Gibson Guitar Corp.

FOR IMMEDIATE RELEASE:

                                                                                                                                                      Contact Info:    

Monday, August 6, 2012                                                                            Henry E. Juszkiewicz

www.gibson.com                                                               … 615-871-4500/Ext.2405

Government agrees it will not prosecute Any Criminal Action against Gibson

After many weeks of negotiation, Gibson has settled all issues with the US government and the Department of Justice.  CEO, Henry Juszkiewicz commented, “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.  This allows us to get back to the business of making guitars.  An important part of the settlement is that we are getting back the materials seized in a second armed raid on our factories and we have formal acknowledgement that we can continue to source rosewood and ebony fingerboards from India, as we have done for many decades.”

Despite the fact that,   “…the government acknowledges that Gibson has cooperated with the Government and the investigation conducted by the Fish and Wildlife Service”, Gibson was subject to two hostile raids on its factories by agents carrying weapons and attired in SWAT gear where employees were forced out of the premises, the production was shut down, goods were seized as contraband, and threats were made that would have forced the business to close.

CEO, Henry Juszkiewicz commented, “We feel that Gibson was inappropriately targeted, and a matter that could have been addressed with a simple contact a caring human being representing the government. Instead, the Government used violent and hostile means with the full force of the US Government and several armed law enforcement agencies costing the tax payer millions of dollars and putting a job creating US manufacture at risk and at a competitive disadvantage.  This shows the increasing trend on the part of government to criminalize rules and regulations and treat US businesses in the same way drug dealers are treated.  This is wrong and it is unfair.  I am committed to working hard to correct the inequity that the law allows and insure there is fairness, due process, and the law is used for its intended purpose of stopping bad guys and stopping the very real deforestation of our planet“.

Gibson will publish the agreement and the attached Statement of Facts that both the Government and Gibson agreed to so anyone can independently draw their own conclusions.


Possible questions and answers Gibson would give:

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.     The company is gratified that the government ultimately saw the wisdom and fairness in declining to bring criminal charges in this case.

or

A.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.



Image001

                                                                           United States Attorney

Middle District of Tennessee

Image003

John K. Webb,  AUSA Deputy Criminal Chief

110 9th Avenue South - Suite A-961

Nashville,  Tennessee  37203

Telephone:  (615) 736-5151

FAX:  (615) 736-5323

July 26, 2012

Donald Carr

William M. Sullivan, Jr.

Pillsbury Winthrop Shaw Pittman LLP

2300 N Street, NW Washington, DC 20037-1122

Re:       United States v. Gibson Guitar Corp., et al

Gentlemen:

Enclosed please find the case-closing letter sent today by this office to SAC Nicholas E. Chavez, Southwest Region I U.S. Fish & Wildlife Service, memorializing the conclusion of the Government’s investigations into potential Lacey Act criminal charges against Gibson and its current or former officers, directors, employees or agents.  Your clients and the affected individuals may consider this to represent a final disposition of any and all potential enforcement actions related to the issues described in the case closing letter.

Very truly yours,

JERRY E. MARTIN

United States Attorney

Deputy Criminal Chief

Assistant United States Attorney


Image007

Donald A. Carr, Esq.

William M. Sullivan Jr., Esq.

Pillsbury Winthrop Shaw Pittman, LLP

2300 N Street, NW Washington, DC 20037

Re: Gibson Guitar Corporation

Dear Mr. Carr and Mr. Sullivan:


U.S. Department of Justice

United States Attorney

Middle District of Tennessee

Suite A-961                                              Telephone (615) 736-5151 l/09thAvenueSouth                                 Fax(615) 736-5323

Nashville, Tennessee 37203-3870

July 27, 2012


On the understandings specified below, the United States Attorney’s  office for the Middle District of Tennessee (hereinafter referred to as "this Office") and the United States Department of Justice, Environmental Crimes Section (hereinafter referred to as "ECS"), (hereinafter collectively referred to as "the Government"), and Gibson Guitar Corp. (hereinafter referred to as "Gibson"),  by its