Not only does King represent LI, but he’s also the chair of the House Homeland Security Committee. Instead of looking official or important, he looks like a 7-year-old about to take his first ride through Safety Town.
Petey’s Big Adventure This column is featured in the March 15, 2012 edition of the Long Island Press.
Earlier this week House Rep. Pete King (R-Seaford) uploaded a video of a ride-along with U.S. Marshals performing raids in the Bronx and Brooklyn. In the video King can be seen wearing a police jacket and following marshals who’ve starred in the reality television show Manhunters up the stairs and into a suspect’s apartment. After the bust King is heard joking with them, saying, “I got him,” then listening to an official describe kicking a suspect down a ladder during the raid.
That’s our Pete. Tough on crime. The only problem is that the filming of Petey’s Big Adventure is technically against the law.
The video began circulating on the Web after a story first appeared on the political website Talking Points Memo. According to the story, King’s people took the video down from YouTube, then reposted an edited version later in the day. TPM reports differences between the versions saying, “Clips of an officer kicking in a door, a joke about how King ‘got’ a suspect and an officer describing to King how he kicked someone, perhaps the suspect, off a ladder were cut out.” The edited version was also later taken down.
Considering how many laws and rights we’ve thrown out the window over the last decade, this incident will likely die out in short order. And since the marshals are going after law-breaking reprobates, few will care about the violation of federal protocol. What bothers me is how ridiculous he looks on the video. Not only does King represent Long Island, but he’s also the chair of the House Homeland Security Committee. Instead of looking official or important, he looks like a 7-year-old about to take his first ride through Safety Town in Eisenhower Park.
Wearing a police jacket (illegal) when you’re not a cop while taping a bust inside a person’s home (illegal) and filming yourself joking about it (legal but stupid) is just about the last thing we need this guy doing as the head of the Homeland Security committee.
But judging by the plurality of his victories, Long Islanders love Rep. Pete King. Some people can’t seem to get enough of him. The “take no prisoners” attitude exhibited by LI’s full-time congressman and part-time pugilist whips his dedicated base into a frenzy. He is always on hand to offer commentary on global situations—particularly when it comes to military affairs or law enforcement issues.
King never backs down from conflict; if anything, he seems to invite it. He doesn’t duck reporters or shrink from controversy and has even shown a willingness to publicly battle his own party when he disagrees with its leadership.
These are sentiments that are uttered by King’s proponents and detractors alike. But while many find these qualities appealing, I consider them to be dangerous. Not because these aren’t admirable traits in a person, but because of his position in Congress. Peter King is incapable of nuance and separating his emotion from policy-making and is forever insulting various ethnic groups, sometimes entire nations. Moreover, when he speaks he insults the intelligence community by displaying a remarkable lack of, well, intelligence.
A bigger problem is that King’s bellicose nature and incapacity for subtlety makes him walking fodder for terrorists. He routinely offers bulletin board material that stokes anti-American sentiment like some loudmouth running back pumping up the opposition. Meanwhile, our servicemen and women are cracking under pressure and displaying personal anguish in horrific ways. Recent incidents reported or caught on video of soldiers burning Qorans and urinating on dead Taliban fighters—and the most recent tragedy in Afghanistan when a U.S. soldier reportedly executed 16 unarmed villagers—are overshadowing the positive work being done by our military.
Our mission in Afghanistan was supposed to be to disrupt terrorist cells, not take over the entire country and leave our men and women there to languish in an undefined, unethical and unwinnable war. This was sold as a homeland security mission, not an occupation. This is why watching the head of the House Homeland Security Committee gleefully lumber along behind U.S. Marshals on a raid while a staffer films it for YouTube is so utterly juvenile and ridiculous. Instead of monkey-fucking around in the Bronx living out some sort of unfulfilled cop-fetish-fantasy, I wish this guy would focus on getting our most precious possessions out of Afghanistan.
Tying the tubes of banks that have been, ahem, fornicating with the global economy and impregnating speculative bubbles only to watch them burst, will only hasten the inevitable seismic crash that looms around the corner. Breaking up the banks will happen one way or another…either by the law of the land or the law of nature.
The only phrase in connection with Occupy Wall Street repeated more often than “We are the 99%” is “What do they want?” The former is, of course, the rallying cry inviting citizens to join the movement against plutocracy in America—a show of strength against corporate greed and government corruption. The latter is the response to the growing number of dissenters in the “American Autumn”—criticism for their lacking a coherent list of specific demands. Personally, the only thing I find lacking is the imagination embodied by this mindless question.
The communal process of exploration and debate taking place in Zuccotti Park is like nothing I’ve ever seen. There are plenty of cogent, specific demands to be heard, but only by those who are willing to listen. A good deal of patience and a pinch of intellect are helpful because this isn’t a bumper-sticker movement and the occupiers don’t suffer fools (Geraldo) gladly.
There is no substitute for visiting the park and absorbing democracy, grassroots style. This past weekend my wife and I brought our two children with us to witness history unfolding in Manhattan, as it will someday grace the pages of a textbook, or a tablet, during their college years. With that said, allow me to indulge the frothing masses with a chunk of raw meat by examining one of the cornerstone issues behind OWS: Glass-Steagall.
Breaking the Bank: A Brief History of Glass-Steagall
In short, this was the name of the Act that prohibited commercial banks from engaging in investment-banking activities, among other things. It was established in 1933 to tame the harmful speculative behavior of an industry run amok in the early part of the 20th century; behavior largely credited for the market crash that precipitated the Great Depression. Fast forward to the waning days of the Clinton administration when the Gramm-Leach-Bliley Act repealed the meat of Glass-Steagall and cleared the way for the greatest, most rapid consolidation of banking interests and wealth in recorded history.
Reinstating Glass-Steagall is, of course, easier said than done. Technically, the mechanics of doing it are fairly simple from a structural perspective, though it would cause massive upheaval in the banking world for several years to come. What is almost beyond comprehension are the circumstances that allow banks to continue gambling promiscuously in the world markets, which is a direct result of complementary deregulatory measures, globalization and an extraordinarily loose monetary policy.
These three factors have allowed banks to engage in worldwide investment schemes using cheap, borrowed money in a manner that is both irresponsible and opaque. In other words, be careful what you wish for. Tying the tubes of banks that have been, ahem, fornicating with the global economy and impregnating speculative bubbles only to watch them burst, will only hasten the inevitable seismic crash that looms around the corner. Breaking up the banks will happen one way or another…either by the law of the land or the law of nature.
Protestors from Zuccotti Park to San Francisco are keenly aware of this reality. They have an extremely sophisticated view of the world that goes beyond what we have seen in other movements both here and abroad. It’s their appreciation for complexity and nuance that makes it impossible to translate demands into bite-sized morsels for the media to gobble up and regurgitate into the mouths of shrieking birds in the nest that many television viewers have become.
