Basically, the ATF allowed some suspected gun smugglers to buy guns and transport them across the border to Mexico, with the idea that they would track the guns as they made their way up to the high-level traffickers and cartel leaders, and this would lead to the dismantling of the cartels, a practice known a "gun-walking." They did indict a few gun smugglers over it, but no cartel leaders. But what's worse (and was totally predictable), some of the guns that they stood by and watched get smuggled across the border have showed up at crime scenes, both in the U.S. and in Mexico, including at the scene of the murder of a federal agent.
The dispute now is over some Justice Department documents that relate to how they were going to respond to Congress on questions about the operation. In particular, Republicans are interested in what led up to a February 2011 (quickly retracted) letter from then-Assistant AG Ron Weich denying that guns were ever allowed to walk. Congress has subpoenaed these documents, but Holder has refused to release them, and asked President Obama to assert Executive Privilege over them, saying "the compelled production to Congress of internal Executive Branch documents generated in the course of the deliberative process concerning its response to congressional oversight and related media inquiries would have significant, damaging consequences: It would inhibit the candor of such Executive Branch deliberations in the future and significantly impair the Executive Branch’s ability to respond independently and effectively to congressional oversight. This would raise substantial separation of powers concerns and potentially create an imbalance in the relationship between these two co-equal branches of the Government." Obama agreed and claimed executive privilege, and, since the subpoena doesn't claim that the documents may contain evidence of criminal behavior, that claim can't be overturned.
Hope this helps. I'm trying to confine this response to an objective account of the facts, so I'd better just stop here.




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