Friday, December 11, 2009

Criminal Enterprises and Politically Criminal Negligence

The NY Post is reporting on the alleged violation by Indian cigarette retailers of a court order to cease selling untaxed smokes-cigarettes that are finding their way into NYC: "New York City has accused several cigarette dealers on a Long Island Indian reservation of secretly defying a court shut-down order. The charge is the latest in a legal battle between Mayor Bloomberg and smoke shops on the Poospatuck Indian Reservation over the sale of millions of dollars in untaxed cigarettes. In August, a federal judge ordered most of the largest shops on the reservation to stop selling untaxed packs to the general public, saying such sales were illegal."

This is exactly why there is a need for a comprehensive approach-and strong state action-to this endemic problem of tax avoidance. The culprits in this case-folks who hide behind a Native American mask-are simply run of the mill criminals: "Publicly, the shops promised to abide by the ruling, but in a motion filed in federal court on Wednesday, lawyers for the city said three dealers quietly continued to do business through newly formed cigarette stores not covered by the court order. Among those accused of violating the ban is longtime shop manager Rodney Morrison, who already faces a likely prison term over his dealings in untaxed cigarettes. Morrison, a one-time cocaine dealer who made a fortune after he gave up drugs to open a smoke shop, is scheduled to be sentenced today in a federal racketeering case."

But these are criminals who have been given what amounts to a blanket immunity by the governor of New York State-and as a consequence of this bit of nonfeasance, the tax payers of our state are being ripped off to the tune of possibly $1.6 billion a year. As the new legislative year begins in January, this isn't a fiscal issue that can't responsibly be ignored.

The tax department needs to come clean and provide the legislature with all of the books and records involving the sale of cigarettes in New York so that a clear picture of what kind of revenue stream is being lost can be determined. Davis Paterson talks tough about the legislature's failure to come to grips with the seriousness of the state's fiscal crisis, but all of his tough talk rings hollow when we observe his Caspar Miltquetoast routine with Indian tax cheats.

The city is to be commended for its aggressive legal action-and this action has underscored the blatant illegality of what these retail buttleggers are doing: "The city has asked US District Court Judge Carol Amon for thousands of dollars in penalties against the three men. In August, Amon ruled that the tribal shops' longtime practice of selling cigarettes without collecting required state taxes was illegal."

Now if only the governor would stop his faux tough guy act with the likes of Senator Espada, and come out from under his desk on this issue. It's not all about the money; the respect for the rule of law is also at stake.