Wall Street Journal Exposes State-Big Tobacco Scheme to Snuff Out Tribal Tobacco Economies

It has been no secret that the states and Big Tobacco are in cahoots to destroy tribal tobacco economies (see the 1998 MSA), but the lengths to which they would go to do so, was left to speculation. Now, the Wall Street Journal has blown the cover off dealings between the States and Big Tobacco, which, as with the original MSA negotiations, concern tribal tobacco economics but do not involve any tribal governments. Nor can there be any doubt whatsoever that state governments are actively looking to balance their hundred-plus-million-dollar budget deficit on the backs of Indians.

The MSA is a convoluted mess, as the states would agree, but the upshot of the unholy alliance between them and Big Tobacco relatively straightforward: States pledge MSA monies to back bonds they issue to fund state government, especially while state tax revenues are at an all time low. In exchange for MSA monies paid by Big Tobacco, the states must protect Big Tobacco's multi-billion dollar market share, including in Indian Country.

Big Tobacco complains that tribal tobacco manufacturers and retailers are eating into that market share. So Big Tobacco threaten the states.

Unless the states more rigorously enforce state tobacco tax laws in Indian Country, Big Tobacco will take the MSA monies back, through push or shove, which could cause the state MSA-backed bonds to default. The States literally cannot afford a default so they are forced to cut a deal with Big Tobacco, promising to do more to protect Philip Morris and Friends' market share, with the tribal tobacco economy being the bargaining chip that both parties are all to happy to cede.

If, or when, the deal currently being negotiated between the states and Big Tobacco is consummated, it could result in the biggest heist of tax value derived from Indian Country by state government and non-Indians, since the Dawes Act. And the model state tobacco tax laws contemplated by the agreement, when, not if, passed by state legislatures, would cause massive, further incursion of state civil regulatory authority into Indian Country.

Indian Country -- meaning not just tribal governments with tobacco economies -- unite! And take action to defend tribal sovereignty as we now know it.

Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian majority-owned law firm.  He is an enrolled member of the Round Valley Indian Tribes of Covelo, California.  He can be reached at 206.691.3631 or gabe@galandabroadman.com, or via galandabroadman.com.