Thursday, September 18, 2008

Eeyore's News and Views (Sometimes)

The Battle of Athens, Tennessee

As Recently As 1946, American Citizens Were
Forced To Take Up Arms As A Last Resort
Against Corrupt Government Officials.

Published in Guns & Ammo October 1995, pp. 50-51

On August 1-2, 1946, some Americans, brutalized by their county government, used armed force as a last resort to overturn it. These Americans wanted honest open elections. For years they had asked for state or federal election monitors to prevent vote fraud (forged ballots, secret ballot counts and intimidation by armed sheriff's deputies) by the local political boss. They got no help.

These Americans' absolute refusal to knuckle under had been hardened by service in World War II. Having fought to free other countries from murderous regimes, they rejected vicious abuse by their county government.

These Americans had a choice. Their state's Constitution -- Article 1, Section 26 -- recorded their right to keep and bear arms for the common defense. Few "gun control" laws had been enacted.

These Americans were residents of McMinn County, which is located between Chattanooga and Knoxville in Eastern Tennessee. The two main towns were Athens and Etowah. McMinn County residents had long been independent political thinkers. For a long time they also had: accepted bribe-taking by politicians and/or the sheriff to overlook illicit whiskey-making and gambling; financed the sheriff's department from fines-usually for speeding or public drunkenness which promoted false arrests; and put up with voting fraud by both Democrats and Republicans.

The wealthy Cantrell family, of Etowah, backed Franklin Delano Roosevelt in the 1932 election, hoping New Deal programs would revive the local economy and help Democrats to replace Republicans in the county government. So it proved.

Paul Cantrell was elected sheriff in the 1936,1938 and 1940 elections, but by slim margins. The sheriff was the key county official. Cantrell was elected to the state senate in 1942 and 1944; his chief deputy, Pat Mansfield, was elected sheriff. In 1946 Paul Cantrell again sought the sheriff's office.

At the end of 1945, some 3,000 battle-hardened veterans returned to McMinn County; the GIs held Cantrell politically responsible for Mansfield's doings. Early in 1946, some newly returned ex-GIs decided to challenge Cantrell politically by offering an all-ex-GI, non-partisan ticket. They promised a fraud-free election, stating in ads and speeches that there would be an honest ballot count and reform of county government.

At a rally, a GI speaker said, "The principles that we fought for in this past war do not exist in McMinn County. We fought for democracy because we believe in democracy but not the form we live under in this county" (Daily Post-Athenian, 17 June 1946, p.1 ). At the end of July 1946, 159 McMinn County GIs petitioned the FBI to send election monitors. There was no response. The Department of Justice had not responded to McMinn County residents' complaints of election fraud in 1940, 1942 and 1944.

FROM BALLOTS TO BULLETS

The primary election was held on August 1. To intimidate voters, Mansfield brought in some 200 armed "deputies." GI poll-watchers were beaten almost at once. At about 3 p.m., Tom Gillespie, an African- American voter was told by a sheriff's deputy that he could not vote. Despite being beaten, Gillespie persisted. The enraged deputy shot him. The gunshot drew a crowd. Rumors spread that Gillespie had been shot in the back; he later recovered (C. Stephen Byrum, The Battle of Athens, Paidia Productions, Chattanooga, TN, 1987; pp. 155-57).

Other deputies detained ex-GI poll-watchers in a polling place, as that made the ballot counting "Public" A crowd gathered. Sheriff Mansfield told his deputies to disperse the crowd. When the two ex-GIs smashed a big window and escaped, the crowd surged forward. The deputies, with guns drawn, formed a tight half-circle around the front of the polling place. One deputy, "his gun raised high...shouted: 'If you sons of bitches cross this street I'll kill you!'" (Byrum, p.165).

Mansfield took the ballot boxes to the jail for counting. The deputies seemed to fear immediate attack by the "people who had just liberated Europe and the South Pacific from two of the most powerful war machines in human history" (Byrum, pp. 168-69).

