GMA vows to fight $18M campaign finance fine

By Stephen Davies

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WASHINGTON, Nov. 4, 2016 - The Grocery Manufacturers Association says it will “vigorously pursue its legal options” to overturn $18 million in fines levied by a Washington state court judge Wednesday for campaign violations associated with the group's opposition to a GMO labeling referendum in 2013.

“In light of all the evidence in the record, it is not credible that GMA executives believed that shielding GMA's members as the true source of contributions to GMA's Defense of Brands Account was legal,” Thurston County Superior Court Judge Anne Hirsch wrote in her ruling.

The office of Washington Attorney General Robert Ferguson said the fine “is believed to constitute the largest campaign finance judgment in United States history.” The largest such fine in the state was $735,000 in 2000.

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GMA fired back quickly, saying it “believes that there is no basis in law or fact to support this unprecedented, inequitable and clearly excessive penalty.”

Hirsch's decision, the association said, “ignores uncontradicted testimony and uncontroverted evidence that GMA reasonably believed, after being advised by multiple outside attorneys, that it was complying at all times with Washington State law.”

But Ferguson's office said that GMA had deliberately set up the Defense of Brands account to conceal the identity of companies that contributed to the “No on 522” campaign, named for I-522, the ballot question that asked voters whether GMO food products should be labeled as such.

The initiative failed, with 51 percent of Washington state voters voting against it.

Ferguson's office said that internal GMA documents “revealed an intentional, systematic effort to conceal the true sources” of food company contributions to “No on 522.”

“For example, meeting minutes from the GMA board's finance and audit committee meeting show a discussion on the creation of the ‘Defense of Brands Strategic Account,' largely to oppose I-522,” Ferguson's office said. Those minutes said that by creating the strategic account, state GMO related spending will be identified as having come from GMA, which will provide anonymity and eliminate state filing requirements for contributing members.'”

GMA, however, said its “decision to disclose the association itself, rather that its members, as a contributor to the ‘No on 522' campaign in 2013 was at most an inadvertent technical violation of the state's vague and complex disclosure law that was being handled as a routine matter by the Public Disclosure Commission until Attorney General Ferguson seized control shortly before the 2013 election to further his personal political ambitions.” 

GMA added that Ferguson's "continuing crusade against GMA has been a centerpiece of his fundraising appeals and re-election effort. GMA intends to vigorously pursue its legal options to correct this injustice.”

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Hirsch had a different take on the matter. Explaining how she decided to triple the $6 million fine as “punitive damages for GMA's intentional violations of state law,” she listed the following factors: “violation of the public's right to know the identity of those contributing to campaigns for or against ballot title measures on issues of concern to the public, the sophistication and experience of GMA executives, the failure of GMA executives to provide complete information to their attorneys, the intent of GMA to withhold from the public the true source of its contributors against Initiative 522, the large amount of funds not reported, the large number of reports filed either late or not at all, and the latest of the eventual reporting just shortly before the 2013 election.”

Hirsch called GMA President and CEO Pamela Bailey's testimony at trial “combative at times,” saying she “often would not answer direct questions and frequently answered questions with questions of her own, and gave lengthy explanations that appeared designed to lecture the court and counsel for the state.”

#30

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