Key facts in 'Fast and Furious' gun-probe controversy

(Reuters) - A failed attempt to stem gun smuggling along the U.S.-Mexican border was back in the news on Wednesday with the release of a report from the Justice Department’s internal watchdog that cleared Attorney General Eric Holder of any wrongdoing. However, two senior department officials have left their jobs.

Following are some facts about the case:

Congressional Republicans have pressed the controversy over the so-called Operation Fast and Furious ahead of Democratic President Barack Obama’s bid for re-election on November 6.

The operation, named after a movie about car racing, targeted gun trafficking rings feeding weapons to Mexican drug cartels.

In the process, critics of the effort say, U.S. agents in Arizona let slip into Mexico as many as 2,000 guns bought by low-level suspects. The political row had already cost the chief federal prosecutor in Arizona his job and on Wednesday he was joined by Justice Department officials Kenneth Melson and Jason Weinstein.

In June, the Republican-led House of Representatives found Holder, the chief U.S. law enforcement officer, head of the Justice Department and an Obama appointee, in contempt for not turning over documents about the affair. That prompted angry Democrats to stage a walkout.

At the heart of the controversy is U.S. gun politics, a sensitive issue, especially in the heat of a presidential election campaign.

Gun advocates say federal officials came up with Fast and Furious to pin border crime on gun dealers. Their opponents say the National Rifle Association ginned up the scandal to distract from border violence.

Below are six key dates in the dispute.

* October 2009: Operation Fast and Furious starts to take shape in the Phoenix office of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the agency within the Justice Department charged with enforcing federal gun laws.

The agents begin to track “straw buyers,” gun purchasers who are suspected of buying for others. Straw buying is illegal but can be difficult to prove. Eyeing the potential for an expansive case against a gun-smuggling ring, ATF agents decide not to pursue low-level buyers aggressively. As the case progresses slowly they assemble a database of suspect guns, including serial numbers.

* December 14, 2010: U.S. Border Patrol Agent Brian Terry is shot dead in a remote area of Arizona after a group of Mexican men who had crossed the border hoping to rob drug traffickers come across his unit.

The attackers leave behind evidence, including two semi-automatic rifles with serial numbers that match two in the Fast and Furious database. The rifles were purchased on a holiday weekend, and it is unclear whether ATF agents could have intercepted them.

Terry’s death leads to questions from reporters, gun-rights bloggers and lawmakers about the ATF’s tactics. In February, Holder asks for a review by the Justice Department’s inspector general.

A federal grand jury would later indict at least six men in Terry’s death. At least two are in custody.

* August 30, 2011: Holder reassigns Melson, the ATF’s acting director, to an unrelated job about legal policy, and Dennis Burke, the U.S. attorney for Arizona, resigns.

The two men are the first to lose their jobs as a result of the uproar over Fast and Furious, raising the stakes for other Obama administration officials tied to the operation.

Representative Darrell Issa, the Republican chairman of the House of Representatives Oversight Committee responsible for rooting out wrongdoing in government agencies, says he will continue to lead an inquiry into the operation “to ensure that blame isn’t offloaded on just a few individuals.”

Burke had questioned the motives of congressional staff, calling them “willing stooges for the gun lobby” in emails that later became public. Burke apologized.

* December 11, 2011: The Justice Department retracts a letter it sent to Congress on February 4, in the early days of questions about Fast and Furious. The letter denied that agents ever knowingly allowed suspicious guns to be trafficked. The retraction stokes speculation among lawmakers and other critics that there may be more the department is not revealing.

Justice officials say they relied on federal prosecutors and agents in Arizona in writing the letter.

In a separate letter in October, Holder writes that he had no early knowledge of the Fast and Furious tactics and the “misguided tactics” should never be used again. Lawmakers should spend more time finding ways to stop illegal guns, Holder writes.

* June 28, 2012: The Republican-led House votes 255-67 to find Holder in contempt, saying the Obama administration was withholding documents related to how it responded to the Fast and Furious scandal.

Many Democrats refuse to cast votes and stage a walkout from the House floor, calling the vote politically motivated.

The Justice Department says it provided thousands of documents to the House and wanted to continue negotiating for access to more. After talks fail, Obama claims executive privilege over the remaining records.

The House follows up with a lawsuit asking a judge to order Holder to comply with a subpoena. That request is pending.

* September 19, 2012: The Justice Department’s inspector general, Michael Horowitz, releases a report faulting 14 department employees for systematic failures that led the operation to go awry.

Melson retires effective immediately. Weinstein, a deputy in the department’s criminal division, resigns but launches a counter attack that calls the inspector general’s report inaccurate. He says he was singled out because of politicized congressional hearings.

Holder claims vindication in the report, which makes clear he did not conceive Fast and Furious and did not attempt a cover-up of the operation. Republicans find parts to like, too, as the report said the ATF disregarded public safety.

Reporting by David Ingram in Washington; Editing by Howard Goller and Christopher Wilson