Skip to comments.Why Are The Feds Gunning For Gibson? And Is This Any Way To Stimulate The Economy?
Posted on 09/01/2011 11:32:22 AM PDT by FelixFelicis
The Sixth Amendment to the U.S. Constitution declares that "the accused shall enjoy the right to a speedy and public trial," and must be "informed of the nature and cause of the accusation." Based on their conduct in raiding the Gibson Guitar Company, agents from the FBI and the Fish and Wildlife Service could stand a refresher course in the law of the land. In November 2009, Fish and Wildlife agents, accompanied by a heavily armed FBI SWAT team, stormed Gibson's Nashville plant and confiscated ebony fingerboards that had been imported from Madagascar. On August 24, 2011 the Feds gave an encore, rushing into Gibson factories in Memphis and Nashville with weapons drawn to confiscate ebony and rosewood from India. The urgency of this "shock and awe" display of enforcement power would suggest a serious crime had been committed. Yet nearly two years after the first raid, no formal charges have been filed, leaving Gibson management to ponder what exactly they stand accused of.
The absence of a formal indictment has fueled wild speculation, but affidavits filed to secure search warrants indicate that this case is about suspected violations of the amended Lacey Act, the recently expanded law that gives the Fish & Wildlife Service the right to regulate all trade in plant material (including wood). The new, but we hesitate to say improved, Lacey Act makes it unlawful to import, export, sell, or purchase in interstate or foreign commerce any plant that violates any U.S. or foreign law.
There are no laws on the books in the U.S. prohibiting the use of Indian or Madagascar rosewood and ebony. That didn't stop the industrious John M. Rayfield, a special agent at the Fish and Wildlife service, from concluding that Gibson's use of these woods violated Indian law. The law he cites in his affidavit, "W.E.F. 23.08.2010 Government of India, Ministry of Commerce and Industry," has nothing to do with overharvesting, illegal logging, or anything else related to the environment. Rather, it specifies labor content levels for wood thicker than 6 millimeters that is exported from India. In other words, Gibson stands accused of using U.S. instead of Indian labor to produce its guitars. Had the company imported a finished guitar from India, using the same rosewood and ebony, it would have been in compliance with Lacey. Importing semi-finished component parts caused the violation. In practice, the Indian authorities have a different interpretation of their law: For decades they have allowed the export of millions of fingerboard blanks without challenge.
There isn't a guitar manufacturer of any scale in the U.S. that doesn't use some Indian rosewood or ebony for fingerboards, and all of them, to the best of our knowledge, import the same kind of semi-finished blanks that were seized from the Gibson plant. Thus, by the logic of Rayfield's affidavit, they are all potentially in violation of Lacey. Lacey applies to sellers, buyers, intermediaries, and anyone else who comes into contact with "illegal" wood, so retailers and consumers could be on the hook as well. If that isn't sufficiently unsettling, remember that Lacey is "a fact-based, rather than a document-based statute." Translation: having the right paperwork won't save you from fines, confiscation of product, or even imprisonment, and the world of music is populated with unsuspecting felons.
At a time when the U.S. economy has yet to return to 2008 production levels, when unemployment stands at 9.1%, when the 2011 national deficit will top $1.3 trillion, and when the trade deficit continues to grow, it's hard to understand why federal agencies would be spending millions to prosecute a thriving U.S. company that sells an acclaimed product that delights millions, is adding workers to its U.S. payroll, and exports 60% of its production. (Equally baffling is why Congress would pass such a poorly crafted bill as the amended Lacey Act, but that's an issue for another editorial.) If Fish and Wildlife and the FBI have a cause for action against Gibson, they should have spelled it out long ago. Absent a compelling case, they should pack it in and let the people of Gibson go about their business serving musicians without interference.
When the Oregon Congressional Delegation amended the Lacey act, their self-declared aim was primarily economic. Responding to an influential constituent, they sought expanded import documentation to slow timber imports and thereby boost a Pacific Northwest timber industry that had been hard hit by the downturn in housing construction. Thus, a bill to help loggers in Oregon has hurt guitar makers in Tennessee, proving that the law of unintended consequences is still very much in force.
