Big Tobacco’s New York Black Market
How America’s Top Cigarette Firms Fueled a Billion-Dollar Underground Trade
WASHINGTON - America’s three top tobacco firms — Philip Morris USA, Lorillard, and R.J. Reynolds — supplied two-thirds of all cigarettes sold last year through New York State’s Indian reservations despite ample evidence that those sales fuel a billion-dollar black market, according to an investigation by the International Consortium of Investigative Journalists (ICIJ), a project of the Center for Public Integrity in Washington, D.C.
- As New York State struggled with a massive fiscal crisis in 2007, Lorillard, Philip Morris, and R.J. Reynolds funneled 4.3 billion tax-free cigarettes to smoke shops on New York Indian reservations — more than 25 percent of the companies’ combined total sales in the state.
- Lorillard, maker of the popular Newport brand, sold 40 percent of its cigarettes in New York, 2 billion of them, through reservations — more than any other manufacturer.
- To distribute through the reservations, tobacco companies have relied on a handful of wholesalers who ship billions of untaxed cigarettes to Indian stores. One in three cigarettes sold in New York last year was channeled, untaxed, through these wholesalers, who are being sued by New York City for complicity in cigarette smuggling
The International Consortium of Investigative Journalists (ICIJ) was launched in 1997 as a project of the Center for Public Integrity to globally extend the Center's investigative style of journalism in the public interest. ICIJ's global network includes nearly 100 of the world's top investigative reporters who produce collaborative, cross-border reports on major global issues around the world. www.icij.org
The Center for Public Integrity is a nonprofit, nonpartisan independent Washington, D.C.-based organization that does investigative reporting and research on significant public issues. Since 1990, the Center has released more than 400 investigative reports and 17 books. It has received the prestigious George Polk Award and more than 22 other national journalism awards and 16 finalist nominations from national organizations. In April 2006, the Society of Professional Journalists recognized the Center with a national award for excellence in online public service journalism for the fifth consecutive year. In March 2007, the Center was given a special citation for the body of its investigative work from the Shorenstein Center on the Press, Politics and Public Policy at Harvard's Kennedy School of Government. www.publicintegrity.org