Back to Annual Meeting Page		American Public Health Association 133rd Annual Meeting & Exposition December 10-14, 2005 Philadelphia, PA

Abstract #108717

Max H. Kelton, MPA, Department of Political Science, University of Oklahoma, 3200 Marshall Ave., Suite 230-C, Norman, OK 73072, (405) 325-4884, Max.H.Kelton.Jr-1@ou.edu and Michael S. Givel, PhD, Department of Political Science, The University of Oklahoma, 455 West Lindsey, Room 215, Norman, OK 73019.

As discovered in over 800 previously secret tobacco company documents, court documents, newspaper articles, and federal statutes and regulations used for this qualitative archival content analysis, the tobacco industry willfully utilized duty free Native American land for illegal tobacco smuggling into Canada. The industry promoted excessive smuggling to increase their profits and sales in tandem with reducing tobacco taxes. Native Americans found the smuggling to be a lucrative opportunity, while being able to avoid criminal prosecution under the guise of sovereignty. Beginning in 1988, the Canadian government began imposing major tax increases on tobacco. Over the next decade, the result was a major influx of tobacco smuggling into Canada through Native American reservations cradling the United States and Canadian border. RJ Reynolds, British American Tobacco in conjunction with Phillip Morris, and Rothmans Benson and Hedges publicly blamed the rampant smuggling on excessive taxation, saying it created irresistible incentives for criminals. They maintained the solution to smuggling was to slash taxes. By 1993, tobacco industry smuggling represented 30% of total Canadian tobacco sales. Today, tobacco smuggling continues to be a problem for American and Canadian officials with rampant smuggling from Native American reservations shifting, somewhat, to alternative locations throughout the world due to litigation and increased border enforcement by the United States and Canada. The massive smuggling scheme has ultimately resulted in numerous American and Canadian convictions of tobacco industry officials and partners for smuggling, racketeering, money laundering, customs violations, and fraud.

Learning Objectives: This presentation will describe the policy process concerning the relationship between the tobacco industry and tobacco smuggling into and out of the United States. This presentation will detail the impact that tobacco smuggling has had on taxation policy over the last twenty years, specifically. Also addressed, will be the tobacco industry’s unusual relationships with Native American Reservations and the industry’s conspiracy to promote the use of this land for black and gray market tobacco smuggling. This presentation will use this case example to demonstrate the extent to which the tobacco industry is willing to engage in, simply to make vast profits, increase its market share, and ultimately pressure the government to reduce tobacco taxes. The outcome or actions that participants will demonstrate as a result of this presentation includes

• Describing the tobacco industry’s smuggling networks via Native American lands,
• Describing and recognizing the general effect of an anti-tobacco tax increase on reducing tobacco consumption,
• Articulating the positions of the tobacco industry with respect to the smuggling issue,
• Explaining the issues of sovereignty as argued by Native American tribes, and
• Recognizing the affect smuggling has on both taxation and health policies. At the conclusion of the session, the participant (learner) in this session will be able to
  • Articulate the financial and profit motivation for tobacco smuggling between the United States and Canada,
  • Describe the key role of Native American tribes in tobacco smuggling between the United States and Canada,
  • Describe federal and state efforts to counter tobacco smuggling,
  • Indicate where the primary source of tobacco smuggling on Native American lands occurs between the United States and Canada,
  • Specify which 3 major tobacco companies have been the most involved with the smuggling conspiracy, and
  • Explain at least 2 new sources of increased tobacco smuggling occurring throughout the world that were started as the result of the experiment to smuggle between the United States and Canada.

  Keywords: Tobacco Taxation, Native Americans

  Presenting author's disclosure statement:
  

  I wish to disclose that I have NO financial interests or other relationship with the manufactures of commercial products, suppliers of commercial services or commercial supporters.

  Recorded presentation

  Tobacco Control and Government at the Federal, State, and Local Levels

  The 133rd Annual Meeting & Exposition (December 10-14, 2005) of APHA