Tobacco trade lights fire in Mohawk economy

He won’t say who supplied him with native tobacco and insists it isn’t his  business to know what customers did with the product once he sold it to them.  During his time in an industry where police raids, lawsuits and jail are par for  the course, Simon came to value discretion.

Despite the potentially disastrous consequences of selling tax-free  cigarettes to non-natives, Simon persisted, turning a roadside shack in the  Kanesatake territory into two thriving stores.

Tobacco gave Simon’s family a middle-class life in a settlement where poverty  is rampant. It allowed him to pay for a speech therapist to help treat his son’s  learning disability, to lend friends money and not worry about having them pay  him back. The money he earned selling cigarettes paid for a new roof on the  Kanesatake elders centre. It helped him expand his business and hire seven local  employees.

Simon is grand chief of the Mohawk territory, which sits on the shore of Lake  of Two Mountains 45 kilometres west of Montreal, and said he’s ceded the  day-to-day operation of his shops to his daughter and son-in-law. Now the chief  is among the growing chorus of aboriginal leaders calling for the billion-dollar  native tobacco industry to be regulated by band councils.

“I think there needs to be a way for us, not the RCMP, to take the criminal  element out of the native cigarette business,” Simon told The Gazette. “As long  as people are dealing drugs on the side or selling weapons or what have you, the  RCMP has an excuse to stick its nose in our business.”

Police said it’s a well-known fact that many of the cigarettes sold in native  smoke shops were smuggled across the Canada-U.S. border from factories on a  Mohawk reserve in upstate New York — which is illegal. And it’s almost certain  that most smoke shop clients are non-natives looking to circumvent costly  provincial and federal tax laws by buying them from an aboriginal vendor who  isn’t subject to taxation.

Regardless of the legal grey area in which vendors operate, the native  tobacco industry is an economic juggernaut, employing thousands of aboriginals  and accounting for nearly one-third of the 28 billion cigarettes sold in Canada  every year, according to recent studies and Statistics Canada data.

But a series of laws introduced by the Conservative government in March are  taking aim at the tobacco trade.

The laws will impose mandatory minimum sentences on people caught smuggling  50 or more cartons of contraband cigarettes, or 10 kilograms of other tobacco  products, into Canada. Second-time offenders will receive a minimum of 90 days  in jail, people convicted a third time will be sentenced to at least six months  in prison and any further conviction will result in a two-year sentence.

Stronger policing is just the latest step taken in the RCMP’s decades-long  struggle to stop the flow of illicit tobacco throughout Canada. The Mounties  seized nearly 4 million cartons of native cigarettes between 2007 and 2011 — about $80 million in retail value. In many of the raids, cocaine, amphetamines  and firearms were smuggled into Canada alongside tobacco. Many of the cigarettes  are transported off-reserve by non-natives and, in some cases, by members of  biker gangs like the Hells Angels.

But cigarettes are undeniably a pillar of the Mohawk economy. By undercutting  Big Tobacco, the Mohawks have created a business that has largely rendered them  independent from social assistance and the influence of the federal  government.

On the South Shore Kahnawake reserve, where cigarette shacks line the highway  that links Montreal to many of its bedroom communities, an estimated 2,000 of  the 8,000 residents are employed by the tobacco trade.

Smoke shops range from glorified trailers to steel warehouses with freshly  paved parking lots. They’re adorned with flashing lights, bright colours and  neon-lit marquees advertising brands like Play Fares, Golden Leaf and Wolf  Pack.

The industry provides jobs at every level of cigarette production and  distribution. There are labourers tilling away in tobacco fields, truck drivers  who deliver the raw material to a factory where workers finish and package the  cigarettes on assembly lines. Then there’s more distribution and, finally, the  hundreds of retail stores that dot the landscape in aboriginal towns across  Quebec and Ontario.

“For most people involved, it’s honest pay for an honest day’s work,” Simon  said. “These aren’t welfare cases, these aren’t crooks. They’re mothers and  fathers; they’re students with part-time jobs.”

Tom earned about $700 a week smuggling cigarettes into Canada.

Six to eight times each month, he would drive his rusty Pontiac Tempest  across the border at Akwesasne, Ont., and into a garage in upstate New York.  After parking his car in the building and out of plain view, Tom and a supplier  loaded the car with box after box of contraband cigarettes.

