Gibson Guitar to pay big fine related to wood...

[John Grossbohlin]

[HeyBub]

They caved and I lost all respect for the company.

They had, as best I understand, a defensible position on the merits. I'd be hard-pressed to imagine a jury finding against them.

Secondly, had they just strung (no pun intended) things out for a few months, it's possible a new administration would have dropped the entire business.

[-MIKE-]

> Yep. They caved and I lost all respect for the company.

It was three hundred grand... they probably considered it a bargain. How many millions were they paying to their lawyers? How much would would another 6 months cost them? When you're dealing with the DoJ, who can just keep reaching into *our* pockets to fight in the courts, most of the time it's better to settle and sacrifice principle for profits.

[-MIKE-]

Except that most in-house corporate attorneys aren't used to running up against the DoJ every day, so outside counsel is often sought from firms who do have experience with the Fed.

Of course, if I want to get it from someone who is really "in the know," I 'll just call one of my buddies down at Gibson or stop by for lunch.

[Bill]

> Yep. They caved and I lost all respect for the company.

This article

"Gibson admitted violating the Lacey Act, which requires firms to *know* that timber they use is legally obtained.

From this, it appears they violated the law as charged. What is the defensible position--that they *didn't know*?

[-MIKE-]

>>>>>> Yep. They caved and I lost all respect for the company.

I don't know the particulars, nor do I have a dog in the race, but they wouldn't be the first to admit to a lesser charge to avoid the possibility of being convicted of a higher one, even knowing there were guilty of neither.

[Han]

Bill wrote in news: [e-mail]:

Seems to me Gibson chose the lesser of 2 evils:

from the BBC article referenced above:

"As a result of this investigation and criminal enforcement agreement, Gibson has acknowledged that it failed to act on information that the Madagascar ebony it was purchasing may have violated laws intended to limit overharvesting and conserve valuable wood species from Madagascar, a country which has been severely impacted by deforestation," said Assistant Attorney General Moreno following the settlement.

The ebony was mainly in the form of strips that would be fashioned into fretboards for guitars, mandolins and banjos.

Apparently the DoJ evidence was such that Gibson decided not to fight it further.

[Bill]

>>>>>>>>>>>>> Yep. They caved and I lost all respect for the company.

That will look good in their annual report! I have heard that everyone who is incarcerated "Didn't do it!". I"m sorry, my tolerance for double-talk gets lower by the year.

If we give a darn about our system (s), perhaps we should encourage companies to pursue their innocence by making them pay more for their (admitted) guilt. Our media systems have the power! Just a thought...

[dpb]

...

What they spent to date and faced continuing to fight in direct legal costs is just the tip of the iceberg...but to build enough of a case to actual stand in federal court against DOJ I wouldn't be at all surprised if it at least pushed the six figure amount for legal costs alone.

From a letter Gibson president wrote the NY Times not long ago...

"...they shut down production, sent workers home, seized boxes of raw materials and nearly 100 guitars, and ultimately cost our company $2 million to $3 million worth of products and lost productivity."

In the end, one has to do what one has to do to survive.

--

[dpb]

...

...

I'd say the actual facts are indeterminate as others have noted--that Gibson was in the crosshairs of DOJ pretty much forces their hand to find a way to settle irregardless of the actual facts of the case.

Gibson president also wrote the following -- now, again, how much has been conveniently left out of this narrative is also unknown--it doesn't mention Madagascar, only India.

Again, the fact is that once you're a DOJ target your only real choice is to cut a deal 'cuz you'll go broke before you can defend yourself owing to the disparity of resources and the punitive measures they can take.

--

[Swingman]

And mine for those who speak without bothering to inform themselves of the particulars.

Once again:

To illustrate the ridiculousness and overreaching of this action by the DOJ against Gibson, you have to read the affidavit filed in support of the search warrant:

seized wood is described in the affidavit as in the form of "sawn logs" 510-530 x 75/70 x 10mm.

IOW, each of the 1250 pieces seized is roughly 20" x 3" x 13/32".

Read paragraph 14, page six of the affidavit and you will see that India allows export of this particular wood up to 6mm thick (due to the high complexity of involved in cutting these thin sheets to a uniform commercial quality)

IOW, it must be cut to that thickness by Indian workers at Indian factories, insuring Indian jobs.

IOW, the raid on Gibson's facilities, disrupting the production and jobs of workers at one of the few American companies still "manufacturing" products is based on a difference of 5/32" of thickness, AND TO PROTECT INDIAN WOODWORKING JOBS.

How many of you, experienced woodworkers, could look at bundles of these pieces and tell that there is up to 4mm (5/32") difference in thickness in the pieces?

Do you really think that Gibson should be held accountable, and be subject to a police action, computers seized, production disrupted, jobs lost, by buying rough stock, sight unseen, that is approximately 1/8" thicker than it's supposed to be?

