OMAHA TRIBE OF NEBRASKA
Testimony of
GARY LASLEY, CHAIRMAN
OMAHA TRIBE OF NEBRASKA
Before the:
105TH CONGRESS
SENATE COMMITTEE ON INDIAN AFFAIRS
Oversight Hearing on S. 1530 & S. 1414
February 12, 1998
1. INTRODUCTION
I thank the Indian Affairs Committee for scheduling this Oversight Hearing, and for granting
me the opportunity to speak on behalf of Indian Nations, and in particular, the Omaha Tribe of
Nebraska. As a matter of background, the Omaha Tribe is a federally recognized Indian Tribe
organized pursuant to the Indian Reorganization Act, under a Constitution and Bylaws ratified by
the members of the Tribe on February 15, 1936 and approved by the Secretary of the Interior on
March 30, 1936. The Omaha Indian Reservation is located in the States of Nebraska and Iowa.
Before the Omaha Tribe even signed treaties with the United States, the Tribe cultivated and manufactured tobacco for trade and cultural use. That tobacco was used in a reverent and sacred
manner by the Tribe, and used by the Omaha Tribe when signing our Treaty with the United
States. Today, the Omaha Tribe operates an ATF licensed cigarette manufacturing plant located
on land in Nebraska held in trust by the United States for the benefit of the Tribe within the
exterior boundaries of the Omaha Indian Reservation. The Tribe has fully complied with all
relevant federal laws and licensing procedures for establishing its cigarette manufacturing
facility. It will also pay all relevant excise taxes including any federal excise tax on its tobacco
products
Senator McCain's (S. 1414) and Sen. Hatch's (S.1530) legislation mandates a total
reformation of how tobacco products are regulated by government and manufactured by
companies. As noted in the last Hearing, the Omaha believe societal benefits of this legislation
will be vast, and therefore encourages swift progress in preventing underage use of tobacco,
addressing the adverse health effects of tobacco use and changing the corporate culture of the
tobacco industry. Thus, the Omaha urges inclusion within this legislation and subsequent federal
regulation. I would like to address, however, tribal concerns with these Bills from two
perspectives: (1) as a tribal government, and (2) as a cigarette manufacturer.
A. Tribal Government Concerns
Because this legislation greatly strengthens both the federal and state governments' regulatory arsenal over tobacco products, it must be very clear on its treatment of Indian tribal governments. First, I would like to recognize the refined effort of Senator McCain and Senator Hatch for addressing many Indian tribal concerns of the Tobacco Settlement. Specifically, both
Bills now include provisions treating tribes as states in regard to establishing retail licensing procedures and regulations. These provisions clearly authorize tribal governments to license retailers of tobacco products. Treating Indian tribes as states is a favorable approach as evidenced by the good precedent established in the Clean Air and Water Acts. However, the Omaha believe the legislation could further encourage and recognize tribal sovereignty (1) by allowing tribes to create their own retail licensing requirements apart from state intervention; and (2) by creating an Indian provision granting jurisdiction for enforcement of the legislation.
1 . Tribes Should Reserve the Right to Implement Retail Licensing Regulations
Independent of State Interference.
Senator McCain's Bill provides that even if Indian tribes qualify for treatment as a state under the Act, each tribes' standards must be at least as strict than the program of the state in which the tribe is located (Title Y, Sec. 1002(c)). The minimum federal standards further preserve the authority of state and local governments to enact even more severe standards for retail licensing procedures. Therefore, any strict additions that the states endorse will be vicariously enforced in Indian country. This allows for tremendous state interference in a regulatory activity that should be reserved to tribal governments under the auspices of the federally administered Act. Tribal governments that create retail licensing standards that are above the federal minimum standards certainly will not apply to states, and likewise, state standards above the federal minimum standards should not apply to tribes. Indian tribes do not dispute federal regulation and oversight, but the regulation must be conducted on a government-to-government basis between strictly the federal
government and the respective tribe. This policy would be consistent with the overall United
States goal of self-governance and self determination for Indian tribes. The legislation should
omit the provision requiring tribes to create retail licensing standards at least as strict as the
standards of the state where the tribe is located.
2. Enforcement -Of the Settlement Should be Clearly Granted to Tribes in Indian
Country.
The legislation does not make clear that enforcement of the provisions over tribes will lie with
the Federal government and the tribes themselves. While setting a Federal "floor" for tobacco
control measures in many substantive areas, this legislation preserves, to the maximum extent, state
and local government authority to take additional tobacco control measures. This would include the
authority of a state or local government to further regulate, restrict or eliminate the sale or
distribution of tobacco products, and to impose state or local taxes on such products. While the
legislation states that Indian tribes will retain similar flexibility, it should be made expressly clear
that tribes have the same affirmative authority, and should be free to exercise it in compliance with
standards set by the Federal government. Additional state actions and measures should not impose
increased obligations or requirements on Indian tribes beyond those already imposed by the Federal
government and tribes themselves.
B. Tribal Manufacturing Concerns
The Omaha believe the legislation will not allow the tribal manufacturing facility to participate as a signatory, and still maintain operations. As a matter of background, the Omaha Tribe operates an ATF licensed cigarette manufacturing plant located on land within the exterior boundaries of the
Omaha Indian Reservation. The Omaha have fully compiled with all relevant federal laws and
licensing procedures for establishing its cigarette manufacturing facility. The Omaha established
the cigarette manufacturing facility in response to the Seventy Percent 70% unemployment rate on
our Reservation. The Omaha at first established a casino, but due to local non-Indian owned
competition, our casino has not been very profitable. The cigarette factory employs tribal members,
thus reducing the high unemployment rate, as well as reducing the burdensome drain of tribal funds
that accompanies the high unemployment rate. In the spirit of the Welfare Reform Act, the
manufacturing facility has provided an alternative means of living for those currently on welfare.
