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  • Gibson Guitar: Settling Away Bad Publicity

    It’s another August in Washington. It’s hot and humid. Most people not already at the beach are indoors watching the Olympics or in the water at a pool. The Redskins have started their preseason camp. The Nationals are in first place. The political parties’ conventions are weeks away, school even more so. And Congress is out of town. That last fact means that this is a good time for the executive branch to take actions that otherwise might rile up Congress, since the members are scattered to their home states.

    The U.S. Department of Justice (DOJ) announced yesterday that the Gibson Guitar Corporation had accepted a deferred prosecution agreement regarding DOJ’s allegation that Gibson had imported wood for its guitars in violation of the Lacey Act, a federal law that makes it a crime to import flora or fauna in violation of a foreign nation’s laws. As a result, DOJ will not charge Gibson with a crime (except, perhaps, for a tax offense; that’s left open) for illegally importing “ebony from Madagascar and ebony and rosewood from India” through a German intermediary “from June 2008 through September 2009.” In return, Gibson must pay a $300,000 fine, make “a community service payment of $50,000 to the National Fish and Wildlife Foundation [NFWF],” bulk up its internal procedures, and generally grovel whenever the government asks it to do anything related to this matter.

    There are several features of this agreement worth noting.

    First: The government acknowledges in the agreement that “certain questions and inconsistencies now exist regarding the tariff classification of ebony and rosewood fingerboard blanks pursuant to the Indian government’s Foreign Trade Policy.” In other words, the government acknowledges that the relevant law—not just our law, but a foreign nation’s law—is unclear. Ordinarily, that conclusion should lead the government to drop any charge that Gibson violated the law, especially the law of a foreign nation.

    Second: The government’s case is no better regarding Madagascar. The agreement cites (1) “Madagascar Interministerial Order 16.030/2006,” and (2) some other equally well-known “laws”—all of which may have been written in a foreign language. The agreement alleges that Gibson received a translation (from whom is not stated) of the first whatever-it-is saying that “‘fingerboards’ are considered ‘finished’ under Madagascar law” and therefore may be exported. But, according to the government, “trip organizers”—who, for all we know, could have been Gibson’s trip companions “Greenpeace and other non-profit environmental groups”; the agreement does not say—informed Gibson that “under the organizers’ interpretation of [Madagascar’s] 2006 Interministerial Order, the harvest of ebony was illegal and that instrument part ‘blanks’ would be considered ‘unfinished’ and, therefore, considered illegal to export.” Put aside the obvious problems with government’s reliance on the opinion by the trip’s “organizers” of a foreign order written in a foreign tongue—Gibson was given conflicting views of the law. That should have ended the matter entirely. Remember: Gibson imported wood, not heroin.

    Third: The press release is full of all of the chest-puffing that we are accustomed to see the federal government display: The government has enforced the law, prosecuted the wicked, protected the environment, cured the common cold, etc. But the government has made a federal case out of “fretboards” or “fingerboards.” (For the uninitiated, the agreement even contains pictures of both.) Is that how we want federal tax dollars spent—punishing domestic companies that purchase a valuable, harmless product from foreign companies that, in turn, purchase it from an exporter in a foreign land, where the alleged illegality is the violation of an ambiguous order written in a foreign language? All that not to prevent the import of toxic waste but guitar fretboards?

    Fourth: Gibson must pay the NFWF $50,000 for its (or its designee’s) use for the environment. Really? Fines paid to the government go into the U.S. Treasury and belong to the public; the NFWF is a private organization. In essence, the taxpayers are subsidizing the NFWF. And why just the NFWF? Why not the Boys and Girls Clubs? The Lighthouse for the Blind? The ASPCA? Why not The Heritage Foundation? It’s a charitable organization, too. It seems that the DOJ is using this agreement to send money that should belong to taxpayers to a favored organization of its choosing.

    Gibson probably made a dollars-and-cents decision to put this matter behind it. DOJ probably made the decision to end this case to try to avoid having Congress repeal the criminal provisions of the Lacey Act. Two bills before Congress would have had just that result. The government and environmental groups will say that garage bands across the United States can rest easy tonight. But the people who work at Gibson Guitar or at any other company subject to the Lacey Act still are at risk of imprisonment for not knowing India’s or Madagascar’s laws—and that is the biggest crime of all.

    Posted in Legal [slideshow_deploy]

    11 Responses to Gibson Guitar: Settling Away Bad Publicity

    1. Bobbie says:

      When business matters can be handled upon agreeable terms between honorable men of separate countries, keep the filth of government greed out! There's no call for the U.S. government to enforce U.S. concerns into monetary penalties to increase government fear mongering and their intimidation to close down or take control. The government picks favorites so the money goes right in the pocket of government.

    2. Milton Richards says:

      While I don't consider Gibson a small company by any stretch, it's sad when only the biggest companies have the resources to fight Washington meddling. It sounds like Gibson just became another victim of "pay to play."

    3. Garry Terry says:

      Could it be that Gibson supports Republicans?
      Is that the law they broke?
      When will we wake up and see the simple bullying side of the Obama

    4. red says:

      How long before the US government prosecutes US citizens for not obeying other foreign laws? Like women driving cars, wearing Western clothing and leaving the house without a proper male chaperone, etc.?

      • mike swann says:

        as long as americans put up with it. young voters are liberal, haven't a clue about history,thnks fo the Demos who hav been the head of education for the past 50 years. now, our yuth are taught how bad this country is. when the enter college, the professors tech them same added with karl marx as half of professors are marxists and /or anti-American. I feel this country is doomed, thanks to this aministrtin an the evil they have to keep them in.

      • Rick_in_VA says:

        You mean Sharia?
        It's already creeping into some judges' decisions.

    5. Gene says:

      I understand that settling is a less costly, less arbitrary means of solving a problems. It also leaves doubts as to the inocense of the company. This is why we need Tort Reform to get rid of unwarranted suets. If we could get jurors to think other then "well it's not hurting the person or company, it's the insurance company paying" attitude, we would not have frivilous settlements. Companies and persons would then have fair judgements.

    6. Eric Nisula says:

      The sooner these arrogant ‘leaders’ are out of our government, the better.

    7. Rick_in_VA says:

      This whole thing is a fraud. Just another example of big government running roughshod over American citizens and businesses.

      Can we all hope and pray that things will change next January?

      At this rate, I'm not so sure we haven't already passed the point of no return.

    8. Florida Jim says:

      This is the result of the Obama EPA and the 60's radicals who permeate the Obama administration causing havoc and wasting our tax dollars. while Russia, china, Canada and 100 other countries drill for oil and gas Obama and the environmental whackos have halted America's oil and gas business and then they lie about it. Obama says "we are producing more oil than ever before" he thinks we are to stupid to check and realize George Bush opened more drilling which takes 5 years to do because of EPA, and Obama has done nothing but blow about it. this man is disgusting. Ask him what has he done on unemployment?

    9. smartgardener says:

      People can we at least spell and maybe try and use punctuation? It may make your point more compelling.

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