An influential DC-based food manufacturers’ lobby has agreed to pay $9 million and issue a public apology for violating Washington’s campaign finance laws as it spent millions to defeat a 2013 state ballot initiative. The settlement is a major victory for Attorney General Bob Ferguson, in an eight-year, up-and-down legal battle with the Grocery Manufacturers Assn., since renamed the Consumer Brands Association.
The GMA had established a “Defense of Brands Association” to launder corporate donations to oppose Initiative 522, which required branding of food products and seeds that have been genetically modified. The industry had drawn extensive scrutiny after a campaign spent $47 million fighting a similar initiative on the California ballot.
The Defense of Brands group was set up, according to internal documents, to “shield individual companies from public disclosure and possible criticism” and “provide anonymity and eliminate state filing requirements for contributing members.”
So it did, concealing a wellspring of corporate cash. Pepsico put in $2.69 million; $1.75 million came from Nestle USA, and Coca-Cola gave $1.74 million. Just under $1 million came from General Mills, $949,000 from ConAgra, $413,000 from Hershey; $401,000 from J.M. Smucker, and $369,000 from Kellogg.
Initiative 522 was narrowly defeated. Ferguson first struck in closing days of the campaign, forcing Grocery Manufacturers Assn. to disclose donors to its campaign fund. Defense of Brands collected $14 million, of which $11 million went to fight I-522.
The state sued Grocery Manufacturers, spurning a cost-of-doing-business settlement, and won a $6 million judgment. A Thurston County Superior Court judge trebled damages on legal groups that the Grocery Manufacturers Assn. had deliberately violated disclosure laws. The treble damages award was tossed out by the state Court of Appeals but upheld by the Washington State Supreme Court.
Of the $9 million award, $3 million will be paid out to two groups, Northwest Harvest and Washington Food Lifeline, which deal with hunger in the state. The (renamed) Grocery Manufacturers Assn., has issued a statement: “The GMA accepts responsibility for failing to disclose donors in a timely manner on a 2013 ballot initiative and failing to register as a political committee in accordance with Washington State campaign finance disclosure requirements.” The group formally apologized. Also, the Consumer Brands Assn. agreed not to carry a legal appeal against the state’s campaign laws to the U.S. Supreme Court.
Ferguson celebrated with a statement: “My office will be relentless in ensuring dark money special interests that intentionally violate our campaign finance laws will be held accountable – even if it takes a decade.”
The grocery manufacturers were represented in the case by the high-profile Seattle-based law firm of K . & L. Gates. The firm was where Bob Ferguson hung his hat before being elected to the King County Council and Attorney General.
