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.
#30
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