To make matters worse, our elected federal representatives have no idea how to respond appropriately to a leaderless, populist movement. Apart from some platitudinous, mealy-mouthed responses from ranking Democrats like House Minority Leader Nancy Pelosi or truculent, dismissive statements from the likes of Rep. Peter King (R-Seaford), the upper echelon of American politics is collectively clicking its heels and hoping to wake up on the farm after the storm.
But there is hope for us yet–from someplace you might not expect.
A Buckeye Bulls Eye
Ohio’s 9th Congressional District cradles the southernmost tier of Lake Erie and has been steadfastly represented by Rep. Marcy Kaptur (D) for the three decades. Despite the presence of rollicking Toledo in the westernmost part of her district, things have been pretty quiet in the ninth. Until now.
Ohio’s much ballyhooed loss of two Congressional seats due to redistricting has resulted in a mash up of Kaptur’s 9th district and the neighboring 10th represented by fellow Democratic Congressman, Dennis Kucinich. Kucinich, who has long-represented the most progressive wing of the Democratic caucus, ran back-to-back failed campaigns for the presidential nomination, but he gained more notoriety when he famously called for the impeachment of co-Presidents George W. Bush and Dick Cheney for manufacturing evidence that pushed us into war with Iraq at a cost of nearly $2 trillion, thousands of U.S. soldiers and hundreds of thousands of civilians. Somehow, this effort lacked the same traction and enthusiasm as the impeachment trial of President Bill Clinton for, well, you know.
The combination of the 9th and 10th districts has given new life to Kucinich, who might otherwise have been homeless after Ohio’s redistricting plan, as he is planning to primary Kaptur for the seat. Not to be outdone, the GOP has recruited newcomer Samuel Wurzelbacher to run on the Republican ticket. This development would be of little moment, however, if Wurzelbacher wasn’t none other than “Joe The Plumber,” who made headlines during the McCain-Obama race. Although it was later revealed that he was neither “Joe” nor a licensed plumber, Wurzelbacher became an oft-abused example of the disenfranchised workingman in America. Not content to be a footnote in American political history, Wurzelbacher now seeks to extend his 15 minutes of fame by attempting to join the ranks of hundreds of other talentless slobs who also have no business running the country.
This entire hubbub overshadows one of the most interesting things to come out of this part of Ohio. Earlier this year Kaptur revived a failed effort during the previous Congress to reinstate regulations repealed under the Gramm-Leach-Bliley Act of 1999. Kaptur’s bill, H.R. 1489, is appropriately titled “Return to Prudent Banking Act of 2011,” and it has the support of 45 sponsors, one of whom is Dennis Kucinich.
The men behind the original bill in question—Gramm, Leach and Bliley—are an interesting lot; notable because not one of them remains in government today though their impact is felt every day. Phil Gramm, one of the most loathsome scoundrels ever to hold office, is the reprobate who brought us the Enron Loophole, disastrous tax cuts that destabilized the first part of the Reagan era, and this horrendous bill that bears his name. His darling wife, Wendy, was at the helm of the Commodities Futures Trading Commission when her husband was shepherding through the bill that would castrate the agency and lead to the collapse of Enron and the birth of energy speculation. She went on to head the conservative think-tank, Mercatus Center, which is funded by the Koch brothers.
Thomas J. Bliley, former representative from Virginia, was himself a serial deregulator. Before handing America this pile of legislative crap, he authored the Telecommunications Act of 1996, which paved the way for massive consolidation in the media industry and gave us Orwellian juggernauts like News Corp. that control the airwaves today. Jim Leach, also no longer in office, is more of a curiosity. Brilliant, progressive and, at times, defiant, Leach of Iowa often stood in opposition to the increasingly conservative members of his party and was eventually ousted by a Democrat write-in candidate. Although Leach was a noted fiscal conservative, his true expertise was in foreign affairs. By attaching his name to one of the most destructive economic bills ever written, an otherwise brilliant career has been sullied in a way only Bill Buckner could understand.
So, Marcy Kaptur “gets it.” The protestors on Wall Street also “get it.” And believe it or not, many of us in the media also “get it.” If the banking system is going to collapse under its own weight and hubris because of the sheer volume of horrible investments still filtering through the economy with zero oversight, what’s the next logical play?
Apart from the obvious, which is to enact H.R. 1489, I think it’s time to grant subpoena authority to the protestors on Wall Street so they can hold those responsible for the economic crisis accountable at a people’s tribunal. Since our judicial system has failed to do that, perhaps it should be left to the people in Zuccotti Park. And just to bring things full circle to New York politics, the first star witness to be called should be Sen. Charles Schumer, poster boy for Wall Street and the senior Democratic elected representative of our state.
Time’s up, Chuck. Your silence on the Occupy Wall Street movement is deafening and incriminating.
The actions of those involved in the evolving News Corp scandal are hardly surprising given the arrogance endemic to the organization as a whole.
If it bleeds it leads. With the specter of his News Corp getting hacked to pieces by the bloody politicians who have done his bidding, Rupert Murdoch has become the bleeding headline. The miasma of Murdoch’s brand of “yellow journalism”, to quote frequent Fox News pundit, Congressman Peter King, has hung over Brits (and Yanks) like a London fog. Now it is being dispersed by blasts from the media mogul’s very own supplicants.
Hacking into the cell phone of a murdered thirteen years-old schoolgirl to make room for false hope and more expressions of family anguish seemed just the ticket to keep a titillating tabloid story going. Ditto that for terrorist bombing victims and dead soldiers. There is no place for morality and ethics when titillation, manipulation, power and profits are the four corners of your world. But sex, lies and payoffs have turned toxic for the Thunder from Down Under.
Conservative British Prime Minister David Cameron, who appointed the editor of Murdoch’s offending newspaper as his administration’s chief spokesman, was shocked, shocked by all this appalling behavior: “The people involved, whether they were directly responsible for the wrongdoing, sanctioned it, or covered it up, however high or low they go, must not only be brought to justice, they must also have no future role in the running of a media company in our country.”
On this side of the pond, King wrote FBI Director Robert Mueller, to declare, “It is revolting to imagine that members of the media would seek to compromise the integrity of a public official for financial gain in the pursuit of yellow journalism…. If these allegations are proven true, the conduct would merit felony charges for attempting to violate various federal statutes related to corruption of public officials and prohibitions against wiretapping. Any person found guilty of this purported conduct should receive the harshest sanctions available under law.”
