WASHINGTON, March 23, 2016 - The Grocery Manufacturers Association could be on the hook for as much as $33 million in fines if a judge in Washington state finds that it “intentionally” hid the identity of donors to its anti-GMO labeling campaign in Washington state in 2013.
That judge, Anne Hirsch of Thurston County Superior Court, ruled March 11 that GMA “violated the spirit and letter of Washington's Public Campaign Finance Laws” when it did not disclose that $11 million it contributed to the anti-labeling campaign came from corporations such as Nestle, Pepsi, Coke, General Mills and ConAgra.
Under Washington law, GMA can be fined an amount equal to the amount it did not report, and intentional violations can result in penalties of three times that much. Hirsch scheduled a hearing on the penalty for April 11.
The ballot initiative failed narrowly, with 51 percent of voters rejecting labeling.
State Attorney General Bob Ferguson hailed Hirsch’s decision, saying it “sends an unequivocal message: Big money donors cannot evade Washington law and hide from public scrutiny.”
In a brief statement, GMA said it believes the ruling “will hurt the constitutionally protected right of trade associations to engage in political debate in the state.”
GMA also noted that the judge said there was a possibility that the association thought its actions were appropriate under state law, which GMA said is “an important point in determining any penalty.”
“There is some evidence that GMA believed that such concealment was appropriate under Washington law,” Hirsch wrote.
“GMA consulted with attorneys on this issue, including a staff attorney who specialized in campaign finance law,” Hirsch said in the ruling. GMA CEO Pamela Bailey “wrote in talking points that the DOB (Defense of Brands) fund is ‘legal’ and would ‘protect (GMA member) companies from any disclosure requirements.’”
GMA set up the DOB fund to collect donations from member companies to fight the Washington initiative and any others.
The state and GMA will argue over the penalty at the April hearing. Hirsch said there was a “question of material fact” regarding whether GMA’s actions were intentional. Therefore, she said she could not rule on the issue without a hearing.
Earlier in her decision, however, she said, “There is one, and only one, reasonable inference that can be drawn from the facts before this court: that the GMA intentionally took steps to create and then hide the true source of the funds in the DOB account from the voting public of Washington state. As the GMA Board minutes state: ‘By doing so, state GMO-related spending will be identified as coming from GMA, which will provide anonymity and eliminate state filing requirements for contributing members.’ That is a direct violation of the statute.”
GMA contributed $2 million to defeat a similar GMO labeling measure on the 2012 ballot in California. Major food companies gave millions more, but Monsanto, with $8.1 million, and DuPont, with $5.4 million, were the top donors. That measure, Proposition 37, also failed, with 51 percent voting no, but that campaign may have given GMA members reason to keep their identities secret.
“Although successful in its opposition to the ballot measure in California, some individual members of the GMA, and some staff, received negative responses from the public and the supporters of the California Initiative, including death threats,” Hirsch said in her ruling.
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