Gibson Guitars Faces Bankruptcy After Years of Federal Attacks

P. Gardner Goldsmith | February 21, 2018

Rock n' Roll. The soundtrack to rebellion. Across the decades, the motif has held, and the mythology of the rebellious rocker striding into the political arena to shatter the establishment with some deftly played power chords still stirs the imagination.

Sadly, the new world might not be ready for the revolution, because this week, after 116 years in business, and following years of attacks, fines, and losses incurred by federal bureaucrats, Gibson, the legendary manufacturer of electric guitars, revealed that it could face bankruptcy in July.

Indeed, this hallowed name in the field of modern music, and manufacturer of the instrument based on Les Paul’s 1947 invention, fell prey to the arbitrary and unconstitutional attacks of Uncle Sam.


As ACJ reports, the company that started in Kalamazoo, MI, in 1902, and moved to Nashville in the 1980s has millions in loans to repay, and will need to have ready cash by July.

And this comes after years of hampering by the federal government, a lawsuit by the Fish and Wildlife Agency, the seizure of millions of dollars in wood by the feds, towering legal expenses to fight the bureaucrats, and a final settlement after the situation dragged on with no end in sight.

Music lovers, and even observers of outlandish federal regulations, might recall Gibson head Henry Juszkiewicz passionately testifying to reporters about a raid of their Nashville plant by armed Homeland Security and Fish and Wildlife agents who led his workers at gunpoint into the parking lot, stopped work for a day, slowed work for a week, and seized $500,000 in stock, some of which was not even the focus of the federal invasion.

The attack came as a result of what the feds claimed was a violation of the Teddy Roosevelt-era “Lacey Act”, which was passed in 1900, and originally banned import of certain wildlife if the capture, killing, or export of that wildlife was prohibited by the nation of origin. In 2011, in what some writers have wisely speculated appears to have been a political move made to ensnare people like the GOP-backing Juszkiewicz, the Lacey Act was amended to include flora – alive or dead. As John Hayward noted for Human Events in 2014:

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.

And, as Anthony L. Fisher reported in a 2012 video interview for Reason (just before the Mayan calendar saw the end of the world):

In this case, the Justice Department contends Gibson used an inappropriate tariff code for the export of guitar fingerboards from India… Rather than using the tariff code that describes the raw wood as a musical instrument part, which Gibson did, the government’s interpretation of Indian law describes the wood as veneer, because the wood is a fraction of an inch thicker.

Said Juszkiewicz:

India is wanting to insure that raw wood is not exported without some labor content… It has nothing to do with conservation. It has nothing to do with how scarce or non-scarce rosewood or ebony are, it has to do with (Indian) jobs. They have raided us, come in with weapons, they seized a half-a-million dollars in product, they shut our factory down…

And he offered more valuable thoughts on the activity of the feds:

This is not about responsible forestry and sustainable word and illegal logging. It’s about a bureaucratic law. Think about it. That’s a blank check for bureaucratic abuse.

In fact, the most recent revision to the Lacey Act, called “Due Care”, could ensnare hundreds of thousands of musicians traveling back to the US with their guitars. If they cannot cite for the government what, precisely, is in their guitars, the Lacey act could potentially be used against them, too. Right now, the feds are telling people not to worry.

But that doesn’t help Gibson, nor people who look at the Constitution and wonder what happened to the Sixth Amendment.

That dusty old provision states:

In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defense.

Instead, we get wildly invasive federal laws that stretch the Constitutional provision allowing Congress to set tariffs. We get non-violent business people raided by armed paramilitary units of two unconstitutional agencies, the seizure of private property on which the company relies to make its product, and the long, dragged out legal process in which Gibson never even got to hope that it might have a single day in court before a jury.

The American Revolution was initiated because of similar games played by the British government when it came to tea, stamps, and trials being held in secret, away from local peers (they were conducted in Nova Scotia, no less). Rock n’ Roll hasn’t brought a new political revolution, but maybe, just maybe, if rock fans see what has been done to Gibson, they can begin an ideological revolution that will be worthy of the rock tradition.