Winnebago Tribe slams raid on businesses as attack on sovereignty

Wednesday, January 31, 2018  

Federal agents spend two days on reservation as part of tobacco probe

Tribe calls action a 'direct assault' on its sovereignty
By Kevin Abourezk
@Kevin_Abourezk

Note: This post has been updated with comments from Michelle Free LaMere, a tribal citizen who witnessed the actions of the federal agents on the reservation.

The leader of the Winnebago Tribe is firing back at federal and state officials in Nebraska, a day after federal agents raided the offices of the economic development corporation on the reservation.

Chairman Frank White laid blame for the raid by the Bureau of Alcohol, Tobacco, Firearms and Explosives on the state of Nebraska, which has been in a long-running dispute over tobacco taxes with Ho-Chunk Inc., the tribe’s economic development corporation.

“We believe the ATF was influenced by the state of Nebraska to investigate Ho-Chunk, Inc. and its subsidiary, Rock River Manufacturing, to help the state gain advantage in an ongoing tax dispute,” White said in a statement. “This is unfortunate because the federal agents’ actions place many of our tribal members’ jobs at risk.”

Federal agents remained on the tribe’s reservation in northeast Nebraska on Wednesday. Just a day earlier, nearly 50 ATF agents were seen on the reservation. Many could be seen carrying boxes out of corporate offices, including the company’s headquarters, HCI Distribution, Rock River Manufacturing and Village Pointe, an office complex that houses many of the company’s subsidiaries.

The agents arrived around 8am Tuesday and entered the company’s offices with their guns drawn, according to witnesses. They primarily drove black, unmarked SUVs and remained in the community late into the night, packing boxes into loading trucks.

Michelle Free LaMere, a 51-year-old tribal member, said she spent nearly six hours Tuesday watching federal agents as they walked in and out of HCI buildings and later witnessed agents loading boxes into loading trucks.

She even briefly followed one truck as it left south from Winnebago on Nebraska Highway 77. On Tuesday night, she watched agents loading boxes into trucks filled with items they had taken from Village Pointe.

“We could see them loading box after box after box,” she said. “It looked like they had merchandise on pallets. They were using a forklift to move the pallets.”

After filling the truck, which was nearly the size of a semitrailer truck, they moved it away from a loading bay behind Village Pointe and moved a U-Haul-sized loading truck into the bay and began loading more items.

“As the first one was pulling out, we saw the agents, two agents, high-fiving each other, and we thought that was not very tasteful,” she said.

HCI Distribution and Rock River Manufacturing are subsidiaries that are engaged in tobacco manufacturing and distributing.

The company’s spokesman, Sam Burrish, spoke to reporters briefly Tuesday, saying he was limited in what he could disclose because HCI was the subject of an ongoing investigation.

“The law enforcement activities at Ho-Chunk, Inc. on Tuesday are the latest round in a 20-year state-tribal tax dispute,” Burrish said during a press conference held at Ho-Chunk Centre, a company property in Sioux City, Iowa. “We are fully cooperating with authorities. Ho-Chunk, Inc. is confident that in the end, tribal sovereignty will prevail.”

ATF agents have referred media representatives to the U.S. Attorney’s Office in Nebraska. Jan Sharp, chief of the criminal division in Omaha, said he couldn’t comment on the investigation.

“Per (Department of Justice) policy, we’re just not allowed to comment on an ongoing investigation,” he told Indianz.Com on Tuesday.

In its press release Wednesday, the tribe said it considered the federal raid “a direct assault on tribal sovereignty.” The tribe said ATF agents raided four Ho-Chunk Inc. sites and seized records related to tobacco sales.

The majority of seized information is subject to an ongoing federal court case in Washington, D.C., according to the tribe. As part of the lawsuit, the company is seeking to get a lower court’s decision reversed.

The case involves efforts by the ATF to get HCI to hand over records related to its tobacco sales to other tribes or individual tribal citizens. The company already has agreed to hand over records related to its sales to non-Indian individuals or entities.

But the federal government has argued that the Contraband Cigarette Trafficking Act requires tribes to hand over all of their tobacco sales records.

Last May, a federal judge agreed and ruled that the company must comply with the law. An appeal of the decision is pending before the D.C. Circuit Court of Appeals, with oral arguments scheduled for March 15 in Ho-Chunk, Inc. v. Sessions.

Like most governments, the tribe relies on tax revenues to fund essential programs and services. At Winnebago, the tobacco taxes help pay for the tribal college, a community development fund, health care, language revitalization and infrastructure.

“Additionally, in recent years the taxes helped 40 families purchase new homes through down payment assistance funds,” the tribe said in its statement.

The tribe has attempted to negotiate a tobacco tax compact with the state of Nebraska to address ongoing issues. But negotiations ended last year without a resolution, according to the tribe.

The state believes the tribe should be required to participate in the tobacco master settlement agreement, even though the 1998 court agreement between 46 states, five U.S. territories, the District of Columbia and major tobacco companies did not include Indian Country. The state also contends the tribe should be required to pay money to Nebraska for its tobacco sales, just like the big tobacco companies.

The tribe, on the other hand, has argued that its sovereign status protects it from having to participate in the settlement without its consent.

Ho-Chunk Inc. has long engaged in tobacco sales, manufacturing and distribution on the reservation and in Indian Country. Its activities have seen repeated threats and actions from state and federal authorities.

“The Winnebago Tribe looks forward to settling this dispute and will continue to fight to protect its sovereign status,” Chairman White said.

Free LaMere, a university student studying education, said she’s frustrated to see HCI have to continually fight off attacks by state and federal officials as the company has attempted to build its tobacco sales and distribution business. She credited Lance Morgan, president and CEO of HCI, and his staff for defending the tribe’s economic development efforts.

“To me, it’s disgusting, the level of greed,” she said. “They can’t let Winnebago or HCI take just a tiny morsel of the pie. They have to have the whole thing."

“It’s just frustrating, but I’m very proud of Lance and his crew for fighting so hard and for overcoming all the obstacles that they’ve overcome so far and I have faith they’re going to overcome this one, too.”

HCI owns Indianz.Com. The website is operated by a different subsidiary and is not involved with the tobacco operations.

Winnebago Tribe corporation cooperates with probe into tobacco (January 30, 2018)