(NBC) -- There is new fallout related to the botched gun trafficking probe known as "Operation Fast and Furious".
"Seriously flawed and irresponsibly supervised" is how a report describes the tactics used by the Justice Department.
The internal report says ATF agents watched as 2,000 guns purchased in Arizona were smuggled into Mexico.
Many were lost and turned up at crime scenes.
Two of them were used in a shoot-out that killed Border Patrol Agent Brian Terry.
"The decision that justified what was going on just failed in the primary mission of law enforcement, which was to protect the public," said Justice Department Inspector General Michael Horowitz.
Horowitz detailed overlooked memos, unscrutinized reports and senior officials never informed about the real premise of Operation Fast and Furious.
14 people now face disciplinary action.
Two have stepped down.
Republicans had held Attorney General Eric Holder in contempt on accusations he covered up the operation, but Horowitz's report cleared Holder, who he says didn't know what was going on.
"We struggled to understand how an operation of this size could not have been briefed up to the AG, and it should have been, in our view," Horowitz said.
President Obama reacted To the report during an appearance on Univision, saying, "I'm responsible and my key managers are responsible for holding those people accountable and making sure they are fired as they do dumb thing, and fixing system so it doesn't happen again."