This is long. Sorry not sorry.
Part 1: Lets get the intro out of the way for the newbies and short of memory:
Fast and Furious was an ATF (Part of the justice department) operation that approved sales to people that were buying guns on the behalf of mexican drug cartels. Some store owners were in on the operation, some sales were proceded over the object of store owners.
Fast and Furious was an evolution/continuation of "Operation Wide Reciever", which was an ATF program that coordinated with Mexican authorities to track the shipments and bust the straw buyers and their handlers shortly after they crossed the border. Operation Wide Receiver was successful, but only somewhat - you busted a lot of buyers (who often had no cartel affiliation) or low-level people working for the cartels. They wanted bigger fish, and do that, you'd have to allow those low-level buyers to deliver the weapons up the chain.
Part 2: This is where Fast and Furious came in, and where the problem started.
The primary issue with F&F can be summed up very quickly: Lack of coordination. Specifically there was zero coordination with Mexican authorities.
There was a legit reason for this, which was the Mexican police (for a number of reasons) wanted to keep doing the low-level busts. They were flashy & made good press. These longer operations weren't like that, and they also ran the risk of angering the Cartels. The other reason was information security - you had to coordinate only with vetted Mexican agents, or things would likely leak the cartel. The ATF would also need to coordinate with FBI, customs, etc. Also with various Justice Department offices to help the Mexicans & possibly extradite some of the targets to the US to face charges here.
None of this happened.
None of this happened for several reasons. One of the documented reasons was a power struggle in the Albuquerque ATF office. Two field agents thought the program was a waste of time and hated their new boss, and basically did everything they could to make sure it wasn't a success. These agents never were punished for F&F, but were reprimanded for other instances of "insubordination". There was a whistle blower in the ATF office. They didn't like the office head either, was afraid of retribution from the ATF, so wrote a memo to the Justice Department about the extreme disfunction of the Albuquerque ATF office.
It is known that that a mention of memo made it into a brief to Eric Holder.
The office head also wrote reports that were included in breifings to Eric Holder. This program netted pretty much zero arrests, but there was references of how many guns and how many buyers had been allowed accross the border. Attorney General Eric Holder was provided this information. Whether he read it or not is not known.
What is known is Eric Holder's stance on guns:
Part 3: Parts 1 & 2 are provably factual. Part 3 is where we dip into various level of speculation.
When Mexico finds guns they can't ID, they send the serial numbers to the US and basically asked "hey, are these yours?". These gun requests were being mentioned in articles where "98% PERCENT OF GUNS IN MEXICO CRIME COME FROM US!" - what they actually meant was 98% of the time when the Mexican authorities thought a gun came from the US, they were right. But that wasn't the majority of all seized weapons.
This serial number tracking was how Fast and Furious got green-lit with zero mexican coordination. The plan was to use these serial number requests to track the movement of guns until the Mexicans could be brought on board. But no one made any efforts to bring the mexicans on board.
Until Terry was shot, it looked like gun crime in Mexico would be used to restrict or ban gun sales in the US. Obama mentioned it in speeches, it was a good slow burn work they were doing. Then Terry got shot, and whole program got thrust front and center when people started wondering where that cartel gun came from.
The best part of THAT is the questioning originated to try to make gun sellers look bad by selling to obvious criminals. It just didn't turn out that way.
What seems likely is that Eric Holder knew about a program that would make gun sellers look bad, and allowed it to continue because it could be used to advance his agenda of gun control. Obama almost assuredly never knew about this - even if Holder was up to nefarious shit, he would not tell Obama-senpai; not only to keep working on his personal agenda, but also to shield him if it did blow up. The ass-grabbing scramble in the executive after the lid was blown off is pretty good evidence of being caught completely pants-around-ankles.