Poospatuck reservation, the 52 acres that is home to the Unkechaug Nation, comprises approximately 250 people and boasts a booming local cigarette trade that has some very powerful people up in arms. Located in Mastic, Poospatuck is the smallest reservation in New York State and the focal point of a billion dollar legal battle. Nearly every current elected official and state agency in New York—from Mayor Bloomberg to the U.S. District Court—is angling to curb this trade and send a message to all tribal leaders that the free ride on Tobacco Road is over.
While Poospatuck presents several unique challenges, the debate over tobacco sales on Indian land has raged for decades throughout the United States. For many Indian nations, it is the primary source of revenue, save for the few tribes that have secured the right to run extensive gambling operations. The standoff between New York State and the tribes within its borders boils down to whether or not the tribe is required to collect state imposed taxes from non-native customers from off the reservation.
Put simply from the consumer perspective, it’s less than five bucks to buy a pack of brand name cigarettes on the reservation. The same pack will be more than $8 at a local convenience store and more than $10 in the city. The state contends that the law is clear regarding this issue and that the nations are required to collect and remit taxes on tobacco sold to non-natives. The Indian nations contend that the tribal leadership, not the state, is a sovereign body with the right to determine economic policy on tribal land. The essence of the legal impasse comes down to the definition of sovereignty.
The concept of hundreds of disparate conquered nations within our borders continues to be a haunting issue for both the conquered and the conqueror. Although the U.S. government has struggled for years to define sovereignty as it relates to tribal land, the Supreme Court of the United States has repeatedly ruled that Indian Nations are “quasi-sovereign” nations recognized by, but not governed by, the Constitution of the United States. The only exclusion noted by the Supreme Court is to prohibit tribes from negotiating treaties with other nations. Theoretically, all other matters are exclusively tribal. In practice, however, this is rarely the case.
In the case of Poospatuck, a great deal is at stake on both sides of the debate. Chief Harry Wallace of Poospatuck contends that they have the right as a sovereign nation to sell tobacco without having to collect and remit the taxes levied on all other tobacco retailers in the surrounding jurisdictions. Critics of Wallace and Indian policy in general say this provides a severe competitive advantage to Indian nations over licensed retailers and circumvents the collection of meaningful tax dollars. On the surface it seems hard to argue with New York State’s logic that $1 billion annually is robbed from state coffers. But like everything regarding U.S. and Native American relations, it’s not that simple.
To fully comprehend this issue, consider Poospatuck in a different light. New York can craft any law it desires regarding these territories and it simply doesn’t matter because these are separate nations no different than France, North Korea or Latvia. You don’t have to like this fact to recognize that it is indeed a fact.
The only reason many tribal lands work in conjunction with neighboring municipalities is that their economic survival depends upon it, and striking a tenuous deal with the conquering nation is simply a means of survival. What’s happening on Poospatuck, however, is jarring because their economic survival no longer depends upon our welfare, hand-outs and menial jobs. Here’s the bottom line about this debate: None of this was a real issue until our government ran out of money. So while municipalities throughout New York are struggling to maintain solvency, Poospatuck is gaining momentum and making a handful of Indians really rich. For several cash-strapped and desperate public officials, this economic shift is wholly unacceptable.
Leading the charge of outspoken public officials is none other than Gotham’s anti-smoking billionaire mayor, Michael Bloomberg. Now that the city is bankrupt Bloomberg is circling around these tribes like Gollum in Lord of the Rings, spitting and frothing about while trying to reach into their pockets and grab the brass smoke ring. The rest of the state isn’t far behind. New York, like so many other states, is in dire financial straits because it blew through surplus money in the good times and didn’t prepare for a rainy day. Here’s where it gets good: A good chunk of that rainy day surplus was from the tobacco settlements that required cigarette manufacturers to pay billions of dollars to several state governments that joined in the lawsuit.
This windfall for the individual states was supposed to be used to offset healthcare costs theoretically associated with ailments resulting from tobacco use. New York State did what it does best, however, and leveraged the future payments from the settlement by taking the money in advance through a state-controlled corporation that issued bonds that were securitized by the future payments of the tobacco companies. In theory, everyone was a winner. The state got its money early, Wall Street placed its grubby paws on a new investment vehicle and private investors were able to profit on the misfortune of the tobacco companies that secured the debt.
But here’s the catch: New York blew all the money, maintained a pattern of reckless spending and found itself on the wrong side of one of the worst recessions in American history. To make matters worse, local governments in New York also ran out of money along the way. Together with the state they hiked taxes on cigarettes to balance their budgets; in doing so they artificially caused the price of tobacco to skyrocket and effectively created a black market for cigarettes. Embarrassed and out of money, the government is cracking down on the black market it essentially created in the hopes of getting its money back.
The only problem is they have no right to go and get it.
Long before the cigarette industry was booming, Indian nations sold cigarettes as a means of survival. Now they are being persecuted for succeeding at this endeavor. But the very unsympathetic status cigarettes hold in our society and the issue of bootlegging cast a dark cloud over the critical issue of taxation and places in doubt the inalienable right of self determination they should be otherwise enjoying. But instead of working with tribal leaders, the FBI, Suffolk police and the Suffolk District Attorney have chosen to perform hostile search and seizures on reservation land.
This isn’t Waco. These are sovereign tribal lands belonging to a people here long before we were. The opportunity to work together exists once these agencies figure out that collecting taxes on cigarettes sold to natives and non-natives on the reservation itself is simply off the table. Only then can both sides engage in meaningful dialogue and tactics that will curtail illegal bootlegging on non-tribal land.
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