Ruminations

Territorial, Sovereignty Dispute

"This case has no business being in the courts and Mr. Lahache being criminalized. If they want to go after anybody, then come after the Mohawk Council of Kahnawake."
"Come after our Alcohol and Beverages Commission. Charge us with something. We're the ones that have issued the permits for him to do what he's doing."
"We assumed full authority over the law itself in Kahnawake. That's the way we operate."
He's [Lahache] a hard-working man, loves his family, contributes to the community. He's not somebody who's a criminal."
Kahnawake Grand Chief Joseph Norton, Quebec

"They're not doing anything differently than the SAQ [Société des alcools du Québec]. They import the wine in bulk from Italy. The only thing our oenologist does on location before bottling, he takes the wine and as an oenologist -- certified and graduated with honours in Italy -- all he does is put in different tannins or different tastes to make different kinds of wine, like Valpolicella, like Chianti Classico. That's all he does."
Defence lawyer Roberto De Minico

From the perspective of two governments, provincial and federal, what the First Nations Winery on the Mohawk reserve south of Montreal is doing is illegal. While it is legal for First Nations to sell wine on the Kahnawake reserve, that product is reserved for the use of people living there, not to be sold to the general public. It is tax-free because it is procured and supposedly consumed on the reserve. But selling it to anyone off-reserve short-changes government coffers.

The most expensive bottle they sell, at $12.50, is the Amarone; Chianti is $7.50, red, white or rose wines bought in clear plastic 4-litre bags are sold for $26.00. As far as Quebec's prosecutors and police are concerned, this is all illegal, a multi-million-dollar fraud. Montreal police, going into action against the winery, spoke of having dismantled "a vast network of contraband wine", arresting the winery owner, its oenologist and then others. The SAQ enjoys its monopoly by law.

Christinne Muschi / National Post The flags of Italy, Quebec and Five Nations in the showroom at winery owned by Floyd Lahache in Kahnawake , Quebec

Until last year, the winery's associate, Murray Marshall had been president of a large Niagara winery, Diamond Estates. According to investigators, in their four years of operation, First Nations Winery products and sales deprived governments at both levels of over $14-million in revenues -- comprised of $10-million in markups normally charged by the SAQ, as well as $3.2-million in provincial tax and another $1-million in federal sales tax.

Fraud, simply because "they are amounts not remitted to the government as the law stipulates", according to organized crime investigator Annie Boulianne of the Montreal police. "He [oenologist] also has contacts in Italy for the supply of wine". She labelled Lachache "a producer of contraband alcohol", while oenologist Luca Gaspari "thinks Kahnawake is an independent country". Which is a doubtful assertion; since it is Chief Norton who clearly fondles that belief.

There is a long, troubled history in Quebec with Kahnawake, known for smuggling weapons, tobacco and people from New York into Quebec, its illegal trade and connection with black marketeers and drug gangs bringing wealth into the community, which is led to believe by their local Mohawk authority that they are an independent nation within a nation and within their rights to impose their own rules and regulations; the laws of the federal and provincial governments cannot be imposed upon them.

An investigation revealed that the First Nations Winery was importing wine in bulk from Italy in 24,000-litre bags, with shipments arriving at the Montreal port, marked destined for Diamond Estates Wines and Spirits located in Niagara-on-the-Lake. Therefore, not required to clear customs until arrival in Ontario. But once cleared, the wine is transported to Kahnawake, and emptied into the holding tanks of the First Nations Winery.

In their defence, a 1999 agreement is cited between Quebec and the reserve, allowing Kahnawake the authority to license alcohol sales on the reserve, yet stipulating that what it sold would have to be brought in from the SAQ or from a brewery; no allusion ever made to alcohol produced on the reserve. Chief Norton brushed this aside with the statement that the reserve had unilaterally altered the agreement to give Lahanche the right to produce and market his wine.

Leading Judge Denys Noel to state: "You can't just say, 'It doesn't suit me anymore. We've evolved." Chief Norton was nonchalant in his response that "That's the way we operate", and in fact, it most certainly is. The wine sales run counter to law, but they are modelled on the illegal tobacco trade out of the reserve as well. The winery owner insists that conditions imposed upon him and his winery are "excessive, abusive, unreasonable and unconstitutional".

The winery's lawyer describes the wine as tasting "fantastic. I think this is what bothers them. People could buy wine on the reserve for $6 or $7 that is really a good quality wine". An advocate for the reserve who doubles as a public relations officer who knows the value of advertising a product under all circumstances.