Short of firearms and ammunition, the GIs scoured the county to find them. By borrowing keys to the National Guard and State Guard armories, they got three M-1 rifles, five .45 semi-automatic pistols and 24 British Enfield rifles. The armories were nearly empty after the war's end. By 8 p.m. a group of GIs and "local boys" headed for the jail but left the back door unguarded to give the jail's defenders an easy way out.

Three GIs alerting passersby to danger were fired on from the jail. Two GIs were wounded. Other GIs returned fire.

Firing subsided after 30 minutes; ammunition ran low and night had fallen. Thick brick walls shielded those inside the jail. Absent radios, the GIs' rifle fire was uncoordinated. "From the hillside fire rose and fell in disorganized cascades. More than anything else, people were simply shooting at the jail" (Byrum, p.189).

Several who ventured into the street in front of the jail were wounded. One man inside the jail was badly hurt; he recovered. Most sheriff's deputies wanted to hunker down and await rescue. Governor McCord mobilized the State Guard, perhaps to scare the GIs into withdrawing. The State Guard never went to Athens. McCord may have feared that Guard units filled with ex-GIs might not fire on other ex-GIs.

At about 2 a.m. on August 2, the GIs forced the issue. Men from Meigs County threw dynamite sticks and damaged the jail's porch. The panicked deputies surrendered. GIs quickly secured the building. Paul Cantrell faded into the night, having almost been shot by a GI who knew him, but whose .45 pistol had jammed. Mansfield's deputies were kept overnight in jail for their own safety. Calm soon returned. The GIs posted guards. The rifles borrowed from the armory were cleaned and returned before sunup.

THE AFTERMATH: RESTORING DEMOCRACY

In five precincts free of vote fraud, the GI candidate for sheriff, Knox Henry, won 1,168 votes to Cantrell's 789. Other GI candidates won by similar margins.

The GI's did not hate Cantrell. They only wanted honest government. On August 2, a town meeting set up a three-man governing committee. The regular police having fled, six men were chosen to police Etowah. In addition, "Individual citizens were called upon to form patrols or guard groups, often led by a GI... To their credit, however, there is not a single mention of an abuse of power on their behalf" (Byrum, p. 220).

Once the GI candidates' victory had been certified, they cleaned up county government, the jail was fixed, newly elected officials accepted a $5,000 pay limit and Mansfield supporters who resigned were replaced.

The general election on November 5 passed quietly. McMinn County residents, having restored the rule of law, returned to their daily lives. Pat Mansfield moved back to Georgia. Paul Cantrell set up an auto dealership in Etowah. "Almost everyone who knew Cantrell in the years after the Battle' agree that he was not bitter about what had happened" (Byrum pp. 232-33; see also New York Times, 9 August 1946, p. 8).

The 79th Congress adjourned on August 2, 1946, when the Battle of Athens ended. However, Representative John Jennings Jr. from Tennessee decried McMinn County's sorry situation under Cantrell and Mansfield and the Justice Department's repeated failures to help the McMinn County residents. Jennings was delighted that "...at long last, decency and honesty, liberty and law have returned to the fine county of McMinn.. " (Congressional Record, House; U.S. Government Printing Office, Washington, D.C., 1946; Appendix, Volume 92, Part 13, p. A4870).

THE LESSONS OF ATHENS

Those who took up arms in Athens, Tennessee, wanted honest elections, a cornerstone of our constitutional order. They had repeatedly tried to get federal or state election monitors and had used armed force so as to minimize harm to the law-breakers, showing little malice to the defeated law-breakers. They restored lawful government.

The Battle of Athens clearly shows how Americans can and should lawfully use armed force and also shows why the rule of law requires unrestricted access to firearms and how civilians with military-type firearms can beat the forces of government gone bad.

Dictators believe that public order is more important than the rule of law. However, Americans reject this idea. Brutal political repression is lethal to many. An individual criminal can harm a handful of people. Governments alone can brutalize thousands, or millions.

Law-abiding McMinn County residents won the Battle of Athens because they were not hamstrung by "gun control " They showed us when citizens can and should use armed force to support the rule of law.


