Gibson Guitar raids may benefit competitor

Forests cover more than 30 million of Oregon’s 63 million-acre land base, or about 48 percent of the state’s total landmass. The federal government owns about 60 percent of that total, with another 5 percent in other public or tribal ownership. Oregon is also defined as a forced unionism state by the National Right to Work Legal Defense Foundation. Many forest industry job sectors such as loggers are unionized. (Photo, US Forest Service)Armed federal agents raided Gibson Guitar on Aug. 24 because of amendments to an act most Americans probably didn’t know existed. The Lacey Act, passed in 1900, set regulations for certain wildlife species. In 2008 Sen. Ron Wyden (D-Ore.) introduced amendments to beef up the act with wood products in mind.

The Gibson raid, actually the second time Gibson was targeted, raises a number of questions about trade protectionism, enforcement of laws that will do little to offset deforestation, and political cronyism. It also appears Wyden inflated the problem of illegal logging in the world timber industry.

Wyden’s news release about the Lacey Act amendments said, “Protecting ecosystems across the globe and businesses here at home that are being devastated by the practice of illegal logging, U.S. Senator Ron Wyden (D-Ore.) today praised the inclusion of an amendment to the Farm Bill based on the ‘Combat Illegal Logging Act of 2007’ which the senator introduced last year to halt the trade of illegal timber. American manufacturers are increasingly struggling to compete with the low-priced wood and wood products being harvested from illegal sources, and illegal logging is known to cause severe environmental damage in many parts of the world.”

Wyden’s claims of ‘devastation’ appear to be overblown.  The American Forest and Paper Association published a study on illegal logging and global wood markets in 2004. The study found: “In aggregate, on the order of 5% - 10% of the value of global wood products trade can be traced to suspiciously produced roundwood…Most illegally produced timber is used domestically and does not enter international trade. Suspicious volume of roundwood that enters international trade represents on the order of just 1% of global production for both softwood and hardwood combined, but ranges from 12% to 17% of the volume of roundwood that enters international trade.”

The AFPA study also noted, “In general, forest resource information and monitoring systems are inadequate in most of the countries where illegal activity is believed to be a problem.”

The Lacey Act amendments place the burden of compliance on American companies. China, for example, is believed to be one of the biggest beneficiaries of illegal logging. China is not apt to erect trade barriers because the government in that country is busy building a robust economy.

One columnist disclosed information about Gibson’s competitor E. F. Martin. Andrew Lawton, writing at The Landmark Report, said, “One of Gibson’s leading competitors is C.F. Martin & Company. The C.E.O., Chris Martin IV, is a long-time Democratic supporter, with $35,400 in contributions to Democratic candidates and the DNC over the past couple of election cycles. According to C.F. Martin’s catalog, several of their guitars contain ‘East Indian Rosewood.’  In case you were wondering, that is the exact same wood in at least ten of Gibson’s guitars.”

Posted on the C. F. Martin website is a notice about the company’s Third Wood Summit. Information about the summit suggests a left of center stance on environmental issues: “The day's themes will concentrate on the C. F. Martin Supplier Manual, as well as: updates regarding Forest Stewardship Council certification; Verification of Legal Origin and Harvest in C. F. Martin's Supply Chain and theirs; the transparency and documentation that are necessary for Lacey Act compliance; New and alternative woods or materials and Species and supply issues."

Groups presenting at the Wood Summit included government agencies and leftwing environmental groups.

In a separate article I pointed out a trip sponsored by Tropical Forest Trust in 2007. Procurement officers from Gibson, Martin and Taylor were taken on a tour in Madagascar. The real purpose, in my opinion, was to manipulate supply according to a Western political agenda. Perhaps Gibson didn’t play ball with the environmental leftists.

The strangest aspect of the attack on Gibson, whose CEO said he added  580 jobs to the US economy in the last two years amid a downturn,  relates to the wood in question. The US government allegedly wasn’t concerned about deforestation, not in this case.

Gibson CEO Henry Juszkiewicz said in a prepared statement, “The Federal Department of Justice in Washington, D.C. has suggested that the use of wood from India that is not finished by Indian workers is illegal, not because of U.S. law, but because it is the Justice Department’s interpretation of a law in India. (If the same wood from the same tree was finished by Indian workers, the material would be legal.) This action was taken without the support and consent of the government in India.”

Juskiewicz also said the wood seized was “Forest Stewardship Council controlled.”

Wyden’s amendments should be reviewed. US manufacturers are at a distinct disadvantage because of the Lacey Act amendments. The U.S. doesn’t run the whole world yet, although progressives in Washington are making a concerted effort. It seems that one of Gibson’s competitors has played ball with the administration and the left and actually stands to benefit if Gibson’s production decreases.

Gerrymandering interstate commerce and protectionism raise questions Congress should address. The Lacey Act amendments obviously are in need of amending.

Related Articles

Armed federal agents raid Gibson Guitar again, ‘browbeat’ employees (National Conservative Examiner)

Obama's radical climate change agenda driving US foreign aid policy (Heritage Foundation)

Whose axe made your axe? You better find out. (Cato)

Soros donated to group whose report helped provoke Gibson raid (The US Report)

(Commentary by Kay B. Day/Aug. 29, 2011)

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