Gibson Guitar CEO slams U.S. raids as "overreach"

WASHINGTON Wed Oct 12, 2011 6:06pm EDT

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WASHINGTON (Reuters) - Gibson Guitar Corp.'s chief slammed the U.S. government on Wednesday for sending armed agents to raid two Tennessee factories under a law aimed at curbing the illegal harvest of tropical hardwoods.

"Armed people came in our factory ... evacuated our employees, then seized half a million dollars of our goods without any charges having been filed," Gibson CEO Henry Juszkiewicz told reporters and others at a Washington lunch.

"I think it's a clear overreach," he said.

Government agents seized a total of over $1 million worth of rosewood, ebony and finished guitars from Gibson factories in Memphis and Nashville in raids in 2009 and August of this year, Juszkiewicz said.

He brought samples of rosewood and ebony to the lunch; these tropical hardwoods, used in guitar fingerboards, are prized for their strength and tone. Gibson's factories remain open "under great difficulty" because the raids took most of the company's raw materials, the CEO said.

The U.S. Justice Department declined on Wednesday to comment on the case but provided information on the Lacey Act, which aims to curb trafficking in wildlife, fish and plant products, including illegally obtained timber.

"By prohibiting trafficking in wood illegally harvested overseas, the Lacey Act prohibits companies from undercutting law-abiding U.S. wood products companies ... by trading in artificially inexpensive raw materials that have been illegally harvested from foreign forests," Justice and Interior department officials wrote in a letter.

Gibson Guitar uses a small fraction of the world's tropical hardwoods, compared to that used for furniture and flooring, and because it uses so little it can use it sustainably, Juszkiewicz said. He said his company has been a leader in this area with its line of SmartWood instruments, using wood certified by the Forest Stewardship Council.

"The issue here is not illegal logging or some conservation abuse," he said. "The laws that are being identified by the Department of Justice have to do with protectionism by the country of origin, keeping work in that country and therefore not allowing something that isn't that value-added to be exported."

The Lacey Act, enacted in 1900 and amended in 2008 to broaden the range of plant products it includes, makes it illegal to trade in plants obtained in violation of U.S. or foreign law.

Those who unknowingly possess an instrument containing wood that was taken illegally "do not have criminal exposure," the government said in a letter responding to questions from members of Congress on the Gibson case.

Gibson has filed suit in federal court in Nashville to recover the seized material, but that suit has been stayed while the investigation continues, Juszkiewicz said.

Meantime, Gibson's chief said the law should be changed.

"I believe in the intent of the law ... but I do believe that the way it's currently written allows what's happening to me to happen to other companies, and that's wrong," he said.

House of Representatives Speaker John Boehner invited Juszkiewicz to join him in the speaker's box to watch President Barack Obama's address on jobs to joint session of Congress on September 8.

(Editing by Philip Barbara)

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