NY: Tribal draft deal sparks outrage

Tribal draft deal sparks outrage
Document outlines plan to resolve land dispute, tobacco tax issues
By JAMES M. ODATO, Capitol bureau

ALBANY -- Amid the push to bolster cigarette taxes in New York on Monday, some reporters obtained a draft settlement between the state and the Oneida Indian Nation aimed at resolving a lawsuit over a highly controversial land deal and long-standing tobacco taxation issues. The proposed "stipulation and order" raised questions in the Capitol about the direction the Paterson administration is taking in negotiations with entrepreneurial tribes as he pushes to maintain the right to negotiate agreements with tribal governments to resolve various disputes.


The document, which the Oneida tribe labeled a "discussion piece," would resolve a federal lawsuit by the state and two central New York counties against the U.S. government and the tribe over the Department of Interior's granting in 2008 of 13,003 acres in Madison and Oneida counties as Oneida territory exempt from property taxes.

"I'm absolutely flabbergasted by this," said Paul W. Miller, Madison County administrator. He said the draft, which has editing notes from Gov. David Paterson's lawyer, should never have been written without consultation with county officials. He said Paterson's lawyers should not be allowed to practice law and the governor should resign.

"For the governor or anybody in his office to think they can give it away without speaking to us is criminal," he said.

The draft reveals a plan for a settlement to be signed by a federal judge last month to allow the Interior Department to place up to 30,000 acres in the two counties into trust for the tribe, making it Oneida territory. It would require the tribe to sell cigarette products at similar levels to off-reservation stores to nullify the advantages of not charging excise and sales taxes. It specifically states that cigarettes made by the Oneida tribe on its reservation could be sold tax-free. The Oneidas have acquired a cigarette-making plant in western New York.

Morgan Hook, a spokesman for the governor, would not respond to questions about the draft. Assemblyman David Townsend, R-Sylvan Beach, and Sen. Joseph Griffo, R-Rome, had more questions than comments, and suggested a reporter talk with lawyers.

But tribe spokesman Mark Emery said the document represents a "discussion piece" that is obsolete.

"It sounds pretty scary to me," said Claudia Tenney, a former Assembly lawyer for Townsend who is running for his seat. "It sounds like a nonsense proposal."

David Schraver, a lawyer representing the two counties, said he was unaware of the proposed stipulation until Monday. "I expect we'll be learning more about it from the Paterson administration," he said.

The deal has terms that could be a blueprint for other agreements with tribes selling cigarettes, allowing them to internally tax products without remitting any revenues to the state, but ending the disadvantage that off-reservation stores face when marketing to customers. But it would appear to remove a bargaining chip the state has to get the Oneidas to share casino revenues with the state. Miller suspects the Oneidas wrote the draft.