Will Snuffing out Fine Latin Cigars Strike the Match of Illegal Immigration?

By RealClearInvestigations
RealClearInvestigations
RealClearInvestigations
August 30, 2021 Updated: August 30, 2021

Cigar diplomacy is back—and once again it is clouding the landscape for an American president.

As the Cold War raged in 1962, a trade embargo against Fidel Castro’s communist government in Cuba was an easy political call for John F. Kennedy. The president had a personal conflict-of-interest, however: JFK loved a good smoke. So he quietly secured 1,000 of his soon-to-be-contraband favorite, H. Upmann Petit Coronas, for his personal humidor before taking “necessary actions to promote national and hemispheric security.”

As a nonsmoker, President Biden has a clear conscience as the feds prepare to take on the tobacco industry of Latin America. It’s politics alone that put him in a bind: Does he back policies that would hinder premium cigar imports from Honduras, Nicaragua, and the Dominican Republic to appease the antismoking lobby, or let them be, to promote economic growth and help staunch the current massive flow of migrants to the U.S.?

Since the Food and Drug Administration took the reins of tobacco regulation from the states under the Family Smoking Prevention and Tobacco Control Act of 2009, it has imposed rules on a wide range of nicotine products, from cigarettes and smokeless tobacco to vaping products.

Now the FDA has decided that what this country doesn’t need so much anymore is a good $10 cigar, and it’s preparing to impose new rules on premium stogies, the main source of which is Central America.

The action comes as the Biden administration has taken on the migration problem by pledging $4 billion in aid to Latin countries to help them rebuild their economies. The number of migrants seeking entry to the U.S. has nearly tripled since January compared with the previous year. In July, U.S. Customs and Border Protection apprehended 212,672 people at the southern border, the most in 20 years.

With that human outflow in mind, regional advocates say that if the FDA gets its way, it may undermine one of the region’s most vibrant industries and prompt out-of-work people to leave.

“To impose more restrictions on the premium cigar industry now would disrupt the economy in these countries, at the least,” said Pedro Gomez, who was born in Nicaragua and worked as a saddle maker as a youth. After getting an education in the U.S., he returned home, determined to join the country’s energized cigar economy.

Gomez now lives in Miami where he is employed as a brand representative for Drew Estate, a cigar industry giant that grows its tobacco in Central America.

“There would be lost jobs, and those people would head to the U.S., where the better jobs are,” Gomez said. He recalls the tail end of the U.S. embargo on Nicaragua in the late 1980s, which produced long lines of people waiting for food or cooking oil, the same things that send people from Latin America fleeing for a better life.

Gomez noted that premium cigars represent a small portion of tobacco sales in the U.S.—between 3 percent and 5 percent—but are crucial to the countries that produce them.

“What would be the point of over-regulating such a small industry?” he said. “It would hurt the economy in countries that can’t afford that kind of damage.”

Ambassadors from Nicaragua, the Dominican Republic, and Honduras have repeatedly sent letters to the feds since the FDA tobacco takeover, warning that onerous regulation would result in lost jobs and revenue for the cash-strapped countries.

“Some of the regulations that are proposed by the agency would prove disastrous to the centuries-old cigar industry that provides for over 300,000 jobs among our three nations and represents millions of dollars in export revenue,” a 2015 missive reads.

Cuban cigars
A Cuban model stands next to a display with varieties of cigars, during the opening of the 22nd Cigar Festival, at the Havana Convention Center, Cuba, on Feb. 24, 2020. (Adalberto Roque/AFP via Getty Images)

Politics have already ended the sale of Cuban cigars in the U.S., once a vaunted treasure among cigar smokers. Sanctions were eased by the Obama administration, which allowed unlimited quantities of Cuban cigars into the U.S. for personal consumption. President Trump then reimposed the ban on Cuban products, which still stands.

In their place are smoking from the three Latin nations, considered by many to be superior to the Cuban brands, whose biggest markets are China and Spain.

The FDA’s anti-smoking efforts have until now focused on the smoking sectors that appeal mainly to youth, including e-cigarettes and other vaping devices.

In April, the agency declared that flavored smoking materials, including menthol cigarettes and flavored cigars, are on the table to be banned.

“The FDA wants to get rid of all inhaled nicotine,” said David Gortler, who served at the FDA under the Obama administration as a medical officer, then worked as a senior adviser to FDA chief Stephen Hahn during the last two years of the Trump administration.

