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Monday 22 February 2016

Hidden corporate donors poured $11M into fight to stop GMO labels in Wash.

A food-industry group tried to shield identities of major corporations that spent $11 million to defeat a 2013 food-labeling initiative in what Attorney General Bob Ferguson argues is among the worst cases of concealment in state history.

Newly unsealed documents shed further light on a food-industry trade group’s efforts to shield the identity of corporate donors who poured $11 million into a campaign to defeat a 2013 food-labeling initiative in Washington.

In a filing ahead of a key Friday court hearing, state Attorney General Bob Ferguson accused the Grocery Manufacturers Association of an “egregious” plot to evade campaign-disclosure laws that ranks “among the worst in state history.”

“It was a detailed scheme over many months to purposely, in their words, shield their donors from public scrutiny, and that’s not OK,” Ferguson said in an interview.

GMA rejected the accusations, saying it never intended to break state law. In court briefs and a statement, the group criticized Ferguson’s lawsuit as “based on a one-sided misportrayal of the facts” and called the state’s disclosure law “hopelessly vague.”

The case goes back to 2013’s Initiative 522, which sought to require labeling of genetically modified foods in Washington. The measure was defeated, with a record$22 million spent on the “no” campaign.

GMA was the largest donor, spending more than $11 million. Late in the campaign, Ferguson sued the D.C.-based trade association, saying it had violated state disclosure law by soliciting big money from companies to defeat labeling measures including I-522, while failing to disclose the corporations funding the effort.

The association’s donations were reported only as coming from the GMA, not the individual corporations who had kicked into the fund, including PepsiCo, Nestle and General Mills.

Internal GMA documents show the trade group wanted to insulate its individual members from public blowback for opposing food-labeling initiatives.To do that, the group created a special fund, called the Defense of Brand Strategic Account.

At a January 2013 board meeting discussing the effort, GMA officials said the fund would “shield individual companies from public disclosure and possible criticism,” according to minutes cited in a state court motion unsealed this week.

A month later, the board authorized creation of the fund, with leaders touting one of its advantages as “the ability to identify only GMA as the contributor,” documents show.

That April, GMA distributed talking points to its members suggesting they answer “No” if asked whether they were funding the “No on I-522” campaign.

After the lawsuit filing, GMA agreed to disclose its donors, but Ferguson’s lawsuit argues the damage was done, since the group had succeeded for most of the campaign season in hiding them.

The suit also accuses GMA of failing to properly register as a political committee and of failing to file 58 campaign-finance reports on time.

Ferguson, a Democrat up for re-election this fall, said his office seeks a major penalty sufficient to send a message to other campaigns that avoiding disclosure in the state won’t be tolerated.

In a summary-judgment motion, Senior Assistant Attorney General Linda Dalton argued the penalty should be at least $14 million — equal to the amount GMA pumped into its anti-labeling internal account without proper disclosure.

Ferguson said that could be tripled if a judge agrees GMA intentionally flouted the law.

In a statement, GMA pushed back, saying its internal documents reveal no lawbreaking, but simply the association’s First Amendment right to act “as a single spokesperson for the common interest of its members.”

It said the court “can now focus on Washington State’s hopelessly vague disclosure law and how the State’s administration of this law improperly burdens the constitutionally protected right of trade associations to engage in political debate in Washington State.”

In a court brief, GMA lawyers added that the group even followed advice from Ferguson’s office on some of its disclosures and said the Attorney General’s Office has not held other organizations, including union and trial-lawyer groups, to the same standards.

A hearing is set for Friday in Thurston County Superior Court, where a judge will consider ruling on motions for summary judgment by the state or the GMA. The court also could decide to send the case to trial later this year.


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