ATF and other relevant bureaus hold primary responsibility for getting their regulations drafted, reviewed and disposed
of in a timely manner, the Department also plays a significant role, and lengthy delays in the Department’s
consideration of proposed regulations are contributing to the larger timeliness problem.” With regard to reducing
regulatory backlogs, conference report language directs DOJ to report within 120 days of enactment (April 16, 2010) to
the Appropriations Committees on recommended process reforms and resource investments. (H.Rept. 111-366, p. 659.)
23 U.S. Congress, House Committee on Appropriations, Subcommittee on Commerce, Justice, Science, and Related
Agencies, Hearing on President Obama’s Fiscal Year 2011 Budget Request for the Bureau of Alcohol, Tobacco,
Firearms, and Explosives
, 111th Congress, 2nd Session, March 4, 2010 (CQ Congressional Transcripts).
24 Ibid.

25 Section 504 of the USA PATRIOT Improvement and Reauthorization Act of 2005 (P.L. 109-177; March 9, 2006;
120 Stat. 247) requires the ATF Director to be appointed by the President with the advice and consent of the Senate.
The position of ATF Director, however, has not been filled permanently since August 2006, after ATF Director Carl J.
Truscott resigned due to preliminary findings by the DOJ OIG that he had engaged in questionable expenditures and
management practices while serving as ATF Director. In September 2006, President George W. Bush appointed the
U.S. Attorney for the District of Boston, Michael J. Sullivan, acting ATF Director. Sullivan served in both posts
concurrently. In February 2008, his confirmation as ATF Director was blocked in the Senate, when several Senators
voiced their concern about ATF’s “overly aggressive” enforcement of gun laws and the nominee’s views on such
matters. Sullivan resigned as acting ATF Director on January 20, 2009. Ronnie Carter served as acting Director until
April 2009, when Kenneth Melson was appointed acting Director. In November 2009, Melson was appointed acting
Deputy Director, because the 210-day statutory limit on the acting Director’s tenure had expired. On November 17,
2010, the Obama Administration nominated Andrew Traver, the ATF Special Agent in Charge in Chicago, to be ATF
Director. Because the Senate did not act on this nomination in the 111th Congress, Traver was renominated by the
Administration on January 5, 2010. See U.S. Department of Justice, Office of the Inspector General, Oversight and
Review Division, Report of Investigation Concerning Alleged Mismanagement and Misconduct by Carl J. Truscott,
Former Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives (October 2006). Jonathan Saltzman,
(continued...)
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With regard to the regulatory backlog, it is significant to note that, in most cases, ATF IOIs serve
as the “subject area experts,” who are usually tasked with drafting regulations. ATF’s capabilities
to regulate U.S. firearms and explosives commerce adequately and deter the illegal use of these
commodities is undergirded by its ability to promulgate clear and concise regulations. Although
most of the ATF subject area experts on alcohol and tobacco remained with the Department of
Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB), ATF is still responsible for the
bulk of enforcement of criminal statutes related to these commodities. Other issues raised by
subcommittee members included the scope of gun trafficking on the Southwest border, the
effectiveness of violent crime impact teams, and inter-agency coordination on gang violence.
These issues are discussed below.
Firearms Budget Program
ATF’s firearms budget program funds activities related to administering and enforcing federal
laws related to the manufacture, importation, and distribution of firearms. The principal focus of
ATF’s firearms-related activities, however, is the reduction of firearms-related violence. As part
of this focus, the ATF has dedicated increased resources in recent years toward investigating the
criminal activities of violent street gangs, ensuring that federally licensed gun dealers comply
with the law, and suppressing gun trafficking. ATF’s authority to regulate firearms commerce in
the United States is derived generally from three statutes: (1) the National Firearms Act of 1934
(NFA),27 (2) the Gun Control Act of 1968 (GCA),28 and (3) the Arms Export Control Act of
1976.29 The proposed FY2011 firearms program allocation accompanying the Administration’s
budget request is $837.4 million, or 72% of the FY2011 budget request ($1.163 billion). The
proposed allocation includes an increase of $12.7 million over base ($11.8 million for Project
Gunrunner and $854 thousand for Emergency Support Function #13).
Violent Crime and Gangs
As a full partner in the President’s Project Safe Neighborhoods (PSN), which was initiated in
FY2001, ATF has joined with DOJ attorneys and other federal law enforcement agencies, along
with state, local, and tribal authorities, to investigate and prosecute offenders, with a particular
focus on armed violent and career criminals. ATF also leads the Attorney General’s Violent Crime
Impact Teams (VCITs) in 31 cities30 in an effort to reduce the number of homicides and other

(...continued)
“Sullivan ATF Confirmation Blocked; La. Senator Objects to Gun-License Stance,” Boston Globe, February 14, 2008,
p. B1. Jonathan Saltzman, “US Attorney To Resign Sooner Than Expected: List of Finalists for Post Not Yet Sent To
Obama,” Boston Globe, April 16, 2009, p. 2. Andrew Ramanos, “Senate Returns ATF Nomination to White House,”
Main Justice: Politics, Policy and the Law, December 23, 2010. The White House, Office of the Press Secretary,
“Presidential Nominations Sent to the Senate,” January 5, 2011.
26 U.S. Congress, House Committee on Appropriations, Subcommittee on Commerce, Justice, Science, and Related
Agencies, Hearing on President Obama’s Fiscal Year 2011 Budget Request for the Bureau of Alcohol, Tobacco,
Firearms, and Explosives
, 111th Congress, 2nd Session, March 4, 2010 (CQ Congressional Transcripts).
27 P.L. 73-474; June 26, 1934; 48 Stat. 1236, codified, as amended, at 26 U.S.C., Chapter 53, § 5801 et seq.
28 P.L. 90-618; October 22, 1968; 82 Stat. 1213; codified, as amended, at 18 U.S.C., Chapter 44, § 921 et seq.
29 P.L. 94-329, June 30, 1976; 90 Stat. 729; codified, as amended, at 22 U.S.C. § 2778 et seq.
30 Those cities are Albuquerque, NM; Atlanta, GA; Baltimore, MD; Baton Rouge and New Orleans, LA; Birmingham,
AL; Camden, NJ; Columbus, OH; Fresno, Los Angeles, and San Bernardino, CA; Greensboro, NC; Hartford, CT;
(continued...)
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violent crimes committed with firearms.31 According to ATF, the VCITs assist state and local
authorities by
• systematically investigating all firearms-related leads;
• responding to all street recoveries of firearms and interviewing those involved to
determine the source of the firearms;
• targeting and investigating violent and career criminals, and removing them from
the streets;
• infiltrating criminal groups through undercover operations and confidential
informants;
• tracing all recovered guns used in crime to determine their origin;
• imaging and storing all ballistic evidence in the National Integrated Ballistic
Information Network (NIBIN); and
• inspecting and, when appropriate, investigating corrupt federal firearms
licensees.32
Under the VCIT initiative, defendants referred by ATF for prosecution in gang-related
investigations have increased from 403 in FY2000 to 4,381 in FY2007, nearly a tenfold
increase.33 In FY2008, ATF referred over 4,100 gang members and their associates for
prosecution.34 For FY2010, Congress provided ATF with a $10 million increase to expand VCITs.
During the March 4, 2010, CJS appropriations hearing, Representative Frank Wolfe questioned
ATF Deputy Director Melson about how the FBI and ATF divided their anti-gang
responsibilities.35 Melson responded that, when operating in the same city, the two agencies
usually divide their respective operational areas geographically, so that an ATF-led VCIT would
work one high-crime area and an FBI-led Safe Streets Task Force would work another.36
Representative Wolfe also asked about ATF’s presence at the FBI-led National Gang Intelligence
Center (NGIC).37 Melson responded that ATF has a presence at NGIC, as well as at the DOJ-led
National Gang Targeting Enforcement and Coordination Center (GangTECC), and that ATF and

