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VOL. 126 | NO. 185 | Thursday, September 22, 2011

Feds Still Mum on Reason for Gibson Raids

By Andy Meek

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Federal officials have shed a little light on last month’s raid of Gibson Guitar Corp. facilities in Memphis and Nashville – but not too much.

In a letter dated Monday, Sept. 19, Christopher Mansour, the director of congressional and legislative affairs in the U.S. Department of the Interior, and Ronald Weich, assistant attorney general in the office of legislative affairs at the Department of Justice, wrote to congressional leaders in broad terms about the federal Lacey Act. That’s the legislation that provided the backdrop for the Gibson raids.

Their letter was in response to a letter sent by congressional leaders, including U.S. Rep. Marsha Blackburn, R-Tenn., requesting details about the raids. In it, they declined to provide specific details about the raid because of an ongoing investigation into Gibson, but they spoke to some general facts about the matter.

“By prohibiting trafficking in wood illegally harvested overseas, the Lacey Act prohibits companies from undercutting law-abiding U.S. wood-product companies, including numerous small businesses, by trading in artificially inexpensive raw materials that have been illegally harvested from foreign forests,” the two federal officials wrote. “The Lacey Act provides the federal government with an important tool to ensure that all businesses, including foreign companies that send their goods into this country, are operating on a level playing field by using only legally harvested wood.”

The officials went on to say the federal agents’ search for evidence at Gibson began with authorization from a U.S. magistrate judge, who signed off on the raids. And because law enforcement agents are required to carry side arms for their own protection when executing warrants, they said that explains the presence of armed agents during the raids.

Federal agents executed four search warrants at Gibson facilities in Memphis and Nashville around 8:45 a.m. Aug. 24. They seized several pallets of wood, electronic files and guitars. Both the company and its supporters have criticized several aspects of the raid – including the presence of armed agents – as indicative of what they believe is government overreach.

Consulting firm Climate Advisers convened a call with reporters Tuesday, Sept. 20, that included supporters of the Lacey Act such as Mark Barford, executive director of the Memphis-based National Hardwood Lumber Association.

Barford said the Lacey Act needs to be protected and that small companies need protection against the sale of wood with artificially low prices or wood that is imported illegally.

Meanwhile, in a response to the Monday letter, Blackburn touched on a recurring theme among Gibson supporters: that the government is bullying the company.

“I am frustrated by the administration’s refusal to brief me and our committee with real answers,” Blackburn said. “Specifically, why did they send armed agents into Gibson’s facilities? It is beyond me why not once, but twice, the administration felt the need to act like a bunch of cowboys, when I am sure a letter like this or a simple phone call stating their concerns to Gibson’s leaders would have prompted a very cooperative response.”

In remarks Sept. 15 to the Economic Club of Washington, Speaker of the House John Boehner said Gibson is a well-respected American company that employs thousands of workers.

“The company’s costs as a result of the raid? An estimated $2 million to $3 million,” Boehner said. “Why? Because Gibson bought wood overseas to make guitars in America. Seriously.”

Gibson and supporters are stepping up a public-relations campaign that began almost in the immediate aftermath of the raids, via everything from a Twitter #thiswillnotstand hashtag to a flurry of media interviews by Gibson CEO Henry Juszkiewicz.

By the end of the day Tuesday, the company had surpassed 20,000 signatures for a petition it plans to deliver to the White House asking for the government to drop its investigation of the company.

“I’ve never known anybody in that factory or that organization to be anything but faithful and honest with me,” said Sully Erna, a member of the hard rock band Godsmack, in a video posted at www2.gibson.com/thiswillnotstand.aspx.

“And as I’ve heard that they’ve complied with everything that the law has asked of them, I believe their innocence and I stand by them 100 percent as they fight to protect their rights.”

PROPERTY SALES 74 196 20,828
MORTGAGES 86 244 23,989
BUILDING PERMITS 138 453 43,046
BANKRUPTCIES 64 174 13,354