Tuesday, August 07, 2012

U.S. Settles With Gibson Guitar On Lacey Act Violations

Aug 6: The U.S. Department of Justice announced that Gibson Guitar Corp. entered into a criminal enforcement agreement with the U.S. resolving a criminal investigation into allegations that the company violated the Lacey Act by illegally purchasing and importing ebony wood from Madagascar and rosewood and ebony from India. The agreement was announced by Assistant Attorney General Ignacia S. Moreno of the Justice Department's Environment and Natural Resources Division, Jerry Martin, U.S. Attorney for the Middle District of Tennessee and Dan Ashe, Director of the Department of the Interior's U.S. Fish & Wildlife Service.


    According to a release, the criminal enforcement agreement defers prosecution for criminal violations of the Lacey Act and requires Gibson to pay a penalty amount of $300,000. The agreement further provides for a community service payment of $50,000 to the National Fish and Wildlife Foundation to be used to promote the conservation, identification and propagation of protected tree species used in the musical instrument industry and the forests where those species are found. Gibson will also implement a compliance program designed to strengthen its compliance controls and procedures. In related civil forfeiture actions, Gibson will withdraw its claims to the wood seized in the course of the criminal investigation, including Madagascar ebony from shipments with a total invoice value of $261,844.


    In light of Gibson's acknowledgement of its conduct, its duties under the Lacey Act and its promised cooperation and remedial actions, the government will decline charging Gibson criminally in connection with Gibson's order, purchase or importation of ebony from Madagascar and ebony and rosewood from India, provided that Gibson fully carries out its obligations under the agreement, and commits no future violations of law, including Lacey Act violations.


    U.S. Fish and Wildlife Service Director Ashe noted, "The Lacey Act's illegal logging provisions were enacted with bipartisan support in Congress to protect vanishing foreign species and forest ecosystems, while ensuring a level playing field for America's forest products industry and the people and communities who depend on it. We're pleased that Gibson Guitar Corp. has recognized its duties under the Lacey Act to guard against the acquisition of wood of illegal origin from threatened forests and has taken responsibility for actions that may have contributed to the unlawful export and exploitation of wood from some of the world's most threatened forests."


    Since May 2008, it has been illegal under the Lacey Act to import into the United States plants and plant products (including wood) that have been harvested and exported in violation of the laws of another country. Congress extended the protections of the Lacey Act, the nation's oldest resource protection law, to these products in an effort to address the environmental and economic impact of illegal logging around the world.


    Gibson Guitar CEO, Henry Juszkiewicz commented on the settlement saying, "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. 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 Gibson release states, "Despite the fact that, '...the government acknowledges that Gibson has cooperated with the Government and the investigation conducted by the Fish and Wildlife Service', Gibson was subject to two hostile raids on its factories by agents carrying weapons and attired in SWAT gear where employees were forced out of the premises, the production was shut down, goods were seized as contraband, and threats were made that would have forced the business to close."

    Juszkiewicz continued, "We feel that Gibson was inappropriately targeted, and a matter that could have been addressed with a simple contact a caring human being representing the government. Instead, the Government used violent and hostile means with the full force of the U.S. Government and several armed law enforcement agencies costing the tax payer millions of dollars and putting a job creating U.S.manufacture[r] at risk and at a competitive disadvantage. This shows the increasing trend on the part of government to criminalize rules and regulations and treat U.S. businesses in the same way drug dealers are treated. This is wrong and it is unfair. I am committed to working hard to correct the inequity that the law allows and insure there is fairness, due process, and the law is used for its intended purpose of stopping bad guys and stopping the very real deforestation of our planet."

    Gibson published the full agreement and an attached Statement of Facts that both the Government and Gibson agreed and a list of possible questions and answers from the company. Gibson invited anyone to "independently draw their own conclusions."

    Representatives Edward Markey (D-MA) and Earl Blumenauer (D-OR) issued a release applauding the settlement. Rep. Markey said, "Gibson's admission of wrongdoing is a win for the Lacey Act, a win for US jobs and a win for consumers who can be assured that illegally trafficked 'blood wood' won't be used to make their guitars. Gibson, the Tea Party and House Republicans attempted to gut the Lacey Act by changing the law in Congress before the case against the guitar maker was resolved. I commend the hard and deliberate work of the Fish and Wildlife Service and the Justice Department to bring this case to a close. I thank the U.S. hardwood and paper industries, who stood up for keeping jobs in America, rather than allowing cheap, illegal wood products from other countries to flood the market. I would also like to praise Sting, Dave Matthews Band, and Guster, along with the multitude of musicians and other individuals who stood up for the Lacey Act and who pledged to use legal, sustainable musical instruments. Let's keep the good tunes on good wood coming." 


    Rep. Blumenauer said, "This is another example of the Lacey Act working to protect valuable natural resources and positively reforming the global market for timber products. Not only has Gibson agreed to pay a penalty and forfeit its ill-gotten wood from Madagascar, but this case sends a message to other companies who think they can ignore the laws: The Lacey Act is on the job. The Lacey Act has been, and will continue to be, an effective tool in the fight to protect U.S. jobs and the environment." The Lacey Act was the focus of a House Natural Resources Committee hearing on May 8, 2012.


   Adam Grant, Senior Associate with World Resources Institute (WRI) issued a statement on the settlement saying, "This agreement closes an important chapter on the first major investigation and by far the most publicized cases under the 2008 amendments to the U.S. Lacey Act. The decision demonstrates that the Lacey Act has teeth. It shows that the law can be enacted with serious, but balanced penalties for violations. Fair enforcement of the Lacey Act, the world's first ban on the importation of illegally sourced wood, is important to ensure that the wood comes into the U.S. from legal sources. We are hopeful that this case will provide incentive to other wood product providers -- and their suppliers -- to engage in legal purchasing of wood and help protect endangered forests."


    Access a lengthy release with further details about the settlement (click here). Access the Gibson Guitar release, statement of facts, the full settlement language and list of Q&A's (click here). Access the statement from Reps. Markey & Blumenauer and link to the Pledge and musicians signing it (click here). Access the statement from WRI (click here). Access the House hearing on the Lacey Act with extensive testimony and a webcast (click here). [#Land, #Climate]


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