Government steps in again, bails out AIG with $85B September 17, 2008 - 6:17am WASHINGTON (AP) - Another day, another bailout. The U.S. government stepped in Tuesday to rescue American International Group Inc., one of the world's largest insurers, with an $85 billion injection of taxpayer money. It was the second time this month the feds put taxpayer money on the hook to rescue a private financial company, saying its failure would further disrupt markets and threaten the already fragile economy. AIG said it will repay the money in full with proceeds from the sales of some of its assets. Under the deal, the Federal Reserve will provide a two-year $85 billion emergency loan to AIG, which teetered on the edge of failure because of stresses caused by the collapse of the subprime mortgage market and the credit crunch that ensued. In return, the government will get a 79.9 percent stake in AIG and the right to remove senior management. The move was similar to government's seizure on Sept. 7 of mortgage giants Fannie Mae and Freddie Mac, where the Treasury Department said it was prepared to put up as much as $100 billion over time in each of the companies if needed to keep them from going broke. The Fed said it determined that a disorderly failure of AIG could hurt the already delicate financial markets and the economy. It also could "lead to substantially higher borrowing costs, reduced household wealth and materially weaker economic performance," the Fed said in a statement. The decision to help AIG marked a reversal for the government from the weekend, when it refused to use taxpayer money to bail out Lehman Brothers Holdings Inc. Lehman, which filed for bankruptcy protection Monday, collapsed under the weight of mounting losses related to its real estate holdings. The White House said it backed the Fed's decision Tuesday. "These steps are taken in the interest of promoting stability in financial markets and limiting damage to the broader economy, " White House spokesman Tony Fratto said. After meeting with Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke in a late-night briefing on Capitol Hill, Congressional leaders said they understood the need for the bailout. "The administration is approaching an unprecedented step, but unfortunately we are living in unprecedented times. Hearing of these plans, you have to stop to catch your breath. But upon reflection, the alternatives are much worse," said Sen. Charles Schumer, D-N.Y. In a statement late Tuesday, AIG's board of directors said the loan will protect all AIG policy holders, address concerns of rating agencies and buy the company time to sell off assets. "We expect that the proceeds of these sales will be sufficient to repay the loan in full and enable AIG's businesses to continue as substantial participants in their respective markets," the statement said. "In return for providing this essential support, American taxpayers will receive a substantial majority ownership interest in AIG." New York officials said the deal helps stave off a fiscal crisis for the state. AIG is based in New York. "Policy holders will be protected, jobs will be saved," New York Gov. David Paterson said Tuesday night. The Fed's move was part of a concerted push to help calm jittery markets and investors around the world. On Tuesday, the Fed decided to keep its key interest rate steady at 2 percent, but acknowledged stresses in financial markets have grown and hinted it stood ready to lower rates if needed. The central bank also pumped $70 billion into the nation's financial system to help ease credit stresses. In emergency sessions over the weekend, the Fed expanded its loan programs to Wall Street firms, part of an ongoing effort to get credit flowing more freely. The stock market, which Monday posted its largest point loss session since the Sept. 11 attacks, recovered Tuesday after the Fed's decision on interest rates. The Dow Jones industrials rose 141 points after losing 500 points on Monday. AIG's shares swung violently, though, as rumors of potential deals involving the government or private parties emerged and were dashed. By late Tuesday, its shares had closed down 20 percent _ and another 45 percent after hours. The problems at AIG stemmed from its insurance of mortgage-backed securities and other risky debt against default. If AIG couldn't make good on its promise to pay back soured debt, investors feared the consequences would pose a greater threat to the U.S. financial system than this week's collapse of the investment bank Lehman Brothers. The worries were heightened Monday after Moody's Investor Service, Standard and Poor's and Fitch Ratings lowered AIG's credit ratings, forcing AIG to seek more money for collateral against its insurance contracts. Without that money, AIG would have defaulted on its obligations and the buyers of its insurance _ such as banks and other financial companies _ would have found themselves without protection against losses on the debt they hold. http://wtop.com/?nid=111&sid=1478589
It did not (at least yet) help the (all) Asian Markets

