Gibson Agrees to Pay $350,000 in Penalties, Loses Seized Imported Ebony
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Gibson Guitar will pay $350,000 in penalties to settle federal charges that it illegally imported ebony from Madagascar to use for guitar fret boards.
So ends a criminal investigation that, for the past year, has drawn fire from conservatives as an example of government over-reaching.
Gibson, the legendary guitar manufacturer behind the Les Paul, the SG and the Flying V, agreed to pay a $300,000 fine and donate $50,000 to the National Fish and Wildlife Foundation.
The government deferred prosecution of the company for criminal violations of the Lacey Act, which makes it illegal to import wood that was harvested and exported illegally under another country’s laws.
"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," said Gibson CEO Henry Juszkiewicz in a statement posted on Gibson.com this morning. "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."
The settlement, which was announced yesterday, frees Gibson from the charges as long as it doesn’t violate the agreement over the next year and a half. Gibson also agreed to withdraw a suit seeking to recover $260,000 worth of ebony and rosewood that was seized during by the government.
Agents of the U.S. Fish and Wildlife Service and the U.S. Customs and Border Protection agencies raided Gibson's offices and factories on August 24, 2011. Gibson also was raided in 2009.
Here are some "Possible Questions and Answers" that were posted on Gibson.com this morning:
In light of your previous outspoken condemnation of the Government's conduct in this case, why are you taking such a moderate, mild-mannered approach in your official statement?
The company is gratified that the Government ultimately saw the wisdom and fairness in declining to bring criminal charges in this case. The "Criminal Enforcement Agreement" we have entered into straightforwardly recognizes that it was inappropriate to criminalize this matter.
In light of the Government's lenient treatment here, does Gibson still believe that amendments to the Lacey Act are necessary to make the law more fair and reasonable?
Yes. The outcome here deals only with the particular controversy about the particular fact pattern. A true legislative reform is necessary to avoid systemic criminalization of capitalism, as I explained in my recent Wall Street Journal article.
Wasn't the Government's conduct here, with its armed raid on your headquarters and manufacturing facilities, so outrageous and overreaching as to deserve further Congressional investigation, just calling a spade a spade?
I don't retreat from any of my prior commentary, but I am gratified that this resolution puts the matter behind us. We are a forward-looking company hoping to move our business ahead in an environmentally forward-thinking way.
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mklotz
August 13, 2012 at 7:36am
I think they are overpriced and with poor quality control. Nothing to do with wood or government, just won't pay the money for it.
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Blight76
August 08, 2012 at 8:40am
Is Gibson really bad for using that wood, do you all really think they are the only company doing this, no they are the one who got cought im sure theyre not the only guitar company doing this and as for the prices yes they are higher than in the 90's but so is everything else do you people really expect national prices on everything to go up with inflation and not gibson guitars get off your high horse and bitch about something worth bitching about
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mklotz
August 08, 2012 at 6:54am
Never bought one never will. PRS has better quality and is a company that stands by their product.
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GEENGADE
August 07, 2012 at 7:48pm
Now they will probably file for bankruptcy. This is a as State of the Art as it gets. Tell me who else need Ivory on there furniture, jewerly, or anything if that matters. No one not a thing here in the states nada zlich nothing. period. Now that load will go on the black market because nothing these days is percious nothing not even 1/4 X 1" piece of ivroy. The people who need this stuff is just probably hurtin for a certin.
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johnnycnote
August 07, 2012 at 1:40pm
Not surprisingly, the late Ed Roman has a few thoughts on this subject. He used to work for Gibson, by the way: http://www.edroman.com/rants.htm
Then there's this: Gibson Listed as THE Worst Place to Work http://www.thegearpage.net/board/showthread.php?t=645325
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johnnyone
August 07, 2012 at 1:05pm
you better wake up , who needs big goverment ,it's ok to sell arms to drug dealers but not to make great guitars , you can buy cheaper but you get what you pay for some people think that the world owes them something( in this case Gibson ) that they are suppost to be given everything no body owes you anything get off your can or out of your bag and stop looking for a hand out there are many great used Gibsons for sale at good prices thank you Gibson for making the best guitars on the planet
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gypsyblues73
August 13, 2012 at 11:30am
Since when is it ok to sell arms to drug dealers? Pretty sure that's illegal too LOL
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loral
August 07, 2012 at 1:03pm
CNN (for what that's worth) is reporting Gibson paying $600,000 +/- in fines.
Instantly, these guitars are going to go up in price like the Ibanez Les Paul copies did back in the 80's.
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Terrence Cain
August 07, 2012 at 12:46pm
I was on Musician's Friend this morning and noticed Gibson's Melody Maker series, their cheapest guitars, were gone. So Gibson took a chance of being caught using illegal exotic wood for cheap guitars? That sounds like a really dumb idea to me. Hopefully this will teach Gibson to not be so frivolous with their business actions. Of course this could mean the price of Gibson instruments going up too, which is ridiculous to me.
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vinny6strings
August 07, 2012 at 12:08pm
This will be another reason for Gibson to raise prices. The new American way, raise prices and decrease quality.
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pwyndham
August 07, 2012 at 12:04pm
I love my 1998 Gibson Les Paul standard I bought from GC in 98' for $1,300. Now they are going for what $2,500 or something outrageous like that. Gibson is a corporate beast, way too greedy and overpriced.
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WellehanDVM
August 07, 2012 at 11:55am
I will never buy another Gibson. I wish more companies who are doing things right would advertize about their sustainable practices.