What it boils down to is that US is enforcing India's laws to protect the woodworking jobs at the expense of American jobs. And apparently, the Indian woodworker aren't doing their jobs very well, at least when it comes to "uniform commercial quality".

If Gibson would only move their operations to India, there would be no problem.

[-MIKE-]

Brilliant.

[Scott Lurndal]

So, this statement by the President of Gibson Guitars made me go do some research into this case. It's not as simple as he made it out to be - note that the defendents (McNab, et. al.) in that case were convicted after a trial by jury in federal court in which sufficient evidence was presented to convince the Jury in 'bama to convict.

The appeals court opinion when they contested their conviction contains a concise legal summary of the case including a de novo review. c.f.

Cases like this make it clear that the justice

After reading the appeals court opinions, it seems clear that the justice system worked exactly has it was supposed to. BTW, the law in question (The lacey act) dates from the year 1900.

That said, one could argue that the sentences were a bit on the harsh side.

scott

[John Grossbohlin]

There is a pattern...

The whole Randy Weaver/Ruby Ridge case involved what was arguably less than a 1/4" variance from "legal length. " People were murdered over that so Gibson got off easy with loosing $265K of product, $300K of fine and as I recall $50K of community contributions... they didn't have their staff shot up by the armed government agents during the raid. See the enlarged version of the photo at

Those weren't brad nailers on their hips.

There is no "reasonableness" test in this stuff.... regulators run amuck.

[-MIKE-]

I never stated they spent millions. Maybe you should read the post again? :-p I was simply speculating as to a possible motivation behind settling and posed a hypothetical question. I think you're getting a bit too wound up.

[CW]

And mine for those who speak without bothering to inform themselves of the particulars.

Once again:

To illustrate the ridiculousness and overreaching of this action by the DOJ against Gibson, you have to read the affidavit filed in support of the search warrant:

seized wood is described in the affidavit as in the form of "sawn logs" 510-530 x 75/70 x 10mm.

IOW, each of the 1250 pieces seized is roughly 20" x 3" x 13/32".

Read paragraph 14, page six of the affidavit and you will see that India allows export of this particular wood up to 6mm thick (due to the high complexity of involved in cutting these thin sheets to a uniform commercial quality)

IOW, it must be cut to that thickness by Indian workers at Indian factories, insuring Indian jobs.

IOW, the raid on Gibson's facilities, disrupting the production and jobs of workers at one of the few American companies still "manufacturing" products is based on a difference of 5/32" of thickness, AND TO PROTECT INDIAN WOODWORKING JOBS.

How many of you, experienced woodworkers, could look at bundles of these pieces and tell that there is up to 4mm (5/32") difference in thickness in the pieces? =================================================================================== I could.

[HeyBub]

>>> Yep. They caved and I lost all respect for the company.

Well, it sure cost them my business. And the business of millions of right-thinking potential buyers the world around.

And the DOJ is not invincible. Back in the 60's, the DOJ sued IBM for monopolistic and unfair trade practices. IBM had more lawyers on the case that were in the ENTIRE anti-trust division of the DOJ. IBM strung out the case for ELEVEN years.

Just to show you how stupid the DOJ was, they allowed CDC, Control Data Corporation and a co-plaintiff, to do virtually all of the discovery.

IBM then reached a secret deal with CDC: IBM would pay CDC big bucks and give them the Service Bureau Corporation to go away. In return, CDC had to affirmatively destroy every scrap of discovery garnered over eleven years.

All this book-burning was done over a weekend. Tapes were degaussed, disks deleted, paper records shredded, tape recordings destroyed. On Monday, IBM announced ready for trial.

[Stuart Wheaton]

If it means the difference between legal and not, I think I'd be measuring it and reject the shipment if it fell out of specs. That much wood has serious value, maybe you should have a local employee checking it when you buy it.

If I opened a box and found it full of marijuana, I wouldn't just stick it into the storeroom.

These woods are regulated, if you want to use them, you need to know the regulations and stay within them. Ignoring the rules isn't the way to win in business.

[Swingman]

when you buy it.

Exactly what I was talking about with regard to being ill informed, even when presented with the link that lays out the purported facts according to the governments own affidavit.

Had you bothered to read the affidavit before commenting you would have seen that the 1250 pieces in question were picked up at Dallas customs, addressed to a shipping agent's facility, _BEFORE_ they got anywhere near a Gibson's facility.

(Just hope someone doesn't ship some of that marijuana you spoke of via FedEx with your name on it.)

[Larry Jaques]

>>> Yep. They caved and I lost all respect for the company.

Too bad they didn't simply require the proper paperwork from their sources, so they could be found "not guilty."

-- Another belief of mine: that everyone else my age is an adult, whereas I am merely in disguise. -- Margaret Atwood