(...continued)
Houston and Laredo, TX; Las Vegas, NV; Miami, Orlando, and Tampa, FL; Milwaukee, WI; Minneapolis, MN;
Philadelphia and Pittsburgh, PA; Richmond, VA; Mesa and Tucson, AZ; San Juan, PR; Tulsa, OK; Memphis and
Nashville, TN; and Jackson, MS.
31 U.S. Department of Justice, Bureau of Alcohol, Tobacco, and Firearms, “ATF Fact Sheet: Violent Crime Impact
Teams Initiative,” March 2010.
32 U.S. Department of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives, ATF Congressional Budget
Submission, Fiscal Year 2007
(February 2006), p. 47.
33 U.S. Department of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives, ATF Congressional Budget
Submission, Fiscal Year 2009
(February 2008), p. 22.
34 U.S. Department of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives, ATF Congressional Budget
Submission, Fiscal Year 2011
(February 2010), p. 9.
35 U.S. Congress, House Committee on Appropriations, Subcommittee on Commerce, Justice, Science, and Related
Agencies, Hearing on President Obama’s Fiscal Year 2011 Budget Request for the Bureau of Alcohol, Tobacco,
Firearms, and Explosives
, 111th Congress, 2nd Session, March 4, 2010 (CQ Congressional Transcripts).
36 Ibid.
37 Ibid.
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its partner agencies were satisfied that the center was a success.38 It is noteworthy that FY2010
conference report language accompanying the FY2010 Consolidated Appropriations Act directs
ATF to coordinate with the FBI and other DOJ entities on efforts to maximize the effectiveness of
anti-gang efforts and to report back to the Appropriations Committees within 120 days (April 16,
2010).39 ATF indicated that the report’s target release date was May 16, 2010.40 Also, for FY2008,
Congress appropriated $373,000 for ATF to assign two positions to GangTECC. This program
increase was incorporated into ATF’s base budgets for FY2009, FY2010, and the FY2011 request.
Compliance Inspections of Licensed Gun Dealers
ATF inspects federal firearms licensees (FFLs) to monitor their compliance with the GCA and to
prevent the diversion of firearms from legal to illegal channels of commerce. In the past, despite
its crime-fighting mission, ATF’s business relationships with the firearms industry and larger gun-
owning community have been a perennial source of tension, which from time to time has been the
subject of congressional oversight.41 Nevertheless, under current law, ATF Special Agents (SAs)
and Industry Operations Investigators (IOIs) are authorized to inspect or examine the inventory
and records of an FFL without search warrants under three scenarios:42
• in the course of a reasonable inquiry during the course of a criminal investigation
of a person or persons other than the FFL;
• to ensure compliance with the record keeping requirements of the GCA—not
more than once during any 12-month period, or at any time with respect to
records relating to a firearm involved in a criminal investigation that is traced to
the licensee; or
• when such an inspection or examination is required for determining the
disposition of one or more firearms in the course of a criminal investigation.
By inspecting the firearms transfer records that FFLs are required by law to maintain, ATF
investigators are able to trace crime guns from their domestic manufacturer or importer to the first
retail dealer that sold those firearms to persons in the general public, generating leads in homicide

38 Ibid. Also, for more information on the NGIC and GangTECC, see U.S. Department of Justice, Office of Inspector
General, Evaluation and Inspections Division, A Review of the Department’s Anti-Gang Intelligence and Coordination
Centers
, Report Number I-2010-001, November 2009.
39 H.Rept. 111-366, p. 670.
40 U.S. Department of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives, ATF Congressional Budget
Submission, Fiscal Year 2011
(February 2010), Exhibit M – Status of Congressionally Requested Studies, Reports, and
Evaluations.
41 For example, in the 109th Congress, the House Judiciary Crime, Terrorism, and Homeland Security Subcommittee
held two oversight hearings examining ATF firearms enforcement operations at gun shows in Richmond, VA, in 2005.
ATF agents reportedly provided state and local law enforcement officers with confidential information from
background check forms (ATF Form 4473s), so that those officers could perform residency checks on persons who had
otherwise legally purchased firearms at those gun shows. Questions were also raised as to whether ATF agents had
profiled gun purchasers at those gun shows on the basis of race, ethnicity, and gender. See U.S. Congress, House of
Representatives, Committee on the Judiciary, Subcommittee on Crime, Terrorism, and Homeland Security, Oversight
Hearing on the Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATFE) Parts I & II: Gun Show Enforcement
,
February 15 and 28, 2006. Also see Department of Justice, Office of the Inspector General, The Bureau of Alcohol,
Tobacco, Firearms and Explosives’ Investigative Operations at Gun Shows
, Report Number I-2007-007, June 2007.
42 18 U.S.C. § 923(g)(1)(B).
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and other criminal investigations.43 In addition, by inspecting those records, ATF investigators are
often able to uncover evidence of corrupt FFLs transferring firearms “off the books,” straw
purchases,44 and other patterns of suspicious behavior.
In July 2004, the DOJ Office of Inspector General (OIG) reported on ATF inspections of FFLs.
Among other things, the OIG reported that ATF inspected the operations of 4.5% of the 104,000
FFLs in FY2002.45 Since then, according to ATF, 10,106 firearms compliance inspections were
conducted in FY2007, covering about 9.3% of the nearly 109,000 FFLs in that fiscal year;46
11,169 in FY2008, covering nearly 10% of the 111,600 FFLs; and 11,375 compliance in FY2009,
covering nearly 10% of the 115,101 FFLs.47 Notwithstanding progress, at a March 2010 CJS
Appropriations Subcommittee hearing, ATF Deputy Director Melson testified that many FFLs are
not inspected for five years or more because of a lack of ATF personnel.48
Southwest Border Gun Trafficking49
On the Southwest border with Mexico, firearms violence has reportedly spiked in recent years as
drug trafficking organizations (DTOs) have competed for control of key smuggling corridors into
the United States.50 Beginning in December 2006, Mexican President Felipe Calderón responded
by deploying elements of the Mexican Army and federal police to trouble spots around Mexico,
including on the northern frontier.51 The DTOs and other criminals, however, are reportedly
buying semiautomatic versions of AK-47 and AR-15-style assault rifles, other military style
firearms, and .50 caliber sniper rifles in the United States.52 With those rifles and other small
arms, the DTOs are reportedly achieving parity in terms of firepower in shootouts with the

