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Gibson Guitar reaches settlement with Justice Department

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The Gibson Guitar Corp. has agreed to pay $350,000 in penalties to settle charges that the company violated the U.S. Lacey Act by illegally purchasing and importing various woods from eastern Madagascar and India.

The criminal enforcement agreement requires Gibson Guitar to pay $300,000 in fines. The remaining $50,000 will be donated to the National Fish and Wildlife Foundation to promote conservation, identification and propagation of protected tree species used in the musical instrument industry and the forests where those materials are found.

The agreement, which was announced Monday, defers prosecution for criminal violations of the Lacey Act, according to a U.S. Department of Justice press release.

“Gibson Guitar 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 Ignacia S. Moreno, assistant attorney general of the Environment and Natural Resources Division, an arm of the Justice Department.

The company has also agreed to implement a compliance program designed to strengthen its controls and procedures. In addition, Gibson will withdraw its claims to the wood seized in the course of the criminal investigation, which included more than $260,000 worth of Madagascar ebony shipments.

The materials from Madagascar and India were deemed illegal because woods were shipped to the company unfinished. Those materials were then used to make guitars at the Nashville manufacturing plant.

Despite efforts by members of the Nashville community and several Tennessee lawmakers who rallied to the company’s defense, the Justice Department refused to back down – sparking accusations the move go after Gibson Guitar was political.

The Justice Department has defended its actions, saying federal officials are committed to enforcing laws enacted by Congress.

“Failure to do so harms those who play by the rules and follow the law,” said U.S. Attorney Jerry E. Martin, who represents the Middle District of Tennessee. “This agreement goes a long way in demonstrating the government’s commitment to protecting the world’s natural resources.” Martin said the agreement is “fair and just in that it assesses serious penalties for the (company’s) behavior while allowing Gibson to continue to focus on the busi-

ness of making guitars.” In light of the company’s settlement, the

Justice Department agreed to decline charging Gibson Guitar criminally in connection with the ordering, purchasing and importation of the materials, as long as it refrains from violating in provisions of the Lacey Act in the future.

“Gibson Guitar has ceased acquisitions of wood species from Madagascar,” Moreno said, “and recognizes its duty to guard against the acquisition of wood of illegal origin by verifying the circumstances of its harvest and export, which is good for American business and consumers.”

U.S. Fish and Wildlife Service Director Dan Ashe said his department is please with the settlement.

“Gibson Guitar has taken responsibility for actions that may have contributed to the unlawful export,” Ashe said, “and exploitation of wood from some of the world’s most threatened forests.”

Read more from:
Business, Courts, DOJ, Gibson Guitar Corp, India, Lacey Act, Madagascar, Nashville, Trade, Wood
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