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Trade law hits raw note for guitar maker Gibson

First Posted: 09/19/2011 2:49 pm Updated: 11/19/2011 4:12 am

By Tim Ghianni

NASHVILLE (Reuters) - When federal agents seized rare ebony and rosewood from famed guitar maker Gibson Guitars, it sparked a firestorm over illegal logging, the content of musical instruments, and preserving American jobs.

Last month's raid on Gibson's Tennessee factories so angered chief executive Henry Juszkiewicz that he went to Washington.

His cause was taken up by House of Representatives Speaker John Boehner, the top Republican in the U.S. Congress. Boehner said last week the company was being unfairly singled out and was a symbol of government over-regulation hurting an industry that provides good jobs.

Juszkiewicz, who sat in Boehner's box in Congress while President Barack Obama offered up his jobs proposal earlier this month, said he wants the matter cleared up.

The probe has cost Gibson -- which has made guitars for stars Elvis Presley and B.B. King -- millions of dollars, led it to scrounge for wood used to make guitar fingerboards, and may force it to halt production on some models, he said.

"There's a lot of innuendo ... that we are being sneaky and surreptitious," Juszkiewicz said in an interview with Reuters. "They are flat innuendo and no factual proof whatsoever."

In court documents, the U.S. Fish and Wildlife Service said Gibson is suspected of obtaining illegally logged ebony and rosewood from Madagascar and unfinished wood from India that violate 2008 amendments to the century-old Lacey Act, which prohibits trade in endangered animals and plants.

The government said internal Gibson e-mails show the company was aware of the risks of obtaining illegal wood and may have cut corners with its suppliers. Gibson has not been formally charged, however, and the company has filed court papers seeking the return of wood seized in the earlier raid.

Ebony and rosewood, important for higher quality guitars, is increasingly rare and not grown in the United States but is available from parts of Africa and South America.

LAW TO PROTECT LOGGERS

The amendment to the Lacey Act governing plant material was backed by the Republican administration of George W. Bush to help the beleaguered U.S. logging industry.

Among the fallout from the Gibson case are some American musicians leaving their instruments at home while on tour so as to avoid any risk of having them confiscated by U.S. Customs agents for violating the amended Act, which legal experts say needs interpretation to clarify how it applies.

Other guitar makers say they follow the rules.

The value of illegally logged rare woods is illustrated by rosewood beds sold for up to $1 million apiece, said Andrea Johnson of the Environmental Investigation Agency, a group that tracks the logging issue.

"The people we talk to in the U.S. industry say this has been helpful to preserving jobs. It's helping the export trade of American wood," Johnson said.

U.S. wood production fell by half over the past five years due to the collapse of the housing market, said Jameson French of the Hardwood Federation, a trade group that favors the law.

When Juszkiewicz drew attention by pushing his case into Washington's partisan fray over job creation, many in Nashville saw it as a distraction from his legal problems, said Klint Alexander, a Vanderbilt University law and politics professor.

Gibson is widely viewed in Nashville's environmentally sensitive music community as a good corporate citizen that may have a problem with paperwork or logistics, Alexander said.

"We have shown leadership not only in purchasing wood ... I personally have been involved in conservation organizations" including the Rainforest Alliance, Juszkiewicz said.

"There is a travesty here. There is no due process. I have suffered damage and there is no consequence to those who damaged me. That's wrong," he said.

Prosecutors would not comment on the investigation.

(Additional reporting and writing by Andrew Stern; editing by Philip Barbara)

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Filed by Reuters  |