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Native American Cigarette Industry is Being Crushed

Government and Big Tobacco make Native Americans the low man on the totem pole


Over time, a sea of white faces pushed deeper and deeper into the country—slowly at first, then like a dam bursting, they rushed through the forests and across the plains. Pretty soon they were everywhere. They brought machines and ushered in the Industrial Revolution. Gradually, the skies turned gray, the waters turned brown and the earth lay fallow.

This part of the story took 400 years. The next part took much less time.

Native Americans became like prison inmates adapting to life on the “inside.” By the mid-20th century the Native American population living on reservation land was among the poorest on Earth. The game was long gone and the earth and seas were poisoned. Fast food, low-wage jobs and hustling were part of the daily routine. If you stayed, you hustled. And you probably drank. If you were a woman, there was a one-in-three chance of being raped in your lifetime.


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JC Seneca

This was life on “the res” and for many tribes, it still is.

For the most part, reservations are rural ghettos, forgotten wastelands with few opportunities to get ahead. This concept of “getting ahead” in America usually starts very simply. Find a job. Buy a home. Take out a home equity loan to start your business. As the business grows, you have the option of paying off that loan and securing business financing. But this is precisely where the Indian economic dream ends.

Because reservation land cannot be owned by anyone, the land and any structure on it cannot be leveraged. Put simply, if it cannot be repossessed, you can’t take out a loan on it. Therefore, even the most industrious Indian entrepreneur has been unable to tap into the source of financing that is behind nearly every great American story of growth and industry.

As an attorney, Chief Wallace was able to make a living practicing in New York City and save enough to open a business on the reservation. He credits his business savvy to this experience, saying, “I always worked for myself as a lawyer and not in a firm.” But expanding his business was more challenging. “I have tried many times to get credit. When [lenders] realize they can’t secure my building, the conversation always ends there.”

Then along came the ’80s and, for some tribes, everything changed.

The Indian Gaming Regulatory Act of 1988 articulated a one-size-fits-all approach to establishing gambling on Indian lands. For some tribes gambling brought indescribable wealth. For others it was marginally effective. For most it had little impact because their remote locations made it nearly impossible to draw large enough crowds to ensure profitability.

Other tribes, particularly in western states, found economic success by exploiting the natural resources beneath reservation lands. In one of the more ironic twists of fate, the barren lands turned out to be more resource rich than anyone would have anticipated. But just as selling cigarettes and running casinos present moral challenges, blasting apart the earth to retrieve fuel for an increasingly industrial world presents an ethical challenge to a population long considered to be stewards of the environment. But when faced with third-world poverty and few prospects for a better life, you do what you have to do.

Of all the paths that lead out of poverty, selling cigarettes became by far the most consistent and profitable trade for most reservations.

Tobacco Wars: In the Trenches

In January 2009, NYS Assemblyman Michael Benjamin (D-Bronx) floated a bill to remove “the Poospatuck Indian Reservation from being recognized as an Indian Tribe in NYS.” Benjamin introduced the legislation “in response to a New York Times investigation of the Poospatuck Indian tribe, which seems to be nothing more than a criminal enterprise.” When I visited Wallace late last year, he had choice words for Benjamin, calling him “a political hack whose premise is based on newspaper articles. You don’t deserve the seat you hold. No wonder the state is fucked up if you’re indicative of the talent that emanates from that office.”

Richard Nephew, co-chair of the Seneca Nation of Indians Foreign Relations Committee

But people like Benjamin are more of an annoyance than the gathering storm of deadly serious lawsuits that Poospatuck finds itself defending. In 2009, Judge Carol Amon of the U.S. District Court for the Eastern District of New York issued a ruling requiring Poospatuck to pay taxes on all cigarettes sold to non-natives from reservation smoke shops. Amon essentially ruled that Poospatuck could not claim protection as a sovereign entity.

With the Amon decision on appeal, the tribe caught a break shortly thereafter when Judge Kiyo Matsumoto, also of the Eastern District, issued a vastly differing opinion on a separate suit brought by Gristedes. Matsumoto found that the Unkechaug people of Poospatuck met the burden of proof of establishing that they are legally recognized as a sovereign tribe by federal standards. Although this is different than federal recognition by the BIA, for Poospatuck it is just as powerful and has provided temporary cover. While Wallace is confident that the judicial system will ultimately clear Poospatuck of the immediate hurdles, the fight is taking its toll.

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