Gibson Guitar Raid: A Fox Case Study

Blog ››› ››› JOCELYN FONG

Fox News Correspondent John RobertsOn August 24, federal agents entered the Tennessee factories of the Gibson Guitar Corporation and confiscated wood, hard drives, and guitars on the suspicion that Gibson had illegally imported Indian hardwood. The story is newsworthy to be sure, and it was covered by the Associated Press, the New York Times, the Wall Street Journal, NPR, CNN and others. But Fox stands apart from the rest for both the volume and tone of its coverage.

Fox discussed Gibson 24 times in a little over two weeks, including both the Fox News Channel (14) and the Fox Business Network (10). By contrast, CNN reported on the story 8 times, 7 of which were the same taped news report aired during different hours of programming over three days.

Unlike the other news outlets, Fox speculated that the raid was politically motivated, citing the Gibson CEO's Republican party identification. At the same time, Fox largely omitted important background information that sheds light on why Gibson may have been targeted. Fox also linked the story to narratives about the Obama administration, regulation and jobs -- in line with Congressional Republicans who have incorporated the Gibson case into their broader criticisms of the administration.

All together the coverage of the Gibson story on Fox News and Fox Business totaled over 59 minutes:

FOX INTRODUCED PARTISAN ANGLE

In 10 of the 14 times Fox News discussed the story, it was suggested the raid may have motivated by a displeasure with the political leanings of Gibson CEO Henry Juszkiewicz. For instance, on Fox News' Happening Now, anchor Jenna Lee stated, "Critics of the investigation say it may be payback for the company's CEO who gives freely to GOP candidates." Bret Baier, host of Fox News' Special Report also said, "There is an element of politics here. The CEO of Gibson Guitars is a Republican who has donated to the Republican campaigns."

But Juszkiewicz does not appear to be a major Republican donor. In fact, his most recent contribution was $2,000 to Democratic Congressman Bob Cooper, according to FEC records. His donations for the 2008 presidential election were limited to Mike Huckabee's primary campaign. The vast majority of the contributions listed for Juszkiewicz over the past decade went to the Consumer Electronics Association, which has donated $52,000 this year to Republicans and $39,000 to Democrats.

Fox News correspondent John Roberts, who delivered 8 live reports for Fox News and Fox Business from a Gibson factory in Nashville, provided inconsistent information about Juszkiewicz's campaign donations. In a September 7 FoxNews.com article, Roberts wrote that Juszkiewicz "has contributed to Republican candidates (as well as some Democratic candidates)." But during his appearance on Fox News' America Newsroom that same day, Roberts said only that Juszkiewicz "has donated heavily to Republican candidates." In three other live reports that day, Roberts forwarded the allegation that Gibson was targeted because Juszkiewicz "donated to Republican candidates," without mentioning that he has also supported Democrats.

On 6 occasions, Fox News or Fox Business also suggested that Gibson's status as "a nonunion shop" was a relevant factor. On Fox News' The Five, for instance, Greg Gutfeld stated: "Gibson is non-union for that matter, which is why some think the company was targeted."

Fox was able to suggest that the raid may have been politically motivated by avoiding detailed discussion of both the reasons given by the government for the search and of Gibson's track record.

FOX LARGELY IGNORED GOVERNMENT'S STATED REASON FOR RAID

An affidavit filed by career Fish and Wildlife Service official John Rayfield spells out the government's case for searching Gibson property, as Reuters reported on August 25. The affidavit details a recent shipment of Indian ebony wood that was intercepted by Customs officials for possible Lacey Act violations and referred to the Fish and Wildlife Service. The Customs entry form listed California importer Luthier Mercantile International as the final destination for the shipment, when in fact, it was bound for Nashville for Gibson Guitars, according to the affidavit.

But that wasn't the only problem. The affidavit states that the Customs form falsely labeled the wood as veneer sheets and listed a false tariff code "to match the false description." The Indian export declaration also misrepresented the shipment, classifying it under the tariff code for finished parts of musical instruments. The reason this matters is that, according to the affidavit, veneer sheets (less than 6mm) and finished parts are legal to export under Indian law, but unfinished wood larger than 6mm is not. Juszkiewicz contends that the U.S. government has misinterpreted Indian law.

Rayfield says in the affidavit that "Countries generally establish laws and regulations related to the harvest (logging) and export of wood, timber or plants (forest products) in order to manage natural resources and regulate the commercialization of their nation's natural resources." The Environmental Investigation Agency, a nonprofit organization that investigates environmental crimes, similarly states:

It is common for countries to have bans and restrictions on export of logs or sawnwood; these laws are directly linked to forest management and protection efforts. They are often an important tool to help control export flows of illegally logged timber, and to ensure that the benefits of value-added processing contribute to development within these often poor countries.