43 U.S. Department of Justice, Bureau of Alcohol, Tobacco, and Firearms, “ATF Fact Sheet: ATF’s National Tracing
Center,” March 2010.
44 A “straw purchase” occurs when a person, who is otherwise eligible to purchase a firearm, purchases a firearm from
a federally licensed dealer for another person, who is either prohibited from possessing a firearm or does not want a
paper trail linking him to the purchased firearm. Under 18 U.S.C. § 922(a)(6), it is illegal to a make a false statement to
a federally licensed firearms dealer. Both the dealer and the buyer are required to fill out an ATF Form 4473, on which
the buyer (transferee) attests to the dealer (transferor) that he is buying the firearm for himself and that he is not
otherwise prohibited from possessing a firearm. Knowingly making a false statement on a ATF Form 4473 is
punishable under 18 U.S.C. § 924(a)(2) by a fine or imprisonment for 10 years or both.
45 U.S. Department of Justice, Office of the Inspector General, Inspections of Firearms Dealers by the Bureau of
Alcohol, Tobacco, Firearms and Explosives
, Report Number I-2004-005, (July 2004), p. xi.
46 U.S. Department of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives, ATF Congressional Budget
Submission, Fiscal Year 2008
, (February 2007), p. 29.
47 U.S. Department of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives, ATF Congressional Budget
Submission, Fiscal Year 2010
, May 2009, p. 5.
48 U.S. Congress, House Committee on Appropriations, Subcommittee on Commerce, Justice, Science, and Related
Agencies, Hearing on President Obama’s Fiscal Year 2011 Budget Request for the Bureau of Alcohol, Tobacco,
Firearms, and Explosives
, 111th Congress, 2nd Session, March 4, 2010 (CQ Congressional Transcripts).
49 For further information, see CRS Report R40733, Gun Trafficking and the Southwest Border, by Vivian S. Chu and
William J. Krouse.
50 For further information, see CRS Report R41075, Southwest Border Violence: Issues in Identifying and Measuring
Spillover Violence
, coordinated by Kristin M. Finklea.
51 Ibid.
52 Sara Miller Llana, “US Guns Arm Mexico’s Drug Wars,” Christian Science Monitor, July 19, 2007, p. 1.
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Mexican Army and law enforcement.53 In March 2008, President Calderón called upon the United
States to increase its efforts to suppress the flow of illegal U.S. firearms into Mexico.54
ATF reports that there are 6,647 FFLs in the United States operating in the Southwest border
region of Texas, New Mexico, Arizona, and California.55 Moreover, ATF reports that DTOs are
increasingly using surrogates (straw purchasers) in the United States to buy 10 to 20 military-
style firearms at a time from FFLs. These firearms are reportedly routinely smuggled into Mexico
in smaller shipments of four or five firearms as part of a process known as the “ant run.”56
Project Gunrunner
For FY2006, ATF dedicated 84 SAs and 15 IOIs to a Southwest border initiative known as
“Project Gunrunner” to disrupt the illegal flow of guns from the United States to Mexico.57 For
FY2007, ATF increased those numbers to 103 SAs and 36 IOIs for this effort.58 Those agents
investigated 187 firearms trafficking cases and recommended 465 defendants for prosecution.59
By the end of FY2008, ATF had deployed 148 SAs and 47 IOIs to the Southwest border to bolster
Project Gunrunner60 at an estimated cost of $32.2 million.61 According to the DOJ Office of
Inspector General, ATF has established five main objectives for Project Gunrunner:
• investigate individuals responsible for illicit firearms trafficking along the
Southwest border;
• coordinate with U.S. and Mexican law enforcement along the border in firearms
cases and violent crime;
• train U.S. and Mexican law enforcement officials to identify firearms traffickers;
• provide outreach education to gun dealers; and
• trace all firearms to identify firearms traffickers, trends, and patterns, and
networks.62
The ATF FY2009 budget request was $1.028 billion, including $948,000 to fund 12 industry
operations investigator positions to bolster efforts already underway as part of Project

53 Oscar Becera, “Firing Line—Tracking Mexico’s Illegal Weapons,” Jane’s Intelligence Review, April 28, 2008.
54 Ibid.
55 ATF briefing provided to CRS on May 5, 2008.
56 Oscar Becera, “Firing Line—Tracking Mexico’s Illegal Weapons,” Jane’s Intelligence Review, April 28, 2008.
57 U.S. Department of Justice, Office of Inspector General, Evaluation and Inspections Division, Review of ATF’s
Project Gunrunner
, I-2011-001, November 2010, p. 6.
58 Ibid.
59 Statement of William Hoover, Assistant Director for Field Operations, Bureau of Alcohol, Tobacco, Firearms and
Explosives, before the Subcommittee on the Western Hemisphere, Committee on Foreign Affairs, House of
Representatives, concerning “U.S. Obligations under the Mérida Initiative,” February 7, 2008.
60 U.S. Department of Justice, Office of Inspector General, Evaluation and Inspections Division, Review of ATF’s
Project Gunrunner
, I-2011-001, November 2010, p. 6.
61 CRS conversations with Bureau of Alcohol, Tobacco, Firearms and Explosives, Office of Legislative Affairs, May
14, 2008.
62 U.S. Department of Justice, Office of the Inspector General, Interim Review of ATF’s Project Gunrunner, Report
Number I-2009-006, September 2009, p. 3.
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Gunrunner.63 This was the only program increase/budget enhancement in the ATF FY2009 budget
request. As described above, the Omnibus Appropriations Act, 2008 (P.L. 111-8) included $1.054
billion for ATF, including an increase of not less than $5.9 million for Project Gunrunner.64 Also,
to ramp up Project Gunrunner, the American Recovery and Reinvestment Act (ARRA; P.L. 111-5)
included $10 million for ATF and $30 million to assist state and local law enforcement with
counter-narcotics efforts. In addition, the Supplemental Appropriations Act, 2009 (P.L. 111-32),
included $6 million for Project Gunrunner. As a result, Congress provided a total of $21.9 million
in increasing funding for Project Gunrunner for FY2009.65 In congressional testimony, ATF
Deputy Director Kenneth Melson summed up the results of Project Gunrunner:
Between fiscal year 2005 and fiscal year 2009, ATF has had [a] significant impact on the
trafficking in Southwest Border States. ATF has recommended 984 cases involving 2,034
defendants for prosecution. To date, 1,397 defendants have been arrested, 1,303 defendants
have been indicted, 850 defendants have been convicted, and 636 defendants have been
sentenced to an average of 86 months incarceration. Three-hundred and seven of the cases
and 881 of the defendants recommended for prosecution involve gang related offenses. Four
hundred and ninety-seven cases have [been] charged [with] violations related to trafficking
of an estimated 14,923 firearms. One hundred and fifty-nine of these cases involved gang-
related trafficking of over 3,665 firearms. In all investigations, over 6,688 firearms have been
seized and are no longer available to violent criminals and gang members.66
The ATF FY2010 budget request was $1.121 billion for ATF, including a proposed increase of
$17.9 million and 92 permanent positions (including 34 SAs) to support Project Gunrunner.67
Congress matched this request in the Consolidated Appropriations Act, 2010 (H.R. 3288),
including the $17.9 million for Project Gunrunner.68 According to the House Committee, this
increase would bring total funding for Southwest border firearms trafficking efforts to $59.9
million. This amount includes one-time stimulus funding of $10 million provided in the American
Recovery and Reinvestment Act (ARRA; P.L. 111-5).69 By comparison, Senate report language
noted that this increase would bring total Project Gunrunner funding to over $61 million. By mid-

