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First on CNN: IG finds ex-ATF official took outside job while on federal payroll

By Evan Perez, CNN Justice Reporter
updated 8:16 PM EDT, Tue March 25, 2014

(CNN) -- Top officials at the Bureau of Alcohol, Tobacco, Firearms and Explosives inappropriately allowed a former ATF official to take a job at JP Morgan while still collecting his government salary, according to the Justice Department's internal watchdog.

William McMahon, then an ATF deputy assistant director, was nearing retirement in 2012 and was among senior ATF management facing criticism for failing to stop ATF's "Operation Fast and Furious."

That operation run by agents in the ATF's Phoenix office allowed suspected traffickers to buy about 2,000 firearms, most of which are believed to have ended up with drug cartels in Mexico.

The Justice Department's inspector general conducted an investigation of McMahon's outside work while on the ATF payroll at the request of Rep. Darrell Issa, chairman of the House Oversight and Government Reform Committee, and Sen. Charles Grassley of Iowa.

The two Republican lawmakers led the congressional inquiry into "Fast and Furious."

A summary of the findings shared with the lawmakers was reviewed by CNN.

An ATF spokesman said: "We received the summary of findings from the (inspector general's) investigation concerning former employee William McMahon's outside employment in 2012. We will review the report of investigation further and will take appropriate actions as necessary, consistent with applicable policies, laws and regulations."

According to the inspector general's review, McMahon in June 2012 sought permission from his supervisors to use sick leave and vacation time to be absent from his ATF job for several months until it was time to retire. In the meantime, he would begin working with JP Morgan.

Top ATF officials approved of the request, despite an ATF policy not to allow such use of paid leave benefits. The IG found that some of the officials who approved the leave weren't aware of the ATF's policy.

McMahon began working at JP Morgan in July 2012, before inquiries from Congress prompted the ATF to cancel his approved leave.

The inspector general's probe said McMahon's supervisor, ATF Assistant Director Julie Torres, exercised "poor judgment" in approving the leave.

In a statement, Issa noted the ATF shortcomings raised by the inspector general's findings.

"This outrageous arrangement allowed an official responsible for management failures to collect a significant financial windfall he was never entitled to under even the best of circumstances," Issa said.

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