Asian markets mixed after US bails out insurer AIG September 17, 2008 - 6:18am HONG KONG (AP) - Asian stocks turned in a mixed performance Wednesday, giving up early gains as a U.S. plan to rescue troubled insurer AIG failed to persuade many investors that recent financial turmoil would soon ease. European shares were higher in early trade. Asia's markets opened mostly higher as Wall Street's rise overnight lifted sentiment after Tuesday's huge sell-off. Japan's Nikkei 225 average added 1.2 percent to 11,749.79 after sinking nearly 5 percent the day before to its lowest finish in more than three years. South Korea's Kospi climbed 2.7 percent and Taiwan's benchmark rose 0.8 percent. But Hong Kong's blue-chip Hang Seng Index dropped 3.6 percent to 17,637.19, dragged by Chinese banks to its worst close since October 26. China's Shanghai benchmark fell 2.9 percent, while Australia's S&P/ASX 200 shed 0.6 percent. Investors sent the region's stocks spiraling downward Tuesday, reacting with alarm to the upheaval on Wall Street that saw investment bank Lehman Brothers Holdings Inc. file for bankruptcy and Merrill Lynch & Co. sell itself to Bank of America Corp. The Federal Reserve helped allay some fears about the financial system with an $85 billion emergency loan to shore up insurance giant American International Group Inc., still reeling from billions of dollars in risky mortgage debt. The Fed said Tuesday it acted because a disorderly failure of the company, whose financial dealings stretch around the world, could hurt the already delicate markets and the economy. But there were lingering fears across the region of more trouble ahead should bank stocks sink further and credit losses continue to pile up. "AIG helped stabilize the market earlier, but there could be more turmoil. You don't know who's next to go," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong. While somewhat disappointed by the Fed's decision to leave interest rates unchanged, markets were buoyed by an overnight advanced on Wall Street. The Dow Jones industrial average climbed 141.51 points, or 1.30 percent, to 11,059.02. The index plunged 504-points Monday, its biggest point drop since the September 2001 terror attacks. In early European trading, Britain's FTSE-100 rose 0.5 percent, Germany's DAX 30 added 0.2 percent and Paris' benchmark CAC-40 index was 0.05 percent higher. In Russia, the RTS index retreated 3.4 percent. In Japan, the central bank kept a key interest rate unchanged. Hoping to boost confidence, the Bank of Japan also pumped an extra 3 trillion yen ($28.4 billion) into money markets on top of Tuesday's 2.5 trillion ($24 billion) injections. Japanese financial issues, which had been battered Tuesday, started higher but lost steam. Mizuho Financial Group, Inc. fell 0.7 percent. Mitsubishi UFJ Financial Group, the world's largest bank by assets, rose 1.01 percent. Banks elsewhere in the region fared worse. Macquarie Group Ltd., Australia's biggest securities firm and investment bank, nose-dived 7.8 percent. In Hong Kong, China Merchants Bank plunged more than 7.7 percent after revealing its was carrying $70 million in Lehman debt. Leading lender ICBC dropped 9.9 percent. The greenback bought 105.72 yen Wednesday afternoon in Asia, compared with just above 106 yen late Tuesday. The euro rose to $1.4244 from $1.4151. Oil prices rose in Asian trading but remained well below $100 a barrel. Light, sweet crude for October delivery rose $3.5 to $94.00 on the New York Mercantile Exchange, after dipping as low as $90.51 Tuesday, its lowest level since Feb. 8. http://wtop.com/?nid=111&sid=630962
Russian Markets Halted as Emergency Funding Fails to Halt Rout
By Alex Nicholson and William Mauldin
Sept. 17 (Bloomberg) -- Russian markets stopped trading for a second day after emergency funding measures by the government failed to halt the biggest stock rout since the country's debt default and currency devaluation a decade ago.
The ruble-denominated
Micex Stock Exchange suspended trading indefinitely at 12:10 p.m. after its index erased a 7.6 percent gain and plunged as much as 10 percent within an hour. The benchmark fell 17 percent yesterday, the biggest drop since Bloomberg started tracking the gauge in May 2001. The dollar- denominated RTS halted trading after similar declines.
The government yesterday injected $20 billion into the interbank lending market via central bank and Finance Ministry auctions in a bid to contain soaring borrowing rates as credit dried up in the wake of the Lehman Brothers Holdings Inc. bankruptcy. The one-day MosPrime overnight rate, a gauge for monitoring liquidity demand, leapt 25 basis points to a record 11.08 percent today.
