[DeTomaso] NPC : Your Tax Dollars at Work

[Jeff Udelson]

This is old news . But worth knowing even if you are not a guitarist. The lengths our government will go to regulate business. And kill jobs. 

After Gibson Raid, Other Guitar Makers at Risk of Breaking Law
By John Roberts  
Published October 05, 2011
| FoxNews.com
It's as sweet a sound as you can 
imagine. A $10,000 guitar expertly crafted by the hands of Dave 
Berkowitz, a master luthier in Washington, D.C. 
But Berkowitz's guitars include fretboards 
and bridges made from Indian rosewood and ebony, which the U.S. Fish and Wildlife service declared to be illegal to import in its actions 
against Gibson Guitar back in August. Now, every time Berkowitz uses 
that wood to build his immaculate instruments, he is potentially 
breaking the law.
"I use the exact same ebony and rosewood fingerboards that were confiscated in August from Gibson," Berkowitz told Fox News. 
Does that mean he is "engaging in illegal business practices?"
"Well, technically speaking, yes, because they have declared the materials I'm using illegal," he said.
But whether the Indian rosewood and ebony 
that Berkowitz and Gibson -- and so many other guitar makers -- use is 
really illegal depends on who is asked.
According to the Indian government, 
fingerboard "blanks" -- the wood that will eventually become a guitar's 
fretboard -- are legal to export. 
"Fingerboard is a finished product and not 
wood in primary form," Vinod Srivastava, India's deputy director-general of foreign trade, stipulated in a letter dated Sept. 16. "The foreign 
trade policy of the government of India allows free export of such finished products of wood."
The U.S. government disagrees. In its affidavit to search Gibson, U.S. Fish and Wildlife Service considers fingerboard 
blanks to be raw materials, not finished product -- illegal to export 
from India and, therefore, illegal to import into the United States. 
What's more, according to the complaint, the Gibson wood was imported with an incorrect tariff code, which was off 
by one digit from the correct code. Luthiers Mercantile International, 
the company that imports the wood for Gibson, claims that was a simple 
clerical error. The difference in the codes refers to the thickness of 
the wood -- more than or less than six millimeters in thickness.
Since the government raided Gibson, Luthiers Mercantile has been unable to import any Indian rosewood or ebony. As 
it is a major supplier to guitar makers across the nation, it means the 
companies can't get wood either. Berkowitz said now he would be afraid 
to use it anyway. 
"One fine from Fish and Wildlife would shut me down and bankrupt me," he said.
Gibson was raided for suspected violations 
of the Lacey Act, a 1900 law initially crafted to protect rare and 
exotic birds, whose feathers were prized for women's hats. It was 
amended in 2008 to include wood. The main driver was to protect the U.S. forest industry against cheap foreign competition that involved illegal logging. But it also helped protect sensitive forests and rare species 
of trees against poachers.
But the law appears to have also had the unintended effect of stifling American business. 
The National Association of Music Merchants, which represents some 9,000 manufacturers and retailers wrote a letter to President Obama and every member of Congress, complaining about the confusion left in the wake of the Gibson raid. 
"Many of NAMM's member companies are being 
negatively impacted by the Lacey Act, a well-intentioned law, but one 
with unintended consequences that we feel are damaging to our industry 
and the economy," NAMM's chairman and president wrote.
Sen. Lamar Alexander, R-Tenn. co-sponsored the amendment to the Lacey Act. He suggested changes may be needed. 
"It had nothing to do with guitars," he 
said. "So it's not unusual for laws to have unintended consequences. And when they do, we legislators ought to say, 'Whoops, we didn't think of 
that. That may be a problem. Let's see if we can fix it.'"
Alexander's Democratic co-sponsor, Sen. Ron Wyden of Oregon, declined to to discuss the issue with Fox News. Instead, his office accused Fox News of "whipping up opposition" to the Lacey Act, 
and said that outside of Gibson, they hadn't heard of any complaints. 
Fox News provided his office with the letter from NAMM.
While Alexander acknowledges there appear to be problems with the Lacey Act as it applies to the music industry, 
Rep. Marsha Blackburn, R-Tenn., said the bigger problem is government 
overreach.
"It's not about the Lacey Act," she said. 
"What this is about is selective enforcement, excessive enforcement. 
It's about lack of clarity, confusion and uncertainty pertaining to a 
law."
She added that she has heard plenty of 
anxiety across the country from musical instrument craftsmen and 
furniture makers, who all feel at risk now that Gibson was raided by 
armed federal agents.
"Many people look at this and say, 'If it happened to Gibson, could it happen to me?'"
Not surprisingly, all this doesn't sit well with Tea Party activists who organized a large rally in support of Gibson in Nashville on Saturday. Amy Kremer, president of the Tea Party Express, said she 
can't fathom why the Feds targeted Gibson over wood the Indian 
government says is legal. 
"We believe this is exactly what we (the Tea Party) are fighting against, the big overreach of government. We're 
simply not going to stand for it," she said.
While the issue has turned political, 
Berkowitz said he doesn't think it is a matter of Republican versus 
Democrat. A registered Democrat himself, he said he sees a more ominous 
picture -- the possible death of the American artisan class. 
The modern acoustic guitar was born in 
America, as was the electric guitar. And while guitar-making is not 
uniquely American, its most respected manufacturers are in the United 
States. Gibson, Martin, Fender, Taylor, Paul Reed Smith, Collings, 
Ribbecke, Breedlove are some leading names on the list.
What's really at stake, Berkowitz said, is history. 
"Everything from Gene Autry and Elvis to Pete Seeger and Woody Guthrie. The old American songbook is founded on the steel string acoustic 
guitar. And that industry is currently threatened by the Lacey Act," he 
said.