(CNN) -- The U.S. Justice Department's inspector general found 14 employees of the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Justice Department responsible for management failures in the botched "Fast and Furious" gun-trafficking operation, according to a report released Wednesday.
The inspector general's report referred the 14 for possible disciplinary action, but did not recommend criminal sanctions.
The report found that Attorney General Eric Holder was not informed of the controversial ATF operation until 2011, after the death of a Border Patrol agent ratcheted up the political ramifications of the program.
The botched investigation was designed to expose the illicit networks responsible for illegal gunrunning to Mexico. The ATF launched the Fast and Furious program in Arizona to track weapons purchases, but lost track of nearly 2,000 firearms, two of which turned up in the 2010 killing of U.S. Border Patrol agent Brian Terry.
Since then, a contentious political drama has unfolded in the wake of the program, including a contempt lawsuit against Holder.
Republicans have used the issue to attack Holder and the Obama Justice Department.
"Our review of Operation Fast and Furious and related matters revealed a series of misguided strategies, tactics, errors in judgment, and management failures that permeated ATF headquarters and the Phoenix Field Division, as well as the U.S. Attorney's Office for the District of Arizona," the report concluded.
Moments after the report was released, the Justice Department announced the departure of two employees who were faulted in the report.
Jason Weinstein, deputy assistant attorney general in the criminal division, resigned. The report said he failed to pass along key information about the flawed tactics being used in Fast and Furious.
Former acting ATF Director Ken Melson, who had already stepped down from that role but was still working for the department in another capacity, has retired.
ATF acting head B. Todd Jones said in a statement that his agency accepted the report's findings and that ATF would determine what disciplinary action may by handed down.
"ATF accepts full responsibility for its failure to exercise proper leadership and oversight of these investigations," Jones said, referring to Fast and Furious and a second, similar Bush-era program called Operation Wide Receiver.
"Combined with the lack of effective and accurate internal communication up and down the chain of command, our shortcomings led to a series of regrettable events," he said.
The report by the department's office of the inspector general was highly anticipated by both the Obama administration and its critics, and could figure into November's presidential election. Both sides released statements saying that the report's conclusions backed up their arguments.
Holder said that the conclusions were consistent with what he and other department officials have said all along. Namely, that the flawed strategies dated back to 2006, during the Bush administration, and that the department did not attempt to cover up information or mislead Congress.
Meanwhile, Iowa Republican Sen. Chuck Grassley, who brought ATF whistleblower complaints to the department's attention in early 2011, said the report "reaffirms virtually everything" that congressional investigators turned up.
But in a written statement, he said the report inaccurately lets Assistant Attorney General Lanny Breuer "off the hook" regarding a February 2011 letter to Congress that denied guns were being allowed to cross the border. Along with the statement, Grassley released e-mails he said contradict the report.
"It's clear that both the ATF and the Justice Department failed to provide meaningful oversight of Operation Fast and Furious," Grassley said. "They ignored warnings from employees, and frankly, failed to do their jobs. It took the death of our own Border Patrol agent, action by a courageous whistleblower and intense scrutiny from Congress before they even took note of what was happening under their own eyes. Even then, they wouldn't come clean with how bad it really was until after they had sent a false letter and retracted it eight months later."
Breuer acknowledged last November he had learned that guns were allowed to "walk" to Mexico, and apologized for not informing other senior Justice Department officials. The February 2011 letter to Grassley was later retracted by Justice officials.
Wednesday's report criticized Breuer and another top official, Gary Grindler, who was acting deputy attorney general when the events took place, for failing to pass along information to the attorney general and other top officials. But they remain with the department.
Rep. Darrell Issa, a leading critic of the administration on this issue, called on President Barack Obama to "step up and provide accountability" for the program.
"The Inspector General's report confirms findings by Congress' investigation of a near total disregard for public safety in Operation Fast and Furious," said Issa, R-California, chairman of the House Oversight and Government Reform Committee. Holder "has clearly known about these unacceptable failures, yet has failed to take appropriate action for over a year and a half," he added.
Holder said the report found the opposite: that the leadership did not know or authorize the tactics.
Holder had said he was awaiting the report to determine what actions to take against individuals involved in the case. Up to now, Holder has promised Congress that such "gun walking" of weapons into Mexico would never again be allowed.
A standoff over internal Justice documents erupted after the Obama administration said it was asserting executive privilege in the Fast and Furious case to shield documents that include internal deliberations traditionally protected from outside eyes.
That prompted the House to vote a civil contempt charge against Holder -- the first time a Justice Department chief has been held in contempt by Congress. Democrats protested the vote vehemently as being purely political, and the citation passed along party lines. The House took the issue to court, where it is expected to linger until well beyond November's presidential election.
Some of the documents the White House withheld under the privilege claim were included in the report. Grassley said that inclusion "proves that this subset of documents could have been released earlier," and the president "was merely thumbing his nose at Congress" before the contempt vote.