U.S. guitar makers must comply with Indian export restrictions because in the 2008 farm bill, Congress passed a provision expanding the Lacey Act to prohibit imports of wood products obtained or traded in violation of foreign laws. Law professor and guitar enthusiast John Thomas said via email that "US officials are charged with making an independent determination of the wood's legality" under the laws of the exporting country, regardless of whether that country enforces the law on their side. "That's the point of the Lacey Act. Madagascar provides a good example. At points in time, exporters have gotten illegal woods out of the country by bribing government officials who then improperly conclude that the wood is legal."

The 2008 provision passed with bipartisan support in both houses. It received unanimous support from the House Committee on Natural Resources. In the Senate, the measure was introduced by Ron Wyden (D-OR) and Tennessee Republican Lamar Alexander. (Incidentally, Alexander received a $1,500 contribution from Gibson's Juszkiewicz last year.)

The provision was also supported by hardwood industry groups. The American Forest & Paper Association, which represents pulp, paper, and wood companies, estimated that "illegal logging costs the American forest products industry $460 million each year." In Congressional testimony, Ann Wrobleski stated on behalf of AF&PA:

Among the factors driving illegal logging are: unclear or poorly enforced forest tenure, weak political institutions, poverty, corruption, inadequate natural resources planning and monitoring, and lax enforcement of sovereign laws and regulations.

Illegal logging, associated illegal border trade, and the use of illegally obtained timber in manufacturing distort international trade and reduce market opportunities for U.S. suppliers. The very presence of illegally procured wood fiber in the international marketplace affects the competitiveness of U.S. producers who operate legitimately in accordance with national and international environmental and trade rules.

At no point during its coverage did Fox mention that FWS is enforcing a 2008 law that passed with bipartisan support. Of the 24 times Fox discussed the story, in only 5 instances was it mentioned that there were false statements on the customs form, and even then they were downplayed. During his September 1 interview with Juszkiewicz, Fox News' Neil Cavuto said "part of their affidavit says that a lot of these shipments were falsely labeled. I don`t know what that means. But what -- what do you think they mean by that?" Juszkiewicz replied that "there was no question of what the product was, where it was from, but somebody had put the wrong number on a form."

During a report on Lou Dobbs Tonight, Roberts declared that the false tariff code "was a mistake":

ROBERTS: I don't want to get into the nuts and bolts of it. But this was imported, this latest shipment that was seized by the federal government under a certain tariff code. It was a mistake, it should have been listed as another tariff code. That's probably what set off agents from U.S. Fish and Wildlife and Department of Homeland Security when they came in to raid the company.

Roberts delivered 7 other live reports without mentioning the customs form.

In the vast majority of segments discussing the Gibson story, Fox did not mention the paperwork discrepancies though they were the central issue in the affidavit, which states that the customs declaration "fraudulently presents" the wood as a legal import.

FOX AVOIDED DISCUSSION OF GIBSON'S TRACK RECORD

When asked if he sees any reason to suspect that the raid was politically motivated, Thomas of the Quinnipiac University School of Law said via email, "none at all." Rather, it's important to view the recent raid in the context of the government's ongoing investigation into Gibson's wood purchases. Federal agents had previously raided Gibson factories in November 2009 and seized wood from Madagascar.

Thomas believes that while other companies also import unfinished wood from India, Gibson was targeted because of the paperwork irregularities described above and because court documents have suggested that Gibson previously "knew that it was buying illegal woods" from Madagascar:

My take is that the 2009 and 2011 seizures are related in that Gibson's conduct has given USFW [US Fish and Wildlife Service] officials probable cause to be suspicious of Gibson's wood-buying activities. In 2008, Gibson, Martin, and Taylor officials [Guitar companies] toured Madagascar and observed the illegal logging operations. Martin and Taylor promptly stopped using Madagascar woods; Gibson did not. Internal Gibson emails, as quoted by the US Attorney's office appear to indicate that Gibson knew that it was buying illegal woods. Federal officials seized that wood and as per the 2008 Lacey Act amendments, need not charge Gibson with a crime. Gibson must prove the legality of the wood to secure its return. Gibson has been unable to do that. [After the November 2009 raid, Gibson stopped buying wood from Madagascar.]

The 2011 seizure concerned Indian woods that would be legal but for the thickness. I believe that USFW is investigating because of suspicions due to 1) Gibson using the same wood supplier as it did for the Madagascar woods, 2) irregularities in the wood designations on the paperwork that could be due to innocent error or intentional attempt to deceive officials as to the thickness of the wood and 3) though Gibson is the ultimate purchaser, the paperwork lists an intermediary, LMI, which delivers the wood to a warehouse near the Nashville airport. Gibson retrieves a bit of the wood at a time when it needs it.

Thomas noted that Gibson was "using the same wood supplier as it did for the Madagascar woods" for the shipment from India. Indeed the receipt issued by the airline for the shipment described in the affidavit said the wood was exported by Atheena Exports of India to Theodor Nagel, GmbH, a timber trading company based in Germany.

