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Gibson admits wrong doing

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Just read an AP report were Gibson acknowledged its exotic woods imports violated environmental laws. $300,000.00 penalty, and loss of $262,000.00 worth of wood. Wonder what changed [confused] TC

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Guest farnsbarns

Not really surprised,I didn't believe the pro union/anti union thing and, in my experience, when someone starts creating outrageous arguments, they're hiding something.

 

I think it important that people realize the latest raid at least was due to an Indian political law, not a conservation law. If the environ-mentalists start a witch hunt over this Henry is going to have a hard time convincing the lowest common denominator sheep that conservation has nothing to do with it.

 

I'd like to see Henry's next statement on it.

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Good! I'm glad this thing can start to fade now. I too am eager to see the Gibson statement. Nothing screams guilty to me like copping a plea.

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It sounds like they knew importing "unfinished" would run afoul of the law after all, so they had it all labelled "finished" to circumvent that requirement. Hopefully that aspect of the law can be clarified/refined.

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This is the text of the article:

 

Gibson Guitar in settlement on illegal wood imports

 

By Aaron Smith @CNNMoney August 6, 2012: 12:03 PM ET

 

NEW YORK (CNNMoney) -- Gibson Guitar Corp. has agreed to pay a fine for illegally importing exotic wood from Madagascar and India, the U.S. government said Monday.

 

Gibson will pay a $300,000 penalty to avoid criminal charges for importing ebony and rosewood in violation of the Lacey Act, which prohibits the acquisition of plant products that are protected in other countries, the Department of Justice said in a statement.

 

In this case, Gibson was accused of illegally importing ebony from Madagascar and India, as well as rosewood from India.

 

The guitar maker will also have to make a "community service payment" of $50,000 to the U.S. National Fish and Wildlife Foundation to promote conservation and development of tree species used in making musical instruments.

 

The company also will withdraw its claims to the $262,000 worth of exotic woods seized by federal authorities, said the Department of Justice.

 

The settlement stems an incident last year, when agents from the U.S. Fish and Wildlife Service raided two of Gibson's factorys in Tennessee and its Nashville headquarters on Aug. 24. At the time, Gibson CEO Henry Juszkiewicz said the agents confiscated about $1 million in Indian ebony as well as guitars and electronic data.

 

A Gibson spokesman was not immediately available for comment to CNNMoney about the settlement.

 

On July 19, the Wall Street Journal published an op-ed piece by Juszkiewicz that detailed the raid, which he says cost his company $2 million to $3 million in products and productivity.

 

He also said the importation was in compliance with the laws of India. He called the U.S. government's actions an 'overreach" and a "job killer."

 

First Published: August 6, 2012: 11:52 AM ET

 

 

ONE ODD THING: Compare "Gibson CEO Henry Juszkiewicz said the agents confiscated about $1 million in Indian ebony as well as guitars and electronic data." with "the company also will withdraw its claims to the $262,000 worth of exotic woods seized by federal authorities, said the Department of Justice." Henry must place a heck of a value on that "electronic data"

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How can Martin use East Indian Rosewood?

 

 

I assume they're importing it with the required degree of pre-shipment thicknessing and finshing that Indian law requires.

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They were getting them from LMI just like Gibson and everyone else. I hope Henry has a statement this week.

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They were getting them from LMI just like Gibson and everyone else. I hope Henry has a statement this week.

 

 

If correct, that raises an interesting point regarding LMI's liability to Gibson. This stuff is goods under the UCC, and the impled warranty of fitness almost certainly includes that material is " not laible to get confiscated or result in huge fines to the buyer".....

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Guest farnsbarns

If correct, that raises an interesting point regarding LMI's liability to Gibson. This stuff is goods under the UCC, and the impled warranty of fitness almost certainly includes that material is " not laible to get confiscated or result in huge fines to the buyer".....

 

Yes, but Gibson has admitted wrong doing so I guess that means that they were implicit in the mis-labelling. Whether LMI is also under investigation or not I don't know. It may also be that Gibson didn't get this specific shipment from LMI. I must say I am very curious to hear a statement. SAS, Statement Acquisition Syndrome is setting in.

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ONE ODD THING: Compare "Gibson CEO Henry Juszkiewicz said the agents confiscated about $1 million in Indian ebony as well as guitars and electronic data." with "the company also will withdraw its claims to the $262,000 worth of exotic woods seized by federal authorities, said the Department of Justice." Henry must place a heck of a value on that "electronic data"

 

I noticed that, too. Henry definitely has some 'splainin' to do, although at this point I'm not sure he has very much credibility. I don't like the way the raids were conducted, and the whole affair was handled poorly by the government, but it appears that Henry might be avoiding some jail time by settling. It'll be interesting to see how the BOD and stock holders will deal with Henry, and how this will affect the Gibson business model. I'm sure that the Department of Justice is probably high fiving each other given that they have suffered some recent butt kickings, and the Tea Partiers will find a spin that will make everyone warm and fuzzy.