“By the time we were done, the car reeked of tobacco,” said Tom, who did not  want his real name published. “The trunk would almost be overflowing with  cigarettes. We had to be careful when we were closing the hatch.”

No matter how many times Tom made the trip, he’d start sweating when he  pulled up to the crossing at Akwesasne, which straddles the Ontario, Quebec and  New York borders on the St. Lawrence River.

He always told Canada Customs agents that he was visiting friends on the  Akwesasne Mohawk reserve — a half-truth, because he usually ran into his pals  when he was stateside.

Despite his worst fears, he was never stopped or interrogated by the Customs  agents. But even when he was in Canada, navigating the 150 kilometres of  farmland and urban sprawl that separate Akwesasne from his final destination in  Kahnawake, he couldn’t help but remain on edge.

“You’re always looking over your shoulder, driving the speed limit, praying  you don’t break down or crash your car,” Tom said. “Because if you do get caught  off-reserve with native cigarettes, you’re on your own. Your car gets impounded,  you eat the fine and maybe you go to jail. The suppliers won’t help you out,  that’s just how the deal works.”

Tom’s paranoia wasn’t misplaced. He may have avoided the most severe charges  after passing through the border undetected, but if the highway patrol were to  pull him over and search his trunk, Tom would have still landed in a world of  trouble. While it’s perfectly legal for aboriginals to manufacture and sell  tax-free tobacco among themselves within their territory, the law isn’t so  forgiving to those caught transporting cigarettes off the reserve.

In January, a Quebec judge fined Oka resident Daniel Pominville $45,000 for  hauling 111,000 native cigarettes off the Kanesatake territory — roughly the  same size shipment Tom was accustomed to handling. Should Pominville be unable  to come up with the money, he’ll be jailed for six months.

Tom said he would only settle down when he finally crossed the Mercier Bridge  from Montreal into Mohawk land. In Kahnawake, he unloaded the shipment at a  prearranged meeting point and collected his cut: $350, minus personal  expenses.

Considering the risks Tom took, he wasn’t exactly cashing in during his year  as a cigarette runner in the early 1990s. Despite carrying a payload that could  retail for $8,000 in today’s market, Tom earned around the same wages an  ironworker or welder might expect to take home after a week’s work.

Even so, he was grateful to be working at all after being out of a job for  months.

“It paid the bills, it put food on the table and I didn’t have to take a  handout,” Tom said. “And who knows, maybe I was a little crazy back then, a  little reckless. But when you need that money, when you have people counting on  you, when your back’s against the wall, what do you do?”

Since the border crossing at Akwesasne was moved to Cornwall in 2009, fewer  and fewer people chose to sneak tobacco into Canada by land. The majority of  smugglers have taken to bootlegging their product across the St. Lawrence River  in small boats under the cover of darkness.

They buy their cigarettes at a cost of about $2 to $3 per carton directly  from one of the 10 native factories in New York. From there, the shipment is  loaded onto an aluminum fishing boat in a marsh along the U.S. side of the St.  Lawrence.

When the cigarettes reach the northern bank of the river, they’re stacked  into the back of an idling SUV and driven to a retailer in Ontario or Quebec.  The retailer buys each carton at $10 apiece and sells them for twice that  amount.

It may seem simple, but the typical cigarette run is a well-crafted,  elaborate operation. According to one former smuggler, who refused to be quoted  for this article, the river crossing into Canada is fraught with danger.

The boat captain has to be skilled enough to navigate the islands, shallows  and buoys that line the St. Lawrence River while travelling at full speed. He  has to be so familiar with that 2.5-kilometre stretch of water, that he can  power through its strong currents in the dead of night without the help of  lights or navigational equipment.

The captain is often joined by one or two other men, who are constantly on  the lookout for police boats. They mitigate the risk of being intercepted by the  RCMP or border agents by communicating with spotters who stand on Cornwall  Island directly between both countries. The spotters use cellphones to send text  messages or call the boat if they see anything suspicious.

Because the RMCP uses a speedy Zodiac propelled by two 250 horsepower motors,  it’s usually advisable to just double back to the U.S. shoreline if a spotter  catches a glimpse of the black police boat. The only other option is to try to  lose the cops in a shallow part of the river, where the larger Zodiac is too  clumsy to navigate.

