The Sting and the Overreach: From Kansas City to Tonawanda, Oshweken, Yakama and More

From the LTN Column in the August 21, 2013 edition of The Two Row Times.

Last week, a 43-count federal indictment was filed in the Western District of Missouri. It named 18 defendants and while only a handful of were Native, this indictment and the “sting” that brought it is ALL about us. The elaborate Bureau of Alcohol, Tobacco and Firearms (ATF) sting set up in Kansas City, Missouri was all about selling cigarettes to Native retailers on Native lands within the imaginary borders and, even more imagined, control of New York State.

For more than 30 years, Native retailers have been selling tobacco products on Native lands free from New York State’s regulatory control, including the State’s sales and excise taxes. Compliance with federal excise tax, for the most part, has been met and is not at issue with this indictment. Of course, this specifically raises the question about why, i.e. if the federal taxes are paid, is the ATF mounting a sting over state tax? Herein lies the crux and significance of this case.

The Contraband Cigarette Trafficking Act (CCTA) is really being put to the test here. This law basically states that ANY tobacco products requiring state tax (and the stamp indicating proof of that paid tax) found in a state requiring such a tax and stamp is deemed by the federal government as “contraband” if that tax is not paid (and affixed with the proper tax stamp) UNLESS the product is in the possession of an AUTHORIZED dealer or wholesaler. Of course, Native wholesalers, distributors and retailers do not qualify as AUTHORIZED dealers. The facts that New York State knows – that their taxes cannot be enforced on our lands and that THEY have never established that “unstamped” product on Native land is “illegal” or that Native businesses do not require State “authorization” – are completely glossed over for one reason: PRECEDENT.

Now while the product used in this “sting” was not a Native-made product, establishing that a product brought onto our lands without a NYS tax stamp can be deemed unlawful and to have that hold up in court is HUGE. Let’s be clear: NONE of the cigarettes on the shelves in Seneca Territories, Tuscarora, Tonawanda, Cayuga, Onondaga, Oneida, Mohawk or our brothers on Long Island have NYS stamps on them. NONE! And in the more than 30 years that Native smoke shops have existed, never has a stamped product been on our shelves. Now New York State has, after many years, cleared enough of their own legal hurdles to finally cut off their “state licensed wholesalers” (state stamping agents) from selling us unstamped product, a practice that existed for almost all of those 30 years, but state laws stop well short of establishing that our sales and, likewise, our acquisition of unstamped cigarettes is a crime. In fact, to the extent that “premium brands” or non-Native brands have been made more difficult for retailers to purchase, Native brands have pretty much successfully replaced them and New York State finds itself wrestling with this “problem.”

So now here come the FEDS! By luring a few Native retailers with truckloads of hard-to-come-by Marlboros and Newports from out of state, the ATF hopes it can assert federal law to enforce state law that otherwise cannot be established on our lands, PARTICULARLY AS IT APPLIES TO NATIVE BRANDS!

Even as this case was building, New York State Attorney General Eric Schneiderman had filed lawsuits to block Native brands from entering the State en route to Native territories. So there you have it! This entire elaborate scheme has been developed to crush Native-to-Native commerce, a trade that the State and Feds know they have no business in.

No matter where you stand on tobacco use or “wealthy smoke shop owners,” this is an affront to all of us. The two targets of the NYS Attorney General are King Mountain brand of the Yakama Nation (located in what is now Washington State) and Seneca brand of Grand River Enterprises in Oshweken. In my opinion, this is the SOVEREIGNTY fight of our time – not because of cigarettes but because of trade. We need to realize that it doesn’t matter if it is the Conservatives in Canada or the Democrats (Liberals) in the U.S. We are under attack. When the U.S. federal government under Democrat Barack Obama throws this kind of support to New York State under Democrat Andrew Cuomo to shut down one of the few bright spots in the otherwise dismal economies of our territories, it is time to respond. We will always fight for our land and water – a fight that will be ongoing – but when will we finally draw the line on oppressive governments interfering with a basic right to trade and sustain ourselves? It is time for ALL of us to respond.

Tobacco was always ours and it was always a significant element of our trade. It was this way long before the white man bastardized its use and its form, turning it into a product of addiction, politics and massive wealth opportunities for them. The continuous attempt to criminalize our participation in a trade that they misappropriated from us and almost completely dominate throughout the world is as incredible as it is hypocritical.

Almost as a side note and for any of those within our own ranks that harbor ill will toward private sector development within our territories and are under the belief that all private enterprise is evil and unlawful, perhaps I should mention a few more details of this indictment and just who is in the tobacco trade on our lands. One of those listed in the indictment is the operator of the Tonawanda Seneca Nation Enterprises (TSNE). The TSNE shop, also known as Jan’s Smoke Shop, is not a private enterprise. It is one of the much-touted “lawful” Haudenosaunee businesses that are distinguished from private entrepreneurs by the Grand Council of the Haudenosaunee. This shop’s premier brand is the Seneca brand of Grand River Enterprises, one of the same brands that are being targeted in this grand scheme. Seneca brand is the most popular Native brand not only for the privately owned shops but also for the Onondaga’s smoke shop and Seneca Nation’s “One Stops” and Oneida Nation’s “Sav-on” stores. That’s right, the “Central Fire” of the historic and legendary Haudenosaunee depends on this product from Oshweken. Even beyond these specific “Nation” enterprises, the Seneca Nation and Saint Regis Tribe in Akwesasne also pull millions of dollars into their general funds from the private sector smoke shops. Seneca, King Mountain and a host of other Native brands fund both “Traditional” Native governments and “Elected” ones.

But let’s get back to the individual indicted this past week as the operator of the TSNE’s smoke shop. This is a Nation employee and is actually forbidden from paying state tax according to “A Special Report by the Haudenosaunee on some of the primary aspects of Law, Sovereignty and Governance” (March 1998).

“The Haudenosaunee have never accepted, nor do we intend to accept, the jurisdictional authority of New York State…to levy sales and excise taxes upon our people or any transactions that are conducted within the territorial boundaries of our member nations.”

Will this loyal Tonawanda woman be hung out to dry and “take the rap” for the only enterprise of the Tonawanda Seneca Nation? Will the Tonawanda Chiefs allow this (or recommend it to shield them)? Will the Tonawanda people allow this? Will the Haudenosaunee?

Whether it is a Nation enterprise or private business, the sovereignty of all of us is being violated. The Feds imposing state law on any of us, whether we are in Yakama, Oshweken or Tonawanda is wrong and must be fought. Most on the list of those indicted will ultimately plea out to make a deal. Many did before the indictment even came down. An individual plea agreement is one thing but a court ruling on this must not stand. The ripple effect will cripple what little economies we have and will kill many opportunities we have yet to even explore. Protecting Native-to-Native trade is not an option – it is an imperative.