The
Finance Ministry attempted to stop the selloff by offering 1.13 trillion rubles ($44 billion) of budget funds to the country's three biggest banks, OAO Sberbank, VTB Group and OAO Gazprombank, for at least three months. That measure came as KIT Finance, a Russian brokerage, said it's in talks to find a buyer after failing to meet some financial obligations related to repurchase agreements.
Bond Market `Closed'
``The bond market remains effectively closed and banks are reluctant to lend to one another,'' said
Julian Rimmer, head of sales trading at UralSib Financial Corp. in London. ``The problems experienced by KIT Finance have heightened counterparty risk and reduced liquidity further.''
Finance Ministry Minister
Alexei Kudrin said on state television that the decision to increase the amount of budget funds available to three state-controlled banks would ``smooth over the shock changes'' in the markets and enable the banks to make loans to smaller competitors.
``We must soften such shock changes connected with the market falling,'' Kudrin said. ``With foreign borrowing stopping, we must soften the impact with additional funds, then the situation will stabilize.''
Sberbank, eastern Europe's biggest bank, can borrow as much as 754 billion rubles,
VTB has a limit of 268.5 billion rubles and Gazprombank can get 103.9 billion rubles. About 400 billion rubles more of unspent budget funds is available to other banks.
``These are market-making banks capable of insuring the liquidity of the banking system,'' the Finance Ministry said in a statement today. The government and central bank will take more measures to improve liquidity this week, the ministry said.
Sberbank dropped 2.1 rubles, or 6.1 percent, to 32.55 rubles. VTB sank 0.44 kopek, or 14 percent, to 2.73 rubles, a record low.
``The primary objective of these measures is to inject liquidity to calm nervousness,''
Alexander Morozov, chief economist at HSBC Bank in Moscow, said by telephone. ``Hopefully other banks will be able to get this money via the interbank market and this should prevent the rise of rates,'' he said.
Rancher posted this article at FRC
Real-estate agents bail out As the housing market slumps, thousands of agents across the country are being forced to go back to their former careers or start looking for new ones. By Patrik Jonsson, The Christian Science Monitor after three years showing houses in Atlanta's hilly suburbs, Dee McMahon is finished with real estate. Yanking up her custom-made "For Sale" signs in her North Lake neighborhood rattled her ego, she admits. But when McMahon closed her final sale, a house in Snellville, Ga., in late November, the mother of two felt a swell of relief. "Now I can finally get my own house back together," she says. "I'm nervous about the future, but I feel happy." McMahon is one of thousands of real-estate agents across the U.S. wandering with mixed emotions and uncertain prospects through the debris of a real-estate gold rush. As many train for new careers, return to old ones or wait tables until prices rebound, the plight of the real-estate agent -- average age, 51 -- reveals the human dimension of how loose lending, raw opportunity and self-determination produced a housing bust that has stunned the U.S. economy. "They've tasted success and big money, and now their standard of living has been rocked and reality has set in," says John Baen, a real-estate professor at the University of North Texas in Denton. "The whole (economy) has been built on real estate. When the music stops, what is left?" Americans are still drawn to working in real estate, according to the National Association of Realtors, which says its membership was more than 1.3 million at the end of 2007. That growth in the ranks may be attributed to unaffiliated agents scrambling for clout in a tough market rather than an indication that the total number of agents is rising, the NAR acknowledges. Evidence is growing that agents, especially in hard-hit markets such as Florida, California and Georgia, are closing up shop in large numbers, experts say. In Atlanta, the number of agents letting their licenses lapse is growing at a faster pace than the number of overall licenses held. Nationally, an average agent's income dropped from $49,300 to $47,900 between 2004 and 2006. Not helping that trend is the cold fact that, according to Standard & Poor's house price index, home prices dropped precipitously in 2007, breaking the record 6.1% annual decline in 1991. In Cape Coral, Fla., where only 30% of agents sold even a single home last year, real-estate agents are "dropping out" daily, says local