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EDITORIAL: Gibson axed up by Lacey Act
Guitar raid shows the need to eliminate influence of foreign law
Question of the Day
President Obama doesn’t think Arizona has any business enforcing federal immigration law, yet his administration wants the federal government to make sure U.S. companies abide by obscure regulations adopted by foreign countries. The issue hit the spotlight last week as the Department of Justice forced Gibson Guitar Corp. to pay $350,000 to settle charges that the company bought wood from Madagascar that was one-sixth of an inch too thick. Talk about a bad tune.
Gibson imports Indian rosewood and ebony fingerboards to craft musical instruments used by the biggest names in the industry. The firm’s 2,800 employees were stunned on Aug. 24, 2011, when armed thugs from the Fish and Wildlife Service (FWS), the Department of Homeland Security and the Justice Department raided Gibson’s Nashville and Memphis, Tenn., factories, seizing $260,000 worth of wood along with computer files, emails and other documents.
According to the affidavit filed by FWS Special Agent John M. Rayfield, Gibson’s crime was importing wood that had the Harmonized Tariff Schedule Code 4407, which is 10 mm thick, instead of the exact same wood carrying the code 4408, which is 6 mm thick.
It’s not a U.S. law or regulation that makes this arbitrary distinction. Instead, lawmakers in India came up with it to ensure that only woodwork finished by Indian workers could be exported legally. A protectionist bill introduced in 2007 by Sen. Ron Wyden, Oregon Democrat, and co-sponsored by then-Sen. Barack Obama criminalized possession of plant or wood products “taken, transported, possessed or sold in violation of any law or regulation of any state, or any foreign law.” This unfortunate language — which amended the Lacey Act — was enacted through the 2008 farm-subsidy bill over the veto of President George W. Bush.
What it means for U.S. companies is that they cannot use wood sourced from foreign countries without first studying the applicable laws of those nations. Failure to know the intricacies of Third World case law could result in the American company having its property seized and its premises raided. That means the fate of U.S. concerns is decided by foreign judges and legislatures, who usually act on behalf of their domestic industries.
Sen. Rand Paul, Kentucky Republican, introduced the Focus Act earlier this year to correct the situation by eliminating all reference to “foreign law” from U.S. conservation statutes. This change is long overdue. Gibson CEO Henry E. Juszkiewicz said in an interview on Fox News Saturday that fighting the suit in court could have cost $5 million in legal fees.
What the likes of Mr. Obama and Mr. Wyden don’t realize is that the time, effort and money wasted pursuing this case mean less productivity and fewer jobs. Businesses already have enough red tape to contend with at the local, state and federal levels. There’s no need to add another layer of complexity. Laws like the one Mr. Obama pushed and is enforcing continue to sabotage American businesses and have created a malaise of high unemployment and low growth.
It’s time for change. The Obama administration doesn’t just have guitar-maker Gibson singing the blues; its anti-competitive policies are a swan song for the entire U.S. economy.
The Washington Times
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