Gibson Guitar Corporation - Recent Criticism and Controversy

Recent Criticism and Controversy

Gibson has come under scrutiny for importing illegal rare wood in violation of the Lacey Act. Two police raids of Gibson factories found ebony wood from India with misleading labels authorities say were used to hide violations of Indian export law. At the time, Gibson claimed the labeling was a mistake and that the transaction was approved by Indian authorities.

On November 17, 2009 federal authorities seized six guitars and several pallets of alleged endangered and illegal, rare ebony wood that Gibson had purchased and stored at their factory. During the course of the investigation, Henry E. Juszkiewicz, CEO and Chairman of Gibson Guitar Corporation, took a leave of absence as a board member of the Rainforest Alliance.

In January 2011, Gibson Guitar filed a motion to recover the materials seized in the raid and to overturn the charges made by the U.S. Fish and Wildlife Service. The court denied the motion. According to reports that quote a special agent on the case, the prosecution expected to use the material as evidence.

On June 2011, the United States Department of Justice filed a civil case against Gibson. Authorities said Gibson sourced unfinished rosewood and ebony, in the form of blanks, from Nagel, Germany, which obtained it exclusively from a supplier in Madagascar. Gibson acquired the ebony to manufacture fingerboards. Madagascar prohibits the logging of ebony wood and export of unfinished ebony. The filing also mentioned internal e-mails from 2008 and 2009 that discussed plans to harvest ebony wood and rosewood in Madagascar. The case against Gibson Guitar was the first under the amended Lacey Act, which requires importing companies to purchase legally harvested wood and follow the environmental laws of the producing countries.

Gibson Guitar's offices and factories in Nashville and Memphis were raided again by the U.S. Fish and Wildlife on August 24, 2011. Details were not released about the nature of the raid or what was found due to the ongoing legal proceedings. According to a statement issued by Gibson Guitar the following day, these raids focused on rare wood imported from India. In the release, Gibson said authorities were "bullying Gibson without filing charges" and stating further: "Gibson has complied with foreign laws and believes it is innocent of any wrong doing. We will fight aggressively to prove our innocence." He also criticized the government's use of the Lacey Act because it interprets and enforces the laws of other nations. The case against Gibson had become popular among right-wing politicians and the Tea Party movement, which fought the environmental legislation.

The case was settled on August 6, 2012, with Gibson admitting to violating the Lacey Act and agreeing to pay a fine of $300,000 in addition to a $50,000 community payment. Gibson also forfeited the wood seized in the raids, which was valued at roughly the same amount at the settlement. Had Gibson not settled, it could have also faced felony charges that might have resulted in jail terms for the executives involved. Although the Rainforest Alliance certified the wood used by Gibson Guitar, its FSC certificates only applied to specific product lines. If wood was sourced from Madagascar, the wood could not have been used in products labeled or sold as FSC-certified.

The case has also raised concerns for musicians who lack documentation of vintage instruments made of traditional, non-sustainable materials. However, senior officials from the Justice Department and the U.S. Fish and Wildlife Service have stated that musicians who unknowingly possess instruments made from illegal wood would not be treated as criminals. Instead, they insisted that the government's aim is to target individuals and businesses that profit from the trafficking of these protected species. Despite these assurances, lobbying efforts by Juszkiewicz resulted in a proposed bill that would protect musicians who unknowingly possess materials that violate the Lacey Act, while also exempting wood supplies purchased by companies before May 22, 2008 and requiring the government publish a database of illegal wood sources for the public.