63 U.S. Department of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives, Congressional Budget
Submission, Fiscal Year 2009
(February 2008), Exhibit C—Program Increases/Offsets by Decision Unit.
64 House reported language accompanying the FY2009 CJS appropriations bill indicated that the House bill (H.R. 7322;
H.Rept. 110-919) would have provided $5 million for Project Gunrunner. Corresponding report language
accompanying a Senate bill (S. 3182; S.Rept. 110-397) was silent as to whether such an increase would be provided
under that bill. The Senate, however, had included $15 million for Project Gunrunner in the FY2008 supplemental
appropriations bill (H.R. 2642), but that funding was not included in the enacted appropriation (P.L. 110-252).
65 According to DOJ, ATF allocated 187 SAs, 142 IOIs, and 25 other positions for FY2009. See U.S. Department of
Justice, Office of Inspector General, Evaluation and Inspections Division, Review of ATF’s Project Gunrunner, I-2011-
001, November 2010, p. 6.
66 Statement of Kenneth E. Melson, Deputy Director, Bureau of Alcohol, Tobacco, Firearms and Explosives, before the
House Appropriations Committee, Subcommittee on Commerce, Justice, Science, and Related Agencies, on the Fiscal
Year 2011 Appropriations, March 4, 2011.
67 U.S. Department of Justice, Justice Management Division, FY2010 Budget and Performance Summary (May 2009),
p. 139. Available at http://www.usdoj.gov/jmd/2010summary/.
68 The House-reported FY2010 CJS appropriations bill (H.R. 2847; H.Rept. 111-149) would have provided ATF with
$1.106 billion, including the requested $17.9 million for Project Gunrunner. The Senate-reported version of this bill
(H.R. 2847; S.Rept. 111-34) would have provided ATF with the same amount as requested by the Administration
($1.121 billion), including the $17.9 million increase for Project Gunrunner.
69 U.S. Congress, House Committee on Appropriations, Subcommittee on Commerce, Justice, Science, and Related
Agencies, Commerce, Justice, Science, and Related Agencies Appropriations Bill, 2010, to accompany H.R. 2847,
111th Cong., 1st sess., June 12, 2009, H.Rept. 111-149, p. 66.
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February 2010, ATF reported that it had deployed approximately 190 SAs, 145 IOIs, and 25
support staff to Project Gunrunner in the four contiguous border states.70 DOJ reported that the
final FY2010 allocation for Project Gunrunner included 224 SAs, 165 IOIs, and 32 other
positions.71
The ATF FY2011 budget request included $1.163 billion, including $11.8 million to annualize the
37 positions (21 SAs) previously funded under the ARRA (P.L. 111-5). During a March 2010 CJS
appropriations hearing, Representative Mollohan questioned ATF Deputy Director Melson about
emerging gun trafficking patterns and ATF initiatives, like Project Gunrunner, undertaken to
respond to related criminal activity.72 Melson observed that while firearms were being illegally
trafficked principally from Southwest border states into Mexico, they were also being trafficked
from other states within the interior of the United States.73 Representative Mollohan noted that,
despite the apparent success of ATF’s efforts, the request did not include any additional positions
to bolster ongoing efforts to address illegal gun trafficking.74 As described above, Congress
provided ATF with $37.5 million in supplemental appropriations for FY2010 (P.L. 111-230) for
Project Gunrunner, as requested by the Administration.
Electronic Trace Submission System
ATF maintains a foreign attaché in Mexico City to administer an Electronic Trace Submission
System (ETSS), also known as the eTrace program, for Mexican law enforcement authorities.
From FY2005 through FY2007, ATF traced just over 11,700 firearms recovered by Mexican
authorities, and approximately 90% of those firearms were either manufactured in, or imported
into, the United States.75 Caution should be exercised when drawing conclusions from ATF
firearm trace data, however. Although it is valid to say that 90% of traced firearms originated in
the United States, it would be incorrect to conclude that 90% of all guns used in crime in Mexico
originated in the United States. Although crime gun trace data are useful measurements of crime
gun trends, in most cases the issues of consistent, random, and unbiased data collection have not
been adequately addressed through comprehensive tracing and other controls. Hence, it is often
not possible to test for statistical significance.76 Nevertheless, even though a statistically valid