To what degree has this gangster culture permeated Murdoch States-side operations like Fox ‘News’? Exhibit A is the Bill O’Reilly Loufa Affair. This sordid sortie was quickly covered up by $6 million in hush money Fox News president Roger Ailes purportedly paid to make one plaintiff female producer half O’Really’s age go away. Leave aside the graphic recordings of phone sex and sexual predation contained in the Verified Complaint, Index No. 04114558 filed on October 13, 2004 in the Supreme Court of the State of New York. In “Andrea Mackris, Plaintiff against Bill O’Reilly, News Corporation, Fox News Channel, Defendants,” O’Reilly rails into Mackris’ hidden microphone about what would happen should one of his victims complain:
“If any woman ever breathed a word I’ll make her pay so dearly that she’ll wish she’d never been born. I’ll rake her through the mud, bring up things in her life and make her so miserable that she’ll be destroyed. And besides, she wouldn’t be able to afford the lawyers I can or endure it financially as long as I can. And nobody would believe her, it’d be her word against mine and who are you going to believe? Me or some unstable woman making outrageous accusations. They’d see her as some psycho, someone unstable. Besides, I’d never make the mistake of picking some crazy, unstable girl like that…
“If you cross Fox News Channel, it’s not just me, it’s Roger Ailes who will go after you. I’m the street guy out front making loud noises about issues, but Ailes operates behind the scenes, strategizes and makes things happen so that one day BAM! The person gets what’s coming to them but never sees it coming. Look at Al Franken, one day he’s going to get a knock on his door and life as he’s known it will change forever. That day will come happen, trust me.”
Oh really? Whitey Bolger couldn’t have gangsta-spun it any better, though he wouldn’t have gotten caught on tape.
Implication in criminal activity has not been a disqualifier in the News Corp/Fox world. Consider Fox pundit Karl Rove, who barely escaped prosecution for his role in leaking the identity of CIA agent Valerie Plame. Rove came to his Machiavellian station as “Bush’s Brain” by cutting his spurs on political prankstering. At 19, Rove assumed a false identity to access the campaign office of a Democratic candidate for Illinois treasurer. He concocted a campaign flier on a thousand sheets of stolen letterhead promising “free beer, free food, girls and a good time for nothing” and distributed them to derelicts who showed up to disrupt the Democrat’s campaign rally. Rove’s fingerprints were all over rumors of John McCain’s POW-induced instability and black love child during the 2000 South Carolina Republican primary.
Grand Old Pranksters can track their tradition back through Lee Atwater, Donald Segretti to the godfather of modern political buggery, Tricky Dick. But it was the grand old man of yellow journalism, William Randolph “You can crush a man with journalism” Hearst who can lay claim to one of the founding principles of Fox family values when he got the boot from Harvard for a bevy of pranks including the imprinting of professors’ names inside chamber (piss) pots. Or so he claimed; turns out he was expelled for grades. Could prankstering be a gateway drug for News Corp criminality?
Lawyer for the family of murdered thirteen years-old Milly Dowler provided the most damning judgment upon yet another resignation and arrest of a News Corp exec: “This is not just about one individual but about the culture of an organization.”
“Charles Foster Kane is a scoundrel,” said Citizen Kane 72 years ago. “His paper should be run out of town.”
The greased wheels of democracy behind the PACT Act carry a clown car of strange bedfellows like Peter King and Anthony Weiner down roads that all lead back to billionaire John Catsimatidis, the ringmaster of this bizarre circus of influence.
John Kane is an Indian educator and advocate in upstate New York, who broadcasts a show on WECK-AM in Buffalo and blogs at www.letstalknativepride.blogspot.com. As a Mohawk, married to an Oneida woman, living in Seneca territory, he likes to say he has half of the Iroquois Confederacy covered. Kane brings native issues to light on radio and online from the native perspective, and over the past couple of years we have become fast friends, trading stories and anecdotes related to tribal sovereignty issues that I frequently write about, but he has mastered—an impressive distinction given the complexities and differences of opinion inherent in these debates even among Indians.
During the Anthony Weiner fiasco, Kane reminded me of the disgraced congressman’s duplicitous role in shepherding the Prevent All Cigarette Trafficking Act (PACT Act) of 2009, of which he was the House sponsor, through Congress. In the middle of this ridiculous Twitter situation with Weiner, I spoke with Kane on his show about the scandalous nature of an act sold to the public as an anti-terrorism, tax-evasion punishment with positive public health consequences as Rep. Weiner argued on the House floor. In reality, the act itself was a protectionist economic tool crafted by, and for the benefit of, the American tobacco giants and convenience-store retailers seeking a way to curb the growth of native brand cigarettes. The passage of the PACT Act is a textbook example of money and influence in Washington where holier-than-thou legislators preach from atop an artificial moral high ground from a pulpit made of campaign cash.
The greased wheels of democracy behind this bill carry a clown car of strange bedfellows down roads that all lead back to billionaire John Catsimatidis, the ringmaster of this bizarre circus of influence. Catsimatidis is a high-profile figure in New York politics whose fortune is derived from the oil-refinery, grocery and convenience-store industries. Most recently it was the high society nuptials between his daughter, Andrea and Christopher Cox—grandson of Richard Nixon and son of New York GOP leader Ed Cox—that put the Catsimatidis name in the public eye. This is a merger of the highest social order in New York, renewing the notion that Catsimatidis will take a shot at becoming the next billionaire mayor of New York City, a hope that had been dashed when current Mayor Michael Bloomberg decided to run for a third term. Add to the mix that presumptive candidate and power-grubbing sycophant Weiner is out of the picture, and the Catsimatidis for Mayor campaign will undoubtedly be in full swing.
Catsimatidis stands in stark physical contrast to the relatively soft-spoken and diminutive Bloomberg. A big man with bulbous features, he has a caricaturesque appearance. Apart from these visual differences the two men have much in common. They are self-made billionaires whose party affiliations are fluid and for whom the job of Gotham’s mayor is the brass ring. Less notably, but important where the tobacco industry is concerned, they are perfectly aligned in their unmitigated offensive against the native cigarette trade, and they were Anthony Weiner’s two top individual donors.
Bloomberg’s assault on the Indian cigarette trade has been well-publicized, but it’s Catsimatidis who truly keeps the fire stoked. For example, half of the sponsors of the PACT Act have been recipients of Catsimatidis’ largesse over the past several years. Since the 1990s he has spread around nearly a million dollars in campaign contributions under his name or his direct family members. He even dumped campaign cash into the coffers of Rep. Peter King (R-Seaford), who, during the cycles he received money, produced a congressional committee report titled “Tobacco and Terror,” which attempted to establish a link between the native cigarette trade and Hezbollah. It was a marginal and laughable report until Rep. Weiner matter-of-factly referred to the report (produced by his political nemesis) as gospel while arguing for the PACT Act on the House floor. From that point, the fate of native cigarette traders was effectively sealed. The New York and Washington, D.C. tobacco cabal, bought and paid for by Catsimatidis, included provisions in the act that delivered a direct blow to the Seneca Nation in western New York, arguably the most successful tobacco entrepreneurs in the United States, and direct competitors to the chain of convenience stores and gas stations owned by none other than John Catsimatidis.
Ironically, but purposefully, the only winners from the PACT Act were the tobacco manufacturers and convenience store owners who essentially crafted the legislation and financed its passage. Big Tobacco reaffirmed its competitive economic advantage by squeezing off supply routes for native brands and Indian retailers, which in turn benefited convenience stores with multiple locations. The act had little to do with trafficking, public health or terrorism, and everything to do with asserting monopolistic influence over a growing native trade that was gaining market share.
