Byrne is trying to bring down Vargas and his smuggling ring and thus sent Michael Cahill undercover as a smuggler in Vargas' gang.
He doesn't initially believe that L.O.S. exists. He is ultimately unable to reach Cahill in time to back him up against L.O.S. and Vargas' gang, but Cahill is aided by John Reese and Detective Joss Carter instead.