“The most sacred of the duties of a government is to do equal and impartial justice to all citizens.” — Thomas Jefferson, Note in Destutt de Tracy — 1816
If you’ll recall, the Gibson Guitar Corporation made the headlines in 2011 when federal agents armed with search warrants raided their facilities in Nashville and Memphis, Tenn. The agents seized raw materials, electronic files and guitars and the company was accused of using “endangered” wood in violation of U.S. and foreign laws. Oddly enough, some of Gibson’s biggest competitors — including C.F. Martin & Co. – used similar wood in their guitars but avoided the feds.
On September 1, 2011 I posted the blog “Hide Your Stradivarius” where I detailed the raid by the Department of Justice on the Gibson Guitar Company’s facilities in Nashville and Memphis Tennessee. In that post I quoted an article in The Wall Street Journal’s August 26, 2011 article by Eric Felten:
“Federal agents swooped in on Gibson Guitar Wednesday, raiding factories and offices in Memphis and Nashville, seizing several pallets of wood, electronic files and guitars. The Feds are keeping mum, but in a statement yesterday Gibson’s chairman and CEO, Henry Juszkiewicz, defended his company’s manufacturing policies, accusing the Justice Department of bullying the company. “The wood the government seized Wednesday is from a Forest Stewardship Council certified supplier,” he said, suggesting the Feds are using the aggressive enforcement of overly broad laws to make the company cry uncle.
It isn’t the first time that agents of the Fish and Wildlife Service have come knocking at the storied maker of such iconic instruments as the Les Paul electric guitar, the J-160E acoustic-electric John Lennon played, and essential jazz-boxes such as Charlie Christian’s ES-150. In 2009 the Feds seized several guitars and pallets of wood from a Gibson factory, and both sides have been wrangling over the goods in a case with the delightful name “United States of America v. Ebony Wood in Various Forms.”
The question in the first raid seemed to be whether Gibson had been buying illegally harvested hardwoods from protected forests, such as the Madagascar ebony that makes for such lovely fretboards. And if Gibson did knowingly import illegally harvested ebony from Madagascar, that wouldn’t be a negligible offense. Peter Lowry, ebony and rosewood expert at the Missouri Botanical Garden, calls the Madagascar wood trade the “equivalent of Africa’s blood diamonds.” But with the new raid, the government seems to be questioning whether some wood sourced from India met every regulatory jot and tittle.”
Now with all of today’s questions about the Obama administration’s role in targeting conservative activist groups, one has to question if the Gibson raid wasn’t just another example of a politically motivated attack.
Interestingly, one of Gibson's leading competitors is C.F. Martin & Co. According to C.F. Martin's catalog, several of their guitars contain "East Indian Rosewood," which is the exact same wood in at least 10 of Gibson's guitars. So why were they not also raided and their inventory of foreign wood seized?
Grossly underreported at the time was the fact that Gibson's chief executive, Henry Juszkiewicz, contributed to Republican politicians. Recent donations have included $2,000 to Rep. Marsha Blackburn, R-Tenn., and $1,500 to Sen. Lamar Alexander, R-Tenn.
By contrast, Chris Martin IV, the Martin & Co. CEO, is a long-time Democratic supporter, with $35,400 in contributions to Democratic candidates and the Democratic National Committee over the past couple of election cycles.
"We feel that Gibson was inappropriately targeted," Juszkiewicz said at the time, adding the matter "could have been addressed with a simple contact (from) a caring human being representing the government. Instead, the government used violent and hostile means."
That includes what Gibson described as "two hostile raids on its factories by agents carrying weapons and attired in SWAT gear where employees were forced out of the premises, production was shut down, goods were seized as contraband and threats were made that would have forced the business to close."
Gibson, fearing a bankrupting legal battle, settled and agreed to pay a $300,000 penalty to the U.S. Government. It also agreed to make a "community service payment" of $50,000 to the National Fish and Wildlife Foundation — to be used on research projects or tree-conservation activities.
