Companies may have a voice in Washington, D.C. following the Citizens United decision. But in Washington state, when company-funded organizations shield donors’ identities, it’s called money laundering.
Last week, a superior court judge found the Grocery Manufacturers of America guilty of acting to conceal the names of companies that donated to a controversial campaign to oppose legislation that would have required the labeling of foods containing genetically modified organisms (GMO) in Washington in 2013.
According to Thurston County Superior Court Judge Anne Hirsch’s summary ruling, the GMA was found guilty of violating Washington state’s public campaign finance laws when it accepted $14 million in donations from its members for its “Defense of Brands fund” (DOB) and then donated $11 million of the donations to another campaign fund called “No on 522” without disclosing the original donors.
Instead, say court documents, the trade group representing global food, beverage and consumer products companies listed the donations to the fund as donated by itself. The funds were used to lobby against proposed legislation (Initiative 522) that would have required companies to label foods that contained GMOs.
“In enacting the public campaign finance laws, the people of Washington directed that they be interpreted liberally, to promote transparency and full disclosure to the voters,” the decision states. “By its actions creating the DOB account, the GMA violated the spirit and letter of Washington’s public campaign finance laws.”
The court declined at this point to rule on whether the GMA’s actions to break the law were intentional. The state attorney’s office, which launched the case, argued that the act was indeed intentional and has asked the court to impose “a significant penalty, and triple that.” The GMA, on the other hand, insisted that while it was intentional in its effort to hide the identity of its donating members, it wasn’t intentionally trying to violate the spirit of the law. “The distinction is significant,” said the court, “in that an intentional violation of the law allows the court to impose treble damages,” in accordance with Washington’s public campaign finance laws.
The case will now proceed to trial, based on those disputed facts. For the GMA, which has already been found guilty of violating the state’s stringent campaign finance laws, the size of the penalty can be substantial if it is found to have deliberately done so.
Among the documents that were submitted by the state attorney’s office were minutes from GMA’s finance and audit committee meeting that discuss the strategy behind creating the DOB account: “By doing so, state GMO related spending will be identified as having come from GMA, which will provide anonymity and eliminate state filing requirements for contributing members,” the Washington state attorney’s office revealed. State law requires the name and address of all campaign contributors.
The GMA, which was founded in 1909, has more than 300 member companies. The organization has taken several steps in recent years to shield the identity of its members and no longer provides a listing of its membership on its website. However, court documents show that Pepsico, Coca-Cola, Campbell Soup Co. and General Mills were among the top contributors to the DOB account, providing funds that the state attorney’s office alleges later were used as campaign funds to fight the failed GMO-labeling Initiative 522.
The GMA has been accused of using the Winner & Mandabach campaign strategy, named after the California campaign consulting firm founded in the 1980s that “specializes in ballot measure campaigns,” known for its intense blitz of TV campaign messages and high success rate. The ballot was defeated by a margin of 38,046 in 2013.
At the center of the upcoming trial, however, will likely be not only whether the GMA intentionally broke the law, but also its objection to being defined as a “political committee” representing individual contributors. According to the deposition of a consultant, Evelyn Lopez, defining the GMA as a political committee “is problematic both for the GMA and for the state. [That] was the reason that the GMA … set up this Defense of Brands Account, so that there would be a place to put money that could be used for political purposes.”