Posted 11:09 pm Monday, August 13, 2012
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Government folly in Gibson Guitar case
At least the Gibson Guitar Corporation can stop fretting now. Although even the federal government acknowledged the firm cooperated and tried to follow byzantine rules about the importation of certain hardwoods, Gibson agreed to pay a $300,000 penalty to make the case go away.
The EPA was, after all, holding rock and roll hostage.
You’ll recall that armed officers raided the company’s factories in Memphis and Nashville several times last year, based on suspicions that Gibson’s supplier of rare hardwoods in Madagascar wasn’t complying with U.S. regulations.
The question in the first raid seemed to be whether Gibson had been buying illegally harvested hardwoods from protected forests, such as the Madagascar ebony that makes for such lovely fretboards, the Wall Street Journal explained. Peter Lowry, ebony and rosewood expert at the Missouri Botanical Garden, calls the Madagascar wood trade the equivalent of Africa’s blood diamonds. And with subsequent raids, the government seemed to be questioning whether some wood sourced from India met every regulatory jot and tittle.
The EPA was, after all, holding rock and roll hostage.
You’ll recall that armed officers raided the company’s factories in Memphis and Nashville several times last year, based on suspicions that Gibson’s supplier of rare hardwoods in Madagascar wasn’t complying with U.S. regulations.
The question in the first raid seemed to be whether Gibson had been buying illegally harvested hardwoods from protected forests, such as the Madagascar ebony that makes for such lovely fretboards, the Wall Street Journal explained. Peter Lowry, ebony and rosewood expert at the Missouri Botanical Garden, calls the Madagascar wood trade the equivalent of Africa’s blood diamonds. And with subsequent raids, the government seemed to be questioning whether some wood sourced from India met every regulatory jot and tittle.
It got so ridiculous the Justice Department tried defending the seizure of a number of pallets of wood and some guitars from Gibson in a remarkably silly lawsuit titled The United States of America v. Ebony Wood in Various Forms. That’s right; the Eric Holder Justice Department sued wood.
The whole thing proved to be a costly and lengthy nightmare to Gibson. So it’s no wonder the company was willing to pay to make it all go away.
“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 last week. “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 whole thing proved to be a costly and lengthy nightmare to Gibson. So it’s no wonder the company was willing to pay to make it all go away.
“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 last week. “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.”
Do you detect a sour note here? Read on.
“We feel that Gibson was inappropriately targeted, and a matter that could have been addressed with a simple contact by a caring human being representing the government,” Juszkiewicz continued. “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 taxpayer millions of dollars and putting a job-creating U.S. manufacturer at risk and at a competitive disadvantage. This shows the increasing trend on the part of the government to criminalize rules and regulations and treat U.S. businesses in the same way drug dealers are treated.”
Remember, Gibson was never accused of going in and chopping down endangered trees itself. The company simply bought from a supplier, who attested to the wood’s legitimacy. So it’s particularly disgraceful that an assistant U.S. attorney would crow that the agreement “assesses serious penalties for Gibson’s behavior.”
It’s just another example of government getting it wrong.
“We feel that Gibson was inappropriately targeted, and a matter that could have been addressed with a simple contact by a caring human being representing the government,” Juszkiewicz continued. “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 taxpayer millions of dollars and putting a job-creating U.S. manufacturer at risk and at a competitive disadvantage. This shows the increasing trend on the part of the government to criminalize rules and regulations and treat U.S. businesses in the same way drug dealers are treated.”
Remember, Gibson was never accused of going in and chopping down endangered trees itself. The company simply bought from a supplier, who attested to the wood’s legitimacy. So it’s particularly disgraceful that an assistant U.S. attorney would crow that the agreement “assesses serious penalties for Gibson’s behavior.”
It’s just another example of government getting it wrong.
