Gibson Settles in Gov't Case Over Lacey Act
Posted by Michael Mueller on August 7, 2012 at 11:43 AM
According to Bloomberg's Businessweek.com, Gibson Guitar has settled in the exotic wood case brought on by the U.S. Justice Department. Gibson will pay $350,000 in penalties and also agreed to withdraw its claims to over $250,000 worth of ebony and rosewood from India and Madagascar, which was seized during a raid on the company's headquarters in Nashville, Tennessee, in August of last year.
"Gibson has acknowledged that it failed to act on information that the Madagascar ebony it was purchasing may have violated laws intended to limit overharvesting and conserve valuable wood species from Madagascar, a country which has been severely impacted by deforestation," said a representative of the Justice Department in a statement.
Gibson CEO Henry Juskiewicz also released a statement (available at Gibson.com), saying, "We felt compelled to settle as the costs of proving our case at trial would have cost millions of dollars and taken a very long time to resolve. This allows us to get back to the business of making guitars. An important part of the settlement is that we are getting back the materials seized in a second armed raid on our factories and we have formal acknowledgement that we can continue to source rosewood and ebony fingerboards from India, as we have done for many decades."
In August 2011, agents from Justice and Homeland Security raided Gibson, sending workers home and confiscating nearly 100 guitars as well as raw wood stock as part of an investigation of possible violations of the Lacey Act, which was enacted in 1900 to curb trafficking of fish and wildlife, and expanded in 2008 to include illegally obtained plants and plant products.
Throughout the investigation, Gibson CEO Henry Juskiewicz steadfastly maintained the company's innocence and decried the raid as a political witch hunt. You could infer from this settlement that perhaps Gibson wasn't as innocent as they claimed and that the Justice Dept. didn't have a very strong case. But as is often the case with these types of settlements, we may now never know.