70 Statement of Kenneth E. Melson, Deputy Director, Bureau of Alcohol, Tobacco, Firearms and Explosives, before the
House Appropriations Committee, Subcommittee on Commerce, Justice, Science, and Related Agencies, Fiscal Year
2011 Appropriations
, March 4, 2011.
71 U.S. Department of Justice, Office of Inspector General, Evaluation and Inspections Division, Review of ATF’s
Project Gunrunner
, I-2011-001, November 2010, p. 6.
72 U.S. Congress, House Committee on Appropriations, Subcommittee on Commerce, Justice, Science, and Related
Agencies, Hearing on President Obama’s Fiscal Year 2011 Budget Request for the Bureau of Alcohol, Tobacco,
Firearms, and Explosives
, 111th Congress, 2nd Session, March 4, 2010 (CQ Congressional Transcripts).
73 Ibid.
74 Ibid.
75 ATF briefing provided to CRS on May 5, 2008.
76 With regard to the limitations of firearms trace data, Congress has included a general provision in the annual CJS
appropriations act for the last several years that prohibits ATF from releasing “tracing studies” without adequate
disclaimers that make it clear that broad conclusions about firearms-related crime cannot be made from such data,
because: “(1) Firearm traces are designed to assist law enforcement authorities conducting investigations by tracking
the sale and possession of specific firearms. Law enforcement agencies may request firearms traces for any reason, and
those reasons are not necessarily reported to the Federal Government. Not all firearms used in crime are traced and not
all firearms traced are used in crime. (2) Firearms selected for tracing are not chosen for purposes of determining which
types, makes, or models of firearms are used for illicit purposes. The firearms selected do not constitute a random
sample and should not be considered representative of the larger universe. Firearms are normally traced to the first
(continued...)
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percentage estimate of U.S.-sourced firearms used in crime in Mexico cannot be made based on
trace data, criminal investigations have documented that there is great demand for certain
firearms that are available in normal (non-military) commercial channels in the United States and
that those firearms have been illegally trafficked to Mexico in large numbers.
Moreover, successful firearm traces are instrumental in developing investigative leads in
homicide and gun trafficking cases. According to ATF, some of those cases uncover corrupt FFLs
who were involved in larger criminal conspiracies to smuggle firearms into Mexico.77 In January
2008, ATF announced that e-Trace technology would be deployed to an additional nine U.S.
consulates in Mexico (Mérida, Juarez, Monterrey, Nogales, Hermosillo, Guadalajara, Tijuana,
Matamoros, and Nuevo Laredo).78 The number of traces performed by ATF for Mexican
authorities during FY2008 increased markedly. For FY2008, preliminary data showed that ATF
had traced 7,743 firearms recovered by Mexican authorities, as compared with the 11,700
firearms traced over a three-year period, FY2005-FY2007.79 Of those firearms, 63.5% were
determined to have been manufactured in the United States and 29.5% were determined to have
been manufactured abroad, but imported into the United States.80 Consequently, 93% of firearms
traced by ATF during FY2008 for Mexican authorities were either made in, or imported to, the
United States.81
In March 2010, ATF released eTrace 4.0, a Spanish language version of the software, to Mexico,
Guatemala, and Costa Rica.82 ATF anticipates that trace requests from these countries will
increase markedly in FY2010 and FY2011 with this new software.83 Also, as part of the National
Integrated Ballistic Imaging Network (NIBIN) program, ATF is currently establishing a U.S.-
Mexico ballistic information exchange capability that will allow firearms technicians to acquire
and compare digital images of markings left on fired bullets and cartridges either gathered in test-
firings or recovered at crime scenes.84 Canada already participates in ATF’s NIBIN program.
DOJ OIG Report, Mexican Trace Data, and Multiple Long Gun Sales
In November 2010, the OIG released another review of Project Gunrunner, in which updated
Mexican firearms trace data were reported.85 According to the new data, ATF traced 64,510

(...continued)
retail seller, and sources reported for firearms do not necessarily represent the sources and methods by which firearms
in general are acquired for use in crime.” For FY2010, see §516 of P.L. 111-117; December 16, 2009; 123 Stat. 3151-
3152.
77 ATF briefing provided to CRS on May 5, 2008.
78 Bureau of Alcohol, Tobacco, Firearms and Explosives, Office of Public Affairs, “ATF Expands Efforts to Combat
Illegal Flow of Firearms to Mexico,” January 16, 2008.
79 ATF briefing provided to CRS on April 16, 2009.
80 Ibid.
81 Ibid.
82 U.S. Congress, House Committee on Appropriations, Subcommittee on Commerce, Justice, Science, and Related
Agencies, Hearing on President Obama’s Fiscal Year 2011 Budget Request for the Bureau of Alcohol, Tobacco,
Firearms, and Explosives
, 111th Congress, 2nd Session, March 4, 2010 (CQ Congressional Transcripts).
83 Ibid.
84 U.S. Department of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives, Congressional Budget
Submission, Fiscal Year 2011
(February 2010), p. 60.
85 U.S. Department of Justice, Office of Inspector General, Evaluation and Inspections Division, Review of ATF’s
(continued...)
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firearms for Mexican authorities that were reportedly seized during FY2006-FY2009.86 For
firearms traced between December 1, 2006, and December 31, 2009, and sold for the first time,
OIG analysis showed that those firearms included 973 rifles (77%) and 279 handguns (23%).87 It
also indicated that traced long guns had a shorter time-to-crime interval than handguns.88 In
addition, the OIG reported that evidence suggests that Mexican DTOs are obtaining long guns in
multiple sales. As a consequence, the OIG recommended among other things that ATF ought to
work with DOJ to explore options for seeking a requirement for reporting multiple long gun
sales.89
On December 17, 2010, DOJ and ATF published an emergency regulation that proposed requiring
multiple long gun sales reports from FFLs whenever they dispose of two or more semiautomatic
long guns of greater than .22 caliber within five business days.90 On December 20, 2010, ATF
issued a press release in which acting ATF Director Ken Melson indicated that ATF was
proposing this requirement administratively under its demand letter authority found at 18 U.S.C.
§ 923(g)(5)(A), and that the emergency rule would only be implemented in the four Southwest
border states.91 However, in response to the OIG’s recommendation, Melson had previously
responded that a multiple long gun sales reporting requirement could be beyond ATF’s or DOJ’s
statutory authority under current law.92
Related Legislation in the 110th and 111th Congresses
In the 110th Congress, the House Committee on Foreign Affairs reported the Mérida Initiative to
Combat Illicit Narcotics and Reduce Organized Crime Authorization Act of 2008 (H.R. 6028;
H.Rept. 110-673) on May 14, 2008.93 This bill would have authorized to be appropriated over
three years, for FY2008 through FY2010, a total of $73.5 million to increase the number of ATF
positions dedicated to Project Gunrunner ($45 million) and assign ATF agents to Mexico ($28.5
million). The House passed this bill on June 10, 2008, by a roll call vote: 311 to 106 (Roll no.
393). Similar authorizations were included in the Southwest Border Violence Reduction Act of
2008 (S. 2867, H.R. 5863, and H.R. 5869). In the 111th Congress, similar bills were introduced (S.
205, H.R. 495, H.R. 1448, and H.R. 1867). The three-year Mérida Initiative expired at the end of
FY2010. In recent talks, Mexican and U.S. officials have agreed to refocus and continue the
initiative, however.94