Watching Weiner argue the bill crafted by his donors told me everything I needed to know about this guy long before he revealed his true sleazy nature. “An act that goes after cigarettes, tax evaders and terrorism? Slam dunk… Who gets hurt? Indians? Where do I sign?” This was probably the extent of the conversation that transpired between PACT Act sponsors like Anthony Weiner and sugar daddy Catsimatidis. When it came down to it, Weiner could be bought. That’s the name of the game, I suppose, and whoever takes his spot will likely be no different. After all, a Weiner by any other name is still a dick. (You didn’t think I would get through the whole piece without a penis pun, did you?)
Does King expect American Muslims to take the stand and collapse under his glare, profess their allegiance to Allah and try to massacre everyone in the room? The “war on terror” conducted by the United States is a legitimate, and by my count, successful endeavor that in the past 10 years has resulted in several foiled plots, kept our enemies on the run, and prevented another major attack on our soil. That’s not to say we’re out of the woods, but this fight belongs in covert operations and intelligence circles. Pernicious public hearings isolating Muslims in America is like putting Islam on trial as far as our enemies around the world are concerned and will only serve to agitate them further and provide real fodder for their own propaganda.
I should like to organize a hearing to examine the radicalization of Congressman Peter King. Yes, I should like that very much. I wouldn’t want to host it, mind you. Not because it wouldn’t be a gas, but because our pugilist representative could and would quite handily kick my ass.
An open investigation into his own personal link to terrorism might provide an interesting look into the mind of Peter King. A recent article published in Mother Jones delves into his early career as “one of the nation’s most outspoken supporters of the Irish Republican Army and a prolific fundraiser for the Irish Northern Aid Committee (NorAid), allegedly the IRA’s American fundraising arm.” King would be undoubtedly truculent in his response to accusations that he gave financial assistance to what some consider a terrorist organization. So, too, would he undoubtedly miss the irony in his calling for hearings regarding the radicalization of American Muslims, slated to begin March 10.
The querulous King has often said that 80 percent of mosques in the nation are run by extremists. He asserts that Muslim extremists pose more of a threat to society than other radical elements. To place this assertion in context it’s helpful to understand who else King believes to be a threat to the nation. This is his comment on a Fox News clip, which he’s obviously very proud of because it’s on his website: “We’ve always had radicals here or there. We’ve had Neo-Nazis, we’ve had environmentalists.”
(Chokes, gasps, does spit take:) I’m sorry, did he just lump environmentalists together with Neo-Nazis?
That’s for another column. Let’s move on. The real question here is: What does the chairman of the House Homeland Security Committee expect these hearings to produce? Does King expect American Muslims to take the stand and collapse under his glare, profess their allegiance to Allah and try to massacre everyone in the room? The “war on terror” conducted by the United States is a legitimate, and by my count, successful endeavor that in the past 10 years has resulted in several foiled plots, kept our enemies on the run, and prevented another major attack on our soil. That’s not to say we’re out of the woods, but this fight belongs in covert operations and intelligence circles. Pernicious public hearings isolating Muslims in America is like putting Islam on trial as far as our enemies around the world are concerned and will only serve to agitate them further and provide real fodder for their own propaganda.
Read closely, all of those who would accuse me of extreme liberalism. There is a formula to beating terrorists, and it’s not pretty. It pushes against the boundaries of our civil liberties and makes us wince when we catch a glimpse of the real dirty work we do abroad. Wire-tapping works. So does undercover shit from spy movies. No need to air out our grievances in public, Pete. Big Brother is already listening. These hearings are the worst kind of political theater by a man who should know better than to throw gasoline on the fire of anti-American hatred. At a time when democracy is bursting around the globe, he embarks upon the most near-sighted and dim-witted undertaking possible to tweak the hard-liners who hate us most.
Holding this hearing is like battling cancer with Tylenol. It ignores the root cause of radical extremism, which is fairly obvious and proven. A lifetime spent in poverty or under the thumb of an oppressive regime is what can breed fundamentalism. In this sense America has been instrumental in fostering these circumstances by supporting foreign dictatorships who have strategic economic importance to our hunger for fossil fuels and ignoring nations that hold none.
Here again I return to my oft-beaten drum-warning of the evils of oil speculation in the financial markets. The steady, determined increase of commodity prices is directly correlated to the conditions of poverty around the globe. The lack of regulation on the commodities exchanges has allowed prices to skyrocket, endangering the global recovery (Fed Chairman Ben Bernanke’s words, not mine) and made access to food increasingly difficult for those who need it most.
But the majority of news outlets, to my eye, are ignoring market fundamentals by propagating the myth that tensions in the Middle East and Northern Africa are responsible for the spike in commodities pricing, oil in particular. If ever there was an argument for the price of oil being linked directly to speculation and not actual market forces, this is it. We are not experiencing a true oil crisis like the one in the 1970s because this is not a supply-and-demand issue. If $90 per barrel is the true baseline of oil pricing, can you imagine what it would be if demand was pressuring supply? I have also repeatedly heard the argument that the price of oil is related to the weak dollar, not speculation. And yet, inherent in this reasoning is the very definition of speculation! Commodities are a more lucrative, albeit risky, place to park money when the dollar is weak.
The opaque exchanges that govern the commodities market provide cover for those pressing their bets and lining the pockets of oil companies and dictators alike, thereby putting an artificial lid on economic growth and keeping food out of reach for impoverished nations. These are the seeds that grow into terrorism. This is the hearing that needs to be held.
Peter King is a fighter, literally. As a boxer he should understand that brawlers don’t always win and in this case he’s not even squaring off against the correct opponent. I believe Peter King is a patriot, no matter how misguided he sometimes is. He is also my congressman. For both reasons, I’m in his corner. But I urge him to throw in the towel and pass on this fight because in this one he is in the wrong weight class.
When the Republicans took control of Congress during President Bill Clinton’s first term, it took a while before the “Gingrich Republicans” imploded. Newt Gingrich rose to prominence as Speaker of the House by helping to craft and deliver the Republicans’ “Contract with America,” a document outlining their legislative initiatives. One of the young Turks in Gingrich’s inner circle was John Boehner, the man who is about to take over the position once occupied by his former mentor.
Boehner has been getting a good deal of face time and ink lately. Although he has been around the national political scene for two decades, the country is now getting to know the man with the tan and the new plan for America. Borrowing a page from the Gingrich playbook and delivering the Republicans’ “Pledge to America,” Boehner has put himself on the front lines of the war against President Barack Obama alongside Senate Minority Leader Mitch McConnell, the man who stated that his No. 1 objective is to ensure that Obama is a one-term president.
Both men are unapologetic when it comes to defending big business, tax cuts for the wealthiest Americans and political campaign donations. McConnell’s all-night filibuster against the McCain-Feingold bill for campaign finance reform and the infamous incident when Boehner handed out contributions from tobacco companies to his colleagues on the House floor speak volumes about what makes them tick.