agent Ginette Young. The Oregon Association of Realtors reports an 11.5% decline in licensed agents statewide in the past year. Many of those who leave quietly shelve their signs. Others go out big: In Gilbert, Ariz., the fastest-growing city in the fastest-growing state, RE/MAX 2000 closed 13 offices throughout the Valley of the Sun, laying off at least 20 employees and scores of contract agents right before Christmas. The company couldn't meet its expenses. Real estate is a line of work filled with mothers returning to the work force, older workers squeezed out of lifetime careers and young opportunists looking to trade sweat equity for potentially big cash-outs. Indeed, the industry norm is that only 4% of agents choose real-estate sales as a first career. In Georgia, realty ranks had swelled to 48,000 at the peak of the market. In the end, many say, there were too many inexperienced agents hawking houses. "There's a lot of money being spent (on real-estate classes) teaching agents how to waste a year of their life," says Atlanta agent Sandy Koza. "Then you get a downturn and a bunch of people get bumped. To (experienced agents like) us, it cleans out the business a little bit." Florida's Cape Coral, a canal-sliced beach community, saw 800 building permits a month fall to 25 to 30 in the past year. The rapid slowdown left real-estate agents, investors and brokers holding the bag on big-money deals. "It's a gold-rush mentality," says Michael Davis, an economist at Southern Methodist University's Cox School of Business in Dallas. He has been struck by how many agents, brokers and investors, acting against conventional wisdom of portfolio management, converted large percentages of cash holdings into only a single and somewhat risky investment: property. "I don't know whether they're ignorant or optimistic; perhaps a little of both," says Davis. Many others became the foot soldiers in the housing boom, second- or third-careerists drawn to the self-determination, relatively low entrance costs and perhaps even the allure of the trade as embodied by novelist Richard Ford's legendary character Frank Bascombe, an angst-driven agent who wanders the Jersey Shore for deals and revelations. Thomas Banecke, of Sandy Springs, Ga., a former computer developer, spent most of the summer baby-sitting a new condo development -- usually a plum assignment. But when the Atlanta condo market tanked, foot traffic dwindled to almost zero. Banecke is now back in the computer business and is putting his real-estate career on hold. In some ways, he says, the cold housing market forced real-estate agents, especially rookies, to confront their own abilities, schemes and dreams. Upfront costs, marketing, association fees and the crucial contacts are either more costly or harder to procure than an aspiring real-estate agent usually expects, Banecke says. "This kind of thing will wipe up a whole bunch of people who thought they could do this to make a living," he says. As for McMahon, the Atlanta agent, she still had a nice listing book and plenty of leads when she called it quits. In the end, unreliable buyers, surly sellers and a lack of office camaraderie contributed to a decision that solidified when home sales and prices dipped. "I was waiting for a time to kind of swing out," she says. She's planning to become a high-school science teacher. One problem for out-of-work agents is that their skills may not transfer easily to other careers. California is waiting to hear on a $9 million federal retraining grant after 6,000 people lost their jobs in the housing industry since September. But Baen of the University of North Texas is optimistic about their futures. "These people are hustlers, hard workers. They're used to getting on the phone," he says. "They'll end up in insurance, in mutual funds, in retirement planning and commodities." http://realestate.msn.com/buying/Article_csm.aspx?cp-documentid=6009539
Patient Contracts Hepatitis-C From Dialysis Center
