They settled for the reasons most people do against the government; it was simply cheaper. They couldn't afford to fight it out in the long run, since it was clear the government was out to get them by twisting rules and using new interpretations of said rules.
It was never about smuggling wood, that wasn't even in play. The specific allegations were that Gibson imported unfinished wood, that is wood that wasn't in it's finished state. In other words, the government wanted Gibson to move jobs over to India, which incidentally had no problems at all with Gibson's conduct, and said so numerous times.
And Gibson couldn't gamble on Romeny getting elected and removing the Obama administration's vendetta against Gibson, (or rather against its CEO, who donated to Republican candidates. Which is a common theme with Obama--using the government to go after donors to Republicans).
Achilles is the kind of evil that hollows out a volcano for a lair, and sends killer robots after his enemies.---Lord Simian