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Justice hits Gibson Guitars with $300G fine over fingerboards

Fox News

July 6, 2012

The Justice Department announced Monday that it has resolved a long-running dispute with Gibson Guitar over questionable fingerboard shipments — in a case that became a political flashpoint last year as defenders of the storied guitar-maker claimed the government crackdown went too far.

According to the department, Gibson entered a “criminal enforcement agreement” resolving the investigation. The federal government will not charge Gibson, but the company has apparently agreed to pay a $300,000 penalty, pay $50,000 to a federal conservation fund and withdraw claims to the valuable fingerboards that were seized in a series of federal raids.

“This criminal enforcement agreement goes a long way in demonstrating the government’s commitment to protecting the world’s natural resources,” U.S. Attorney Jerry Martin said in a statement.

Gibson has not yet issued a statement on the agreement. 

The company last year, though, was unrelenting in its criticism of the Obama administration.

The dispute centered on a law known as the Lacey Act, which since 2008 has made it illegal to import plant products, including wood, exported in violation of another country’s laws. The law was updated in an effort to target illegal logging.

However, the series of federal raids on Gibson factories in 2009 and 2011 were prompted by an issue that went beyond conservation.

The shipments of wood from Madagascar and India were deemed illegal because they were unfinished — something those countries prohibited. However, finished fingerboards presumably would have been legal. In the Indian case, court documents said one intercepted shipment was “falsely” labeled as finished when it wasn’t.

Gibson CEO Henry Juszkiewicz said last year that the U.S. government essentially went after his company because the work wasn’t being done in India.

“The fact that American workers are completing the work in the United States makes it illegal,” he said last year.

Tennessee lawmakers, too, rallied to Gibson’s defense and for a brief period claimed the law passed by Congress should be changed to prevent such enforcement.

But the Justice Department said Monday that Gibson “has acknowledged that it failed to act on information” the ebony imported from Madagascar “may have violated” laws.

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