When the Department of Justice announced an agreement on Monday ending its criminal investigation of the Gibson Guitar Company over its handling of hardwoods imported from India and Madagascar, I sought a reaction from W. John Thomas, a law professor at Quinnipiac University. Thomas has deep knowledge of the relevant law, the Lacey Act, as well as Gibson guitars, given that he has written a book on vintage Gibsons and performs on a variety of old Gibson models.
Read below for Thomas?s ?Your Dot? piece describing how the final ?criminal enforcement agreement? between the government and the company [posted here] exposed some significant challenges for Gibson and all guitar makers, while also revealing that most recent federal raid of the company was probably unjustified:
[The statement from Gibson Guitar Company on the resolution of the case is posted here.]
Prof. W. John Thomas:
The settlement agreement resolving the Gibson Guitar Corporation?s recent dispute with the Department of Justice over the importation of woods from Madagascar and India reveals that not only is discretion the better part of valor, but it should also be the better part of business and risk management plans.
The Criminal Enforcement Agreement provides that the government will drop all charges against Gibson arising from the seizure in 2009 of wood that the company imported from Madagascar and the seizure in 2011 of wood that it imported from India. ?In both cases, the government contended that Gibson violated the Lacey Act, a law which, by the terms of its 2008 amendments, makes it illegal to import into the United States any wood obtained in contravention of any foreign or domestic law. ?The government contended that the both shipments violated the laws of the countries where the wood was harvested.
For its part, Gibson will pay a $300,000 fine, make a $50,000 contribution to the National Fish and Wildlife Foundation, and forfeit wood valued at $261,000 seized in the 2009 government raid on its Nashville facilities. The government will return the wood valued at $155,000 that it seized in 2011.
By the terms of the agreement, Gibson concedes that after traveling to Madagascar in 2008, it received a report concluding that ?It is currently illegal to harvest or export ebony.? ?In 2009, on the advice of a Gibson employee who counseled that a German wood supplier named T.N. (Theodore Nagel) could supply the company with ebony obtained from ?the grey market,? Gibson arranged for four shipments of Madagascar ebony. Furthermore, ?Gibson assumed, without asking, that T.N. had undertaken to provide it with lawfully harvested and exported materials.?
The Criminal Enforcement Agreement also reveals that the government might have exercised more discretion in its 2011 enforcement effort. Though Gibson?s use in 2011 of the same German wood supplier that provided it with the 2009 seized shipment and irregularities in the shipping paperwork might have justified the government?s suspicions, the illegality (or legality) of the 2011 shipment was far from obvious. (For an illustrated guide to the 2011 case, see my article in the ABA Journal.) ?
As the government concedes in the agreement, ?certain questions and inconsistencies now exist regarding? the legality of the Indian wood. Consequently, the government has resolved that it ?will not undertake enforcement actions related to Gibson?s future orders, purchases, or imports of [wood] from India, unless and until the Government of India provides specific clarification? regarding its legality or illegality.
Finally, Gibson?s agreement to exercise ?due care in determining whether prospective wood purchases are legal prior to purchase? should serve the environment, guitar enthusiasts, and the company?s business and risk management plans. This bespeaks of valor and discretion.
I also recommend that you read the new World Resources Institute post on the case and the pressures from the hardwood trade on tropical forests.
Source: http://dotearth.blogs.nytimes.com/2012/08/10/a-closer-look-at-gibson-guitars-legal-troubles/
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