Gibson’s Problem Getting Wood Settled- Gibson Pays $300,000.00 Fine in Lacy Act Settlement With the Feds Forfeits Confiscated Wood

Posted on: August 6, 2012

By ERIK SCHELZIG Associated Press
Posted: 08/06/2012 08:49:05 AM PDT
Updated: 08/06/2012 12:13:43 PM PDT

NASHVILLE, Tenn.—Federal prosecutors on Monday announced a deal to drop a criminal case against Gibson Guitar Corp. after the instrument maker acknowledged its importations of exotic wood violated environmental laws.

Nashville-based Gibson agreed to pay a $300,000 penalty, forfeit claims to about $262,000 worth of wood seized by federal agents and contribute $50,000 to the National Fish and Wildlife Foundation to promote the conservation of protected tree species.

“The agreement is fair and just in that it assesses serious penalties for Gibson’s behavior while allowing Gibson to continue to focus on the business of making guitars,” U.S. Attorney Jerry Martin said in a statement.

Gibson didn’t immediately respond to messages left Monday seeking comment. The privately held company is considered one of the top makers of acoustic and electric guitars, including the iconic Les Paul introduced in 1952.

Gibson’s decision to cooperate with the federal Lacey Act banning the import of endangered wood products stood in contrast to a publicity campaign mounted in protest after agents raided Gibson facilities in Memphis and Nashville.

Republicans and tea party members had rallied behind CEO Henry Juszkiewicz at the time he denounced the raids as overzealous federal regulation that threatened American jobs.

“We feel totally abused,” Juszkiewicz said immediately after the August 2011 raid. He vowed at the time the company would “fight aggressively
to prove our innocence.” Soon afterward he was invited by House Speaker John Boehner to attend a joint session of Congress in which President Barack Obama delivered a speech on jobs.

A few weeks later a company spokesman claimed that a federal agent had “lied” in affidavits claiming the CEO knew the wood seized by authorities was illegally imported.

Those affidavits supporting the search warrant that authorized the raids alleged that shipments of imported Indian ebony and rosewood were given false labels to circumvent import restrictions.

The settlement says a Gibson employee learned during a 2008 trip to Madagascar—the source of some of the ebony wood that was seized—that it was illegal to import unfinished wood and sent a report about it to his superiors, including company President David Berryman.

The exotic woods used in such guitars are considered integral to the sound. And artists who have played Gibson instruments range widely from Chet Atkins and Maybelle Carter in country to Pete Townshend of The Who and Eric Clapton in rock to Larry Carlton and Paul in jazz.

George Gruhn, who owns a vintage guitar shop in Nashville, said he wasn’t surprised that Gibson officials accepted the settlement.

“Regardless of the merits of the case on either side, it would have cost more than that by far to pursue it,” he said. “Even if they thought they conceivably they could win, it would have probably cost more than $1 million to do it.”

Gruhn said the resolution of the Gibson case doesn’t ease his concerns about the Lacey Act, which initially halted the trade in endangered wildlife goods, like ivory, but in 2008 added rare woods to the import ban.

“The problem is that virtually every instrument prior to 1970 contains Brazilian rosewood,” he said. “Even on a Gibson LGO, which was their cheapest student guitar.”

Justice and Interior Department officials said in a September letter that those who “unknowingly possess” an instrument made from illegally imported materials don’t have a criminal problem.

Last year, Blackburn and fellow U.S. Reps. Jim Cooper of Nashville, a Democrat, introduced legislation they said would protect people from charges for unknowingly possessing illegally imported wood, and would require the federal government to establish a database of forbidden wood sources.

A coalition of environmental, logging industry and musicians’ groups oppose the measure.

4 responses to “Gibson’s Problem Getting Wood Settled- Gibson Pays $300,000.00 Fine in Lacy Act Settlement With the Feds Forfeits Confiscated Wood”

  1. michael g

    oh..gibson donates to the repubican party…and martin doesnt….no wonder martin wasnt hassled in the rare wood conspiracy….political crooks…..i will never vote democrat again.

    1. Steve Lockridge

      Michael G, I agree completely. This was nothing more than bullying by the government of someone they wanted to punish. The government’s claims were unfounded anyway. I wish Gibson could have fought longer and harder against this.

  2. C Douglas Nichols

    I haven’t bothered owning a Gibson since they abandoned Kalamazoo.

  3. scott

    it’s an (obamanation) LOL. what a load going after Gibson like that yet other foreign guitar companies are importing guitars with ebony. example the loar lh-309 has a solid ebony bridge but it’s made in china so i guess that’s ok. just another example of government giving a pass to foreign interest while screwing over an American icon. i have and always will support Gibson. It sucks that you can’t get a Les Paul custom with an ebony fret board any more.

Leave a Reply