Responsibility for enforcing Lacey, and making sure that all wood was in compliance with all of the world's regulations, was handed to the Animal Plant Heath Inspection Service (APHIS), an arm of the U.S. Department of Agriculture. In a December 15, 2008 presentation, APHIS officials appeared overwhelmed by the new job. They said that enforcement was a low priority and it would take at least a year to develop reporting requirements and proper forms. Yet 11 months later, the Feds were at Gibson's door with guns drawn.
We're not lawyers, but this prosecution (or should we say persecution) of Gibson seems a violation of "due process" and a clear-cut case of regulatory agencies run amok. And the problem extends beyond the pain inflicted on a single company. By the reasoning employed by Fish and Wildlife, the entire guitar world--manufacturers, retailers, vintage dealers, teachers, and players--could be implicated in a Lacey sting. This kind of open-ended threat of prosecution is an affront to a legion of decent, hardworking people who provide the tools for musicians; it's an unnecessary burden on an already struggling economy; and it's a blow to the credibility of a government that is not universally well regarded by its citizenry. As Gibson CEO Henry Juszkiewicz put it, "We feel totally abused. We believe the arrogance of federal power is impacting me personally, our company, and the employees here in Tennessee, and it's just plain wrong."
He's right, and his complaint is one that should be taken up by the entire industry.
Can anyone check FENDER’s contribution records?
Gibsons CEO Henry E. Juszkiewicz is a Republican donor. But the CEO of C.F. Martin & Company one of Gibsons main competitors and another user of the East Indian Rosewood is a big Democratic donor. It's the political donations, stupid.
I'd like to know how, if they don't have the money to deport illegal aliens, they can come up with money to prosecute American citizens.
Of course, his being a Republican and a contributor to the GOP had NOTHING to do with being targeted by the DOJ ....just like all those profitable GM dealerships that were owned by Republicans and were shut down.
Time for Issa to march that sorry sack of s**t of an Attorney General back to the Hill for the grand opening of another can of Wupa**.
I’m trying to find out. Not having much luck. :-(
Misleading. The federal customs case, U.S. v. Ebony Wood in Various Forms, Case No. 3:10 CV 00747, was filed in the U.S. District Court for the Middle District of Tennessee over a year ago.
“can’t imagine the feds coming after a maker of fine interments.”
Uh, we don’t need you giving the DOJ any ideas about going after the casket industry.
I think the government's case against Gibson for the East Indian Rosewood fingerboard blanks is silly.
I've read the affidavit of Rayfield, as well as the affidavits, search warrant, complaint, answer, and motions in the current civil case (which was recently sealed in preparation of criminal charges after the Dallas airport and Canadian shipments situation).
It doesn't seem like a good summation.
As I mentioned, when the article says "no formal charges have been filed," it ignores the fact that you can have civil charges without criminal charges. The civil action was brought as an in rem customs action over a year ago.
Nothing in Rayfield's affidavit talks about "it specifies labor content levels for wood thicker than 6 millimeters that is exported from India." The 6mm is only important because wood under 6mm in thickness (veneer) has a different coding under the Harmonized Tariff Schedule of India and the U.S.
The article also talks about Rayfield "concluding that Gibson's use of these woods violated Indian law." He never does that. He concludes that Gibson's import of the woods, not the use, was illegal. I think that was a silly conclusion, because it's clear to me as a four-decade guitar collector that India has not enforced its HTS. However, the article is not correct when it states that Rayfield concluded that Gibson's "use" of the wood violated Indian law.
It's also hard to discuss Rayfield's affidavit and these raids at all without mentioning the Dallas airport, Luthier Mercantile and the Red Arrow Delivery Service warehouse. While I still think the government's position in this case is wrong, Gibson looks suspicious because this shipment in Rayfield's affidavit (described in the summation) came into Dallas without a Lacey Act declaration, in containers with inaccurate descriptions as to the contents, with a small California company listed as the ultimate consignee but instructions to ship the containers to a warehouse in Nashville, without Gibson's name on any paperwork. The California company admitted that Gibson was the ultimate consignee (even submitted paperwork to that effect), and it turned out that East Indian Rosewood had also come into the U.S from Canada and had been shipped to the same warehouse in Nashville listing the California company as the ultimate consignee (without Gibson's name on any of the paperwork), although the warehouse had an email from the company telling the warehouse that Gibson was the ultimate consignee.
I'm curious. How do you know this source is within the music products industry? I may have missed that in the summation.
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