That’s not an ATF badge. ATF ceased to be part of the Treasury Dept. when DHS was created back in 2002, and ATF was put under the DOJ.
There remains a section within Treasury for collection of federal taxes on alcohol and tobacco, known as Alcohol and Tobacco Tax and Trade Bureau.
Oh, okay, I just re-read the story and realized that the boating incident happened in 1992, so it makes sense now.