Gibson Guitar Under Investigation – music, politics, business, and the government collide

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From Jimmy Page and Slash with their raging Les Pauls, to Angus Young’s SG and B.B. King’s “Lucille,” Gibson guitars are indelibly linked to popular music dating back to the 1950s. Today, in addition to electric guitars, Gibson makes acoustic guitars, banjos, dobros, mandolins, pianos (Baldwin), juke boxes (Wurlitzer), electronics, and accessories – not to mention the entire line of Epiphone products.

But in recent months, the most notable thing manufactured by Gibson has been publicity over the raids of three Tennessee facilities by federal marshals. On August 24, 2011, armed agents arrived unannounced at 8:45 AM, evacuated the Gibson plants, and confiscated over $1 million worth of rosewood, ebony, and finished guitars. It amounted to roughly one month’s worth of materials, and has cost Gibson an estimated $2-3 million.

This is the second such raid in the past two years – the first happened in November 2009 at Gibson’s Nashville plant. No charges were ever leveled, and according to Gibson CEO Henry Juszkiewicz, Gibson has not been able to recover the wood seized in the first raid and is pursuing the matter in court.

The raids have implications for musicians and other instrument manufacturers, and even has dealers in used and vintage instruments concerned. It all stems from legal issues involving the importing and exporting of exotic woods from countries like Madagascar and India, and the seizures were made in the enforcement of the Lacey Act, which dates back to 1900.

According to the Wall Street Journal, the Lacey Act “was originally passed to regulate trade in bird feathers used for hats and [was] amended in 2008 to cover wood and other plant products. It requires companies to make detailed disclosures about wood imports and bars the purchase of goods exported in violation of a foreign country’s laws.”

Gibson has been importing wood from India for over 17 years (much of the confiscated wood was from India), and has been hailed as a leader in better forestry practices. Gibson stopped importing wood from Madagascar following the 2009 raid.

There are a number of questions being raised – including what prompted the investigation and why Gibson seems to be being targeted – with no answers, so far. There are also concerns over the interpretation of the Lacey Act, which is why some vintage dealers are now fearing for their businesses. They are worried they’ll be asked to provide proof of the origin of the woods used in the instruments they are selling, which in many cases is simply impossible.

The National Association of Music Merchants (NAMM) has gotten involved, sending a letter to Congress and President Obama to voice concerns for their members, and two Tennessee Congressional leaders, Jim Cooper (D-Nashville) and Marsha Blackburn (R-Brentwood), have filed a bill to amend the Lacey Act in the hopes of providing clarity and to “protect musicians whose older guitars, violins, or other instruments were built from woods that are now considered endangered (and illegal to import) from any sanctions.” (From an article in The Tennessean).

Adding to the intriguing politics of these events, Juszkiewicz attended President Obama’s recent jobs speech with Blackburn, who has ties to the Tea Party. Federal prosecutors have confirmed there is a criminal investigation underway, but no charges have been made and the government has not provided any details into why the raids occurred or what the charges might be.

In the current economic climate, it is difficult to understand why our government would target an American icon in this manner – there has been no outcry from the countries involved with the exports and no smoking gun. The latest raids are tied to a shipment of ebony fretboards that were intercepted in Dallas in June 2011 marked with the wrong tariff code. According to Juszkiewicz, the code was off by one digit and was the result of a clerical error on a piece of paperwork. His charges that these actions are “heavy-handed” and suggest an “overreach” of government seem, at this point, legitimate. Until the government charges Gibson with something and brings forth a case, we’ll have to wait to find out.

Story Links: There are a ton of articles posted about this; here are the ones I read in compiling this post.
Gibson Guitar Wails on Federal Raid Over Wood (Wall Street Journal)
Gibson Guitar CEO slams U.S. raids as “overreach” (Reuters)
Gibson Raid Leaves Other Guitar Makers at Risk (The New American)
Famed Guitar Maker Raided by Federal Agents (New York Times)
Feds: Gibson wood seizure linked to criminal probe (Forbes)
Blackburn, Cooper target law cited in Gibson guitar raids (The Tennessean)

7 thoughts on “Gibson Guitar Under Investigation – music, politics, business, and the government collide

  1. Good raid as Gibson treats their employees like crap!FACT:Most disfruntled employees in US.I do love my Gibbys and got lots of ’em!

  2. There’s no  fretting per se frets are tapped and pressed at Gibson and Fender factory!Too many Gibsons not enuf time!!!!

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