Gibson Guitar CEO: Don't Know Why We Were Targeted

Henry Juszkiewicz on government probe into company's exotic wood imports

NEIL CAVUTO, HOST OF, "YOUR WORLD": Legendary rockers play them, and the company that makes them is now under investigation, Gibson Guitar raided by federal agents over whether the company is illegally importing wood for those guitars.

But according to the CEO, the government says he wouldn’t be in this fix if he had just used foreign workers instead.

Gibson CEO Henry Juszkiewicz, joining us right now.

Now, we did call the Department of Justice. No comment from the Department of Justice.

Henry, what happened here?

HENRY JUSZKIEWICZ, CEO, GIBSON GUITAR CORP.: Well, last Wednesday, we had a raid with armed agents, came into our factories, three different factories, and our corporate headquarters.

They evacuated all the people in the factories. They were standing out in the driveway, in the street, in the parking lots, respectively. The agents started to seize a great deal of raw material for our guitar manufacturing process, as well as papers and hard drives and such.

And they closed our plants down for the -- almost the entire day.

CAVUTO: Well, what was their argument, that you -- the wood you were using, you shouldn't have used? But I understand that the wood you used, there was no problem with the governments of the countries from which you got it.

JUSZKIEWICZ: That's right.

Initially, when they raided us, they didn't tell us why they were raiding us. And it was only two days later when they revealed the affidavit, which -- which then went on to have a cause regarding the wood. And it really regards the definition of an import item.

We’ve been importing this wood for 17 years, consistently, on a regular basis, with no problem. And our competitors continue to use and buy this wood without any problem today.

CAVUTO: Well, whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa. That's interesting. So, your competitors use the same wood that's in question here?

JUSZKIEWICZ: Yes.

CAVUTO: And their offices were not raided?

JUSZKIEWICZ: Correct.

CAVUTO: Your offices were raided?

JUSZKIEWICZ: That's right.

CAVUTO: And you've been threatened that if any of your -- if you keep selling this stuff, you could go to the pokey, right?

JUSZKIEWICZ: That's right as well, which is really kind of a nightmare.

CAVUTO: Yes. So it would mean, essentially, Henry, anything that you're saying on this show can and will be used against you.

No, I -- but here's what’s weird, Henry, looking at this. Out of the blue, they pick on you. There’s no problem with the governments from whose country you are getting this wood and have for many, many years. Then they just get involved.

And I'm trying to add this up, and I don't -- I don't understand. What prompted this? Was it either a competitor’s call? Was it just an out-of-blue witch-hunt? What?

JUSZKIEWICZ: I -- you know, we have no idea. They're not talking to us.

When they originally raided us in 2009, there was an affidavit as well. They did not tell us what that was. It was sealed. It...

CAVUTO: What did they do when they raided -- what did they do when they raided you?

JUSZKIEWICZ: They -- they shut us down. And they took a great deal of wood, and, you know, generally harassed our employees and intimidated them.

CAVUTO: Did they return any of the products they took?

JUSZKIEWICZ: No. And, in fact, we have a lawsuit in Nashville federal court for the return of the product that was seized in the original 2009 raid.

CAVUTO: Wouldn't that be a kick, if some Justice folks who took the product are like strumming in a room now? But that’s neither here nor there.

What -- here’s what's amazing, Henry, that, out of the blue, they come after you. And I'm trying to think why they would come after you, when there are much bigger fish to fry. You're a commendable company. You have a lot of devoted, die-hard fans and musicians.

But you're not a big, big cheese, in other words, no offense to you. So, I'm wondering, why? Something's not adding up. Why? Did anyone of you or your staffers say anything critical of the White House, critical of this Justice Department, critical at all?

JUSZKIEWICZ: You know we've been pretty low-key. We're a guitar company. We've been manufacturing guitars. We've been involved in the environmental movement. We’ve been trying to do the right thing in terms of sourcing. We really don’t know why they are picking on us.

CAVUTO: But 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: Well, the only thing I know of is in regards to one shipment that was seized that has nothing -- is not part of the raids.

But there was a shipment seized at our broker about a month ago. And somebody had filled in the wrong import category on the paperwork. In other words, it was -- there was no question of what the product was, where it was from, and -- but somebody had put the wrong number on a form.

And they seized those goods from our broker.

CAVUTO: You don't seize tough for that, though, you know? But I don't know.

JUSZKIEWICZ: Well, the government did, believe me.

CAVUTO: Yes.

JUSZKIEWICZ: And...

(CROSSTALK)

CAVUTO: But you're just back to selling this stuff as usual and moving on?

JUSZKIEWICZ: We're – we're trying to move on.

CAVUTO: All right.

JUSZKIEWICZ: But they took well over a month’s worth of raw material out of our factory. And so it's going to be hard going for us to recover from that.

CAVUTO: Well, we'll watch it closely, Henry Juszkiewicz, but it is amazing.

And, again, we did place calls and interview requests to anyone at the Justice Department. They declined.

We're going to stay on this story, because I just -- I just want to think, it's a fairly small, albeit significant company in its little universe here, out of the blue picked on, everything seized, a lot of jobs in jeopardy. Why? All right.

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