Lawmakers Claim Justice Inspector Obstructed Probe Into ‘Fast and Furious’

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Attorney for Key Fast and Furious Witness Defends Client

Exclusive: Extended interview with Larry Gaydos, attorney for gun store owner Andre Howard

The inspector general of the Department of Justice undermined and obstructed a congressional investigation by releasing secret tape recordings that corroborate allegations of misconduct in "Operation Fast and Furious," according to a letter written by Rep. Darrell Issa and Sen. Charles Grassley.

The two lawmakers leading the probe into the Obama administration scandal claim Justice Inspector General Cynthia Schnedar compromised their investigators' ability to get to the truth and potentially prosecute those responsible for selling thousands of weapons to the Mexican drug cartels.

Schnedar failed to even listen to the recordings before handing them over to the actual targets of the investigation, the letter alleges.

"Each of these disclosures undermines our ability to assess the candor of witnesses in our investigation and thus obstructs it," they wrote in a letter dated Tuesday. "Moreover, your decision to immediately disclose the recordings to those you are investigating creates at least the appearance, if not more, that your inquiry is not sufficiently objective and independent.

"It appears that you did not consider the significant harm that providing these recordings to the very individuals under investigation could cause to either our inquiry or your own. You did not consult with us about the recordings even though the congressional inquiry and reactions to it are discussed at length."

The OIG argues that under discovery rules it is required to turn the tapes over to the U.S. Attorney's Office.

The tapes Issa and Grassley refer to were recorded by Andre Howard, owner of the Lone Wolf Trading Co., after he suspected the Bureau of Alcohol, Tobacco, Firearms and Explosives was lying to him about the guns they recruited him to sell to buyers of the Sinaloa Cartel.

On two occasions Howard taped Hope MacAllister, the lead agent in the Fast and Furious case.

Dallas lawyer Larry Gaydos, who represents the Lone Wolf Trading Co., claims Howard was trying to get MacAllister to implicate herself and the ATF in the illegal gun-running scheme.

"He became very suspicious and in his own defense would tape key conversations with Ms. MacAllister and try to get her to make admissions about the truth of the matter," said Dallas attorney Larry Gaydos. "Andre was trying to get her to admit that indeed they let guns go to Mexico."

Howard has become a key witness in the congressional investigation of the Department of Justice and its alleged cover up of Operation Fast and Furious. The Justice Department has repeatedly said it did not allow guns -- purchased under its direction and authority -- to reach Mexico.

The facts in the case suggest otherwise, but the agency continues to deny it and refuses to turn over pertinent documents to Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, and Grassley, R-Iowa, ranking member of the Senate Judiciary Committee.

"Andre was acting under the direct supervision of the Department of Justice and ATF. And he thought he was making a difference and that these people were being arrested and there were going to be indictments and that there were going to be prosecutions," Gaydos told Fox News exclusively on Tuesday.

"He is appalled at the position being taken by the Department of Justice and the lack of candor and the lack of cooperation with Congress. He wants the truth to come out for the American people and the Terry Family."

Howard is not alone in his regret. Speaking in reaction to the tapes Tuesday was ATF agent and whistleblower Larry Alt, who has never spoken publicly about his opposition to the case and the retaliation he has suffered as a result of it.

"Agent Terry's death brought just a tremendous amount of, I guess, regret and sorrow, disappointment, disgust to myself, to other members of the group. I can't express enough--I've never had an opportunity to publicly express condolences to the Terry family," Alt told Fox News. "I'm almost speechless when it comes to that."

Alt stepped forward after hearing MacAllister disparage his wife and family on the tapes. He felt it was necessary to defend them, and his own reputation. A decorated soldier and police officer, an instructor at the ATF academy, Alt says he and fellow whistleblower John Dodson were transferred to dead-end jobs after standing up to Agent-in-Charge Bill Newell. The ATF in Phoenix and U.S. Attorney's Office in Arizona then attempted to conceal the role they played in directing area gun dealers to sell weapons to buyers the agency knew were breaking the law.

"We were transferred from the group. We were placed in positions away from the investigation itself, denied access to the investigation," said Alt. "I would view that as a measure of control and if you want to call it a cover up, that would be an accurate statement."

Howard made the tapes in March 2011 after a meeting he and his attorneys held with federal officials. In that meeting, Assistant U.S. Attorney Emory Hurley continued to insist the guns Lone Wolf sold were stopped and seized before reaching Mexico.

But ATF officials are quoted in a Washington Post article and the Spanish language daily La Opinion saying just the opposite -- blaming Lone Wolf for "selling guns to the cartels" with no mention that Howard was operating under the federal government's direction, encouragement and approval.