DEPARTMENT OF THE TREASURY
                        WASHINGTON, D.C.  20220

Office of                       January 7, 1999
Inspector General

Mr. Eric M. Larson
P.O. Box 5497
Takoma Park, Maryland  20913

Dear Mr. Larson:

Mr. Williams has asked me to respond to your letter of
November 5, 1998.  In that letter you expressed concern that the
previous Inspector General, Valerie Lau and others may have tried
to compromise a congressionally directed audit of the firearm
registration practices of the Bureau of Alcohol, Tobacco and
Firearms (ATF).  Since my office oversaw the work, I assured
Mr. Williams and wish to assure you that no effort to influence
the audit occurred.

When former Inspector General Lau received the request from
Chairman Dan Burton, House Committee on Government Reform and
Oversight, it was referred to my office.  We initiated a review
to specifically address the allegations made in your April 1997
testimony.  We issued that report on October 26, 1998.  Although
we did not substantiate any misconduct or violations of law on
the part of ATF employees, we did discover that there were
potential weaknesses in the controls over the administration of
the National Firearms Registration and Transfer Record.  We
subsequently initiated a separate audit to address these
weaknesses and made recommendations to ATF that would help
correct them.  This audit was just completed and a report was
issued on December 18, 1998.

On January 6, 1999, we submitted the reports to Congressman
Burton.  These two reports together provide a complete objective
assessment of the issues raised in your April 1997 testimony.

page 2 - Mr. Eric M. Larson

I hope this satisfies your concerns, and clarifies that this
office did not in any way compromise the review requested by
Chairman Burton. if you have any further questions, please call
Roberta N. Rickey, Director, Program Audits at (312) 886-6300,
extension 118.

                        Sincerely,

                        (signed---Dennis S. Schindel)

                        Dennis S. Schindel
                        Assistant Inspector General
                                for Audit

---------------------------------------------------------
        Eric M. Larson
        P.O. Box 5497
        Takoma Park, Maryland 20913
        (301) 270-3450
        larsone@erols.com

Mr. Dennis S. Schnindel                         January 22, 1999
Assistant Inspector General For Audits
Department of the Treasury
Office of Inspector General
1500 Pennsylvania Avenue, N.W.
Washington, D.C.  20220

Dear Mr. Schindel:

This is in reponse to your letter of January 7, 1999, regarding the
recent audit work your office performed on the National Firearms
Registration and Transfer Record (NFRTR), in response to both my recent
allegations and a request by Chairman Dan Burton, House Committee on
Government Reform and Oversight.

Chairman Burton asked me to review both reports, and I hand-delivered my
review on Tuesday, January 19th.  A copy of the review is enclosed for
your information, and the Committee has no objection to me sharing my
review with others.  I suspect my review, and both IG reports on the
NFRTR, will soon be up on the Internet.

Your office did not fully substantiate all of my allegations, because
your office did not fully investigate them; however, your office did find
there are errors in the NFRTR, evidence that documents were destroyed,
and that there are missing documents.  I tried to be easy on you on
allegation #4 because the IG cleared some things up, but of your sample
of 70 records, the report states that documentation for 17 of them could
not be found, and that works out to a rate of 25 percent by my
calculator, not reassuring.  Your office also did not give the NFRTR a
clean bill of health, and I suspect that fairly soon the accuracy and
integrity of the NFRTR will be successfully challenged in court.  Given
that the Government is using an admittedly inaccurate data base to
prosecute folks on an up to $10,000 fine and 10 years in prison basis,
the IG's failure to ascertain the NFRTR's accuracy, as well as that of
the searches to support criminal prosecutions, I think that a very large
problem is looming on your horizon, and that it ought to be corrected as
soon as possible.

        Very truly yours,

        (signed---Eric M. Larson)

cc: The Honorable Dan Burton