On Wed, Apr 30, 2008 at 7:14 AM, Raphael Moeller wrote:

SMUGGLED BUTTS: THE TERROR TIES – New York Post

THE TERROR TIES
By PETER KING

April 30, 2008 — STATE law-enforcement officials approached me several months ago with some disturbing news: Recent investigations have indicated that cigarette-smug gling rings in New York are funneling large sums of money to overseas terrorist groups. The officials estimated it at millions of dollars a year.

I immediately ordered my staff on the US House Committee on Homeland Security to conduct a full investigation; the results are alarming.

The report, based on interviews with federal, state and local officials, sheds light on two startling issues:

Smugglers send millions a year to Hamas, Hezbollah.

* By failing to enforce its tax laws, New York state has in essence created a safe haven for cigarette smuggling.

* The reports of cigarette smugglers’ sending money to terrorist organizations are true.

New York’s refusal to collect taxes on the resale of untaxed cigarettes by Native American reservations – a policy called “forbearance” – has created an incredible opportunity for criminal enterprises.

Smugglers can buy cartons of brand-name cigarettes from the reservations for as little as $30, attach counterfeit tax stamps and resell them for more than twice what they paid.

Keep in mind that it’s illegal for reservations to resell these cigarettes to non-Native Americans without paying the applicable taxes. But Albany’s policy is to turn the other cheek – simply out of fear of a political backlash.

The profit margins for cigarette smugglers are staggering. In New York City, where cartons must sell for a minimum of $70, a smuggler can make more than $50,000 on a 1,500-carton load. A well-organized ring can generate $200,000 to $300,000 a week.

A 2006 state Department of Health report estimated that New York loses $436 million to $576 million a year in taxes from the sale of untaxed cigarettes alone – a figure that could rise to $800 million-plus this year.

Given the state’s budget shortfall, the hundreds of millions in lost revenue would seem to be more than enough reason to end the “forbearance” policy. But it’s far more than just a matter of revenue – it’s a matter of national security.

Many cigarette-smuggling rings are now sending their profits to overseas terrorist organ- izations, including Hamas and Hezbollah. The report identifies three recent cases where cigarette smugglers had ties to such groups. In one case, convicted butt-smuggler Mohamad Hammoud made more than $8 million from 2000 to 2002 – and funneled at least $100,000 to Hezbollah. Officials estimate that these smugglers are sending millions a year to overseas terror networks.

The $50,000-plus from just one contraband load would be enough to fund as many as 10 USS Cole bombings. In just several weeks of butt-smuggling, a motivated terrorist cell could generate enough to fund another 9/11-style attack (estimated operational cost: $500,000).

New Yorkers, more than anyone else, understand the terrorist threat – and that’s why we must bring the illicit cigarette trade in the state to an immediate end.

Last week, Gov. Paterson indicated a willingness to re-examine the “forbearance” policy; I’ll fully support him in the effort.

New York state must take action to enforce our tax laws – and give law enforcement the support it needs to crack down on cigarette-smuggling rings.

This issue has been ignored for far too long. Given the clear threat to the city, state and nation, we can’t afford to wait another day.

Peter King, a Republican

1. “don’t you know one of the first rules of economoics; namely that war is good for the economy?”

I believe you’re oversimplifying it just a bit…

2. And by the way you wrote “but that is due to a whole other set of events.”
Well why don’t you elaborate.

All you’ve done is attacked someone else and thrown out cliches. Why don’t you articulate more thoroughly before commenting.

Seriously, without rebutting your inane comments, don’t you know one of the first rules of economoics; namely that war is good for the economy? (Yes, I know that the economy is “in der erd” right now, but that is due to a whole other set of events.