Senate committee passes PACT Act to extinguish Indian
mail order tobacco trade
WASHINGTON – A Senate
committee has approved a proposed bill that the Seneca Nation says would
significantly impact its tobacco-based economy, its citizens, employees, and the
financial well-being of western New York state.
The
Senate Judiciary Committee passed the Prevent All Cigarette Trafficking Act
– PACT – Nov. 19. No date has been set for a full Senate vote, but if passed the
PACT Act would prohibit the U.S. Postal Service from delivering cigarettes
and certain other tobacco products, effectively putting Indian-owned mail order
tobacco businesses out of operation.
The U.S. Postal Service is the only remaining delivery system open to
Indian-owned mail order tobacco businesses. A few years ago, the
National Association of Attorneys General, led by former New York Attorney
General Eliot Spitzer pressured UPS, FedEx and DHL to sign “voluntary”
agreements not to transport tobacco.
Versions of the PACT Act have been proposed annually for several years, usually
introduced by New York legislators. The effort is part of the state’s ongoing
tobacco wars in which various governors and state legislators so far have been
unsuccessful in trying to force tribes to collect tobacco and other taxes on
behalf of the state.
The Seneca Nation is regarded as having perfected the mail order tobacco trade
business model. It has a state-of-the-art stamping and enforcement mechanism
that ensures compliance with a rigorous set of internal regulations, including
retailer authorization, minimum pricing and a ban on sales to minors. Revenue
from a 75 cent per pack levy is used to provide health, education and other
social services for nation citizens.
Passage of the PACT Act could result in up to a 65 percent loss in import/export
revenue to the nation along with a projected job loss of 1,000 Seneca and
non-Seneca positions, Seneca Nation President Barry E. Snyder said in a prepared
statement following the Senate Judiciary Committee’s approval of the bill.
“At a time of record unemployment in western New York, Phillip Morris and the
Senate Judiciary Committee, acting as this holiday’s Grinch, voted to steal
1,000 jobs from our nation and the western New York community,” Snyder said.
“And this all comes just days after I heard how President Obama wants to help
Indian country during American Indian Heritage Month. To be clear, the PACT Act
is about a big corporation using the federal government to line its pockets by
increasing its market share.”
The Seneca Nation has long fought both state and federal lawmaker’s attempts to
collect taxes on tobacco and gasoline products sold by Indian nations. According
to Snyder, the PACT Act is a direct contradiction of President Obama’s statement
to “reverse the U.S. government’s history of marginalizing and ignoring the
plight of Indian nations.”
Snyder’s mention of Philip Morris refers to the tobacco giant’s enthusiastic
support of the PACT Act for its potential to undercut – or eliminate – Indian
tobacco sales. Last year, Philip Morris spokesman Dave Sutton said the company
is “proud to support” the PACT Act.
“The sale of untaxed and under-taxed cigarettes and smokeless tobacco products
remotely – via the Internet, mail or phone – harms legitimate wholesale and
retail businesses, consumers and government budgets.” Sutton said.
Seneca, however, works in close partnership with the federal Bureau of Alcohol,
Tobacco and Firearms Enforcement to battle illegal tobacco trafficking.
“We agree with the fundamental goals reflected by the PACT Act, that no one
should be engaged in illegal cigarette smuggling. But cigarettes are a lawful
product and this PACT Act is nothing but a money grab by Philip Morris to
destroy legitimate, treaty-sanctioned American Indian commerce,” Snyder said.
“Senators supporting the PACT Act, especially the New York senators, should ask
themselves why are they letting Philip Morris take jobs and money from the
Seneca Nation and the western New York economy?”
The House version of the PACT Act was sponsored the past two years by
Congressman Anthony Weiner, D-N.Y. Congress passed the bill May 21 by 397-11.
The Senate bill was introduced on the same day by Sen. Herb Kohl, D-Wis., a
Senate Judiciary Committee colleague of Sen. Charles Schumer, D-N.Y., and
co-sponsored by Schumer and Sen. Kirsten Gillibrand, D-N.Y., among others. Last
spring, the New York Times revealed that Gillibrand represented Philip Morris in
the mid-90s in its efforts to block the Justice Department from obtaining
evidence that tobacco company executives had lied about the negative health
effects of smoking.
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