The feds in return agreed to let Gibson resume importing wood while they sought "clarification" from India. According to Juszkiewicz in an interview on Fox and Friends the raid has cost the company over $7 million in fines, forced contributions, legal fees, confiscated materials, and loss of sales in response to a civil suit filed in June 2011 by the Justice Department.
The feds say they acted to save the environment from greedy plunderers. America is a trivial importer of rosewood from Madagascar and India. Ninety-five percent of it goes to China, where it is used to make luxury items like $800,000 beds. So putting Gibson out of business wasn't going to do a whole lot to save their forests.
Juszkiewicz' claim that his company was "inappropriately targeted" is eerily similar to the claims by Tea Party, conservative, pro-life and religious groups that they were targeted by the IRS for special scrutiny because they sought to exercise their First Amendment rights to band together in vocal opposition to the administration's policies and the out-of-control growth of government and its power.
The Gibson Guitar raid, the IRS intimidation of Tea Party groups and the fraudulently obtained warrant naming Fox News reporter James Rosen as an "aider, abettor, co-conspirator" in stealing government secrets are but a few examples of the abuse of power by the Obama administration to intimidate those on its enemies list.
Gibson Guitars are among the most sought-after musical instruments in the world. Everyone from Chet Atkins to Les Paul to Jimmy Page of Led Zeppelin to Slash of Guns n’ Roses played them. A vintage 1959 Les Paul guitar can go for as much as $400,000. Almost every kid who has dreams of music stardom wants a Gibson guitar.
Gibson is also a company that is proud to put the “Made in the USA” label on its instruments. While the company has lower-end lines that are made overseas, every guitar that bears the “Gibson” label is made in the U.S. by American workers.
On August 24, 2011, armed agents from the U.S. Fish and Wildlife Service and Homeland Security raided the corporate headquarters and two factories of the Gibson Guitar company. The agencies took away 24 pallets of Indian rosewood and ebony, as well as a number of guitars and computer files.
The federal agents’ contention is that Gibson had illegally imported the exotic wood, which is used to make fretboards and bridges for their high-end instruments. Under the 1900 Lacey Act, which was amended in 2008 to include wood products, American companies must abide by the laws of source countries when importing products. The intent of the law is to protect endangered species of wildlife and plants. U.S. Fish and Wildlife claims that the Gibson wood — in the form of fingerboard ‘blanks’ — was illegal to export from India and therefore illegal to import into the United States.
Now here’s the rub. While the feds say the wood — as imported — is illegal, had it been ‘finished’ by workers in India, it would have been perfectly legal to import. The wood itself was not banned, just the manufacturing process — or lack of it.
“I think they’re taking the position that we should be shifting these jobs overseas,” says Bruce Mitchell, the chief legal counsel for Gibson. “We have — probably 40 people in our factory here just at USA who are doing the inlays into the fingerboard that are putting the fret on. If all that was to be done over in India, then those jobs would be lost.”
What’s most puzzling about this case is that India is perfectly happy to ship the fingerboard ‘blanks’ to the United States. In a letter dated July 13, 2012, the deputy director general of foreign trade for India confirmed that “fingerboards made of rosewood and ebony is (sic) freely exportable.”
U.S. Fish and Wildlife offered no comment about the discrepancy. But people involved in the import and export of musical instruments and parts believe the U.S. Department of Justice offered its own interpretation of Indian law. Even though India saw no reason for an enforcement action, the U.S. did.
“It is such an outrageous position — it has hurt Gibson tremendously — has criminalized Gibson and its workplace and its workers. It is an unsustainable position that they’re taking,” Mitchell says.
Something else to consider in all of this: Gibson uses the same wood, from many of the same suppliers and importers that nearly every other guitar company in America does. And they have not been targeted. You might ask – why?
Rewind the clock four years. Gibson was raided in 2009 and a shipment of rosewood and ebony from Madagascar was seized. Gibson argued that the wood was obtained through proper channels, but U.S. Fish and Wildlife argued that Gibson could not adequately prove that the wood came from legitimate sources. Again, the issue of ‘finishing’ the wood came into play. Had Gibson imported finished parts from Madagascar instead of ‘blanks,’ it would have been perfectly legal.