And that’s cool. It illustrates who they are and what their intentions are: power and control. But lately the platitudes they’re offering through McConnell’s measured speeches about wanting Obama to change and Boehner’s public blubbering on 60 Minutes sound disingenuous, particularly in light of Republicans strong-arming Congress to push through the Tax Relief Unemployment Extension Bill, extending what are known colloquially as the “Bush Era Tax Cuts.”
Douglas Adams, author of The Hitchhiker’s Guide to the Galaxy, famously wrote, “If it looks like a duck, and quacks like a duck, we have at least to consider the possibility that we have a small aquatic bird of the family Anatidae on our hands.” Perhaps an appropriate update might be: “If it looks like a duck, quacks like a duck, and shits all over your living room carpet while flapping about and knocking over your valuables, we have to consider the possibility it’s actually an elephant in duck’s clothing.” And this is no lame duck we’re talking about here. In fact, this duck is vibrant enough to hobble America with its arrogance.
The bill has Americans quibbling over the fine points, namely the extension of tax breaks to the wealthiest Americans. While this might be deplorable, it’s hardly the most outrageous thing happening at the moment. The bill is essentially a third-round stimulus package that pumps nearly $1 trillion back into the economy over the next two years, requiring the federal government to dig deeper into debt while we attempt to pull out of the Great Recession. It’s a gamble that may actually boost President Obama’s approval ratings in the coming months if consumers begin to feel that things are turning around. Or not.
The wave of anger that swept away so many incumbents and installed an entirely new cadre of jackals in November was powerful and effective. But anger burns faster than Boehner’s two-pack-a-day habit.
President Obama may be taking hits for being cool and aloof, but by the time the next election cycle comes around he may look like the only sane one in the room. As president, maybe he should be calm, cool and collected. What has me flummoxed is how the tri-state congressmen and senators aren’t publicly losing their minds every day like Rep. Anthony Weiner did with Rep. Peter King – and that was an argument over procedure by two guys who favor the Zadroga bill.While Republicans in Congress have been busy masquerading as thinking, feeling human beings, the Democrats are busy feasting on their favorite meal: themselves. Any hope that they would muster some palpable outrage to aid the Zadroga bill quietly drowned in the tidal wave of tax cut rhetoric. Not even Sen. Charles Schumer, one of the most powerful Senators in modern times, could marshal enough votes to bring the bill forward, let alone raise his voice. As he took the Senate floor to urge his colleagues to “step up to the plate” and pass the 9/11 Health Care bill, he calmly yielded the floor four minutes later. At least Boehner cries when he thinks about billionaires having to pay 3 percent more on their taxes.
An economic noose is being gradually slipped over Native Americans, who are being quietly led to the gallows, as they have been so many times before. Under the executioner’s mask is the tobacco industry, preparing to pull the lever and release the floor beneath them.
Tucked away along a waterway in Mastic, Long Island is Poospatuck, the smallest Indian reservation in New York State. It means “Where the water meets” and is home to 400 enrolled members of the Unkechaug tribe of Native Americans. It’s difficult to discern where exactly the reservation begins and ends. There are no visible signs to guide your way, no glow from a towering casino to mark the spot. Once you happen upon Poospatuck, however, there’s no mistaking you have arrived.
Large billboards advertising native-brand cigarettes adorn the façades of several homes converted to tobacco shops and traffic moves briskly in and out of parking areas. People are finding their way here for one reason only: cheap cigarettes.
Harry Wallace is the elected chief of the Unkechaug Nation who has found himself at the center of one of the largest controversies facing Indian nations today. He is also the owner of Poospatuck Smoke Shop, a bustling retail enterprise nestled in a wooded area deep within the reservation. Hanging boldly from the deck of the quaint wood shop on Wallace’s property is a sign that reads “Sovereignty Yes, Taxes No.”
Behind the shop is an office where Wallace conducts the business of his enterprise and the tribe. On the right side of the office is a wall of legal books that remind visitors that Wallace is not just an entrepreneur but a lawyer, a skill that has proven vital to the survival of Poospatuck. As I enter, he is talking to his staff and admits to being slightly irritable due to a strict diet and having recently kicked the caffeine habit.
“I’m trying to take care of my health,” he says.
Wallace was recently diagnosed with diabetes, one of the most common diseases plaguing Native Americans. This affliction makes him a statistic. Harry Wallace hates being a statistic.
Born in Flushing, Queens, Wallace lived there until his grandmother’s house burned down, forcing his family to move to Williamsburg, Brooklyn. As a kid he would make frequent trips to Poospatuck and recalls a beautiful place.
“People built their own homes and kept the powwow grounds in good shape,” he remembers. “They had socials and there was this old dock with rowboats and you could actually swim in the river.”
In the early ’70s, Wallace got what was then a rare opportunity for a financially supported college education at Dartmouth College in New Hampshire. This chapter in his life would change him forever and connect him with his heritage in a way he never conceived of before.
As it turns out, the Dartmouth years provided as much education as they did turbulence, as Wallace was at times confronted with blatant racism. “I ran into a conflict the first day I got there,” he laughs, recollecting a fight stemming from a racist comment made by a football player.
After college, Wallace moved back to Brooklyn to start a family and received his law degree from New York Law School. He began practicing law in New York City in 1983, which he did for nearly 10 years before returning to Poospatuck.
“My mother asked me to,” shrugs Wallace. “She said, ‘We need your help to take care of our land.’”
Upon his return he describes finding only “desolation.”
Gone were the pristine waters of his youth, sullied, he says, by industry and the refuse from duck farms at the mouth of the canal that Poospatuck lies adjacent to. The shellfish were gone and many of the residents who had existed on a marine economy had fallen into abject poverty; not an unfamiliar condition on reservation land throughout the country. Time and natural resources had run out for the inhabitants of this tiny reservation until the most unlikely of scenarios provided a dubious light at the end of a dark tunnel.
“It’s cigarettes, man.”
Because so many states have driven up the cost of cigarettes due to tax levies, they are cheaper to purchase from retailers on Indian reservations who don’t recognize government taxes on retail tobacco. The disparity has led to an economic boon that is creating newfound wealth and generating badly needed funds in some of the most poverty-stricken areas of the country.
But not everyone is happy about the burgeoning success of Native Americans. Many state and federal elected officials feel as though they are being cheated out of sorely needed tax dollars and anti-cancer advocates claim that tobacco consumption hasn’t decreased as a result of taxes; demand has merely shifted toward the unregulated Indian marketplace. Ironically, the biggest threat to the native cigarette industry may actually be from the cigarette companies themselves.
With the Great Recession as the backdrop to this unfolding drama, the stage is set for a David versus Goliath battle between Indian Country, the US government and Big Tobacco.
The price disparity between cigarettes available from reservations and traditional American-based retailers is at an all-time high. A carton of Marlboro cigarettes, the most popular brand in America, will run the consumer as much as $95 in New York City (NYC), where Mayor Michael Bloomberg has initiated an all-out war on smoking. The same carton costs somewhere in the neighborhood of $43 at a Native American-owned smoke shop on reservation land. This is the result of so-called “sin taxes” applied by state and local governments who use the additional tax to balance budgets and discourage consumption for public health reasons. While retailers and local municipalities have cried foul for several years about the inequity of cigarette pricing, it wasn’t until recently that these cries reached a fever pitch.
