As a long-time Scouter I agree with what people are saying here. However, it is very definitely against BSA rules to use tobacco on their properties and/or in front of youth. That goes for everyone, whether in uniform or not.
It sure is, and I have a hard time believing that someone would have gotten away with doing it at summer camp. I have been to many camps in several states (Texas, Illinois, Michigan, Wisconsin, Colorado, Arkansas) and at none of those camps was anyone allowed to smoke in front of the kids. I bet it is a rumor started just to get the smoking nazis over on his side.