From NY Magazine:
Mayor Bloomberg, along with Representative Peter King, wrote an August 4, 2008, editorial arguing that cigarette sales on reservations should be taxed—one line insinuated that cigarette-smuggling money might go to terrorists. Chief Wallace is still riled about it. “We got blamed for the MTA deficit! Phenomenal, man. Supporting terrorism. It upsets me because this is our land, whether we occupy it or not. It’s still our land, and we defend our homeland against all enemies, domestic and foreign.”
On August 25 of this year, a federal-court judge in Brooklyn handed down a verdict addressing the Unkechaug’s motion to dismiss. Federal Judge Carol Amon denied the motion and ruled that the state appellate court had misinterpreted the law in question. She ruled that regular tax law indeed applied to the tobacco trade on Indian reservations, as it does everywhere in the state. She issued a temporary injunction banning all further cigarette sales at four stores identified in the city’s suit. Chief Wallace and the Unkechaug appealed. On September 25, the court announced that though the appeal would be heard, the injunction would continue. But that leaves ten other smoke shops in the Poospatuck reservation, and the cars are still backed up around Squaw Lane. “The city will go after every dollar that is owed to city taxpayers,” said Bloomberg in a statement.
Wallace is far from ready to smoke the peace pipe, however. He says it’s the same as it was with whaling in the seventeenth century. “The goal here is not to stop us from selling cigarettes,” Chief Wallace said. “It’s to try and destroy us as a people, because every effort that we made to resolve these things has met with resistance. They don’t want to do it. They want to take it as far as they can to try and kill us.
“They need a scapegoat for not blaming his friends on Wall Street,” said the chief, his tone slowly rising. He began pacing in circles, literally hopping mad. “Who is a convenient scapegoat? The smallest tribe in New York, selling a demonic product—that’s a good scapegoat.”