Gibson Guitars should be smiling today.
For one thing, news broke that President Donald Trump is discontinuing a shady policy the Department of Justice applied in dealing with US businesses.
For another, watchdog group Judicial Watch is suing the Justice Department for records related to what many of us viewed as unethical shakedowns of US businesses.
Gibson’s case was one for the record books. The way the Justice Department handled the case was worthy of a third world dictatorial regime.
Gibson was caught in the snares of obscure amendments to the Lacey Act. Those amendments like so many other laws and amendments Congress passes left loopholes as wide as the state of Texas. In essence, if the government chose to come after you, there was ample wiggle room even if you’d done nothing wrong and had not been charged with a crime.
I was infuriated as this case progressed under former attorney general Eric Holder in the administration of President Barack Obama. I called it a shakedown and I still believe it was. Making it worse, restraints the government placed on Gibson in the final agreement call into question all manner of constitutional violations, including the First Amendment.
The Wall Street Journal currently has an op-ed up—you have to be a subscriber to read it. It appears Gibson was not alone in the shakedown community.
I interviewed Gibson’s CEO Henry Juszkiewicz after his Tennessee factory was raided by federal officials in tactical gear. In the end, Gibson was cleared. Obama’s Department of Justice rapped Gibson’s knuckles over reporting and compliance issues. Of course what no one pointed out is the disadvantage anyone is at when dealing with our federal bureaucracy. Even Gibson, an icon in the music world, knew the amounts required to battle it out in court would be astronomical.
The company paid a fine, but what came next was worthy of a dictatorial regime. Gibson was forced to make a $50,000 donation to the National Fish and Wildlife Foundation—an independent 501(c)(3) nonprofit organization.
Note I am not taking issue with NFWF’s work. The foundation relies on the federal government for some funding; other funding is obtained by corporate partners. According to left of center the Washington Post, NFWF was created by Republicans in 1984 “to muster conservation funding in the face of Reagan administration budget cuts.”
In addition to being directed to give money to a specific organization, Gibson paid a $300,000 fine. The company was directed to not take that as a tax deduction. Nor could the company tout the $50,000 handout—a violation of the First Amendment to the US Constitution.
Gibson placed information on the company website about the case.
Ultimately, Gibson even created a style of guitar to commemorate the fleecing.
“Slush funds” is the term critics use to refer to such shakedowns. President Trump placed a news release on the White House website about this practice, including an excerpt from the editorial:
“The misuse of settlement slush funds was one of the Obama Administration’s worst practices, which it used to end run Congress’s constitutional spending power. After the GOP took the House and tried to cut spending for liberal interest groups, the Obama Justice Department began to force corporate defendants to allocate a chunk of their financial penalties to those same groups.
Banks were made to fund left-wing activists such as NeighborWorks—though these groups were neither victims nor parties to lawsuits. In 2015 JP Morgan was required to pay $7.5 million to the American Bankruptcy Institute’s endowment for financial education. In 2016 Volkswagen was required to invest $2 billion in zero-emissions technology and promote zero-emissions cars. Government enforcement became an income redistribution mechanism without having to go through Congress.”
Judicial Watch filed the lawsuit after a congressional investigation:
“Judicial Watch submitted its FOIA request in the aftermath of an extensive investigation by the House Judiciary and Financial Services Committee that found the Obama Department of Justice had “engaged in a pattern or practice of systematically subverting Congress’ budget authority by using settlements from financial institutions to funnel money to left-wing activist groups.”
The investigation, announced in February by House Judiciary Committee Chairman Bob Goodlatte (R-VA), revealed that the Justice Department used the mandatory “donations” to direct nearly a billion dollars to liberal activist groups over the past two years. According to the investigation, “activist groups which stood to gain from mandatory donation provisions were involved in placing those provisions in the settlements.”
A billion bucks in two years. Lucky ‘activist’ groups.
Trump’s attorney general Jeff Sessions has discontinued this practice, requiring any such agreements in the future to either benefit real victims or the US Treasury. It was long past time to stop a practice no free republic should have ever tolerated. While much of media ignored it, I began covering it six years ago, and I called for reform.
I guess in a way both Gibson and I got vindication, courtesy of the Trump Administration.
Most US media apparently were fine with the shakedowns, because none investigated the practice although it was commonly known.
The US attorney handling the case resigned soon thereafter. He never should have been part of the DOJ to begin with.
(Commentary by Kay B. Day/June 12, 2017)
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