Gibson Settles with the Feds

[nat whilk II]

That "Three Felonies A Day" book sounds interesting. The author echoes one on my dinner table rants -

Mr. Silverglate writes, "Since the New Deal era, Congress has delegated to various administrative agencies the task of writing the regulations," even as "Congress has demonstrated a growing dysfunction in crafting legislation that can in fact be understood."

Sloppy, unclear legislation creates a large gray area around core laws, within which the enforcement agencies can operate in a shadowy legal limbo. In those shadows, they can claim they are perfectly within the law and that some citizen or other is outside the law and there is no one, no process, no voice, no power that can hinder them. Until the courts catch up, interpreting the law sometime later, if ever.

This is not to say that all government agencies are filled with evil, plotting, power-hungry abusers. Just to say that even good people in the regulatory and enforcement agencies know that their boundaries are unclear, and if they take advantage of the legal ambiguity, their reach can grow longer and they can get er done a lot faster.

The complexities of law, of economics, of technology, etc etc are beyond the skillset of our politicians, yet they are writing the laws. So they turn to their experts in the agencies to deal with the details. Where, famously, the devil lives and thrives.

nat whilk ii

[Anderton]

 

why no option for they admitted guilt because they were actually guilty? Here's the thing: Gibson was hyperaware of this issue, and tasked one of their employees to go to Madagascar and write a report. He did and found that buying unfinished wood was illegal and should stop. He sent his report to Gibson's president and purchasers. Their response? Continue.

 

 

I assume (yeah, I know the problems with that!) that if Gibson had been found to be willfully circumventing the law with full knowledge, the feds would have gone for the criminal prosecution. Also, from what I read in the news reports (not that they're necessarily accurate) was that Gibson did not unilaterally task the employee to go, but employees from several guitar companies went to Madagascar as a sort of group fact-finding mission to explore alternative sources, find out what the law of the land was after the coup, etc.

 

I don't want to insult anyone, but I've consulted to a ton of large corporations and am constantly surprised at how often the right hand doesn't know what the left hand is doing, memos get lost in the noise, etc. I can easily imagine someone saying "hey, we're not supposed to do this" and the supplier saying "no, it's okay" and the whole issue just kind of dropping off the radar. Who knows, the supplier might have said "yes, but this wood is from before the ban, so it's okay."

 

Apparently the situation was nuanced enough that neither side really had a lock on their contentions, so they settled. But, as far as this situation is concerned, all I know is what I've read, coupled with some comments from Gibson employees, particularly concerning what the raid was like...which as I've said repeatedly, is my main problem with this whole flap.

[scarecrowbob]

 

I don't want to insult anyone, but I've consulted to a ton of large corporations and am constantly surprised at how often the right hand doesn't know what the left hand is doing, memos get lost in the noise, etc. I can easily imagine someone saying "hey, we're not supposed to do this" and the supplier saying "no, it's okay" and the whole issue just kind of dropping off the radar. Who knows, the supplier might have said "yes, but this wood is from before the ban, so it's okay."

 

 

I accede that you're probably way more up on the specifics of this than I care to be, but isn't the idea that corporations should be allowed to do bad stuff (whatever that might be) because they are large, complicated organizations kind of one of the big problems we'd all like to see stop?

 

Corporations are often used as a way of getting rid of personal liability (while keeping profits, of course), and they do a whole lot of stuff that we don't like but can't prosecute simply because of the structure of their liability... ultimately no one is responsible even though you can trace the payouts of what they do pretty clearly.

 

I find your argument here well stated and sympathetic, but ultimately the excuse that it's hard to keep on top of all this stuff when you've got a big company doesn't seem like a very good excuse.

[Anderton]

 

I accede that you're probably way more up on the specifics of this than I care to be, but isn't the idea that corporations should be allowed to do bad stuff (whatever that might be) because they are large, complicated organizations kind of one of the big problems we'd all like to see stop?

 

 

No, of course they should not be allowed to do bad stuff, and Gibson paid a price for doing wrong stuff. But they shouldn't be presumed to be evil when sometimes the reason is incompetence. If that's what the Feds found, it would explain the "why the feds didn't pursue criminal prosecution" angle.

[Anderton]

Here's a semi off-topic example about perception. At one point Digidesign was having a hard time providing support for Mac variations, particularly when the Mac clones (remember those?) started appearing. They tried to figure out a solution, and decided they would specify particular systems that were known to work and work well, and they would support those systems 100%. For other systems, they'd do what they could but ultimately if the problem was intractable, you were on your own.

 

Internally, they saw this as a way to give better, more efficient service and support - "If you have one of the computers we approve, you're covered no matter what." Externally, it was perceived as "evil empire Digidesign dictating which computer I can and cannot buy."

[Anderton]

Here's the viewpoint of someone who's read the settlement in depth.

