The Grocery Manufacturers Association (GMA), whose 300-plus members include Monsanto, Coca-Cola and General Mills, got caught in a 2013 money-laundering scheme aimed at protecting the identity (and hence the reputation) of members who donated funds to defeat Initiative 522 (to label genetically engineered (GE) foods in Washington State).
You might remember that several major food companies experienced major backlash from consumers when their contributions to the 2012 anti-labeling campaign in California (Prop. 37) came to light, and those donating to the Washington campaign certainly wanted to avoid the same fate.
Proponents raised about $8.4 million for the campaign to label GMOs, $2.6 million of which was raised within the state. Meanwhile, the opposition poured more than $22 million into their campaign, but only $550 was donated within Washington.
The opposition's coffers were filled by donations from multinational corporations like Pepsico, Coca-Cola and General Mills, that laundered their campaign donations through a "brand defense" account created by GMA in order to avoid consumer backlash.
This illegal move helped GMA defeat I-522 (by a mere 1 percent margin), but they did get their just deserts. GMA was sued by Attorney General Bob Ferguson in 2013, who accused them of intentional money laundering and violating state campaign disclosure laws.
Earlier this year, Thurston County Superior Court Judge Anne Hirsch ruled that GMA had indeed violated state law, but the punishment was just issued in November.
GMA Ordered to Pay Record-Breaking $18 Million Penalty for Breaking Campaign Laws
GMA has been ordered to pay $18 million for violating campaign-finance laws in Washington State. Hirsch imposed a $6 million fine but because it was found the company intentionally violated the law, the fine was tripled to $18 million. GMA will also have to pay the state's trial costs and attorney's fees.
The fine is the highest ever imposed for campaign finance violations in the U.S., with Hirsch writing in the ruling:1
"The totality of the record establishes under a preponderance of evidence, as well as the higher clear, cogent and convincing standard, that the GMA intentionally violated Washington state public campaign finance laws."
Hirsch was especially critical of the "combative" testimony provided by GMA executive Pamela Bailey. According to the ruling:2
"Bailey's testimony was combative at times. Bailey 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."
Ferguson was elated with the ruling, calling GMA's conduct "egregious." He continued to Seattle PI, "They are sophisticated people and they set about to conceal these donations from the people of Washington state."3
GMA Plans to Appeal to 'Correct Injustice'
In response to the ruling, GMA issued a release noting its intention to "pursue its legal options to correct injustice" in this case, noting:4
"GMA believes that there is no basis in law or fact to support this unprecedented, inequitable and clearly excessive penalty — nearly 18 times higher than any other Washington State public disclosure fine."
To explain away their blatant attempts to conceal its members' contributions to the "No on 522" campaign, GMA stated it was an "inadvertent technical violation of the State's vague and complex disclosure law … "5
However, "inadvertent technical violation" does not correspond with GMA's actual actions. As The Seattle Times reported, GMA even distributed talking points to its member companies advising them to deny they were funding the anti-I-522 campaign.6 It's not the first time GMA tried to skate responsibility.
Shortly after they eventually revealed the individual donors to their aggressive anti-labeling campaign, GMA sued the state of Washington, arguing they should be allowed to hide their donors — which is a direct violation of state campaign disclosure laws — in order to "speak with one voice" for the interests of the food industry.
But clearly there was a concerted effort to hide who is behind this radical front group. It's ironic that GMA feels they've been dealt an injustice, as it's the American public that has been treated unjustly with the blind addition of GMOs (genetically modified organisms) to the food supply — and GMA fought hard to keep it that way.
Further, the $18 million penalty to GMA, though significantly higher than other similar penalties issued in the past, amounts to only a slap on the wrist. It's nothing more than a cost of doing business to these companies.