(...continued)
Project Gunrunner, 1-2011-001, November 2010.
86 Ibid., p. 25.
87 Ibid., p. 38.
88 Ibid.
89 Ibid., p. 40.
90 Bureau of Alcohol, Tobacco, Firearms and Explosives, “60-Day Emergency Notice of Information Collection Under
Review: Report of Multiple Sale or Other Disposition of Certain Rifles,” 75 Federal Register 79021, December 17,
2010.
91 U.S. Department of Justice, Office of Inspector General, Evaluation and Inspections Division, Review of ATF’s
Project Gunrunner
, 1-2011-001, November 2010, p. 108.
92 U.S. Department of Justice, Office of Inspector General, Evaluation and Inspections Division, Review of ATF’s
Project Gunrunner
, 1-2011-001, November 2010, p. 108.
93 For further information, see CRS Report R41349, U.S.-Mexican Security Cooperation: the Mérida Initiative and
Beyond
, by Clare Ribando Seelke and Kristin M. Finklea.
94 Ibid.
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Arson and Explosives Budget Program
ATF’s arson and explosives budget program covers activities related to administering and
enforcing federal laws governing the manufacture, importation, and distribution of explosives, as
well as investigating arson cases with a federal nexus. The federal statutory provisions regulating
explosives commerce in the United States were enacted under Title XI of the Organized Crime
Control Act of 1970 (often referred to as the Explosives Control Act of 1970).95 The Anti-Arson
Act of 1982 amended this act to create a federal crime of arson.96 The act was amended further by
the Safe Explosives Act, which was included in the Homeland Security Act of 2002.97 The
proposed FY2011 allocation for the ATF arson and explosives program is $302.4 million, or
about 26% of the FY2011 budget request ($1.163 billion). The proposed FY2011 allocation
includes a program increase of $320,000 for Emergency Support Function #13.
Among law enforcement agencies, the ATF is recognized for its investigative expertise in
responding to both arson and explosive incidents. The Attorney General (AG), for example, made
the ATF responsible for maintaining a consolidated database of all arson and explosive incidents
that occur in the United States. Reportedly, as part of the department’s law enforcement
information-sharing program, this and other databases are to be linked and made Web-accessible,
and first responders anywhere in the United States are to have access to critical information about
arson and explosive cases nationwide.98 Nevertheless, as described below, both ATF and the FBI
share concurrent jurisdiction over federal criminal investigations involving explosives, and both
bureaus have maintained separate databases on explosives incidents. At times, this shared
jurisdiction appears to have resulted in an inter-agency rivalry.
Safe Explosives Act
Under the Safe Explosives Act,99 Congress made ATF responsible for more closely regulating the
U.S. explosives industry. This act made ATF responsible for fully investigating all explosive
thefts and losses, as well as providing background checks for licensees and permittees to prevent
prohibited persons from acquiring explosives. In FY2008, ATF completed 68,645 explosives
employee/possessor background checks and 3,231 responsible persons background checks. The
act also requires ATF to inspect explosive licensees and permittees every three years to ensure
that all explosive materials are properly stored and accounted for. ATF reports that there are about
12,000 licensees and permittees nationwide, so that to comply with the act, about 4,000
inspections would need to be conducted by ATF annually.100 ATF conducted 3,291 explosives

95 P.L. 91-452; October 15, 1970; 84 Stat. 952; codified, as amended, at Chapter 40, 18 U.S.C. § 841 et seq.
96 P.L. 97-298; October 12, 1982; 96 Stat. 1319.
97 P.L. 107-296; November 25, 2002; 116 Stat. 2280 (Title XI, Subtitle C of the Homeland Security Act of 2002).
98 The Federal Bureau of Investigation reportedly continues to maintain its own bomb data center despite the AG’s
memorandum. See Jerry Markon, “FBI, ATF Battle for Control of Cases: Cooperation Lags Despite Merger,”
Washington Post, May 10, 2008, p. A1.
99 P.L. 107-296; November 25, 2002; 116 Stat. 2280 (Title XI, Subtitle C of the Homeland Security Act of 2002).
100 U.S. Department of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives, ATF Congressional Budget
Submission, Fiscal Year 2007
(February 2006), p. 53.
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compliance inspections in FY2007 (or about 28% of licensees/permittees), 3,055 in FY2008
(27%), and 2,640 in FY2009 (22%).101
ATF and FBI Concurrent Jurisdiction over
Explosives Investigations

As described above, ATF was transferred from Treasury to DOJ in January 2003. This transfer,
however, did little to ameliorate the perennial source of tension between the ATF and FBI over
their concurrent jurisdiction over explosives. In March 2003, then Attorney General John
Ashcroft convened an Explosives Review Group (ERG) to develop recommendations to improve
coordination between the ATF and FBI. In August 2004, the Attorney General responded to the
ERG’s report and directed (1) the ATF and FBI to consolidate all of the DOJ’s arson and
explosives incidents databases into a single database; (2) that all consolidated arson and
explosives incident databases be maintained by the ATF; and (3) both agencies coordinate post-
blast explosives training and explosives detection canine training.102 In response to this directive,
ATF established the U.S. Bomb Data Center (USBDC) as the sole repository of arson and
explosives related incident data.103 On the other hand, the Attorney General also directed the FBI
to take the lead on any terrorism-related cases (domestic and international) that involved
explosives, and directed ATF to take the lead on all other criminal cases involving explosives.
Notwithstanding the Attorney General’s directives, the partnership on federal explosives-related
investigations between the FBI and ATF continues to be marked by what has been described as an
acrimonious rivalry and competition for mission share and resources.104 The FBI apparently had
not transferred its bomb data to the ATF, arguing that such a transfer would be detrimental to the
FBI’s ability to conduct counterterrorism investigations.105 In response to this, the Senate
Judiciary Committee chair, Senator Patrick Leahy, and ranking minority member of that
committee, Senator Arlen Specter, wrote a letter to the then Attorney General, Michael Mukasey,
urging that an end be brought to this inter-agency rivalry.106 Meanwhile, FBI and ATF officials at
the headquarters level have maintained that their partnership produces examples of interagency
cooperation on a daily basis. They point to their jointly administered Terrorist Explosive Device
Analytical Center (TEDAC), which is based at the FBI laboratory in Quantico, VA. This center
was established to process and evaluate evidence from improvised explosive devices (IEDs) that
have been recovered in Iraq and Afghanistan.107

