What happened was that Cliven Bundy (who I'll again say is a foolish man and who I don't sympathize with as regards the outcome of that standoff) claimed as a defense that they'd armed themselves because they believed the government was surveilling them and had also positioned snipers around them.

As it turns out, the evidence withheld by the assistant US attorneys prosecuting the case revealed that, yes; the government was indeed surveilling the Bundys and had also indeed positioned snipers around them. One can see how a prosecutor might not want that evidence to end up in the defense's hands, nor be presented to a judge or judge and jury.

No one from the government, as far as I can tell, willfully and knowingly fabricated any evidence in order to ensure the Bundys would be convicted. What they did was withhold the evidence that might convince a finder of fact and/or a jury the Bundys had taken appropriate defensive steps to safeguard themselves from possible improper use of deadly force by the government. I believe the government was maintaining that it was solely the actions of the Bundys in arming themselves when there was no perceived threat by the government that lead to the outcome of that standoff, and that they should suffer legal sanctions for it.

Certainly, what the US attorneys did concerned the trail judge enough that she'd already declared a mistrial in the case. Yesterday's actions regarded whether the case would be dismissed with or without prejudice (the latter would have allowed the government to charge the Bundys on the same counts yet again) and whether or not any retrial should ensue. The judge's action in dismissing the case with prejudice has pretty much put an end to the Bundy saga, at least for the government and any hoped-for prosecutorial efforts.

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"Politics is just show business for ugly people."