The true villains behind the Gibson Guitar raid are revealed
Time to revisit an old abuse-of-power scandal from President Obama’s first term: the utterly bizarre raid on Gibson Guitars by a paramilitary unit of the U.S. Fish and Wildlife Service. Nothing about this caper ever smelled right: a raid coming from out of nowhere, without warning, to kick Gibson’s doors down, ostensibly because they violated some vaporous provision of import laws when bringing hardwood into the country. It wasn’t even American law they were supposedly violating, but an American law that said they were in hot water for violating the laws of India and Madagascar, which came as something of a surprise to authorities in India and Madagascar. In a delightful inversion of American legal principle, the folks at Gibson were never allowed to see the sealed warrant that supposedly authorized the raid. Guilty until proven innocent! We’ll get back to you later on what you’re allegedly guilty of.
It was long suspected that the Gibson raid was a political hit, carried out because CEO Henry Juszkiewicz, made campaign donations to Republicans. The financial disruption to the company was considerable – a $250,000 settlement, a $50,000 payoff to environmentalist groups, over $2 million in legal fees, plus the cost of being essentially shut down for a while by the raid.
Forbes recently talked to Juszkiewicz, and he finally thinks he knows who was really behind it all: unions. He’s got some good reasons for thinking so:
Two months before the raid, lobbyists slipped some arcane supply-chain reporting provisions into an extension of the Lacey Act of 1900 that changed the technical definition of “fingerboard blanks,” which are legal to import.
With no clear legal standards, a sealed warrant the company has not been allowed to see too this day, no formal charges filed, and the threat of a prison term hanging over any executive who does not take “due care” to abide by this absurdly vague law, Gibson settled. “You’re fighting a very well organized political machine in the unions,” Juszkiewicz concluded. “And the conservation guys have sort of gone along.” Hey, what’s not to like about $50,000?
Anti-competition is for sale in many flavors from the Big Government ice-cream stand:
And this isn’t an isolated incident. Just ask Harvey Silverglate, Boston lawyer, activist, civil liberties advocate, and author of Three Felonies a Day: How the Feds Target the Innocent. As he explains, the Feds routinely take advantage of the vagueness of many of our laws by starting from the target and working backwards, selectively prosecuting people they want to go after by charging them with crimes they often don’t even know exist.
“We are in terrible trouble as a nation under law,” he says. “When you have a system predicated on jurisdictional interests rather than on specific, identifiable, understandable, definable violations of law, there is a great opportunity for tyranny.” As a result, just about any businessperson, especially in highly regulated industries, can be construed by a prosecutor to have committed three or four arguable felonies a day. “If for some reason the authorities are eyeing you and they look closely enough at your daily activities, they can find something. That makes us all very vulnerable.”
Worse, 95 percent of federal cases never go to trial, because “Justice Department prosecutors have engineered the system to make it too risky to go to trial,” often railroading people who are innocent. “They have built a conviction machine, not a system of justice.”
Gibson Guitars is located in Tennessee, which is a right-to-work state; their competitors are not. At one point in the saga, Juszkiewicz was told by government agents he could make his problems go away if he used foreign labor for manufacturing. Gibson Guitars is hardly the only company on union target lists to find itself in trouble with the Obama Administration.
There aren’t too many companies our mega-government couldn’t find an excuse to hassle, and even if the charges prove to be groundless – or based on obscure laws no one seems to understand – the process is the punishment. Nearly unlimited power is available to cost people and corporations targeted by the State huge amounts of money, or damage their business models. Stories keep piling up of people afraid to resist aggressive bureaucrats because of how much it would cost them – look at what happens to those who dispute EPA land-use regulations, and discover they’ll be on the hook for millions of dollars in accumulated fines if they lose. Powerful anti-competitive weapons are available to those with the money and political connections to hire Uncle Sam as muscle. Conversely, it’s remarkable how often laws are simply waved off as trifles for people with the right friends in high places.
The cynic would say such things are inevitable – politicians always try to reward their friends and contributors. That’s a good argument against allowing so much regulatory power to accumulate, until it reaches the point where corruption is so endemic that few dare to call it corruption any more. And efforts to keep the government honest grow notably less effective as the size of government increases; the State ends up perpetually investigating itself, but no one of stature ever seems to take a fall.
The good news is that Gibson Guitars eventually got back all the hardwood confiscated from it by the government. They used it to make the Government Series II Les Paul guitar, which is stamped with this logo: