TRIBE PUTS HOPES IN TOBACCO

Rejecting Health Worries, Nebraska Indians See Cigarettes As Their Path To
Prosperity

MACY, Neb. -- The thrumming green machines in the new factory here are the
hope of the Omaha Indian tribe. Early sales are encouraging, and soon the
tribe will be tripling production.

``Our dream,'' said Jerry Montour, the factory's consultant, ``is to have
like 100 people working here at one time.''

And who would quarrel with that?

As it turns out, many might. The Omaha tribe is manufacturing cigarettes.

Even if the factory were not in a building that previously housed the
tribe's health club and wellness center, the debut of the Omaha Nation
Tobacco Co. might seem a little misguided.

After all, big cigarette companies are under fierce fire from states and
the federal government, with proposed legislation and lawsuit settlements
designed to force them to restrict cigarette advertising, jack up prices
and pay penalties to cover the costs of smoking-related afflictions like
lung cancer and heart disease.

Widespread use of tobacco

And those afflictions hit Indians particularly hard. Cancer and
heart-disease rates are rising faster among American Indians than the
general population, smoking is much more common than in other groups and
Indians start smoking at a younger age.

Several tribes have even filed lawsuits in tribal courts against companies
like Philip Morris, seeking direct compensation for illnesses related to
tobacco, instead of relying on money that states expect to receive. The
Omaha are thinking of filing such a suit as well, said the tribe's
Washington lawyer, Robert Rosette.

``Smoking is much more severe on Indian reservations and has a much harsher
impact,'' Rosette said. ``As a sovereign government, we have just as much
right to recoup from the big tobacco companies.''

Still, Rosette argued, ``You can't mix that in with our manufacturing
cigarettes, because we're a legal business.''

He added: ``We have a great product -- and we need avenues to get it out in
the market.''

If the logic seems cloudy, it is largely a reflection of the circumstances
many Indian tribes are grappling with these days.

Facing high unemployment, poverty and dwindling federal grants,
reservations, especially in remote areas, are struggling to create jobs.
They have only a few economic advantages over non-Indian communities,
including the right to operate casinos, and to be exempt from state taxes
on gasoline and cigarettes sold on Indian land.

First tribe with a cigarette firm

The Omaha, whose reservation spills from northeastern Nebraska over the
Missouri River into Iowa, is the first tribe to start a cigarette company.
But it will soon be joined by another, the Confederate Tribes of the
Chehalis Reservation, near Seattle, which is investing enough to add two
assembly lines to the one in the Omaha factory and is setting up a
cigarette plant on its own reservation. Montour said another joint venture
is being negotiated with an East Coast tribe.

``People aren't going to stop smoking,'' said Gary Lasley, Omaha tribal
chairman, puffing on an Omaha Full-Flavor cigarette. ``They're addicted
now. When you're out here in the middle of nowhere, what else are you going
to do for jobs?''

Omaha leaders even traveled to Washington recently to testify before the
Senate Indian Affairs Committee, hoping to influence federal legislation to
exempt tribal manufacturers from some penalties and proscriptions on big
tobacco companies. They want out of advertising restrictions like a
proposed ban on cartoon characters (Omaha cigarette packs feature an
Indian's face) and absolution from payments for illnesses before Omaha's
company existed.

While these special pleadings are unlikely to be endorsed by the Indian
Affairs Committee, it is likely to recommend that tribes be able to excuse
themselves from price increases or marketing bans that state governments
layer on top of whatever federal restrictions are approved.

Historical use of tobacco

That means tribal cigarettes could continue their edge not only on Indian
land, but even off reservations in some states. To Indian leaders this is
only fair, given tribes' historical and ceremonial use of tobacco.

``We understand there's a lot of negativity about the tobacco industry
right now, but we're not the ones who misrepresented and did all the
marketing to teenagers,'' Montour said. ``Native Americans have been
involved in tobacco for hundreds of years. It's only when these new
settlers came in that they were starting to do all this misrepresentation.''

Roped by fields yellow-gray with corn stubble on a recent winter day, the
Omaha reservation is home to about 3,400 of the tribe's 6,000 members and
has 60 percent unemployment, Lasley said. About a quarter of those on the
reservation are on welfare or receive food stamps.

Six years ago, the tribe opened Casino Omaha on its Iowa property, but
attendance and profits have been gutted by competing riverboat casinos.

Since September, when the tribe began selling its cigarettes, made from
tobacco imported from North Carolina, results have been promising, tribal
leaders say. So far, the factory has orders for half the 50,000 cartons it
makes a month, mostly from 26 tribes around the country.

Heart disease, cancer deaths

Nationally, more than 36 percent of Indians smoke. But even though heart
disease and cancer are the leading causes of Indian deaths, Omaha officials
say these afflictions are not their first health priority.

``The life expectancy isn't high enough for there to be a lot of cancer,''
said Greg Phillips, the tribe's vice chairman, who said the average tribe
member dies at 57. More obvious threats, he said, were alcoholism and
diabetes.

``Are they going to object when we try to manufacture Twinkies?'' he said.

Dr. Nathaniel Cobb, director of cancer prevention and control for the
Indian Health Service, has heard this before.

``When someone dies of lung cancer, they're usually in their 60s or older
and they usually die pretty quickly, and it's sad, but it's not devastating
to the community, compared to alcoholism or suicide,'' Cobb said. ``There's
a little disconnect there.''