Report slams U.S. effort to curb Mexico gun trade

Mexican federal police present two suspected members of the Los Zetas drug cartel and weapons confiscated during their capture at a news conference at the federal police center in Mexico City October 22, 2010.

PHOENIX (Reuters) - U.S. efforts to stop the "iron river" of guns headed south to Mexico's drug war are being hampered by failures at the federal agency tasked with tracing and seizing the weapons, according to a Justice Department report.

The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) fails to share intelligence with other agencies in the United States and Mexico and does not target the big fish in the illegal trade, the department's Office of Inspector General said in a report released on Tuesday.

Although U.S. and Mexican authorities have ramped up cooperation to drugs and arms curb smuggling over the southwest border, the ATF's main initiative to stop the gun trade -- Project Gunrunner -- has "significant weaknesses," the report said.

A raging drug war has killed 31,000 people since Mexican President Felipe Calderon took office in December 2006 and sent the military to crush the drug cartels

About 90 percent of the crime guns seized and traced in Mexico last year were initially sold in the United States. This "iron river" of firearms flowing south to the drug cartels includes high powered Kalashnikov and AR-15 rifles and decorative .38 caliber pistols popular with drug kingpins.

The report chided the ATF for focusing on less important gun dealers and "straw purchasers" -- individual third-party buyers -- instead of higher-level traffickers, smugglers, and the "ultimate recipients of the trafficked guns" in Mexico.

It found the agency does not "systematically and consistently" share strategic intelligence with partners in Mexico and the United States, including the U.S. Drug Enforcement Administration and the Immigration and Customs Enforcement and Customs and Border Protection agencies.

And, it said intelligence personnel in ATF's southwest border field divisions do not routinely share firearms trafficking intelligence with each other.

While ATF has increased traces of firearms seized in Mexico to almost 22,000 last year, from 5,834 in 2004, most of those trace requests are considered "unsuccessful" because of missing or improperly entered gun data, the report found.

Among ATF's achievements, it noted that the agency had increased traces of seized firearms from Mexico and the southwest border, boosted referrals for prosecution for firearms trafficking-related offenses and ramped up gun dealer compliance inspections in border states.

The ATF's deputy director, Kenneth E. Melson, said that the agency was "committed to building on these successes and improving the program in the areas identified" by the report.

(Reporting by Tim Gaynor, editing by Jackie Frank)