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WASHINGTON GIVES ITS BLESSING TO DUTY-FREE CIGARETTES, A BIG BUSINESS AT THE BORDER

There's something about the proposed Peace Bridge Plaza that might have people at the White House, especially Vice President Gore, scratching their heads if they knew.

Gore made this dramatic speech at the Democratic Convention in Chicago last year about cigarettes. He told of watching his sister's life ebb away from lung cancer. The next day, Gore told reporters at a luncheon I attended that he felt guilty because he and other members of his family shared in the money their tobacco farms earned while his sister was sick from cigarettes.

He attributed this lapse to "numbing," a process where people just blot out things selectively. A number of reporters questioned his sincerity. I was troubled about this, but I wanted to believe him.

So I felt better when he and President Clinton went on their crusade against cigarette advertising.

Then Clinton and Congress pushed through an increase in the cigarette tax to help pay for children's health care.

Yet, foreign and American business interests, with the government's help, are cashing in on this well-intended reform.

Using licenses controlled by the Clinton administration, their companies sell untold amounts of cigarettes, as well as liquor, to tourists at almost every crossing point between this country and Canada and Mexico. They sell cigarettes and liquor at all the international airports, and even on some trans-oceanic planes.

The big attraction these stores have is that the purchasers don't pay any federal taxes on these cigarettes, as they would have to do if they bought them at the gas station just before crossing.

One needn't be a an odds-maker to realize that these tax-free border stores will profit from what Gore and Clinton and Congress did when they raised taxes on cigarettes. As domestic taxes increase, so will the attractiveness of these duty-free cartons.

About a month after President Clinton signed the law raising the tax by 20 cents a pack, the Connecticut-based company that owned the duty-free stores along the Niagara, and elsewhere, sold out to a British company, BAA plc, for about $661.6 million.

Then, just last October, the plans released by the Peace Bridge Authority for its toll plaza showed a massive expansion of space provided on government-owned land for BAA's "duty-free" store.

In the great Buffalo bridge debate, we're getting strong preachments from economists and politicians about how precious space is in the plaza. The premium is on moving trucks and auto traffic through this plaza with dispatch, they say. This means progress, they say.

Yet, a look at the Peace Bridge Authority's plans for the plaza shows a lot of space set aside for a brand new duty-freestore right on this cherished real estate.

In addition, the authority proposes setting aside in this coveted space between 95 and 115 parking spaces for customers of BAA's duty-free store. BAA operates the store in Fort Erie where tourists buy ciggies tax-free on their way into New York.

The Buffalo-side store does not need to be on the bridge or on the plaza. Under federal law, the store only needs be within 25 miles of the border.

The store used to operate on Porter Avenue in property that paid city and county real-estate taxes.

Nothing the authority has published, or that economists and politicians have said, shows how the traffic generated by this big new store and its mini-plaza is going to do anything but impede the movement of trucks.

Some say the authority's plaza plans look less like a conduit for traffic and more like the layout for a pinball machine, without the flippers.

There's a bit of "numbing" going on in the Clinton administration about these stores. No one knows why Clinton and Gore went on a tear on cigarettes, on one hand, and care nothing about the administration's role in marketing tobacco at the country's borders.

The U.S. Customs Service, which is directly answerable to Treasury Secretary Robert Rubin, issues the stores' permits. Customs doesn't like the term "permit," but the stores can't avoid paying taxes unless Customs approves their applications.

If not government in the shadows, Customs' duty-free store business is government in deep shade. While polite, Customs spokesmen in Washington were not prepared to divulge a lot of detail about the stores. They said, for example, they do not know the volume of cigarettes they sell.

For information on how the Buffalo permit was issued, and for how long, and whether the vendor paid our government anything for the privilege of avoiding taxes, Washington referred me to Customs/Buffalo, which made no pretense of courtesy.

File a written request for what you want, the Buffalo office said.

The authority's partisans will claim the agency's generosity to the duty-free store is part of economic development. Sen. Jesse Helms says the same thing about the tobacco business in North Carolina.

Can this be part of the reason that Frederick Law Olmsted's Front Park is being carved up like a Christmas goose? Oh well, pass the chutney.

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