From CBS News:

There’s a new twist in the government’s “gunwalking” scandal involving an even more dangerous weapon: grenades.

CBS News investigative correspondent Sharyl Attkisson, who has reported on this story from the beginning, said on “The Early Show” that the investigation into the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)’s so-called “Fast and Furious” operation branches out to a case involving grenades. Sources tell her a suspect was left to traffic and manufacture them for Mexican drug cartels.

Police say Jean Baptiste Kingery, a U.S. citizen, was a veritable grenade machine. He’s accused of smuggling parts for as many as 2,000 grenades into Mexico for killer drug cartels — sometimes under the direct watch of U.S. law enforcement.

Law enforcement sources say Kingery could have been prosecuted in the U.S. twice for violating export control laws, but that, each time, prosecutors in Arizona refused to make a case.

Grenades are weapons-of-choice for the cartels. An attack on Aug. 25 in a Monterrey, Mexico casino killed 53 people.

Sources tell CBS News that, in January 2010, ATF had Kingery under surveillance after he bought about 50 grenade bodies and headed to Mexico. But they say prosecutors wouldn’t agree to make a case. So, as ATF agents looked on, Kingery and the grenade parts crossed the border — and simply disappeared.

Six months later, Kingery allegedly got caught leaving the U.S. for Mexico with 114 disassembled grenades in a tire. One ATF agent told investigators he literally begged prosecutors to keep Kingery in custody this time, fearing he was supplying narco-terrorists, but was again ordered to let Kingery go.

The prosecutors — already the target of controversy for overseeing “Fast and Furious,” wouldn’t comment on the grenades case. U.S. Attorney Dennis Burke recently resigned and his assistant, Emory Hurley, has been transferred. Sources say Hurley is the one who let Kingery go, saying grenade parts are “novelty items” and the case “lacked jury appeal.”

Attkisson added on “The Early Show” that, in August, Mexican authorities raided Kingery’s stash house and factory, finding materials for 1,000 grenades. He was charged with trafficking and allegedly admitted not only to making grenades, but also to teaching cartels how to make them, as well as helping cartel members convert semi-automatic rifles to fully-automatic. As one source put it: There’s no telling how much damage Kingery did in the year-and-a-half since he was first let go. The Justice Department inspector general is now investigating this, along with “Fast and Furious.”

 Sharyl Attkisson has indeed been on this story from the beginning, as have the folks at Sipsey Street Irregulars and David Codrea with Examiner.  This isn’t the first mention of explosive ordnance in the context of Fast and Furious, but the magnitude of the scandal in this report is important.

It’s also important to note that, unlike the characterizations in the MSM (other than CBS) and even sometimes at one of my favorite hangouts (reddit guns), this scandal has nothing whatsoever to do with incompetence or negligence.  Even the term malfeasance isn’t quite appropriate.  All of these terms imply that the ATF was simply too stupid to pull off a sting that was ill-conceived from the beginning and should never have been tried.  Folks at the ATF aren’t stupid.  The real story, as so aptly pointout out by Bob Owens, is that the ATF knew that they could never track these weapons across the border, as they have no jurisdiction in Mexico, no intelligence, no ability to follow the firearms themselves, and no confidence in the ability of the Mexican authorities to do any of this either.

This operation wasn’t an instance of stolid neglect or incompetence.  What we’re witnessing isn’t a bug in the operation.  It is a feature.  And now we see that one aspect includes knowingly allowing the trafficking of explosive ordnance.  It isn’t just the coverup that is the problem here.  This is clearly a violation of Arms Export Control Act, and many other statutes.