But the rise of the Native American tobacco entrepreneur has also contributed positively to the overall economic conditions on some reservation territories. The burgeoning Indian cigarette trade is having the ironic effect of creating tribe-funded public welfare systems that address health issues such as diabetes, drug addiction and heart disease that have crippled Native Americans.
The stunning growth of the Indian tobacco trade has drawn the ire of some powerful people and corporations, and together they are collaborating with remarkable efficiency to wage an epic political and economic war against Native American tribes. The cast of characters involved in the battle is like something out of the movie The Insider. Senators, governors, congressmen and women, local politicians, the U.S. Postal Service, Homeland Security and the mayor of Gotham are all playing key roles in targeting the native Indian tobacco trade. But it is Big Tobacco that is controlling the game and moving these powerful interests around the chess board like a master.
Don’t Tread on Us
New York State (NYS) is ground zero for the attack on the native cigarette trade. On one end of the spectrum, the 55-acre Poospatuck reservation is being called a bootlegger’s paradise and is a defendant in several high-profile lawsuits from neighboring municipalities. At the other end is this highly organized and extremely well-funded Seneca Nation, located on three territories in upstate New York. If Poospatuck is a minor league ball team in this scenario, then the Seneca Nation is the New York Yankees. Both tribes are fighting enormous, yet entirely different, political battles.
Despite the differences in size and resources, both nations cite the same reason for why the US government, at any level, is forbidden from interceding in their affairs: sovereignty. To understand sovereignty, it is helpful to think of these nations not as territories within US borders, but as geographically and politically independent nations far away. In every instance the theory of sovereignty is invoked by Native Americans, imagine it being invoked by leaders of small nations abroad instead of in your backyard.
The economic extremes that Poospatuck and Seneca Nation represent are as divergent as their take on the nature of sovereignty and the legal rights associated with it. For its part, Poospatuck is not federally recognized as a reservation, but it is recognized by NYS. Chief Wallace of Poospatuck believes that the fact the Unkechaug never sought federal recognition is perhaps an even greater claim of sovereignty than any agreement could possibly provide.
“The BIA [Bureau of Indian Affairs] cannot confer sovereignty,” scoffs Wallace. “All it was, all it is and continues to be, is an agency that manages funds. This whole notion of sovereignty was created as fiction during the Nixon administration. You cannot confer sovereignty, you can only recognize it.”
Conversely, the Seneca believe their sovereign rights are superior to other tribes who are federally recognized because Seneca territories in western New York are protected by what is known colloquially as the Buffalo Creek Treaty of 1842. The treaty explicitly states that the “lands of the Seneca Indians, within the State of New York” are protected from “all taxes.” For the Seneca people this is impenetrable language and the basis of their claim of total sovereignty and independence.
But as one quickly learns from reporting on Indian issues, nothing is absolute in Indian Country.
Chief Wallace believes that the Seneca stance may have deleterious repercussions on Poospatuck’s assertion of sovereignty. “When we negotiated with the state in the past we had a unified coalition with the League of First Nations,” says Wallace. “Most of the Indian Nations were a part of that coalition. That unified front is not there today.”
Robert Odawi Porter, the senior policy advisor and counsel to the Seneca Nation, offers a slightly different viewpoint. “We’re still united with other nations in the state but our constitutional government is what sets us apart. We’re a stronger and more functional government.” Then he carefully adds, “There are times that our advocacy is common.”
Standing together at this time may be more important than ever before, as impending federal laws and mounting legal challenges against these nations have everyone running for cover, leaving the tribes to defend their economic rights on their own. Even a representative from the New York Civil Liberties Union said that Native American issues are “not our area of expertise” and declined to comment on the issue.
As to why no organizations or individuals are likely to come to their defense, it’s simple. As Chief Wallace says, “It’s cigarettes, man.”
The Long and Winding Trail
Because cigarettes have such a deservedly unsympathetic role in modern society, it’s no wonder there is little support for any cigarette retailers. Questions of fairness and free enterprise fly out the window due to the simple fact that cigarettes kill people. Even still, Wallace is incredulous at the attack on the Native American smoke trade for reasons beyond the economic peril it places them in.
“They’re the ones that turned a Native American sacrament into a carcinogen,” he says in disgust.
When America declared itself free, indigenous people were herded like animals onto isolated areas of the burgeoning nation. Stretches of remote desert lands and parcels nestled in the secluded woodland areas became homesteads for Native Americans. Their numbers were decimated and the survivors were humiliated. Yet, in the beginning, there was still food to eat and some freedom to move about. But the influx just kept coming.
Says Porter: “Personally I don’t think it sunk in with our people that the usage of our land was so severely restricted. We weren’t used to lines being drawn on a map.”
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.
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.”
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.
Through it all, NYC and NYS assert that Poospatuck is little more than a weigh station for cheap, untaxed and unstamped cigarettes that are being sold in massive quantities off the reservation. The state, during the waning days of the Cuomo administration, crafted legislation to establish a couponing system that would track these sales and require reservations to pay taxes on all cigarettes sold to non-native customers. Any cigarettes sold to enrolled members of the tribe would be exempt from the tax. The New York tribes were up in arms, having not been consulted on the matter, and argued that any law passed by a foreign government such as New York that is not recognized and adopted by the tribes themselves is unenforceable.
The Pataki administration attempted to enforce the regulations, known as 471-e, in 1992 and 1997. Both attempts were met with angry throngs of organized and armed Indians who blockaded the NYS Thruway, held up traffic and burned tires in protest, ending in a standoff with state troopers. Wishing to avoid further conflict, the Pataki administration instituted a policy of forbearance, which basically acknowledges that although New York deems the law to be valid, without tribal consent there is no clear and official method of enforcement, and the issue was dropped.
Desperate to close a rapidly expanding budget deficit yet anxious to avoid similar conflict, NYS Gov. David Paterson sent a letter last September to the U.S. Attorney’s Office, inquiring as to the level of support NYS could expect if it decided to pursue visiting a coupon program on Indian reservations.
It was the last line of the letter, which was leaked almost immediately, that provoked strong interest in several channels and brought the debate back to the front lines. In it, Paterson wrote: “I would be grateful if you would please review this matter and provide me with your assessment as to the likelihood of violence and civil unrest should the Tax Department begin the implementation of Tax Law 471-e. Furthermore, I would appreciate your operational commitment to help mitigate any disturbances that might occur in each of your Districts if implementation were to occur.”
Tribes throughout New York saw this as a shot across the bow and all eyes shifted to the Seneca Nation.
With the state running out of money, Mayor Bloomberg on the offensive in court and unrest among the tribes, the state legislature turned its focus to the tribes’ booming cigarette trade. In October 2009, the Senate Standing Committee on Investigations chaired by NYS Sen. Craig Johnson (D-Nassau) held a hearing to determine the extent of the loss in tax revenue to New York. In a spirited session before a packed room of Indians from nations across New York, the panel attempted to nail down an answer, which proved to be nearly impossible.
