Creek smokeshops still selling disputed cigarettes

After telling a federal court that it would stop supplying its affiliated smokeshops with controversial cigarettes, the Muscogee Creek Nation is allowing the stores to seek and stock the cigarettes on their own, a World investigation shows.
The Oklahoma Tax Commission seized 77 cases of Seneca brand cigarettes Wednesday, according to a search warrant affidavit filed in Tulsa County District Court.
The cigarettes were headed to Riverside Smokeshop in Tulsa and had a value of $103,000 once sold to the public, said Paula Ross, a Tax Commission spokeswoman.
Karen Goodson, the manager of Riverside Smokeshop, said the seizure should ot have occurred.
"It is a sovereignty issue that needs to be decided by the court once and for all," Goodson said.
In January, the Creek Nation temporarily suspended distribution of Seneca brand cigarettes through its wholesale company in Okmulgee pending the outcome of an injunction filed in U.S. Eastern District Court in Muskogee, records show. The suspension also includes King Mountain cigarettes manufactured in Washington state by a tribal entity. Seneca is manufactured in Canada, also by a tribal entity.
The cigarette seizure is part of the state's ongoing pressure to force the Creek Nation to sign a tobacco compact or face further confiscation of unapproved cigarettes, records show. The conflict began in 2005 when the Creek Nation opted out of renewing its compact because of alleged unfair negotiation practices by the state.
Meanwhile, the Indian-based company that sold the cigarettes to the Riverside store said the cigarettes were sold with the knowledge of the Creek Nation.
"It is my hunch that the smokeshop was acting under the licensure of the tribe and with full knowledge of the tribe," said Lance Morgan, CEO of HCI Distribution, an economic development corporation of the Winnebago Tribe in Nebraska.
Morgan said that the Muscogee Creek nation had a temporary license with HCI, which expired Friday.
Creek Nation spokesman Thompson Gouge said the tribe could not comment on the cigarette seizure or the tribe's suspension on stockpiling Seneca or similar cigarettes.
Tax commission officials contend that Seneca and King Mountain cigarettes are contraband smokes not listed on the state's approved list of cigarette brands sold in Oklahoma. The cigarettes are competing heavily with other discount brands and allegedly bleeding off millions of dollars of tax revenues intended for health initiatives and smoking-cessation programs. The cigarettes are being sold by Creek-affiliated stores without an Oklahoma tax stamp.
Tribal officials contend that they can provide such cigarettes without paying taxes to Oklahoma because the cigarettes are tribal-to-tribal sales that are exempt from state taxation.
Four weeks after the tribe temporarily suspended stocking the cigarettes for its affiliated stores, the World purchased packs of Seneca at three Creek-affiliated stores in Sapulpa, Glenpool and Tulsa. King Mountain cigarettes were not available.
King Mountain officials said they could not comment on the absence of their cigarettes in the Tulsa area.
Two additional stores visited by the World did not sell the cigarettes. In the past, most of the Creek-affiliated stores within the Tulsa area have refused to sell the cigarettes, saying they are "illegal" when asked why they don't sell them.
Meanwhile, area smokeshops appear to be fully complying with a new state law that requires retailers to sell cigarettes that inhibit accidental fires.
Of the cigarettes recently purchased by the World, all of the packs, including contraband brands, had fire-safe paper. The paper involves tiny bands within the paper that act like speed bumps while the cigarette is burning.
Records by the Tulsa Fire Department reveal that cigarettes were the No. 1 heat source for fatality fires in Tulsa during the past seven years.
Between 2001 and 2008, 59 people lost their lives to fires caused by cigarettes or smoking material.
Capt. Jeff Vandolah of the Tulsa Fire Department said it is too early to determine if fire-safe paper is decreasing the number of accidental fires.
The new state law requires cigarettes to be sold with "fire-safe" cigarette paper, which allows the cigarette to extinguish itself if it is left unattended.
The law took effect Jan. 1, 2009, but to delay the law's effect, several area smoke shops reportedly were selling old inventory bought before the law took effect and were allowed to sell old inventory until Jan. 1, 2010.
In October, 10 months after the law took effect, the World bought several packs of discount-brand cigarettes without fire-safe paper at smoke shops. The tribal stores stated the stock was old stock bought before the law took effect.