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VOL. 127 | NO. 154 | Wednesday, August 8, 2012

Gibson Guitar Deal a Contrast With Earlier Stance

By Andy Meek

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The deal Gibson Guitar Corp. and federal prosecutors said they reached this week to drop a criminal case against the Tennessee-based guitar maker represents a sharp reversal from the combative stance Gibson took publicly last year.

Gibson Guitar Corp. has reached an agreement with federal prosecutors acknowledging wood in violation of environmental laws was used in Nashville and Memphis factories.

(Daily News File Photo: Kyle Kurlick)

Under the agreement announced Monday, Aug. 6, Gibson acknowledged some of its exotic wood imports violated environmental laws and agreed to pay a $300,000 penalty.

Gibson also agreed to forfeit claims to about $262,000 worth of wood seized by federal agents. The deal further provides for a community service payment of $50,000 by Gibson to the National Fish and Wildlife Foundation. It will 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.

“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 Ignacia Moreno.

Gibson representatives weren’t immediately available for comment.

Agreeing to the deal is a sharp contrast from Gibson’s response in the immediate aftermath of federal agents executing search warrants one year ago this month at the guitar maker’s factories in Memphis and Nashville.

On the morning of Aug. 24, 2011, agents seized several pallets of wood, electronic files and guitars. From the outset, helped in part by a Gibson-led PR campaign and through a media blitz that included interviews with mainstream media outlets as well as right-wing personalities like Glenn Beck, Gibson rallied supporters.

Underscoring how quickly the national spotlight settled on the Nashville-based company, Gibson Guitar CEO Henry Juszkiewicz found himself two weeks after the raid seated in the balcony as a guest of Republican lawmakers for an address by President Barack Obama to a joint session of Congress.

In a statement she released prior to his attendance, U.S. Rep. Marsha Blackburn, R-Tenn., said “Gibson Guitar is at the heart of this jobs debate, and is an example of exactly why President Obama has it wrong when it comes to getting our economy back on track.”

Tennessee Lt. Gov. Ron Ramsey last year came to the company’s defense on his Facebook page. In remarks to the Economic Club of Washington last September, Speaker of the House John Boehner praised Gibson as a well-respected American company.

After Ramsey introduced former Republican presidential candidate Rick Perry at a fundraiser in Memphis in October, Perry walked to the guitar player in one corner of the room at the Memphis Botanic Garden and told the musician, “God bless you, that is a Gibson guitar. And you tell the government, keep your hands off my Gibson!”

Later that month, at a “We Stand With Gibson” rally in Nashville that included Blackburn and conservative radio talk show hosts among the guests, Juszkiewicz told the crowd the company intended to fight the case against it.

The CEO added: “We will make sure other people and other companies do not face bullies with guns.”

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