101 U.S. Department of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives, ATF Congressional Budget
Submission, Fiscal Year 2011
(February 2010), p. 60.
102 U.S. Department of Justice, Office of the Inspector General, The Bureau of Alcohol, Tobacco, Firearms and
Explosives’ and Federal Bureau of Investigation’s Arson and Explosives Intelligence Databases
, Audit Report 05-01,
October 2004, p. 34.
103 Bureau of Alcohol, Tobacco, Firearms and Explosives, “ATF Fact Sheet: U.S. Bomb Data Center,” September
2008.
104 Jerry Markon, “End FBI-ATF Rift, Senators Urge,” Washington Post, May 17, 2008, p. A03.
105 Ibid.
106 Ibid.
107 Federal Bureau of Investigation, Fact Sheet on Terrorist Explosive Device Analytical Center, revised June 15, 2009,
available at http://www.fbi.gov/page2/june09/tedac061709.html.
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In October 2009, the DOJ OIG found that ATF and FBI are not adequately coordinating
explosives investigations and related operations and that the two agencies have developed parallel
capabilities to respond to explosives incidents.108 As noted above, both agencies maintain separate
explosives-related databases, despite the Attorney General’s May 2004 directives. Nor have the
agencies coordinated post-blast explosives training and explosives detection canine training,
despite a directive from the Attorney General to do so. The OIG also observed that investigative
jurisdictional disputes, lack of information sharing, and lack of coordination between the two
agencies hinders DOJ’s ability to effectively respond, investigate, and prevent explosives crimes.
The OIG underscored that these circumstances could increase the risk that DOJ would not meet
the requirements set out by then President George W. Bush in Homeland Security Directive
(HSPD)-19, which envisions a comprehensive U.S. government strategy to mitigate the threat,
and prevent the use, of explosives by terrorists.109
Alcohol and Tobacco Budget Program
The ATF alcohol and tobacco budget program covers expenses related to agency efforts to
counter a rising trend in the illegal diversion of tobacco products, as well as the illegal movement
of distilled alcohol products. The FY2010 allocation for the Alcohol and Tobacco program totals
$22.3 million, or about 2% of ATF’s direct appropriation ($1.115 billion) for salaries and
expenses, which is in line with historical budget trends (FY2004 through FY2010). The proposed
FY2011 allocation accompanying the Administration’s budget request is $23.3 million, or again
about 2% of the request ($1.163 billion). In addition, through DOJ’s asset forfeiture authority,
ATF also has “churning budget authority,” or the authority to obligate the proceeds of seized
assets to fund tobacco diversion and other long-term, complex undercover investigations.110
Notwithstanding this additional funding authority, in September 2009, the DOJ OIG issued a
report on ATF’s efforts to prevent tobacco diversion, which includes contraband cigarette
trafficking. In this report, the Inspector General found that tobacco diversion investigations, along
with alcohol diversion investigations, are accorded a low priority at ATF, as compared to its other
mission areas, such as investigating firearms- and explosives-related crime, particularly violent
crime, and arson.111 This low priority is partly the result of the view that tobacco diversion is
largely a nonviolent crime, despite its connections with terrorist financing and organized crime.112
Between FY2004 and FY2008, ATF conducted 645 alcohol and tobacco diversion investigations,
or about 1% of ATF’s investigative caseload. Of these cases, 566 investigations (88%) involved
tobacco and 79 (12%) involved alcohol.113 With regard to the greater number of tobacco cases
than alcohol cases, ATF observed that tobacco diversion is much more lucrative to criminal
enterprises than is alcohol, as the latter is much more difficult to transport in large quantities.

108 U.S. Department of Justice, Office of the Inspector General, Audit Division, Explosives Investigation Coordination
Between the Federal Bureau of Investigation and the Bureau of Alcohol, Tobacco, Firearms and Explosives
, Audit
Report 10-01, October, 2009, p. 12.
109 Ibid., p. 33.
110 U.S. Department of Justice, Office of the Inspector General, The Bureau of Alcohol, Tobacco, Firearms and
Explosives’ Efforts to Prevent the Diversion of Tobacco
, Report Number I-2009-005, September 2009, p. 6.
111 Ibid., p. 35.
112 Ibid., p. 15.
113 Ibid., p. 1.
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Alcohol diversion, moreover, is also limited to certain geographic areas and generally such cases
today are handled by state and local authorities.
The FY2011 budget request includes a program increase of $24,000 for Emergency Support
Function #13. It is significant to note that the OIG reported that the FY2010 departmental budget
request to the Office of Management and Budget (OMB) included $28.3 million for tobacco
diversion, but this request was denied by OMB and was not included in the ATF’s FY2010
congressional budget submission (request).114
Alcohol Diversion
The federal statutes that address the diversion of distilled spirits (alcohol) are many. They include,
but are not limited to, the Internal Revenue Code (IRC),115 the Federal Alcohol Administration
(FAA) Act,116 the 21st Amendment, the Webb-Kenyon Act,117 the Federal Criminal Code,118 and
federal Indian laws.119 Although ATF has primary jurisdiction for illegal interstate transportation
of liquor and related racketeering activities, the regulatory statutes underlying those violations are
found in the IRC. In addition, the Department of the Treasury has primary jurisdiction over the
IRC, as well as the FAA and Webb-Kenyon Act. While historically ATF traces its roots back to
Eliot Ness and other Treasury agents who battled organized crime during the era of prohibition
and illegal liquor production (moonshining), since its transfer to the DOJ, ATF’s role in enforcing
liquor laws has been diminished, as is evident in part by its small investigative caseload. Most of
the ATF personnel dedicated to the regulation of alcohol and tobacco remained at Treasury within
the Alcohol and Tobacco Tax and Trade Bureau (TTB).120
Tobacco Diversion
According to ATF, it has primary jurisdiction over criminal provisions related to tobacco in the
Contraband Cigarette Trafficking Act (CCTA) of 1978.121 In May 2004, the General Accounting
Office (now the Government Accountability Office) reported that the illegal diversion and
smuggling of cigarettes in the United States results in an unknown but significant loss in tax
revenues.122 ATF criminal intelligence indicates that cigarette bootlegging is a lucrative criminal