According to the testimony of William J. Comiskey, the deputy commissioner in the Office of Tax Enforcement, the department estimates “that if all cigarette transactions conducted through Native American merchants with non-Indians were properly taxed, New York would collect additional state revenue of approximately $220 million. Because complete compliance is not likely, the actual number achievable would be less.”
Eric Proshansky, from the Corporation Counsel of the City of New York, zeroes in on the Poospatuck Reservation in his testimony claiming that the deliveries to Poospatuck “amounted to a $155 million tax loss in 2007 alone, for the State alone.” He then concluded that “if those cartons replaced sales in the City, as the evidenced proved that many of them did, that amounts to City tax loss of up to another $155 million in 2007 alone.”
Steve Rosenthal, former tobacco retailer and frequent testifier at tobacco hearings, estimated the annual loss of tax revenue to NYS to be approximately $1.6 billion.
For his part, Proshansky is largely critical of the Paterson administration, stating that the “failure of the State of New York to enforce the laws with respect to reservation sales is directly responsible for the loss of many billions of dollars that rightfully should have gone into the public treasury.” He went on to say that, “It hardly seems like good public policy to leave so much lawful tax money in the pockets of bootleggers.”
Richard Nephew of the Seneca Foreign Relations Committee dismisses the city’s claims altogether. “Long before the Indians started selling cigarettes there was a black market of cigarettes heading into New York City,” Nephew tells the Press. “They’re just utilizing us as scapegoats.”
Yet with all of the talk about numbers of cartons and billions of dollars lost to reservations, the city and state are reluctant to talk about how much is lost to bordering states and states as far away as North Carolina due to lower state tax penalties. For all of the attention that focuses on Indian reservations there is no discussion of requiring other states to curb the sale of tobacco to New York residents. Theoretically, if it abided by the same regulation, it is attempting to pass with respect to Indian reservations, then NYS should be sending state troopers into Pennsylvania demanding the records of all tobacco transactions to New Yorkers and payment thereof. This, of course, is never going to happen.
Up In Smoke?
The hearing began to head down a slippery slope when the panel brought JC Seneca, Tribal Councillor for Seneca Nation, up to testify. During the question and answer period, NYS Sen. Martin Golden (R-Brooklyn) said it was only fair that the New York tribes share the burden of the financial crisis, sending the crowd and the Seneca members into a frenzy. Sensing the growing anger of the attendees and referencing the conflicts during the Pataki years, Golden tried to strike a conciliatory note with JC Seneca, saying he didn’t seem like the type of person that would resort to violence. Seneca simply replied, “Then you don’t know me very well.”
Not wanting to agitate the situation further during the hearing, the committee members turned their attention to the governor’s representative. But Peter Kiernan, counsel to Governor Paterson, refused to take the bait when pressed aggressively by the committee. Reluctant to engage either the legislature or the tribes present, Kiernan offered testimony that included language like: “A US dollar spent on an Indian reservation in New York is a dollar put into motion in the New York State economy. Every time that dollar is re-spent or invested is good for New York.”
But with Gov. Paterson barely holding onto his office, there is blood in the water. On March 2, NYS Sen. Carl Kruger (D-Brooklyn) called for full compliance and the revocation of the forbearance policy and went as far as to call Gov. Paterson “a willing and active partner in a longstanding travesty that has hurt legitimate businesses and robbed billions from our state.”
In a statement issued exclusively to the Press, Seneca’s Richard Nephew fired back, saying: “It should occur to some that we are heading into an important election year for New York State politicians. I believe this is largely politics being played out for the public. Paterson, Klein, Kruger, Golden and others may be blowing their own brand of smoke, engaging in political theatrics against the backdrop of New York’s economic crisis.”
Perhaps in an effort to show strength during a troubled time, Gov. Paterson reversed his stance in recent weeks, proposing a new set of regulations that would essentially choke the supply to reservations located in New York.
Included in the regulations are exact calculations for how many cigarettes would be allowed to be delivered to reservations from certain state-approved wholesalers. The law calculates Poospatuck, for example, would only be allowed to take delivery of 8,100 packs of cigarettes every quarter. The calculations are based upon the number of enrolled members each tribe reports and the theoretical consumption on Indians who live on the reservation. Sales of any other tobacco in the state that is not through these approved retailers would be strictly prohibited and the manufacturers would then bear the burden and risk losing the ability to do business in New York.
This proposal is currently in the public comment period and will most likely be met with several reservation-based challenges for the courts to untangle once again. But in a state with as many problems as New York right now, these efforts are child’s play compared to what is taking place on the federal level.
Gods and Generals
There is impending doom for the tribes in federal legislation that seeks to curtail the growing Indian cigarette trade, known as Prevent All Cigarette Trafficking Act of 2009 (PACT). It’s an act that has the support of almost every sitting politician in America today. The act itself would prevent retailers from mailing cigarettes purchased by catalog or on the Internet through the U.S. Postal Service (USPS). Private delivery services such as United Parcel Service and Federal Express already have voluntary bans in place to prevent bulk mail order purchases of tobacco, but the USPS operates under no such agreement. Cancer organizations and elected officials are supporting PACT for the obvious reason of protecting public health by cutting off part of the cigarette supply chain, but there is another unlikely supporter of this bill: Big Tobacco.
The growing cigarette trade on tribal lands was never much of a concern to the multi-billion dollar tobacco industry until Native American retailers began manufacturing and promoting native-owned brands. Brands such as King Mountain and Seneca (unrelated to the tribe) have gained a tremendous following and begun encroaching on Philip Morris’ territory by gaining market share. This phenomenon has turned the relationship between Big Tobacco and Indian smoke shops on its ear. As the tobacco industry and US government combine efforts to attack Indian cigarette sales, the dispute between Big Tobacco and Indian Country grows by the day. Wallace has already banned all Philip Morris products and claims to have felt only a minimal impact to his gross sales.
As this relationship erodes, Philip Morris has ratcheted up its lobbying effort to support the government ban on shipping cigarettes through the mail. It’s a stance that on the surface seems confusing, but the tobacco industry is no stranger to the upside of paradox.
One of the most notable examples was the effect of the cigarette advertising ban on television and radio imposed in 1970. Due to the ban on broadcast advertising, the major tobacco companies at the top of the industry were able to protect their positions because a new entrant to the market was unable to effectively advertise its brand to a broad audience. Indeed, the advertising ban has contributed to freezing these positions in a time capsule with companies such as R.J. Reynolds (Camel), Lorillard (Newport) and worldwide leader Philip Morris (Marlboro) maintaining levels of market share domestically.
A more recent example was in 1998 when it appeared as though Big Tobacco might be dealt a significant blow. Under pressure from several states with massive pending lawsuits against them, Big Tobacco entered into a landmark agreement known as the Master Settlement Agreement (MSA). Under the terms of the deal, the tobacco companies would fork over $200 billion over a 20-year period to 46 states that enjoined in an action against the major tobacco companies. The states who received this money were then supposed to put the funds to good use toward health care and anti-smoking initiatives. In return, the tobacco companies would be indemnified from future claims against them.
