After settling with the U.S. Department of Justice, Gibson Guitar CEO Henry Juszkiewicz on Monday reiterated his belief that his company had been "inappropriately targeted" by law enforcement authorities during two federal raids on its facilities for violations of the Lacey Act.
Log in to view the full article
After settling with the U.S. Department of Justice, Gibson Guitar CEO Henry Juszkiewicz on Monday reiterated his belief that his company had been "inappropriately targeted" by law enforcement authorities during two federal raids on its facilities for violations of the Lacey Act.
Juszkiewicz made that comment on Monday in a lengthy official response to a "criminal enforcement agreement" the U.S. Department of Justice (DOJ) announced earlier that same day. The criminal enforcement agreement comes in the wake of two raids on Gibson for alleged Lacey Act violations, one in November 2009 during which agents seized illegally obtained ebony wood from Madagascar, and another in August 2011 during which agents seized ebony and rosewood Gibson imported from India.
In his response, Juszkiewicz reiterated several stances he maintained throughout the DOJ's investigation of his company. He called the raids "hostile" and decried the fact the U.S. Fish & Wildlife Service agents who conducted the raids were armed. He also condemned the fact that, during the August 2011 raid, Gibson employees were ordered to wait in parking lots and production shut down for the day.
Juszkiewicz said his company settled with DOJ to "get back to the business of making guitars." "We felt compelled to settle as the costs of proving our case at trial would have cost millions of dollars and taken a very long time to resolve," he said.
As part of the settlement, Juszkiewicz said the federal government is returning goods seized during the second raid on his company. Also, Gibson is allowed to continue sourcing ebony and rosewood from India.
Juszkiewicz's response on Monday included a Q&A section of "Possible questions and answers Gibson would give." Here it is in its entirety: Q.1.: In light of your previous outspoken condemnation of the Government's conduct in this case, why are you taking such a moderate, mild-mannered approach in your official statement?
A.1.1.: The company is gratified that the Government ultimately saw the wisdom and fairness in declining to bring criminal charges in this case.
A.1.2: The "Criminal Enforcement Agreement" we have entered into straightforwardly recognizes that it was inappropriate to criminalize this matter.
Q.2.: In light of the Government's lenient treatment here, does Gibson still believe that amendments to the Lacey Act are necessary to make the law more fair and reasonable?
A.2.: Yes. The outcome here deals only with the particular controversy about the particular fact pattern. A true legislative reform is necessary to avoid systemic criminalization of capitalism, as I explained in my recent Wall Street Journal article.
Q.3.: Wasn't the Government's conduct here, with its armed raid on your headquarters and manufacturing facilities, so outrageous and overreaching as to deserve further Congressional investigation, just calling a spade a spade?
A.3.: I don't retreat from any of my prior commentary, but I am gratified that this resolution puts the matter behind us. We are a forward-looking company hoping to move our business ahead in an environmentally forward-thinking way.
Q.4.: The statement of facts includes Gibson's official acknowledgement that you could have and should have exercised greater due diligence in regard to the importation of the questionable wood from Madagascar. Doesn't this amount to an admission that the company violated the law, notwithstanding all your previous protests?
A.4.: Gibson is strenuously dedicated to continuous environmental improvement. We want to be leaders in our business, and our business includes protecting the environment. We can always do better.
Q.5.: This is a pretty unusual legal deal being executed here. It's not a plea bargain, and it is not a traditional deferred prosecution agreement because there is no draft indictment or other criminal-charging document. But it's apparently not a complete declination, as Gibson is at least paying a nominal penalty. How did you settle on this unique form of agreement, and doesn't it represent just a fig leaf to cover the Government's naked surrender?
A.5.: The case is behind us. The extensive negotiations to reach this agreement succeeded in finding a balance that Gibson supports.
