HUD-Aided Smoke Shops Decried

Despite the Clinton administration’s vociferous public opposition to cigarette smoking, the administration has paid $4.2 million to build six stores that sell high volumes of discounted cigarettes on Native American lands.

Since 1997, when the administration was working behind the scenes to get state attorneys general to settle their lawsuits against the tobacco companies in exchange for strong new efforts to discourage teenage smoking, the federal Department of Housing and Urban Development has granted the construction funds, according to a report by Sen. Christopher S. Bond (R-Mo.).

“HUD’s decision to finance construction of these smoke shops for the sale of discounted cigarettes is, in my mind, completely at odds with efforts to discourage and reduce teen smoking,” Bond said.

Bond called on the government to stop funding the shops and find some other way to pump money into needy communities. His fervor over the issue was something of a surprise because he was an ardent opponent of the tobacco control legislation by Sen. John McCain (R-Ariz.) in 1998.

Nonetheless, Bond’s report has set off a small firestorm among anti-smoking groups that want to see the financing ended, tribal leaders who say that their projects are being unfairly singled out and the administration, which defended the projects, saying that it is up to Congress to change the law if it wants to stop grants from going to shops that sell tobacco products.

“If the senator’s point is that the federal government should not be providing funds to any facilities that sell tobacco, that would be a massive shift in federal policy,” said David Egner, deputy assistant housing secretary for public affairs.

“Hundreds of projects across the United States, including many in Missouri, would lose millions of dollars in federal funding,” he said.

HUD funds many projects such as restaurants, convenience stores and groceries where cigarettes are sold in vending machines and over the counter.

Tribal leaders lambasted the report for focusing solely on Native American-owned smoke shops. “Sen. Bond’s exclusive focus on convenience stores operated by Native Americans belies a prejudice and paternalism that poisons public debate,” said Arlan Melendez, chairman of the Reno-Sparks Tribal Council.

The government money is not being used to buy cigarettes but to build a roadside commercial business that, along with smoke shops, include art galleries and fast-food restaurants, Melendez said.

Nonetheless, anti-smoking groups are particularly offended that the shops are on reservations. Native Americans have the highest smoking rate of all ethnic groups in the United States and one of the highest teen smoking rates as well, said Matthew Myers, president of the National Center for Tobacco Free Kids.

“It’s mind-boggling,” Myers said. “It’s formal federal government policy not to directly or indirectly promote the sale of tobacco. . . . We’ve changed our foreign trade policy not to promote the sale of cigarettes. . . . And yet we’re promoting the sale of cigarettes on Indian reservations.”

One-third of Native American adults smoke cigarettes compared to fewer than 25% of adults in the overall population, according to the Centers for Disease Control and Prevention.

The report found that the smoke shops, located in Nevada and Oklahoma, typically are part of travel plazas consisting of several stores along major highways. But in at least one instance the first business to open has been the smoke shop. Smoke shops sell high volumes of discounted cigarettes, usually by the carton.

Staff members in Bond’s office who visited the shops called them “wall-to-wall cigarettes.” At one of the stores, in Thackerville, Okla., a clerk answered the telephone by saying “smoke shop.”

Most buyers at the shops were not Native Americans but people who lived in the area in search of bargains. Typically cigarettes at smoke shops are sold for less than at other retailers because they are bought and sold in large quantities. Furthermore, on tribal lands the tax laws differ, often resulting in lower rates of taxation on cigarettes, although varying from state to state.

However, in the two states in the Bond report, the tax factor was not significant in driving down the cigarettes’ prices, HUD said.

It is difficult to know how many smoke shops there are nationally, or how many on tribal lands. HUD awards community development grants primarily based on whether they create jobs, said Egner, the HUD spokesman.

A White House spokesman also defended the job-creation grants.

“This is funding which is part of an effort to promote jobs in impoverished parts of the country, including Indian reservations,” said James Kennedy, a White House spokesman. “We do want to create meaningful jobs where they are desperately needed. Part of this funding helps small businesses put in convenience stores.”