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Seneca Nation asks Obama to veto anti-sovereignty PACT Act

SALAMANCA, N.Y. – The president of the Seneca Nation has called on the president of the United States to veto the PACT Act, a bill that targets Indian tobacco mail order businesses by banning the delivery of cigarettes through the U.S. Postal Service.

The Prevent All Cigarette Trafficking Act “flies in the face” of Obama’s promises to respect tribal sovereignty, improve health care and create jobs, Seneca President Barry E. Snyder said.

“If signed into law, the PACT Act will seriously impact the Seneca Nation and the Seneca people. We will be subject to racial profiling for the simple act of mailing a package. We will lose thousands of jobs and important health care support. And most damaging, we will be set back in our journey to self-determination by the very treaty partner that pledged to support and protect us,” Snyder wrote.

The nation estimates that the PACT Act could result in up to a 65 percent loss in import/export revenue which it uses to fund health and education programs and the elimination of up to 3,000 tobacco and tobacco-related jobs in western New York.

The Senate approved the bill by unanimous consent without a vote or a hearing late in the evening of March 11.

White House spokesman Shin Inouye said the president would review the bill further and was “working with the Department of Justice to consider the bill’s impact while Congress resolves the differences between the House and Senate bills.”

But Congress passed the bill by a 387-25 vote on March 17 – a speedy six days after the Senate approval – and sent it to Obama for signing the next day. There has been no update from the White House on Obama’s review of the PACT Act.

The PACT Act would:

Prohibit the U.S. Postal Service from mailing cigarettes and certain other tobacco products, excluding cigars. Require online cigarette sellers to pay all federal, state and local taxes and affix tax stamps before delivering any products to any customer.

Require sellers to register with the state where they are based and make periodic reports to state tax collection officials.

Require sellers to verify the age and ID of online customers when they purchase cigarettes or other tobacco products and when they receive them.

Lawmakers, such as New York Democratic Congressman Anthony Weiner who sponsored the House bill, say the PACT Act will give states and local governments a huge revenue increase by “cracking down on the illegal sale of tobacco.” Weiner and other supporters also say it will stop kids from having “easy access” to cigarettes sold over the Internet.

While there is a huge illicit global tobacco trade, Indian tobacco sales are not part of it: Indian nations are sovereign entities with inherent rights to trade, including the sale of cigarettes, and to issue their own licenses, fees and regulations regarding trade. Seneca, for example, has a state-of-the-art stamping and enforcement mechanism that ensures compliance with its internal regulations, including retailer authorization, minimum pricing and a ban on sale to minors. The nation works in close partnership with the Federal Bureau of Alcohol, Tobacco and Firearms Enforcement.

New York lawmakers have tried for decades to force Indian nations to collect taxes on cigarettes sold through the Internet or to non-Indian customers on reservations. The PACT Act is a double whammy, coming on the heels of proposed new state regulations that would require cigarette manufacturers to sell cigarettes only to licensed stamping agents who sign a certification each year, under penalty of law, that they are not selling tax-free cigarettes to retailers, essentially cutting off supplies of brand name untaxed cigarettes to Indian businesses. The nations have vowed to fight the measure in court.

While the PACT Act would have a devastating effect on the Seneca’s tobacco businesses, the state, which is facing a projected $9.2 billion budget deficit for the 2010 – 2011 fiscal year, would share the pain. Seneca businesses provide the state’s economy with $1.67 for every $1 of gross profits generated, according to a recent study by Harvard economist Jonathan Taylor. In 2007 alone, the nation’s combined tobacco and gas businesses generated an estimated $313 million and spun off nearly $200 million into the economy. The nation’s economic activities have contributed more than $1.1 billion to the statewide economy over the last decade, he said.

The nation is one of the largest employers in western New York, providing jobs with benefits for more than 6,300 mostly non-Native people.

The ailing U.S Postal Service would also take a hit.

Gerry McKiernan, a postal service spokesman, told The Buffalo News, that the post office could lose $30 million to $40 million a year in revenue from the PACT Act – if it can be enforced.

Enforcement will be difficult, McKiernan said, because privacy laws ensure that priority and first class mail are sealed from inspection.

“I don’t really know how it’s going to work,” he said.

Snyder reminded Obama that the bill is in conflict with the U.S. president’s promise to improve relationships between the White House and Native Americans. During the first White House Tribal Nations Conference last November, Obama signed Executive Order 13175 directing consultation on issues affecting tribal nations.

“It is most disturbing this legislation was developed without any meaningful consultations with Indian nations,” Snyder wrote. “Your ‘Tribal Consultation Executive Order’ indicates that you intend to be committed to regular and meaningful consultation and collaboration with tribal officials in policy decisions that have tribal implications. When I heard you say this at the meeting of tribal leaders in November, I took your word that you would follow through.”

The PACT Act is a “Trojan horse” that provides an end run around the treaties and other promises, said Lance Morgan (Winnebago Tribe of Nebraska), CEO of Ho-Chunk, Inc. and partner at Fredericks, Peebles & Morgan.

“It says it protects tribal nations (by prohibiting states from suing them), but we had those protections anyway, and it doesn’t protect us against the state suing those who deal with us, so in the end the state has figured out a way to win without directly attacking us.”