114 Ibid., p. 22.
115 See 26 U.S.C., Chapter 51, Alcohol Excise Taxes.
116 See 27 U.S.C., Chapter 8, Federal Alcohol Administration Act.
117 The Liquor Law Repeal and Enforcement Act of 1913 (37 Stat. 699), otherwise known as the Webb-Kenyon Act,
prohibits a person from receiving, possessing, selling, or in manner using, intoxicating liquor of any kind that has been
transported from one state into another in violation of any law of any state. See 27 U.S.C., Chapter 9.
118 See 18 U.S.C., Chapters 59 and 95, which are related liquor traffic and racketeering.
119 See 18 U.S.C., Chapter 53.
120 For FY2010, Congress appropriated $103 million for the TTB, of which $3 million was provided to hire, train, and
equip SAs and related support personnel. When ATF was transferred to DOJ, all its SAs were also transferred to DOJ
as part of the newly constituted ATF. Consequently, until FY2010, the TTB had no funded SA positions, with which to
hire criminal investigators to conduct alcohol- or tobacco-related investigations.
121 P.L. 95-575; November 2, 1978; 92 Stat. 2463; codified, as amended, at 18 U.S.C., Chapter 114, § 2341 et seq. The
Department of the Treasury, however, has primary jurisdiction of the Internal Revenue Code (IRC) provisions related
to excise taxes on cigarettes that have to be violated in order to trigger the criminal provisions in the CCTA. See 26
U.S.C., Chapter 52, Tobacco Excise Taxes.
122 U.S. General Accounting Office, Cigarette Smuggling: Federal Law Enforcement Efforts and Seizures Increasing,
(continued...)
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venture that terrorist groups have used and would possibly use to finance their future criminal
activities,123 including drug and weapons trafficking, identity theft, and various types of fraud.
ATF has investigated Armenian, Chinese, Middle Eastern, Russian, Taiwanese, Ukrainian, and
Native American organized crime groups engaged in diverting large quantities of contraband and
counterfeit cigarettes and counterfeit tax stamps.124 These activities have become increasingly
lucrative as states and the federal government have raised excise taxes on cigarettes.125 According
to the Inspector General, transporting contraband cigarettes from low-tax states to high-tax states,
and reselling those cigarettes on the black market, can yield high profits:
• a car load of 10 cases can yield an estimated $18,000 to $23,000;
• a van load of 50 cases, an estimated $90,000 to $115,000; and
• a small truck load of 200 cases, an estimated $360,000 to $465,000.126
Nonetheless, the Inspector General described the ATF’s tobacco diversion efforts as “ad hoc,”127
and underscored that there is no systematic method within the agency to share intelligence and
information between field divisions.128 The Inspector General reported, moreover, that ATF
headquarters is not facilitating information sharing between its field agents and personnel at
Treasury’s TTB, which maintains a database on tobacco licensees, and had not coordinated with
tobacco companies, which often provide cigarettes for undercover operations.129
Related Legislation in the 110th and 111th Congresses
The 110th and 111th Congresses considered legislation to strengthen federal laws that address
contraband cigarette trafficking. Representative Anthony Weiner introduced the Prevent All
Cigarette Trafficking (PACT) Act (H.R. 1676). The House Judiciary Committee reported this
measure (H.Rept. 111-117) on May 18, 2009, and the House passed it on May 21, 2009, by a
recorded vote (two-thirds required): 397-11 (Roll no. 287). Senator Herb Kohl introduced a
similar measure (S. 1147). The Senate Judiciary Committee amended the bill with substitute
language and reported it without a written report on November 11, 2009. It was passed by the
Senate on March 11, 2010. It was passed by the House on March 17, 2010, by a recorded vote
(two-thirds required): 387-25 (Roll no. 124). On March 31, 2010, President Obama signed S.
1147 into law (P.L. 111-154).
The House-passed H.R. 1676 included two sections that addressed ATF’s tobacco diversion
mission, but only one of these sections (section 5) was included in the Senate- and House-passed

(...continued)
GAO-04-641 (May 2004), p. 7.
123 Ibid.
124 U.S. Department of Justice, Office of the Inspector General, Evaluation and Inspections Division, The Bureau of
Alcohol, Tobacco, Firearms and Explosives’ Efforts to Prevent the Diversion of Tobacco
, Report Number I-2009-005,
September 2009, p. 15.
125 Ibid., p. 11.
126 Ibid., p. 13.
127 Ibid., p. 26.
128 Ibid., p. 26.
129 Ibid., p. 23.
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bill (S. 1147) that was signed into law by the President. Section 7 of the House-passed H.R. 1676,
which was not included in P.L. 111-154, would have authorized ATF to establish
• six regional contraband tobacco trafficking teams over a three-year period in
New York City; Washington, DC; Detroit; Los Angeles; Seattle; and Miami;
• a tobacco intelligence center to serve as the “nerve center” for all ongoing
tobacco diversion investigations;
• a covert national warehouse for undercover operations; and
• a computer database to track the retail sale of tobacco products through the
Internet, by mail-order, or in any other non-face-to-face transaction.
For these purposes, section 7 would have also authorized to be appropriated $8.5 million for five
years beginning with FY2010.
By comparison, the other section, which was included in P.L. 111-154, authorizes ATF to enter
the business premises of “delivery sellers” and inspect their records and information and any
cigarettes or smokeless tobacco stored at such premises. It also authorizes federal district courts
to compel such inspections, and imposes a civil penalty for failure to comply with inspections.
In the 110th Congress, the House passed a similar bill (H.R. 4081) on September 10, 2008, by a
recorded vote (two-thirds required): 379 to 12 (Roll no. 584). This bill was reported by the House
Judiciary Committee on the previous day (H.Rept. 110-836). The Senate Judiciary Committee
reported a similar bill on September 11, 2007 (S. 1027; S.Rept. 110-153), but the Senate took no
further action on this bill.
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Appendix. Authorizations Compared
to Appropriations

Congress last provided authorizations for ATF’s annual appropriation in the Violence Against
Women and Department of Justice Reauthorization Act of 2005.130 This act authorized
appropriations for DOJ as a whole and ATF as a DOJ agency for FY2006 through FY2009.
Congress did not associate authorized dollar amounts with FTE or permanent positions. The
annual authorization for appropriations lapsed for FY2010, as the 110th and 111th Congresses have
not considered legislation to reauthorize appropriations for either DOJ or ATF. As Table A-1
shows, Congress has generally appropriated more money for ATF than has been authorized.131
Table A-1. ATF Authorizations Compared to Appropriations
(Dollars in millions)

FY2006 FY2007 FY2008 FY2009 FY2010
Authorization 923.6a 960.6a 999.0a 1,038.9a NA
Appropriation 935.8b 988.1c 1,011.6d 1,078.2e 1,120.8
Source: FY2006 CJS Appropriations Act (P.L. 109-108); Gulf Hurricanes and Pandemic Influenza Supplemental
Appropriations Act, 2006 (P.L. 109-148); Global War on Terror and Hurricane Recovery Supplemental
Appropriations Act, 2006 (P.L. 109-234); Revised Continuing Appropriation Resolution, 2007 (P.L. 110-5);
Katrina-Iraq Supplemental Appropriations Act (P.L. 110-28); Consolidated Appropriations Act, 2008 (P.L. 110-
161); Supplemental Appropriations Act, 2008 (P.L. 110-252); Omnibus Appropriations Act, 2009 (P.L. 111-8);
Supplemental Appropriations Act, 2009 (P.L. 111-32); American Recovery and Reinvestment Act of 2009 (P.L.
111-5) and Consolidated Appropriations Act, 2010 (P.L. 111-117).
Notes: NA = no authorization.
a. Authorizations for appropriations provided in the Violence Against Women and Department of Justice
Reauthorization Act of 2005 (P.L. 109-162).
b. Includes a supplemental appropriation of $20 million provided under P.L. 109-148 and $4 million under P.L.
109-234.
c. Includes a supplemental appropriation of $4.0 million provided under P.L. 110-28.
d. Includes a supplemental appropriation of $4.0 million provided under P.L. 110-252.
e. Includes supplemental appropriations of $10 million provided under P.L. 111-5 and $14 million under P.L.
111-32.


130 P.L. 109-162, January 5, 2006, 119 Stat. 2960.
131 For further information, see CRS Report RS20371, Overview of the Authorization-Appropriations Process, by Bill
Heniff Jr.
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Author Contact Information

William J. Krouse

Specialist in Domestic Security and Crime Policy
wkrouse@crs.loc.gov, 7-2225


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