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    Small business gets hammered by big banks and lobbyists … oh wait

    Small business gets hammered by big banks and lobbyists … oh wait

    Gibson Guitar is paying hundreds of thousands of dollars in fines and foreiting possession of wood product used in guitars, based on the trumped up claim that it violated Indian law (and thereby a provision in U.S. law) in purchasing the “endangered” wood, as reported by The Christian Science Monitor (via Reason, h/t Mark Hemingway):

    Federal prosecutors on Monday announced a deal to drop a criminal case against Gibson Guitar Corporation after the instrument maker acknowledged its importations of exotic wood violated environmental laws.

    Nashville-based Gibson agreed to pay a $300,000 penalty, forfeit claims to about $262,000 worth of wood seized by federal agents and contribute $50,000 to the National Fish and Wildlife Foundation to promote the conservation of protected tree species.

    “The agreement is fair and just in that it assesses serious penalties for Gibson’s behavior while allowing Gibson to continue to focus on the business of making guitars,” U.S. Attorney Jerry Martin said in a statement.

    The privately held company is considered one of the top makers of acoustic and electric guitars, including the iconic Les Paul introduced in 1952.

    “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,” CEO Henry Juszkiewicz said in a statement late Monday night.

    “This allows us to get back to the business of making guitars,” he said, noting that the settlement would allow them to continue sourcing rosewood and ebony from India as it has for decades.

    As Reason reported at the time:

    The feds raided Gibson for using an inappropriate tariff code on wood from India, which is a violation of the anti-trafficking statute known as The Lacey Act. At issue is not whether the wood in question was endangered, but whether the wood was the correct level of thickness and finish before being exported from India. “India is wanting to ensure that raw wood is not exported without some labor content from India,” says [Gibson CEO Henry] Juskiewicz.

    Andrea Johnson of the Environmental Investigation Agency (EIA) counters that “it’s not up to Gibson to decide which laws…they want to respect.” She points out that Gibson had previously been raided under The Lacey Act for imports from Madagascar.

    (video via Instapundit)

    Absolute insanity. Over half a million down the drain for Gibson, not to mention whatever it has spent on attorney’s fees and business it has lost.

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    Comments



     
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    Subotai Bahadur | August 7, 2012 at 2:05 pm

    Some corrections, if I may.

    1. Insufficiently Sensitive | August 7, 2012 at 11:49 am

    The USFWS that is the enforcement arm for the Lacey Act is a department of the US government. Yes, their agents conducted the raid

    http://www.fws.gov/

    The National Fish and Wildlife Foundation that the Federal government directed the $50K fine to is a totally private, Leftist tax-exempt organization with no government authority. Being private, they have the ability to covertly transfer the funds to the Obama campaign in cash or in kind. This is a simple protection money racket shakedown for the Democratic Party using Federal goons.

    http://www.nfwf.org/Content/NavigationMenu/WhoWeAre/AboutUs/default.htm

    2. jimzinsocal | August 7, 2012 at 11:58 am

    Good. At least they are getting the materials back that were grabbed by armed agents.

    I may well have missed it, but I didn’t see where they got the wood back. Could you cite it in the decision? The closest thing I could see was a clause about future purchases:

    The Government and Gibson acknowledge and agree that certain questions and inconsistencies now exist regarding the tariff classification of ebony and rosewood fingerboard blanks pursuant to the Indian government’s Foreign Trade Policy. Accordingly, the Government will not undertake enforcement actions related to Gibson’s future orders, purchases, or imports of ebony and rosewood fingerboard blanks from India, unless and until the Government of India provides specific clarification that ebony and rosewood fingerboard blanks are expressly prohibited by laws related to Indian Foreign Trade Policy.

    In other words, the government is admitting the law is shaky, and promises [as if they can be believed] that if the Indian government gives the same guarantees that they just raided the company for accepting, they will not prosecute the company in the future for doing the exact same thing they just raided them for. I don’t see anything saying saying that they would give back what was seized. Nor do I see any reason to trust the government.

    3. As far as I can see, the government is still in possession of a whole bunch of now much more expensive wood that is in the exact form used to make guitars. I don’t think that they will burn it. I will bet that the wood will be sold as government surplus. At a pennies on the dollar price. To Fender Guitar Co.

    Fender Guitar Co. is a major contributor to Obama and the Democrats. And, of course, competitors to the Gibson Co. They buy the exact same wood, using the same brokers and methods that Gibson was prosecuted for, and the Federales give them a free pass, even when challenged on it.

    After all, part of a shakedown racket is not only showing that it is dangerous not to pay, but also that there can be benefits to paying.

    I make custom political t-shirts [for my own use only, not for sale] to make Leftists’ heads explode. One which I wear around town to great effect has an Obama symbol with a circle and slash. Above it is the phrase: “BOYCOTT DEMOCRAT OWNED BUSINESSES”. Below is: “Make them as poor as they are making us!”.

    The concept seems to fit this situation. Patriots should not buy Fenders.

    Subotai Bahadur


     
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    OcTEApi | August 7, 2012 at 2:08 pm

    “…proving our case at trial would have cost millions of dollars and taken a very long time to resolve.”

    NOT spending funds on projected outlays…
    Obamanomics logic dictates that.. err Gibson Guitar just made millions !!!


     
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    Insufficiently Sensitive | August 7, 2012 at 2:41 pm

    Subotai-

    Good catch. It wasn’t until I read the Gibson/DOJ settlement – link provided above by jimzinsocal, and NOT by the Seattle Times – that I saw the difference between USFWS and the National Fish and Wildlife Foundation. You’re spot on, that $50K from Gibson will undoubtedly be converted at least partially to baksheesh to enhance the Obama campaign. That is corruption on stilts, as aforesaid.

    Emails: Geithner, Treasury drove cutoff of non-union Delphi workers’ pensions

    Enforcing a selective rule of law appears to be motivated not by an aversion to business, small or otherwise, but by marginalizing and eviscerating competing interests.

    So, now we have a better understanding of what happens behind the scenes.


     
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    Aridog | August 7, 2012 at 4:24 pm

    Currently … Department of Justice and various federal agencies have a tendency to investigate and raid conservative companies or firms owned by conservatives. Just ask Sheldon Adelson.

    What I do not understand is, if no charges are brought because the evidence is insufficient, or wholly lacking, for whatever charge was sought, why is the target firm/individual not made whole, materials returned, records returned, etc.?


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