NYC Clinic Shut Down, Nearly 700 Urged To Get Tested For Hepatitis, HIV; Blood Found On Chairs, MachinesNEW YORK (CBS) ― An Upper West Side dialysis center was shut down by the state Health Department and hundreds of patients were urged to be tested after at least one patient contracted hepatitis C from treatment at the center. The Health Department notified 657 patients of the Life Care Dialysis Center at 221 W. 61st St. that they should be tested for both hepatitis B and C strains, as well as HIV. Nearly 200 patients were forced to be transferred to other centers to continue dialysis, a treatment that filter's a patients blood through a machine when the kidneys can no longer function properly. After a week-long inspection of the center, Health Department officials said they uncovered poor infection control practices, including "blood on the treatment chairs and dialysis machines, lack of proper hand hygiene, and inadequate disinfection of equipment," according to a release. Officials say anyone treated at the center at any time after Jan. 23, 2004 should contact their physicians and get tested. Hepatitis C is a chronic disease contracted through sex or contact with blood of an infected person. The department has established a toll-free information hotline for LCDC patients at 1-800-278-2965 that will receive calls 24 hours a day, 7 days a week, for the foreseeable future.
Audit: ATF lost 76 weapons, hundreds of laptops
By LARA JAKES JORDAN – 1 hour ago
WASHINGTON (AP) — The ATF lost 76 weapons and hundreds of laptops over five years, the Justice Department reported Wednesday, blaming carelessness and sloppy record-keeping.
Thirty-five of the missing handguns, rifles, Tasers and other weapons were stolen, as were 50 laptops, the internal audit found. Two of the stolen weapons were used in crimes.
The audit by Justice Department Inspector General Glenn A. Fine found "inadequate" oversight of weapons and laptops resulted in "significant rates of losses" at the Bureau of Alcohol, Tobacco, Firearms and Explosives.
"It is especially troubling that that ATF's rate of loss for weapons was nearly double that of the FBI and DEA, and that ATF did not even know whether most of its lost, stolen, or missing laptop computers contained sensitive or classified information," he added.
In a Sept. 10 letter responding to the audit, ATF acting Director Michael J. Sullivan said his agency "agrees or partially agrees with most of the recommendations."
"We are revising our procedures of reporting losses of weapons or laptops," Sullivan said.
The audit looked at ATF's inventory of weapons, laptops, ammunition and explosives between Oct. 1, 2002 and Aug. 31, 2007.
It found that ATF lost three times more weapons each month than it had in a similar 2002 audit by the Treasury Department, which used to oversee the agency. It also lost 50 times as many laptops as reported in the earlier audit.
Of the 76 weapons, 35 were reported stolen, 19 lost and 12 missing from inventories, investigators found. Of the 418 missing laptops, 50 were stolen, 8 lost and 274 could not be found during inventory. Another 86 laptops were unaccounted for because ATF had either destroyed or lost documents showing where they were, the audit concluded.
Two weapons reported stolen were used to commit crimes. In one instance, a gun was stolen from an ATF car parked outside the agent's home and later used to shoot through the window of another residence, the audit found. In the other, a stolen ATF gun was taken from a burglary suspect.
Additionally, ATF employees did not report 13 of the 76 lost weapons, or 365 of the 418 missing laptops, to internal affairs as required. ATF officials also did not report much of the lost equipment to the Justice Department.
Investigators could not conclude what was on 398 of 418 missing laptops — except that few were encrypted. That means any sensitive material on the laptops could have been exposed.
Moreover, "we found that ATF did not regularly attempt to determine whether the lost, stolen or missing laptop computers contained sensitive or classified information," the audit said.
But few — only 18 of 7,500 — ATF laptops were authorized to hold classified information.
Compared to weapons loss rates for the FBI and Drug Enforcement Administration, the ATF misplaced almost twice as many guns. The audit found that the ATF lost .52 weapons per 1,000 employees, compared to .29 at the FBI and .28 at the DEA.
Fine's investigators concluded there were proper controls and oversight of explosives in ATF's possession, and good security for ammunition. However, nine of 20 ATF field offices surveyed did not have proper accounting methods for ammunition.
In a statement responding to the audit, ATF Assistant Director W. Larry Ford said the agency disciplined employees whose carelessness or improper handling of equipment resulted in losses.
"ATF is committed to safeguarding its inventory of weapons and laptop computers in the interest of public safety," Ford said. "ATF agrees that rigorous and thorough internal controls will enhance its ability to account for, and most importantly prevent, thefts and losses of weapons and laptop computers."
On the Net:
The Justice Department's report can be found at:
http://www.usdoj.gov/oig/reports/ATF/a0829/final.pdf

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