 

Sending A SWAT Team to Collect a Parking Ticket

 

Gibson Settles Three-Year-Old Case With Dept. Of Justice

 

Brian Majeski, Music Trades Magazine

 

GIBSON'S AGREEMENT TO PAY $350,000 to settle with the Department of Justice over alleged Lacey Act violations prompted a flood a press releases from environmental groups, lawmakers, and U.S. wood manufacturers. In unison, they hailed the settlement as a win for the world's forests, a blow against slave labor, a victory for American jobs, and a triumph of diligent law enforcement. The actual settlement agreement, jointly signed by justice officials and the Gibson legal team, paints a far different picture. Presenting facts both sides agree on, it depicts overzealous and poorly informed enforcement officials in hot pursuit of a company that was trying in good faith to comply with contradictory foreign statutes. It also inadvertently sums up all that is wrong the Lacey Act provision that holds U.S. firms criminally liable for violations of foreign laws.

 

Suspecting a Lacey violation, in 2009, the Environmental Crimes unit of the Justice Department, aided by the FBI and Fish and Wildlife service, raided Gibson's Nashville factory and seized pallets of ebony fingerboard blanks that had been imported from Madagascar. In 2006, Madagascar issued an edict banning the export of unfinished ebony, and two years later had further restricted ebony exports, so the DOJ felt they had a strong case. On closer reading of Madagascar law, however, the case started to unravel. The order banning "unfinished" ebony contained a provision specifically permitting the export of guitar fingerboards, though it didn't specify whether "fingerboard" meant rough blanks, blanks with fret slots and inlay pockets, or fully finished, fretted fingerboards.

 

Upon banning ebony exports in 2008, the Madagascar government simultaneously issued licenses permitting select forest operators to legally ship wood that had been cut previously. The DOJ acknowledges that Gibson's ebony came from a logger who had obtained one of the coveted export licenses. Documents seized during the raid, also showed that Gibson had acquired the wood from a Forest Stewardship Council certified broker, who had provided ample assurances that it was in compliance with all relevant statutes. So the DOJ case against Gibson came down to how Madagascar officials defined "fingerboard," and the validity of documents filed at various points in the supply chain.

 

The charges arising from the 2011 Department of Justice raid, when DOJ seized Indian rosewood fingerboard blanks from plants in Memphis and Nashville, were even flimsier. The DOJ claimed that the wood was "unprocessed" under Indian law and unlawful to export, because it was several millimeters too thick. The Indian Foreign Trade office, along with several local industry groups pushed back immediately, and said that the DOJ had misread the law, noting that millions of similar fingerboard blanks had been exported without issue over the past three decades to guitar makers around the world.

 

Faced with such a potent rebuke, the DOJ returned the seized rosewood and gave Gibson the green light to continue importing it as they had in the past. So three years and two armed raids later, the Justice Department admitted that Gibson did nothing wrong in importing Indian rosewood, "may have" violated some unspecified Madagascar statutes. This "may have" cost Gibson $350,000 in fines, the loss of wood valued at $261,000, and $2.4 million in legal fees. Not to mention the costs associated with disruptions in production, and having its reputation tarred by a government agency. Furthermore, the DOJ apparently used its limitless resources and the threat of ongoing prosecution to coerce Gibson to settle. Both sides apparently won: Gibson limited its legal expenses, and the DOJ was spared the potential embarrassment of trying to make its case in court.

 

The biggest argument against the amended Lacey Act is that it holds U.S. companies liable for violations of the laws of all the world's 200 countries. But, if the U.S. Department of Justice, the arbiter of right and wrong, has a demonstrated problem grasping the nuance of foreign law, is it fair to hold private enterprises like Gibson to a higher standard? Furthermore, should arguments over how Madagascar defines a fingerboard be elevated to criminal status? In comprehensive coverage of the settlement within the September issue of The Music Trades, Gibson CEO Henry Juszkiewicz rightly states, "We feel that Gibson was inappropriately targeted [in] a matter that could have been addressed with a simple contact by 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."

 

But what's worst about this case is how an unlikely coalition of environmental groups, U.S. wood manufacturers (whose wood consumption dwarfs that of the music industry) and the Department of Justice can transform the use of raw coercion on flimsy legal grounds into some kind of a victory. For anyone who thinks our assessment is overly harsh, we suggest they go to Gibson website where they can read the Department of Justice Settlement for themselves.

 

There is no argument against proper stewardship of finite wood resources. However, there is something wrong about abandoning basic concepts of due process, proportionality, and creating scapegoats in the name of even a worthy cause.

[MikeRivers]

So if the law was about exporting wood, did anything happen to the exporter? After all, if he hadn't broken the law (nebulous as it is, apparently) it wouldn't be there for Gibson to import. I know that if you buy a Rolex watch for $200, a genuine one, you're likely to be guilty of "receiving stolen property," but they really want to catch the one who stole it.

 

Not to imply that there was theft involved in the Gibson case, but just a question of who's really guilty of breaking a law.

[thankyou]

 

after reading all that posts here, i think I want a guitar made in bamboo

 

 

OK

 

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