Federal agents raid 2 homes, 3 tribal smoke shops in area

Federal agents raided a warehouse, homes and tribal smoke shops Tuesday in Western Washington, executing the state's largest bust of allegedly illegal cigarette trafficking since a record-breaking seizure in 2003.

The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) simultaneously served search warrants at three privately owned smoke shops on tribal properties in the Arlington, Anacortes and Olympia areas, said agency spokeswoman Julianne Marshall.

Two state-licensed cigarette wholesalers, in Longview and in Clackamas, Ore., also were raided, along with two private homes in Washington, she said.

No arrests were made, and the ATF declined comment on the quantity or nature of the seized contraband.

State and federal agencies are investigating tribal smoke shops that don't charge cigarette taxes -- $20.25 per carton -- which are supposed to be collected by either the state or by tribes that have negotiated state contracts to use the revenues for tribal services.

Tuesday's busts were a continuation of the 2003 operation that resulted in the confiscation of 1.6 million packs from smoke shops in northern Idaho and Washington, said Kelvin Crenshaw, special agent in charge for ATF's Northwest region.

Legally sold cigarettes must bear one of three markings: a Washington taxes-paid stamp, a tax-exempt stamp or a tribal-contract stamp. All recognized tribes are allotted a certain number of tax-exempt cartons, based on tribal populations, which may be sold only to tribal members, Crenshaw said.

Contracts with state

In addition, 19 of the state's 29 tribes have secured state contracts to collect the tax themselves to support tribal programs, he said.

"The victims of this are the citizens of Washington and the tribes," Crenshaw said. "It's no different than you or I not paying our taxes."

Only one of the three smoke shops targeted Tuesday was on reservation land where a state contract was in effect, said Capt. Tim Thompson of the state Liquor Control Board's tobacco-tax unit.

The Trading Post at March Point lies on the Swinomish reservation in the Anacortes area, where the tribe collects cigarette taxes to finance programs that include Head Start, low-income housing and law enforcement, said tribal spokesman Marty Loesch.

"We support everybody complying with the law," he said. "Our tribal law enforcement is assisting with the investigation."

In the Olympia area, the Franks Landing Indian Community was dismayed by the raid of Franks Landing Indian Trade. Allison Gottfriedson, whose family owns the store, said the community has been negotiating with the state since 2005 for a formal contract. In the meantime, she said, the family for decades has donated cigarette revenues to tribal services, buying school equipment and helping the poor.

The community, a recognized entity under federal law, includes members of 27 tribes.

Gottfriedson said her home was among the two raided Tuesday.

"They had people standing outside the house with guns. They scared the heck out of my grandkids, who are 10 and 11," she said.

The Stillaguamish Tribe declined comment on the investigation of the Blue Stilly Smoke Shop, on a triangle of tribe-owned land along Highway 530 just east of Interstate 5 in the Arlington area.

Angry customer

A steady flow of would-be customers gawked at the all-day search.

"I am just furious," said a Bothell woman, 63, who made the 40-minute drive for nothing. "We need some protection from the tyranny of this government. They want to tax us to death. Smokers are easy victims -- nonsmokers don't realize it's taking away another freedom."

She wouldn't give her name.

"I have people who don't know I smoke," she said.

Diane Brooks: 425-745-7802 or dbrooks@seattletimes.com