Three former smugglers told The Gazette that at the height of the tobacco  trade a few years ago, a good courier could earn up to $5,000 a week sneaking  cigarettes into Canada.

With the looming threat of mandatory minimum sentences and the creation of a  new 50-person RCMP task force to fight illicit tobacco, the earning potential  may grow even higher for smugglers.

The Mounties declined multiple interview requests from The Gazette but in  past media reports, RCMP agents characterize the cigarette trade as a breeding  ground for illegal activity.

A 2009 drug raid that resulted in the arrest of 33 people, including several  full patch members of the Hells Angels, also yielded thousands of crates of  native smokes and cigarette manufacturing machinery. One police source spoke of  AK-47 assault rifles and Glock 9mm pistols being seized alongside contraband  tobacco in the roundup — which took place in Montreal, Laval and parts of  Kahnawake.

Later that year, police found that the Hells Angels were heavily involved in  trafficking native cigarettes off-reserve. The bikers used the profits from  selling cigarettes to finance the construction of meth labs, according to the  Sûreté du Québec.

Mary works upwards of 80 hours a week producing aboriginal crafts.

Until very recently, the longtime Kahnawake resident supplemented that income  by renting out her garage to a tobacco retailer. She said there were more than  100 crates of cigarette cartons in her home — a stash that would exceed $100,000  at market.

“People came and went, dropped things off and picked them up, and I earned  enough to pay my mortgage,” said Mary, who wished to remain anonymous.

“I was just a middle man like so many of the people involved in this  business. People look at the tobacco industry and they think about gangsters and  criminals. I don’t even own a BB gun, not even a pea shooter. Like most of the  people who make money from cigarettes, I’m a worker.”

The cigarette trade is held together by working-class Mohawks like Mary and  Tom, according to Kahnawake band council chief Lloyd Phillips.

“When we talk about the revenue generated by the cigarette industry, it’s not  just those little stores by the side of the highway,” Phillips said. “And it  isn’t just all of the people who work at every level of production and  distribution. It’s the other businesses. The locally owned gas station that was  bought with cigarette money, the grocery stores, the convenience market, the  catering service.”

Even with the economic benefits provided by the cigarette trade, there are  serious drawbacks to having such a huge percentage of the economy relying on  just one activity.

“In Akwesasne, you’re starting to see problems where kids don’t see the value  in an education because there’s so much money to be made selling smokes,” said  Karl Hele, director of the First Peoples Studies program at Concordia  University. “The real question is, what do you do the day people stop smoking?  What if your only experience was working in an industry that’s now obsolete.  It’s a serious problem.”

Unlike many observers, Hele doesn’t think tougher laws or more policing will  prevent the flow of native cigarettes into Canada.

“You might see more people go to jail and you might see the price of a carton  go up a bit, but there’s no stopping it,” he said. “Police can barely put a dent  in the industry now, the only way they’ll stop it is if they form a blockade  between Cornwall and Akwesasne, (N.Y.).”

Still, Phillips fears that if native tobacco isn’t regulated the consequences  could be dire for Kahnawake.

Phillips wants to see the town’s tobacco vendors get together with band  council and iron out a system that would establish industry standards. He speaks  of ridding the trade of drug and weapon smuggling, of making native cigarettes  100-per-cent legitimate and ensuring that the revenues from sales are all  reinvested locally.

Without regulation, it’s impossible to know how many cigarette factories  operate on the South Shore Mohawk reserve — although estimates place the number  of local manufacturers at about 10 to 12. The factories are often hidden in  plain sight, operating in nondescript warehouses and dimly lit buildings.

Owners pay their employees upwards of $800 each week and can hand out yearly  bonuses that number in the thousands of dollars. But because there are no  industry standards in place, they can also be fired or laid off at the drop of a  hat.

Historically, there’s been resistance from vendors, who fear band council  control will lead to taxation. But without immediate action, Phillips and Simon  fear the worst.

“If the RCMP completely shuts down the trade, and puts thousands out of work,  what do you think will happen?” Simon asked. “People don’t just accept poverty,  they fight back. So you’ll see people opening marijuana grow operations, you’ll  see people committing other crimes or maybe you’ll see a new, poorer generation  of Mohawks. Is that really the solution?”