August 27, 2011

More on the Gibson Guitar Company raid

I had posted here about a raid on Gibson Guitar Company looking for "illegal" wood It seems that politics might enter into the picture. From Landmark Report:
CEO of Gibson Guitar a Republican donor; Democrat competitor uses same wood
On Thursday, the iconic Gibson Guitar Corporation issued a press release stating that government officials raided their Tennessee manufacturing facility over warrants concerning the legality of the importation of wood purchased from India that they use in their world famous guitars. The wood�which is certified and regulated by the Forest Stewardship Council�is not illegal, but rather subject to a domestic law in India frowns upon the processing of this wood by non-Indians. (Gibson uses American labor for the processing.)
The author (Andrew Lawton) amplifies a bit and then quotes Gibson's Press Release on the raid:
The Federal Department of Justice in Washington, D.C. has suggested that the use of wood from India that is not finished by Indian workers is illegal, not because of U.S. law, but because it is the Justice Department�s interpretation of a law in India. (If the same wood from the same tree was finished by Indian workers, the material would be legal.) This action was taken without the support and consent of the government in India.

On August 24, 2011, around 8:45 a.m. CDT, agents for the federal government executed four search warrants on Gibson�s facilities in Nashville and Memphis and seized several pallets of wood, electronic files and guitars. Gibson had to cease its manufacturing operations and send workers home for the day, while armed agents executed the search warrants. Gibson has fully cooperated with the execution of the search warrants.
Andrew then asks: Why Gibson?
Putting aside the presumably misguided motivation to enforce another sovereign nation�s laws, why would a homegrown American company be the target of the Department of Justice in the first place?

It�s worth pointing out that Henry E. Juszkiewicz, Gibson�s Chief Executive Officer, is a donor to a couple of Republican politicians. According to the Open Secrets database, Juszkiewicz donated $2000 to Rep. Marsha Blackburn (R-TN07) last year, as well as $1500 each to Sen. Lamar Alexander (R-TN). Juszkiewicz also has donated $10,000 to the Consumer Electronics Association, a PAC that contributed $92.5k to Republican candidates last year, as opposed to $72k to Democrats. (The CEA did, however, contribute more to Democrats in the 2008 election cycle.)

When warrants as ridiculous such as these are issued and executed, there appears no other reason than because the company or individual at hand is being targeted, not because there is any sort of wrongdoing. As a company, Gibson is a legendary. They�ve done nothing wrong, except, apparently, deigning to have a Republican CEO.

The plot thickens, however.

One of Gibson�s leading competitors is C.F. Martin & Company. The C.E.O., Chris Martin IV, is a long-time Democratic supporter, with $35,400 in contributions to Democratic candidates and the DNC over the past couple of election cycles. According to C.F. Martin�s catalog, several of their guitars contain �East Indian Rosewood.� In case you were wondering, that is the exact same wood in at least ten of Gibson�s guitars.

The Gibson facility wasn�t raided over allegations of tax evasion, charges of embezzlement, or even something as drab as child labor. Not even close. It was raided over what the DOJ deems an inability to follow a vague domestic trade law in India (one that apparently the Indian government didn�t seem too concerned about enforcing) regarding a specific type of wood. Not illegal wood, just wood with obscenely specific procedural guidelines.

Stand with Gibson: They have the Law on their side, just not the government.
My first thought was that this was a fishing expedition. Now I see that it was a stick of dynamite in the lake from our cultural elites in Washington. I do not play guitar and would probably get a Taylor if I were in the market but C. F. Martin just dropped a couple yards in my eyes. It's about music and a level playing field, not about questionable ethics and dirty tricks... Posted by DaveH at August 27, 2011 4:52 PM
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