In a recent podcast for the Fretboard Journal, Thomas said that "In the 2009 shipments from Madagascar, Gibson was using an importer named Nagel from Germany," who in turn was obtaining wood from a man named Roger Thunam in Madagscar. According to Thomas, a report about Thunam in the Madagascar Conservation and Development Journal "said that almost everything he does is illegal. All the woods he's gotten out of Madagascar, he's gotten illegal through bribing local officials, through just violating whatever laws. And he's been dealing exclusively with Nagel. And the wood that Gibson got came through Nagel."

A June court filing quoted in news reports says a Gibson official wrote in an 2009 email that until they could identify "some legitimate harvests" in Madagascar, Thunam "should now be able to supply Nagel with all the rosewood and ebony for the grey market."

Fox never mentioned the court filing indicating that Gibson knew it was purchasing illegally sourced wood from Madagascar. The closest Fox came to reporting these facts was a September 7 report by Roberts for Fox Business:

ROBERTS: So why is Gibson being targeted? There's a couple of theories about that. In 2009, they were raided and a bunch of Madagascar rosewood and ebony was taken, because U.S. Fish and Wildlife said they couldn`t properly source that and maybe they were looking at buying things on the grey market. The other theory out there is that because the CEO of Gibson, Henry Juskiewicz, is Republican, who's donated to Republican candidates, that he is being singled out by this Democratic administration.

Roberts did not mention Gibson's discussion of the "grey market" in any of his other live reports, including the 5 he delivered on Fox News, or in his FoxNews.com article. In fact, Madagascar went unmentioned altogether in 17 of the 24 times Fox discussed Gibson.

FOX FRAMING DOVETAILED WITH GOP MESSAGING

Although the raid took place on August 24, the bulk of Fox's coverage came on the days surrounding President Obama's September 8 speech to Congress outlining a plan to create jobs. Republicans were picking up the Gibson story around the same time.

On September 7 Republican presidential candidate Newt Gingrich called on Congress to investigate the Obama administration's treatment of Gibson, adding: "With 14 million Americans unemployed and another 11 million underemployed or dropped out of the work force, the Obama Administration is trying to pressure Gibson Guitar into moving its wood-finishing jobs offshore." The Hill reported on the same day that Juszkiewicz would attend President Obama's jobs speech as a guest of Rep. Marsha Blackburn (R-TN) and that he would sit in Speaker John Boehner's (R-OH) box.

Blackburn said in a statement: "Gibson Guitar is at the heart of this jobs debate, and is an example of exactly why President Obama has it wrong when it comes to getting our economy back on track." On Fox & Friends, Michelle Malkin cheered the move:

MALKIN: You know, one thing that I think is wonderful is seeing Marsha Blackburn invite a CEO who has been negatively impacted by these Obama policies and I think we should have a take an entrepreneur to Capitol Hill date tonight and have every attending Republican who actually is showing up bring a CEO, bring a small business entrepreneur who has been strangled, who has been stifled by these Obama policies.

Sen. Rand Paul (R-KY) also discussed Gibson with Lou Dobbs on September 6 and said, "When a government has that type of animus towards business, can you wonder why everybody in the business community thinks this president is the most anti-business president we've ever had?" Dobbs replied, "You know, Senator, indeed, he may be anti-business, but this government has become anti-reason and logic and common sense."

In fact, from the very beginning of Fox's coverage, the Gibson raid was framed in terms of the Obama administration's economic policies. For instance:

  • CHRIS COTTER: The Obama administration says it doesn't want to drive business overseas but the head of Tennessee-based Gibson Guitars may find that hard to believe right now. [Lou Dobbs Tonight, 8/26/11]
  • DAVID ASMAN: Even as the Obama administration comes out with the claims that it's cutting red tape, new red tape could be destroying jobs in a uniquely American enterprise. [America's Nightly Scoreboard, 8/26/11]
  • PETER SCHIFF: The economy is weak enough as it is without having Obama sicking his dogs on our manufacturers. [America's Nightly Scoreboard, 9/1/11]
  • CHARLES LANE: This narrative does not help the president in terms of this whole job creation debate. [Special Report, 9/7/11]
  • CHARLES KRAUTHAMMER: Either you favor jobs or you don't and I think this another example of job-destroying actions by the federal government. [Special Report, 9/9/11]

Roberts also emphasized jobs in his reports, stating on Fox News' America's Newsroom: "Now here is the really interesting part. Had Gibson imported this from India as finished piece, it would have been perfectly legal to import ... which has led Gibson to say that the U.S. government, this White House, this administration wants to ship U.S. jobs overseas."

Posted In
Economy, Trade, Environment & Science, Conservation
Network/Outlet
Fox News Channel, Fox Business
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