NM lawmakers put off vote on Indian Affairs nominee

SANTA FE, N.M. (AP) – Gov. Susana Martinez's nominee to lead the Indian Affairs Department is under scrutiny from lawmakers over possible illegal sales of cigarettes at a store operated by the cabinet secretary's family.

The Senate Rules Committee agreed Monday to temporarily postpone a vote on the confirmation of Indian Affairs Secretary Arthur Allison because of questions about the sale of untaxed cigarettes at the Star Ranch Store, which is near Farmington on the Navajo Nation.

At issue are sales to non-Indians of cigarettes without New Mexico's tax and the sale of certain cigarettes that the attorney general's office contends are prohibited in New Mexico.

Martinez appointed Allison last year to run the agency. He is the first Navajo appointed to the cabinet-level job.

Allison told the committee that he has turned over the store's operation to his son and doesn't receive compensation from it.

“I take no profit from it. I am not the managing member,” said Allison, who described himself as a “passive member” of the partnership that owns the gasoline and convenience store.

However, Sen. Peter Wirth, D-Santa Fe, repeatedly quizzed Allison about his financial stake in the store and said it's possible for a “passive member” to be entitled to a share of a partnership's money. Wirth pointed out that Allison's state financial disclosure statement listed the store under a category of “other business interests in New Mexico of $10,000 or more.” Allison said he included the store because it had sales of more than $10,000.

At the request of lawmakers, Allison said he will provide the committee with a copy of the operating agreement for the store. Wirth said that will shed light on whether Allison continues to have a financial interest in a store that possibly violated state law.

Wirth and Senate President Tim Jennings, D-Roswell, said the committee must resolve questions about the store and Allison's involvement to avoid a potential confirmation fight in the Senate. Allison must step down from his $87,000-a-year government job if the Senate rejects his nomination.

“I don't want to do anything that hurts Mr. Allison's reputation,” said Wirth.

Jennings said, “I don't think anybody questions his honesty.”

However, several committee members expressed concerns that unregulated sales of certain cigarettes by tribal vendors may put New Mexico at risk of losing some of the more than $35 million the state receives yearly under a 1998 nationwide settlement with large tobacco companies.

The committee plans to resume considering Allison's nomination Wednesday and wants to hear from the attorney's general office, which sent a letter to the governor's office last May telling the administration that cigarette sales at Allison's store violate state law and that Allison “is aiding and abetting the sale of contraband.” A month later, a reporter for The Associated Press was still able to buy Seneca brand of cigarettes without a state tax stamp.

Allison told the committee he doesn't know whether the store continued to sell Seneca cigarettes.

The Canadian-based manufacturer of the Seneca brand, Grand River Enterprises, is not certified to sell its products in New Mexico, according King's office. However, the company has sued New Mexico and the attorney general, contending that the state can't prohibit the sales of Seneca and other cigarettes on tribal lands. The company describes itself as the largest manufacturer of Native American made tobacco products in North America.

Under a 2010 law, New Mexico increased its tax on cigarettes by 75 cents a package to a total of $1.66. However, the state agreed to give tribal retailers a price advantage by exempting them from 91 cents of the New Mexico tax if a tribe or pueblo levied its own tax of at least 75 cents.

Allison said the Navajo Nation charges a tax on cigarettes. However, the tribal government has not certified to the state that the tax meets requirements of the 2010 law, according to a spokesman for the Taxation and Revenue Department.

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