Micmacs hope to use profits from tax-free tobacco sales to provide housing to members.

PRESQUE ISLE (AP) – Ads for Winston and Camel adorn merchandise racks, and signs warn minors against buying tobacco, but the Micmac Variety store has yet to sell a single carton of cigarettes.

Maine authorities are fighting the tax-free smoke shop while the federal Bureau of Indian Affairs is siding with the Aroostook Band of Micmacs in what could become the country’s next showdown over tribal sovereignty.

The 850 Micmacs in Aroostook County are in a similar position to the Narragansett Indians in Rhode Island, where a violent clash between tribal members and state troopers was captured on videotape in July.

In Maine, both sides have expressed hopes of resolving the situation peacefully, but no one is backing down.

Micmac Chief William Phillips said he’s willing to be arrested if necessary, but he hopes Maine authorities learned from the Rhode Island situation, where Gov. Don Carcieri faced criticism for using aggressive tactics.

“Rhode Island had such an impact,” Phillips said. “No politician wants to have that kind of P.R. going against him.”

The idea of tax-free smoke shops grew out of Phillips’ 1999 visit to the Oneida Indian Nation in Verona, N.Y. He saw how a rural tribe was prospering from tax-free cigarette and gasoline sales, as well as a casino.

While the larger Passamaquoddy and Penobscot tribes have proposed a casino and resort in southern Maine, the Micmacs are taking a more modest approach. They plan to open two tobacco stores on tribal land in Presque Isle, offering cigarettes, chewing tobacco and cigars, as well as tribal crafts.

One is across the street from the Northern Maine Community College. Another would be built on U.S. 1 near the Caribou line.

The tribe hopes to use profits from tobacco sales to provide housing to members, roughly 75 percent of whom live in trailer homes or some kind of substandard housing, Phillips said.

But the plan has met stiff resistance from state and city officials, along with local convenience store owners who stand to lose tobacco business.

In May, Maine Gov. John Baldacci wrote to Interior Secretary Gale Norton and took issue with the federal government’s position that the Micmacs retain their sovereignty.

The Rhode Island arrests were still more than a month away, but Baldacci foresaw a confrontation.

“The pattern established by the BIA and the Band can only result in an unfortunate and dangerous clash between state and federal authorities,” the governor wrote.

Phillips read the governor’s reference to a “dangerous clash” as an attempt to intimidate the tribe. “They’re just using the pure threat of violence to try to suppress us,” he said.

Baldacci declined to comment.

Attorney General Steven Rowe argues that the Micmacs are not immune from Maine law, which mandates a $1 tax on a $4 pack of 20 cigarettes. State officials don’t have the authority to negotiate a settlement, he said.

“The law does not give us discretion to make exemptions or to enter into agreements,” Rowe said. “We hope that this matter is resolved in the courts.”

The governor’s chief legal counsel, Kurt Adams, echoed Rowe’s sentiments but added that the governor would be willing to sit down with the Micmacs to discuss economic development issues.

For now, state officials hope a federal lawsuit over whether the state’s Human Rights Commission has jurisdiction over the Micmacs will shed light on the tobacco dispute. Both sides are required to file briefs by Oct. 6.

Douglas Luckerman, a Lexington, Mass., lawyer who represents both the Micmacs and the Narragansetts, said the Maine tribe would prefer to resolve the tobacco dispute through negotiations.

“The benefits to the state are much greater in working to resolve this with this tribe than in litigating it,” he added.

If the issue is eventually decided by a federal judge, it could help clear a muddled legal history that stretches back 23 years.

Rowe contends the Micmacs are bound by the state’s historic 1980 Indian Land Claims settlement with the Penobscots, Passamaquoddies and Maliseets even though the Micmacs weren’t direct parties to the agreement. The Micmacs disagree.

The Micmacs also maintain they’re not bound by a later state settlement that led to federal recognition in 1991 because it was never certified by the tribe. The federal Bureau of Indian Affairs sides with the tribe.

The legal arguments could be overshadowed if the Micmacs, taking a cue from the Narragansetts, begin selling cigarettes without the state’s blessing.

Adams, the governor’s legal counsel, doesn’t believe that will happen. “My impression of Chief Phillips is that he … would not promote a confrontation with the state gratuitously,” he said.

Back in his Presque Isle office, Phillips bristled at how Maine’s tribes have been treated over the years and compared the Micmacs’ plans with the Nov. 4 casino referendum by the two larger tribes.

“It’s pretty small potatoes compared with trying to build some $650 million casino down south,” he said.

The Micmacs are currently keeping all of their options open, but Phillips said it would only take seven days to open their first smoke shop. “We’re ready to roll any time,” he said.