BRUCE BUMSTEAD/BRANDON SUN
Supporters of the Dakota Nation and five men charged in connection with the operation of a smoke shop near Pipestone prepare to ride to the Brandon courthouse earlier this week.
The first of a series of raids of a controversial aboriginal-run smoke shop seemed to do nothing to faze one of the leaders allegedly involved in its operation, an investigator testified.
Franklin Brown — then chief of the Canupawakpa Dakota First Nation — said the shop would remain open after Manitoba Finance raided it for the first time in November 2011, the investigator recalled.
"He said that the smoke shop would continue operation," Manitoba Finance special investigator Scott Connors testified, paraphrasing from the notes he jotted down following the meeting he had with Brown and others about a week after the raid.
"He said they have the right to provide for and sustain their people, and by selling cigarettes they were doing that."
Five Dakota men are on trial in Brandon provincial court on numerous charges under the Tax Administration and Miscellaneous Taxes Act. The allegations date between November 2011 and March 2012.
The charges relate to the operation of the Dakota Chundee Smoke Shop near Pipestone and include possession and sale of unmarked tobacco, and unauthorized possession and sale of tobacco.
Supporters of the accused have described the smoke shop, which has since closed, as an expression of Dakota sovereignty and a means to speed up treaty negotiations with the federal government. Despite a history that predates Confederation, the Dakota have no treaty that recognizes them in this country.
Brown, who recently stepped down as chief of Canupawakpa, is among the five accused, as is Dakota Plains First Nation Chief Orville Charles Smoke.
The trial began Tuesday and continued on Wednesday with a show-and-tell by Manitoba Finance investigators. They displayed and described samples of the Deerfield and Wolf Pack brand cigarettes seized during repeated raids in the months that followed the shop’s opening in November 2011.
None of the seized cigarettes were marked for tax purposes in Manitoba, investigators testified.
Mike McDonald, the assistant manager for Manitoba Finance’s special investigation unit, explained that cigarettes should be marked with a grey tear strip put in place by the federally licensed manufacturer.
Such markings show that the wholesaler has collected the provincial tax when it sells the cigarettes to a retailer that then passes the cost on to the consumer.
Deerfield and Wolf Pack brand cigarettes — made by the Quebec-based Rainbow Tobacco Company — could never be sold in Manitoba, McDonald said. They were marked to show that federal duty had been paid for sale on reserves, but never marked for Manitoba tax purposes.
McDonald said the idea of bringing contraband cigarettes into Manitoba is to avoid paying provincial tobacco tax, but that means the province loses tax revenue. Based on McDonald’s testimony, the savings are passed on to the consumer in the form of cheaper prices.
Court heard that the smoke shop cigarettes were offered at $40 to $50 per carton of 200 cigarettes. By contrast, a carton marked for Manitoba tax purposes currently costs $95 to $115.
McDonald estimated that at the time of the allegations, $40 of the cost of a properly marked carton of cigarettes went to provincial tax. He roughly estimated that the province makes, on average, more than $230 million per year off tobacco tax.
The trial also included a voir dire in which Connors described meeting with Brown and Smoke at the Brandon provincial building about a week after the first raid of the shop on Nov. 15, 2011.
Court heard that during that raid, investigators had seized 317 cartons, 127 Ziploc bags and 30 individual packs — a total of 89,550 individual cigarettes.
Connors said the intent of the meeting was to discuss the search and charges against three men found at the shop during the raid.
According to Connors’ testimony: During the meeting Smoke said he started the smoke shop and would take responsibility, while Brown said investigators could charge whoever they wanted and he asked who he could charge from Manitoba Finance.
Brown said the smoke shop would continue to run as they had a right to provide for their people and selling cigarettes was part of that. He said they had never signed a treaty and weren’t under the jurisdiction of the provincial or federal governments.
Brown also seemed upset at having to talk to Manitoba Finance staffers and believed he should be talking to someone higher in the department, Connors testified.
However, Associate Chief Judge Shauna Hewitt-Michta declined to rule for now on whether the statements attributed to Brown and Smoke are admissible at trial.
To be admissible, it needs to be shown the statements were made voluntarily.
In the meantime, the trial continues, and today Crown counsel Shaun Sass will present further witnesses.
The accused, who are representing themselves at trial, have repeatedly indicated that the jurisdiction of the court will be an issue. That was reflected in the questions asked during cross-examination.
"Have you proven jurisdiction over the Dakota people?" Garth Leon Blacksmith, one of the accused, asked Connors during cross-examination.
Hewitt-Michta ruled the question inappropriate to put to the witness as jurisdiction is an issue she’ll have to decide.
Blacksmith’s questions also hinted at how the accused and their supporters view the raids.
"You state for the record that you personally participated in the armed robberies of the Dakota Chundee Shop?" Blacksmith then put to Connors, who had testified to his part in the investigation and raids.
Sass objected and Hewitt-Michta agreed the question was inappropriate.
Republished from the Brandon Sun print edition September 19, 2013