“They are supposed to be protecting Americans, but lately there has been a very political influence behind everything they do,” said Gortler, who is now a fellow with the conservative Ethics and Public Policy Center.

Lawyers, Smoke, and Money

Yet the FDA’s battle with premium cigars has not gone as smoothly as it hoped.

Records reviewed by RealClearInvestigations show that of the 4,452 citations and warning letters issued by FDA agents for alleged violations of underage sales laws between August 2019 and August 2021, over 90 percent were issued to convenience stores, liquor hubs, and other general retailers that sell inexpensive cigars. Fewer than 20 citations went to cigar stores with a humidor, an indicator that the shop deals in high-end cigars.

The FDA’s press office did not respond to an interview request.

Associations representing the premium cigar industry have stalled significant FDA progress in court. In August, a federal judge ruled that the FDA must seek more science on the issue to determine if the premium cigars represent enough of a hazard, particularly to youth, to warrant the FDA’s costly oversight and rules.

Both sides accept the FDA’s definition of premium cigars: They are wrapped in whole tobacco leaf, contain a 100 percent leaf tobacco binder, are handmade or hand-rolled, and do not have a characterizing flavor other than tobacco.

As part of the legally mandated pursuit of the science on premiums, the FDA has solicited the input of a committee of scientists and academics composed almost exclusively of tobacco critics.

“It is a who’s who of tobacco control scientists,” said Drew Newman, general counsel for J.C. Newman Cigar Co., a Tampa-based family operation that has produced and sold cigars since 1895. In 2011, the company built a tobacco plantation in Estelí, Nicaragua, employing over 800 locals.

Roll cigars
A Cuban instructor (C) helps participants roll cigars during a master class in the 20th edition of the Havana Cigar Festival at the Convention Palace in Havana, Cuba, on Feb. 28, 2018. (Adalberto Roque/AFP via Getty Images)

Today, Newman is the last large-scale cigar producer in the U.S., with 150 employees kicking out 12 million sticks a year. Once an importer of Cuban tobacco, it’s a largely symbolic remnant of a past that ended with the 1962 embargo.

An unfavorable report from the committee would result in an “exorbitantly expensive nightmare for all of us,” Newman said, noting that higher costs from taxes, registrations, and ingredient verifications would knock out most small cigar producers both in the U.S. and south of the border, costing many jobs.

To be sure, the 14-member National Academy of Sciences committee is not deliberating in a smoke-filled room, but most of its work has proceeded in closed sessions via Zoom beginning in March.

In its few public meetings, it has heard mostly from antismoking factions, including the Centers for Disease Control and Prevention, the FDA, the National Cancer Institute, and the National Center for Environmental Health.

It is also hearing from anti-tobacco doctors, who deny the existence of the panel’s focus.

“There is no such thing as a premium cigar,” Hasmeena Kathuria, a physician who directs the Tobacco Treatment Center at Boston Medical Center, told the committee in one of its first meetings. “The premium cigar is a concept developed by the tobacco industry to escape FDA regulation of all tobacco products. … [The committee] should not adopt the fraudulent concept of a premium cigar.”

Several appointees have previously put their name on reports condemning smoking, including one report with a contribution from panel member Maciej Goniewicz, who declared that “high exposure to harmful constituents among cigar smokers is a continuing health issue.”

The premium cigar committee will present its findings in March.

* * *
The Finck family produced cigars for 122 years in its downtown San Antonio, Texas, manufacturing facility, the longest-operating cigar factory in the U.S. When taxes increased from four cents a cigar to 52.75 percent of the wholesale price in 2009, the family did its best.

By 2014, though, as the FDA promised more scrutiny of premium cigars, Bill Finck Jr., whose great-grandfather Henry started the company in 1893, closed production. That left 100 people without work—all older Latino women with limited job prospects.

“That first big federal tax increase really hurt us, increasing our costs almost 50 percent overnight,” Finck said. “Part of the reason we kept going after that was pride. This was what my family has done for five generations.”

Finck contracted out the production of his cigars to Latin America. He continues to operate three cigar stores in San Antonio.

“The FDA has now focused [itself] against premium cigars,” said Gortler, the former FDA official, “They are the federal government, and they see themselves as their own entity with an unlimited amount of money to spend on attorneys and unlimited funding to conduct studies to demonstrate their narrative. They answer to no one, and can do anything they want, even if it’s not science. And it’s easy for them to say they are doing this for public health.”

This article was written by Steve Miller for RealClearInvestigations.

RealClearInvestigations
RealClearInvestigations