NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Friday, November 13th, 2020

The mother of all grocery bills: GMA must pay $18 million fine for 2013 disclosure violations

Attor­ney Gen­er­al Bob Fer­gu­son is not only a chess mas­ter, but a marathon man of the legal pro­fes­sion, as can be  sev­en-year legal bat­tle that is like­ly to car­ry a price tag of $18 mil­lion for a pow­er­ful nation­al lob­by­ing apparatus.

The $18 mil­lion rep­re­sents a tre­ble dam­age award against the Gro­cery Man­u­fac­tur­ers Asso­ci­a­tion, in a mon­ey laun­der­ing law­suit brought by Fer­gu­son in clos­ing days of the 2013 cam­paign over Ini­tia­tive 522.

The award was unan­i­mous­ly affirmed ear­li­er this week by the Wash­ing­ton State Court of Appeals, in a deci­sion which held:

“Because of GMA’s inten­tion­al actions, Wash­ing­ton vot­ers were deprived of know­ing the mul­ti­ple com­pa­nies who were spend­ing mil­lions of dol­lars to defeat Ini­tia­tive 522 and the iden­ti­ty of those companies.”

Ini­tia­tive 522 was a bal­lot mea­sure that would have required that genet­i­cal­ly engi­neered foods and seeds be “clear­ly and con­spic­u­ous­ly” labeled as such.

The food and agribusi­ness indus­tries spent $22 mil­lion to defeat it, blan­ket­ing the air­waves with such spokes­men as Dan Newhouse.

If the Gro­cery Man­u­fac­tur­ers Asso­ci­a­tion antic­i­pat­ed a slap on the wrist, or a cost-of-doing-busi­ness penal­ty, they vast­ly under­es­ti­mat­ed (or “mis­un­der­es­ti­mat­ed”, as George W. Bush would put it) the tenac­i­ty of Attor­ney Gen­er­al Ferguson.

The sto­ry must be told again, as an exam­ple of unre­strained cor­po­rate clout in an ini­tia­tive cam­paign, and a rare case where those who sow the wind reap the whirl­wind. “We intend­ed to send a strong mes­sage to all: If you want to engage in polit­i­cal cam­paigns in Wash­ing­ton, you have to play by the rules,” Fer­gu­son said at one point in the battle.

The rules – Washington’s pio­neer­ing Pub­lic Dis­clo­sure Act.

The Attor­ney Gen­er­al’s law­suit pro­duced a com­pelling trail of doc­u­ments from with­in “Big Food,” the indus­try lob­by fight­ing the ini­tia­tive. Food man­u­fac­tur­ers and agribusi­ness spent more than $47 mil­lion in 2012 to nar­row­ly beat back a Cal­i­for­nia bal­lot propo­si­tion to require label­ing of genet­i­cal­ly mod­i­fied foods.

Antic­i­pat­ing bat­tles to come, specif­i­cal­ly in Wash­ing­ton, the GMA set out to, in its words, “scope out a fund­ing mech­a­nism while bet­ter shield­ing indi­vid­ual com­pa­nies from attack for pro­vid­ing fund­ing” to defeat bal­lot initiatives.

A bevy of food giants – Pep­si­co, Coca-Cola, Kraft Foods and Camp­bell Soups – had come under fire for their mas­sive spend­ing in the Cal­i­for­nia campaign.

The solu­tion was for the Gro­cery Man­u­fac­tur­ers Asso­ci­a­tion to solic­it con­tri­bu­tions from big food com­pa­nies into a new­ly cre­at­ed “Defense of Brand” fund, so the Asso­ci­a­tion – not the com­pa­nies – could appear as the big donor in fil­ings with the state Pub­lic Dis­clo­sure Commission.

Weeks before elec­tion day in 2013, Fer­gu­son struck with a lawsuit.

The com­pa­nies retreat­ed and released fig­ures on who gave how much to the No on 522 cam­paign. Just $600 out of a stag­ger­ing war chest of more than $20 mil­lion came from with­in the Ever­green State.

Five cor­po­ra­tions donat­ed $14 mil­lion-plus to defeat the mea­sure: Pep­si­Co donat­ed $2.5 mil­lion, with Nes­tle and Coca-Cola donat­ing $1.5 mil­lion each. Gen­er­al Mills donat­ed $500,000. Out of the agribusi­ness sec­tor, Mon­san­to spent $5.4 mil­lion, while DuPont put up $3.9 million.

The indus­try cam­paign, true to form, set up a front group.

A woman was put in place as tit­u­lar spokesper­son. The real work was done by a con­sult­ing firm that has run cor­po­rate cam­paigns against ini­tia­tives for near­ly forty years. Win­ner & Mand­abach (for­mer­ly Win­ner-Wag­n­er) is based in Bev­er­ley Hills, and cut its teeth fight­ing nuclear safe­guards ini­tia­tives. It blan­ket­ed the air­waves with tele­vi­sion spots fea­tur­ing Washingtonians.

As he is empow­ered to do under law, Fer­gu­son sought tre­ble dam­ages argu­ing that the GMA’s vio­la­tion of cam­paign laws was fla­grant and intentional.

Inter­nal doc­u­ments backed him up.

In Novem­ber of 2016, Thurston Coun­ty Supe­ri­or Court Judge Anne Hirsch agreed GMA’s actions were inten­tion­al. She tripled GMA’s penal­ty to $18 million.

Almost two years lat­er, the Wash­ing­ton State Court of Appeals upheld the $6 mil­lion penal­ty, but not the tripling. Big Food would not get off that easy, though.

In a rul­ing last April, the Wash­ing­ton State Supreme Court rein­stat­ed the full $18 mil­lion judg­ment and penal­ty. The Supremes sent the case back to the Court of Appeals to hear the gro­cers’ legal challenge.

At one point, dur­ing the drawn-out legal bat­tle, an attor­ney rep­re­sent­ing the GMA pri­vate­ly acknowl­edged pri­vate­ly that Big Food expect­ed a fine or judg­ment, but with­in the real of cost-of-doing-busi­ness. He voiced sur­prise, speak­ing for his clients, at Ferguson’s relent­less pur­suit of the case.

So, the appel­late court has now upheld the full award of dam­ages and penalties.

In words I wish applied to forty-nine oth­er states, Fer­gu­son declared: “Dark mon­ey has no place in Wash­ing­ton elec­tions. This deci­sion con­firms that our courts take inten­tion­al vio­la­tions of our cam­paign laws seriously.”

Tim Eyman, are you listening?

The Gro­cery Man­u­fac­tur­ers Asso­ci­a­tion has changed its name to the Con­sumer Brands Asso­ci­a­tion after los­ing many of its biggest mem­bers.

It react­ed to this week’s rul­ing with what amount­ed to exhaus­tion, say­ing it is “eager to close the door on one of the last legal issues of the Gro­cery Man­u­fac­tur­ers Asso­ci­a­tion, and put this case behind us.”

But they’re not done fight­ing, and nei­ther is the Attor­ney Gen­er­al of Washington.

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2 Comments

  1. Here! Here! Mark one up for Wash­ing­ton State and AG Fer­gu­son! I wish all cor­po­rate mon­ey was made to light up a bright light every time it steps into the polit­i­cal are­na to advance that which is detri­men­tal to vot­ers. Too bad this isn’t a nation­al statute!

    # by Scott K. Williams :: November 14th, 2020 at 1:35 PM
  2. Hear hear big mon­ey cor­po­ra­tions must be held accountable!

    # by Brett langner :: November 23rd, 2020 at 5:07 PM

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