Historic compact ends legal fight between tribe, state of Oklahoma

Ending years of tension in state-tribal relations, the state of Oklahoma and the Muscogee (Creek) Nation signed an historic tobacco compact.

Tensions peaked with litigation that began in 2009, after a state investigation identified tribal smoke shops selling cigarettes obtained from unauthorized wholesalers.

The pactlegally both a compact and a settlement of litigation — was inked less than 24 hours after a special “emergency” session, of the Creek National Council, approved the agreement between Gov. Mary Fallin and Creek Chief George Tiger, with the collaboration of Attorney General Scott Pruitt. The tribal Legislature’s vote was unanimous, 15-0.

The compact is a first for Fallin, who came into office in January 2011, and Tiger, whom tribal members elected in September 2011. At the signing ceremony, officials avoided all references to past discord, focusing instead on lauding “valuable partners” and a “spirit of cooperation” going forward.

“This was far too long in being signed. We look forward to more relationships with communities around the state. After all, we’re all Oklahomans,” Tiger told CapitolBeatOK.

Fallin and Pruitt left Friday’s formal signing ceremony without taking questions from reporters, while Tiger was guarded in his comments.

“This is the start of a new relationship, and much of that will be carried out at the local level in partnerships with other communities. Economic development will be important in this. All of us are happy to resolve this and move forward,” Tiger said.

“This” was muted reference to three years of litigation Creeks lost earlier this year.

Former Attorney General Drew Edmondson, a Democrat, filed the original lawsuit in Tulsa Country District Court against Creek-operated tribal smoke shops.

In 2010, the tribe countered with its own federal lawsuit, asserting the wholesaler was on “Indian land” and the state could not limit sales. In February of this year, the U.S. Tenth Circuit Court of Appeals in Denver sided with Oklahoma, clarifying the state had authority to regulate tribal tobacco sales even when and if cigarettes are purchased from another tribe.

That federal ruling ended a stay on the Tulsa County lawsuit. Pruitt’s office will not seek a formal dismissal of that lawsuit, however, until the tribe repays $11.5 million to the state.

That is a sum Fallin’s legal counsel, Steve Mullins, declined -in response to a question from CapitolBeatOK– to characterize as a penalty or fine. However, legal references to the settlement have routinely characterized the sum as a penalty or fine.

Expressing satisfaction with the outcome was state Rep. Jerry McPeak, D-Warner, a citizen of the Muscogee (Creek) Nation.

Fallin and Tiger each credited McPeak with “facilitating communication” between the executives. McPeak told CapitolBeatOK he was “very happy” with the result.

The compact allows up to five years for settlement of financial terms. In addition, the state begins collecting money in the place of taxes.

“The compact governs the payment of taxes to the state on the retail sale of cigarettes and other tobacco products sold on Creek Nation lands. The Oklahoma tax on cigarettes is $10.30 on a carton; under this compact, Oklahoma will receive 50 percent of that tax rate from retail sales by the Creek Nation,” according to a news release.

While welcoming the compact and end of litigation, Fallin and Tiger said they would continue efforts to reduce smoking rates among all Oklahomans.

You may contact Patrick B. McGuigan at Patrick@capitolbeatok.com and follow us on Twitter: @capitolbeatok.