Instead of Big Tobacco’s wallet being negatively impacted by the MSA, the opposite occurred, with the tobacco manufacturers simply hiking the base price of cigarettes to a level that covered the payments to the states while receiving full indemnification against future claims.
Big Tobacco’s ability to display contrition and a willingness to address public health concerns while reaping huge rewards as a result of this behavior provides a useful context in which to understand its support of the PACT Act. The only businesses affected by the ban on cigarettes in the mail are the native retailers who have exploited the tax disparity issue and reinvested into native-owned brands. By targeting this methodology, Big Tobacco gives the appearance of cooperating with the government, showing a concern for public health and eliminating competition for market share.
Native American entrepreneurs in turn became victims of their own success.
The last remaining step in the process, or nail in the coffin, is to guarantee passage of the PACT Act. So Big Tobacco tied it to an issue that most elected officials would never argue with: Terrorism.
Terrorism and Tobacco
In April 2008, U.S. Rep. Peter King (R-Seaford) issued a report titled “Tobacco and Terror.” The report attempts to draw a straight line between the sale of untaxed cigarettes on Indian reservations to non-Native Americans and terrorist groups such as Hezbollah. In it, King wrote: “It is possible for these Arab networks to rely on suppliers in lower tax states such as Virginia and North Carolina as well as Hezbollah-linked front companies in various free trade zones around Latin America. However, sources told the committee that in NYS the smuggling networks rely primarily on access to the Native American Indian reservations for tax-free cigarettes—for obvious financial reasons.”
King’s primary evidence is “a North Carolina based operation that forwarded a total sum of $100,000 to Hezbollah in 2000.” Before 9/11. Based upon this data, the report arrives at the conclusion that: “In just two months of illicit cigarette trade operations, a motivated terrorist cell could generate sufficient funds to carry out another September 11th-style attack, in which operational costs were estimated to be $500,000.”
That’s a pretty sensational conclusion from the evidence proffered in this report. But it may be all the fuel necessary to provide the impetus to pass the PACT Act. The link to terrorism has many, including Chief Wallace, concerned beyond the impact of this bill. “National Security interests,” he says, “may play a part in taking the rest of our land.”
PACT has seen relatively few bumps along the road to passage—quite a feat given the climate of severe partisanship that currently chokes Washington. The key to this lies in the main body of the bill authored by U.S. Sen. Herbert Kohl (D-WI), which says: “We can no longer continue to let terrorist organizations exploit weaknesses in our tobacco laws to generate significant amounts of money.” With that, Kohl closed the loop begun by King by linking the Altria (Philip Morris)-backed bill to prevent mail- and Internet-order tobacco retailing. Seneca Nation saw this coming.
“When Peter King came out with his report,” sighs Seneca’s Porter, “that was the brush that all Indians were painted with. Those types of propaganda are hard to fight against.”
JC Seneca was, however, not impressed with the new strategy. “We’ve been fighting terrorism since 1492. The issue is sovereignty. To protect what we have today like what our ancestors fought for.”
PACT has already passed the House with unanimous support from all of New York’s Congressmen and women. The U.S. Senate version lists Senators Charles Schumer and Kirsten Gillibrand, both Democrats, as co-sponsors. While Schumer recently opened the door to listening to the Seneca Nation, which would be most affected by the bill’s passage, Gillibrand has remained publicly silent on the issue. This has Indian Country enraged and crying foul at Gillibrand’s much-touted ties to Altria, the parent company of Philip Morris, who Porter alleges to be the one “banging the drum” for the passage of PACT. According to a New York Times report, while an attorney, Gillibrand represented Philip Morris in a sensitive case and as senator she has taken in tens of thousands of contribution dollars from the tobacco giant.
But another Times article this week indicates that the Senecas have been actively lobbying elected officials with some measure of success. According to the report, “two or three Democratic senators” are trying to stop the bill. But with the PACT Act being shopped as an anti-terrorism bill, time may be running out for New York’s Indians.
The Inevitable Conclusion
The past 20 years have brought a sense of optimism and independence to Native Americans, who have begun to create infrastructure on reservation land and become, in some cases, a vital part of the economic engine in the regions they exist within. In western New York, according to the Seneca Annual Report, the Nation “operates a $1.1 billion economy that employs more than 6,300 people, Seneca and non-Seneca.”
As the Seneca economy grew over the past two decades, it poured funds back into areas like health care and badly needed projects. Seneca’s Richard Nephew takes a shot at the U.S. government, saying: “We’re a government that provides for our people,” moreover, “we’re not emptying people’s pockets.” Porter likewise adds, “We have what Americans are fighting for: top-to-bottom health care.”
JC Seneca cites the problem New York has in losing big business to other regions of the country and wonders why politicians, particularly an upstate official like Gillibrand, wouldn’t want to work together with the Seneca people. “We’re not a company that’s going to pack up and head out of state.”
Though not on the same scale, Chief Wallace also argues that Poospatuck has increasingly contributed to the local economy.
“We approved fuel oil for our seniors from a local company,” he says proudly. “We spent $1.8 million on home improvement with approved contractors through the [Suffolk] county. We spent about $200,000 hooking up water to municipal services. Put drains in, improved powwow grounds and purchased a new building.” Wallace points out that a local contractor was chosen to construct a new community center at the heart of the reservation.
Perhaps most impressively, the leaders of Poospatuck created a fund that last year gave every household $15,500 toward home improvement. The funds had to be made payable to an approved third party home improvement contractor to ensure that they went exclusively toward construction and beautification. Tribal members call it the “fifteen five.”
Wallace Wilson, a 29-year-old member of the tribe who works for Chief Wallace, says: “The impact of the fifteen five was a complete change. Just last year it was a dump.”
In New York, the new regulations proposed by Paterson would restrict the flow of cigarettes to reservations while the PACT Act will block Indian retailers from fulfilling cigarette orders through the mail. If the US government is successful in clamping down on the cigarette trade on reservation lands, then this brief encounter with prosperity will most likely come to an unceremonious end. An economic noose is being gradually slipped over Native Americans, who are being quietly led to the gallows, as they have been so many times before. Under the executioner’s mask is the tobacco industry, preparing to pull the lever and release the floor beneath them.
But the tribes have vowed that they won’t go down without a fight. “There are two paths we can go on,” states JC Seneca. “Diplomacy or controversy and confrontation. They want controversy and confrontation? They’ll get it.”
Should the tribes find themselves on the losing side of the battle, they may be forced back into another prolonged era of poverty and hopelessness. The resulting job losses and increased dependence upon social services and welfare may have the ironic effect of forcing the states to pick up the tab.
The only winner here is Big Tobacco, able to once again manipulate the public and our politicians at will to maintain dominant market share. Their products are addicting to people and their power is intoxicating to politicians, because, as Wallace so aptly puts it: “It’s cigarettes, man.”