No charges have been filed as of yet, and Gibson is fighting in court to get its wood back.
It could be that the Madagascar issue put Gibson front and center on the Department of Justice's radar screen.
There was a discrepancy in the import of this latest shipment of wood. It was listed with an improper tariff code, which the importer, Luthiers Mercantile International of Windsor, Calif., claimed was a clerical error by a junior employee and tried to clear up. But rather than talk to the importer and Gibson about it, the Justice Department dispatched U.S. Fish and Wildlife and DHS agents to raid the Gibson compounds.
Gibson feels it has been unfairly targeted. “We are being singled out. Very much so,” says Mitchell. “Every music instrument company in the United States uses rosewood fingerboards. Period. And they’re in the same state — they’re buying from the same suppliers, they’re using the same shippers.”
Gibson has also been working hard to maintain proper sources of wood, working with the Forest Stewardship Council to insure its suppliers are certified. Gibson also works closely with the Rainforest Alliance on sustainable supplies of exotic woods. It’s a no-brainer for Gibson and other guitar manufacturers. If they can’t get the highly sought-after tone woods that artists crave, they just might go out of business.
Outside observers see a more sinister possibility in all of this. Henry Juszkiewicz, Gibson’s CEO, is a Republican, who has contributed to Republican candidates (as well as some Democratic candidates). Other guitar companies, which have not been targeted, are led by Democrats. Is there a political motivation to all of this? Neither Mitchell, nor Juszkiewicz will offer an opinion, but consider what Juszkiewicz told Neil Cavuto on "Your World."
“You know we've been pretty low key. We're a guitar company. We've been manufacturing guitars. We've been involved in the environmental movement. We’ve been trying to do the right thing in terms of sourcing. We really don’t know why they are picking on us.”
With the current rash of charges against the Department of Justice we might consider changing the name to The Department of targeted Injustice based on your politics.
As more and more charges mount against Eric Holder it is evident he is no doubt the worst Attorney General since Alexander Mitchell Palmer, Woodrow Wilson’s AG noted for his infamous “Palmer Raids.”
Cleta Mitchell has prepared a comprehensive guide to the IRS’ abuse of election-integrity and Tea Party Groups. It has everything you need to know to understand the legal environment that sprouted this scandal.
On May 23 we discovered that Attorney General Eric Holder personally signed the search warrants targeting Fox News reporter James Rosen. That was very bad news, because President Obama is supposed to be deeply “troubled” about the whole affair, and deeply believes that “journalists should not be at legal risk for doing their jobs.” The President loves freedom of the press very, very, very much. He’s so troubled that he assigned the Attorney General to get to the bottom of it, a grueling search that lasted until Holder wandered into the men’s room and caught a glimpse of himself in the mirror.
But this is more than just a profound embarrassment for Holder and his boss, because a compelling case can be made that Eric Holder once again lied to Congress — and, unlike the Fast and Furious mess, he’s not going to get out of it by claiming that he doesn’t read his email, doesn’t know what his subordinates are doing, and can only find the Justice Department because his driver and body guard know where it is.
Because Holder, in sworn testimony before Congress, said this: “In regard to potential prosecution of the press for the disclosure of material, this is not something I’ve ever been involved in, heard of, or would think would be wise policy.”
It’s not a misstatement or a slip of the tongue. Holder has not only been “involved in” the “potential prosecution of the press for the disclosure of material.” On May 24th the Huffington Post reported that he not only signed the search warrants, but vetted them. This means he can’t use the “Colonel Blake” maneuver and claim he just signed a stack of paperwork without reading it.
On CNN’s State of the Union, former House speaker Newt Gingrich argued that Republicans have an important choice to make when it comes to discussing the IRS scandal: “I think this is a really important moment for Republicans in particular to make a decision: Is this a gotcha moment or is this a major educational opportunity?” Gingrich pointed to even Obama adviser David Axelrod’s recent acknowledgement that the government is too large for President Obama to have known what was happening at the IRS.
The crucial question, said Gingrich, is, “Are we going to have systemic change, and are we going to talk about the fact that big government and big bureaucracy is inherently out of control by its very definition?”