Gibson Guitar is paying hundreds of thousands of dollars in fines and foreiting possession of wood product used in guitars, based on the trumped up claim that it violated Indian law (and thereby a provision in U.S. law) in purchasing the “endangered” wood, as reported by The Christian Science Monitor (via Reason, h/t Mark Hemingway):
Federal prosecutors on Monday announced a deal to drop a criminal case against Gibson Guitar Corporation 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.
The privately held company is considered one of the top makers of acoustic and electric guitars, including the iconic Les Paul introduced in 1952.
“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,” CEO Henry Juszkiewicz said in a statement late Monday night.
“This allows us to get back to the business of making guitars,” he said, noting that the settlement would allow them to continue sourcing rosewood and ebony from India as it has for decades.
As Reason reported at the time:
The feds raided Gibson for using an inappropriate tariff code on wood from India, which is a violation of the anti-trafficking statute known as The Lacey Act. At issue is not whether the wood in question was endangered, but whether the wood was the correct level of thickness and finish before being exported from India. “India is wanting to ensure that raw wood is not exported without some labor content from India,” says [Gibson CEO Henry] Juskiewicz.
Andrea Johnson of the Environmental Investigation Agency (EIA) counters that “it’s not up to Gibson to decide which laws…they want to respect.” She points out that Gibson had previously been raided under The Lacey Act for imports from Madagascar.
(video via Instapundit)
Absolute insanity. Over half a million down the drain for Gibson, not to mention whatever it has spent on attorney’s fees and business it has lost.