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VOL. 126 | NO. 167 | Friday, August 26, 2011

Gibson CEO Fires Back Over Federal Raid

By Andy Meek

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In a press conference Thursday that at times touched on themes of class warfare and government overreach, Gibson Guitar chairman and CEO Henry Juszkiewicz struck back against the raid of his company’s factories and offices in Memphis and Nashville by federal agents several days ago.

Around 8:45 a.m. Wednesday, Aug. 24, agents executed four search warrants on Gibson facilities in the two cities. They seized several pallets of wood, electronic files and guitars.

But Gibson’s CEO says his company has not been told what it did wrong and that he assumes the allegation is that some of the wood being used to manufacture the company’s guitars is illegal.

“Everything is sealed. They won’t tell us anything,” Juszkiewicz said, never raising his voice but pulling no punches in his defense of the storied guitar maker.

He valued the equipment and raw materials seized from Gibson at almost $1 million. At one point, the chief executive said he’s letting the U.S. Justice Dept. know that he’s telling his employees to keep making the instruments.

“We are noticing the Justice Dept. that I’m taking that step, and we’ll see what they do,” he said. “You might be interviewing me in jail in another hour or so, we’ll see.”

In a statement released following the raids, Gibson said it marks the second time federal agents have raided the company’s facilities and interrupted production but that this time it caused lost productivity and sales.

“The federal bureaucracy is just out of hand,” Juszkiewicz said. “And it seems to me there’s almost a class warfare of companies versus people, rich versus poor, Republicans versus Democrats … and there’s just a lack of somebody that stands up and says, ‘I’m about everyone. I’m really about America and doing what’s good for the country and not fighting these little battles.’”

“We feel totally abused. We believe the arrogance of federal power is impacting me personally, our company personally and the employees here in Tennessee, and it’s just plain wrong.”

The company’s statement says it assumes the raid stems from an alleged violation of the U.S. Lacey Act, legislation that requires anyone coming into the U.S. to declare with unambiguous specificity the nature of materials being brought into the country.

According to Gibson: “The U.S. Lacey Act does not directly address conservation issues but is about obeying all laws of the countries from which wood products are procured. This law reads that you are guilty if you did not observe a law even though you had no knowledge of that law in a foreign country. The U.S. Lacey Act is only applicable when a foreign law has been violated.”

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 74 74 17,458
MORTGAGES 93 93 20,128
FORECLOSURE NOTICES 9 9 2,654
BUILDING PERMITS 126 126 36,072
BANKRUPTCIES 63 63 11,227
BUSINESS LICENSES 32 32 5,741
UTILITY CONNECTIONS 0 0 6,715
MARRIAGE LICENSES 51 51 3,967