Secret ATF account paid $21K for NASCAR suite

Justice Department criticizes lack of oversight on funds.

Agents WASHINGTON — with the Bureau of Alcohol, Tobacco, Firearms and Explosives used a secret, off-the-books bank account to rent a $21,000 suite at a NASCAR race, take a trip to Las Vegas and donate money to the school of one of the agents’ children, according to records and interviews.

Agents also used the account to finance undercover operations around the country, despite laws prohibiting government officials from using private money to supplement their budgets, according to current and former government officials and others familiar with the account.

The revelations highlight the lax oversight at the ATF that allowed agents and informants to spend millions while avoiding the normal accounting process. The Justice Department’s inspector general, who is investigating the secret account, criticized the ATF recently for mismanagement and said the agency did not know how many informants it had or how much they were paid.

The New York Times revealed the existence of the bank account in February, prompting an investigation by the House oversight committee.

The Justice Department, which oversees the ATF, has denied any wrongdoing, and the department has refused to say whether the bureau continues to operate such secret accounts, which the government called “management accounts.”

The ATF has also refused to say who authorized the account, which was created by agents based in Bristol, Virginia, who were investigating tobacco smuggling. One government official said the bureau regarded the account as a hybrid of government funds and private money, a combination that is not authorized under federal law. Ryan Kaye, an ATF supervisor, is quoted in public court documents as saying the agents received “verbal directives” from unidentified officials at headquarters to open the account.

The arrangement dates back at least to 2011, court records show. Records show that a pair of ATF informants who ran a tobacco warehouse in Bristol, Jason Carpenter and Christopher Small, opened the account. The informants helped the bureau’s investigations into tobacco smugglers, who move cigarettes across state or national borders to avoid taxes.

Sometimes, the ATF agents used the money for expenses that normally would be paid from the agency’s own budget, such as leasing cars and renting warehouses under fake names to conceal the government’s involvement in undercover investigations. The account also helped pay for a trip to a tobacco convention in Las Vegas in early 2012, according to a former law enforcement official and a former industry official. The officials said the ATF supplemented its travel budget with money from the management account.

Current and former government and industry officials who discussed the case did so on the condition of anonymity because the Justice Department has argued successfully to keep nearly all the records in the case sealed.

The Times has been fighting since last summer to make the documents public.

Other expenses, such as renting a 16-person suite at Bristol Motor Speedway in Tennessee, had no obvious connection to law enforcement operations. ATF agents, along with some community members, used the suite in 2012 for the Irwin Tools Night Race, a NASCAR event, according to two people who worked closely with the bureau at the time. A receipt obtained by The Times shows the suite cost $21,000.

Agents also donated money from the account, according to documents and interviews, including thousands of dollars to the high school and volleyball team of the daughter of an ATF agent in Bristol.

The agent, Thomas Lesnak, is now retired and did not respond to messages seeking comment. He has previously dismissed suggestions that anything was done improperly.

ATF agents also had their credit card bills paid with money from the account, according to a former law enforcement official and two former industry officials.