The State of Nebraska has not done anything to create jobs or alternative means of living for tribal
welfare recipients. Indeed, Nebraska has a very poor track record in providing these services to the
Omaha. Additionally, the revenues that the Omaha stand to derive from the manufacture and sale
of its own cigarettes will further the Federal government policy of tribes' achieving self-sufficiency,
and reduce the Omaha's dependence on Federal government support.
1 . The Omaha Should Not Be Held Liable for the Past Behavior of the Large
Cigarette Companies.
While the Omaha desire to participate as a signatory to the legislation, we are concerned over the severe penalties assessed to cigarette manufacturing companies for "past behavior"(S.1414,Sec.
702) (S.1530, Sec.257). (1) The Omaha did not engage or participate in any of these past
behaviors, and accordingly, should not be liable for that portion of the Settlement thereof. The
value gained by the large companies in having civil liabilities from past conduct dismissed
should not be assessed to the Omaha. For example, the Omaha do not have any "past" civil
liability or law suits against its cigarette facility because it is a new operation. Because the
Omaha--as a manufacturer--does not have any past bad acts to settle, the Omaha should be
given more consideration and incentive for becoming a signatory to the legislation. Thus, the
legislation should only subject the Omaha to paying its legitimate market-share of the cigarette
industry's annual payment for future claims and liability.
The overall liability inclusion of the tiny Omaha manufacturing facility for activity taking
place prior to the legislation would mean a certain death sentence for the new company. The
Omaha are very poor people, and we are trying our best to stimulate income through a
legitimate business venture. The cigarette business right now barely makes enough to pay
overhead, employee salaries, and materials. Under the legislation, the Omaha should only be
subject to paying its market-share of the cigarette industry's annual payment for the settlement
of future claims. 2. New Tribal Cigarette Companies Should Be Granted a Level Playing Field
Through this Legislation.
The advertising regulations in this legislation unwittingly perpetuates the large manufacturer's
goal of strengthening the powerful cigarette oligopoly. Established brand names such as Marlboro
or Camel will be less impacted by the advertising restrictions than newer brand names such as the
Omaha brand of cigarettes. Without venue's for introducing a new product, the Omaha can not
penetrate the market or mount any serious challenge for regional market share against the established
big tobacco companies. Accordingly, the Settlement does not provide a level playing field for new
tribal manufacturers and will entrench the present cigarette industry even further. Under the deal,
advertising exemptions should be fashioned allowing new tribal cigarette manufacturers to launch
a market penetration strategy, thus promoting free enterprise.
II. CONCLUSION
From a tribal government perspective, the Tribe does not dispute federal regulation and
oversight, and urges inclusion within the legislation. While the legislation has addressed many tribal concerns with the original Tobacco Settlement, there are still provisions that infringe upon tribal sovereignty. For example, the requirement that tribal retail licensing standards must be at least as strict than the program of the state in which the tribe is located allows state standards to be vicariously enforced in Indian country. This allows for unprecedented state interference in a tribal economic activity that should be reserved to tribal governments under the auspices of the federally administered Act. Indian tribes do not dispute the need for federal regulation and oversight, but the regulation must be conducted on a government-to-government basis. The legislation should omit
provision requiring tribes to create retail licensing standards at least as strict as the standards of
the state where the tribe is located.
From a manufacturing perspective, the Omaha are concerned about the severe penalties
assessed for "past behavior" of cigarette companies. The Omaha facility is in its embryonic
stage, and did not engage or participate in any of these past behaviors. Accordingly, the Omaha
should not be liable for that portion of the Settlement. Under the legislation, the Omaha should
only be subject to paying its share of the cigarette industry's annual payment for the settlement of
future claims. The Omaha's concern over these penalties stem from the severity and direct
impact they 'll have on the newly opened Omaha cigarette facility. The overall liability inclusion
of the tiny Omaha manufacturing facility for activity taking place prior to the legislation would
mean a certain death sentence for the new company. The Omaha is a very poor tribe, and we are
trying our best to stimulate income through a legitimate business venture. The legislation should
not force the Omaha tobacco facility to be held liable for the cigarette industries past bad acts.
If you have any questions regarding my testimony, I will be happy to provide supplemental
remarks. If you desire additional language for the legislation, I would also be happy to assist
with that effort. Thank you.
1. The Omaha recognize--and do not intend to defend--the unconscionable past acts of the large
cigarette manufacturing companies. The Omaha understand that tobacco executives discovered
smoking's risks long before the Surgeon General, and yet intentionally kept this information
confidential. Indeed, the Omaha realize that in April, 1994, executives from the seven largest
U.S. tobacco companies swore in congressional testimony that nicotine isn't addictive and denied
manipulating nicotine levels in cigarettes. Further, large cigarette companies not only sold
cigarettes to minors, but targeted young kids as a market niche. The Omaha does not contend
that these past atrocities of the large companies go unnoticed, rather, the Omaha's concern over
these penalties stem from the severity and direct impact they will have on the newly opened
Omaha cigarette facility.