Late Monday, I got a tip from one of my contacts. It was one of those tips where a little negotiating went on. I couldn’t air the story right away, but I could “go with it” after midnight. So I am writing this story around 5 with the idea it will go up on the Web in about seven hours. I will also do an “as-live” that is TV speak for a taped report that “looks live” for the overnight headlines.
The new report, obtained by FOX News, claims that cigarette smuggling is generating big bucks for terror groups overseas. The total terror funding is estimated to be in the millions of dollars annually.
The ranking member of the House Homeland Security Committee, Peter King, who called for the investigation said, “This is a very serious homeland security issue, one that has gone unnoticed for far too long. Cigarette smugglers are able to generate millions of dollars in illegal profits with a great deal of this wealth being sent to terrorist groups overseas – groups that would like nothing more than to inflict devastating harm on our country and its citizens.” The fifteen page report, obtained by FOX, includes intelligence from law enforcement sources as well as New York State’s Department of Taxation and Finance. The report reads in part:
“Historically, the low-risk, high profitability of the illicit cigarette trade served as a gateway for traditional criminal traffickers to move into lucrative and dangerous criminal enterprises such as money laundering, arms dealing, and drug trafficking. Recent law enforcement investigations, however, have directly linked those involved in illicit tobacco trade to infamous terrorist organizations such as Hezbollah, Hamas and Al Qaeda.”
One of the key issues, according to the report, is what maybe a fundamental flaw in New York state policy. In that state, according to the Congressman King’s office, there is a policy of “forebearance,” or refusing to collect on sales of Native American tax-free cigarettes to non-Native Americans. Critics of the policy say it has effectively created a safe haven for smugglers. In some cases, the report claims that a well-organized operation can generate up to $300,000 per week with a loss of up to $576 million in tax revenues to New York State.
According to the report, citing federal and New York state law enforcement sources, nearly 60 percent of all convenience retail outlets in New York City are now Arab-owned, primarily families of Lebanese, Yemeni, Jordanian and Palestinian descent. While the vast majority of retailers are operating above board, some are not, seeking their supplies from Native American reservations. The benefits of tax-free cigarettes are obvious.