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Gibson doesn't have stock holders.

 

[EDIT]

 

Gibson Guitar is owned by executives Henry Juszkiewicz and David Berryman.

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With the amount Gibson charge for their guitars he probably meant millions worth of finshed product... lol (equating to $262,000 worth of boards) :P

 

(and the week they were forced to shut down)..

 

 

I too will be VERY interested in what Gibson have to say about it.

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What do you think happened to the seized wood from the feds? Hopefully this will get things back on track to business as usual for Gibson and I can concentrate on getting another flying V. [thumbup]

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GIBSON FOUNDATION BOARD OF DIRECTORS:

Henry Juszkiewicz, CEO, Gibson Guitar Corp.

Dave Berryman, President, Gibson Guitar Corp.

Senator John Breaux, Former US Senator (D-Louisiana)

Patton Boggs, Senator

Orrin Hatch, United States Senator (R-Utah)

Karen Giberson, President, Accessories Council

Bob Ezrin, Producer, Gibson Guitar Corp.

Daniel Katz, The Overbrook Foundation

 

Even though the stock is not public, I'm sure that there is stock.

 

Believe me, even though Henry is owner, chairman of the board, CEO, and chief bottle washer, he is accountable to someone. The BOD can recommend a change in leadership, and it might be good for the face of Gibson, not to mention sales and profitablility, for Henry to step down as CEO while maintaining ownership and board status.

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For what it's worth from a cynical journalist of nearly 50 years...

 

Plea bargains and settlements need not reflect reality, truth or what many of us would consider ethics.

 

E.g., I know of at least one instance where there was a criminal claim of police brutality with vid and other evidence that it was simply a predatory lawsuit. The insurance company settled - leaving the officer apparently "guilty" - because it was cheaper than going to court.

 

That's the sort of "business decision" involved in a lotta lawsuits, both criminal and civil...

 

Add to that, as usual there was a gag agreement so... the truth never came out. That's far too typical, IMHO.

 

m

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GIBSON FOUNDATION BOARD OF DIRECTORS:

Henry Juszkiewicz CEO, Gibson Guitar Corp.

Dave Berryman President, Gibson Guitar Corp.

Senator John Breaux Former US Senator (D-Louisiana)

Patton Boggs Senator

Orrin Hatch United States Senator (R-Utah)

Karen Giberson President, Accessories Council

Bob Ezrin Producer, Gibson Guitar Corp.

Daniel Katz The Overbrook Foundation

 

Even though the stock is not public, I'm sure that it has stock.

 

Not in the sense that you used it up there, how the "shareholders" will deal with Henry. They won't. It's his company. It isn't Eisner being tossed by 35,000 Disney Shareholders. Gobsin prolly has less than 500 actual "shareholders", people that have leant them money to keep them above the hairy part of the drain. They are "shareholders" in that they are Friends Of Henry And Dave.

 

And your list above is for The Gibson Foundation, which is not the company.

 

rct

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Any of those "members" that high on the food chain were probably well aware of the situation.

 

They are appointed figureheads for the company.

 

Henry and Dave have the last word.

 

Just my humble opinion.

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Not in the sense that you used it up there, how the "shareholders" will deal with Henry. They won't. It's his company. It isn't Eisner being tossed by 35,000 Disney Shareholders. Gobsin prolly has less than 500 actual "shareholders", people that have leant them money to keep them above the hairy part of the drain. They are "shareholders" in that they are Friends Of Henry And Dave.

 

And your list above is for The Gibson Foundation, which is not the company.

 

rct

 

I stand corrected.

 

EDIT: It is difficult to find any information about Gibson's annual sales, how they are organized, how their stock is distributed, anything about their board or trustees... anything. If their annual sales are $500 million, they must be structured to include a board and stock to investors. Can't find anything on the internet.

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Gibson hasn't "admitted" anything, they have just settled the matter for an agreed sum in order to bring it to a close. It is frankly an inconsequential amount. BUT! What is the disposition of the Indian wood products and associated guitars seized in August, 2011, and why didn't the DoJ release discuss it? One can only specuslate thast the purpose of the 2011 attack on the Nashville plant was intimidation, plain & simple.

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Gibson is paying hundreds of thousands of dollars (and costing them perhaps millions when all the dust settles) to make this go away, when they could have paid nothing more than they already have in lost wood, guitars, computers, etc.? I'm thinking the Feds were finally ready to make a move and threatened Gibson with prosecution/jail time or offered them a settlement, which they accepted. I'm thinking that given the options, Henry chose to settle. Of course, at this point no one really knows.

 

Washington Post Report

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Guest farnsbarns

You don't make a huge public political and moral fuss about something if you're the kind of person to settle despite being innocent because it is cheaper. If you take all the moral high-ground that way you burn all those bridges. I can't accept that after all that he settled and accepted that he looks guilty just because it's cheaper than fighting. I might be wrong but that's how most people will see it and that's what matters.

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