GMA $18 Million Fine Reinstated over Cover Up in GMO Labeling Fight

The Washington State Supreme Court ruled Thursday that the Grocery Manufacturer’s Association intentionally violated Washington’s campaign finance laws while supporting the “No on 522” campaign against GMO labeling in the State, and reinstated the historic $18 million penalty in Attorney General Bob Ferguson’s lawsuit against the trade organization.

Source: www.atg.wa.gov/

“Today’s Supreme Court ruling constitutes a tremendous victory for fair and transparent elections,” Ferguson said. “The court ruled that the Grocery Manufacturers Association, an association of large corporations, including PepsiCo, Inc, Nestle USA, Inc, and The Coca Cola Company, intentionally violated our voter-approved campaign finance transparency law. GMA’s unlawful conduct was intentional — and unprecedented.

”They concealed from Washingtonians $14 million contributed by their members to win an election in Washington state. My philosophy is straightforward – penalties must be more than a cost of doing business for those, like GMA, who intentionally violate our transparency laws. After an extensive trial, the Superior Court judge ordered GMA to pay an $18 million penalty for their intentional, unlawful conduct – appropriately the largest campaign finance penalty ever assessed. Today, the Supreme Court reinstated the $18 million penalty.”

“The court’s decision sends a ringing message to any group that might try to circumvent Washington’s campaign finance laws,” Washington State Public Disclosure Commission Chair David Ammons said. “Voters have a right to know who the players are in a campaign – whether they support or oppose a ballot measure. And this case demonstrates the Commission’s crucial role in ensuring transparency on the part of those who spend money to influence voters.”

Internal GMA documents obtained as a result of Ferguson’s lawsuit revealed an intentional, systematic effort to conceal the true sources of those contributions to “No on 522.”

In one GMA Executive Committee meeting, the Executive Vice President for Government Affairs noted that the fund would “shield individual companies from public disclosure and possible criticism.”

In its ruling, the high court remanded the case back to the state Court of Appeals to consider GMA’s argument of whether the penalty is excessive under the state and federal constitutions.

Case background

The lawsuit against GMA, filed in October of 2013, accused the organization of collecting over $14 million for a new “Defense of Brands” account from its members — including PepsiCo, Nestle, Coca-Cola and others — and then contributing $11 million of that money to the “No on 522” campaign against GMO labeling without disclosing that the money came from its member companies. Instead, the money was listed as coming from GMA, not the actual donors.

Internal GMA documents obtained as a result of Ferguson’s lawsuit revealed an intentional, systematic effort to conceal the true sources of those contributions to “No on 522.”

In November of 2016, Thurston County Superior Court Judge Anne Hirsch ruled that GMA violated state campaign finance laws. In addition, she found that GMA did so intentionally. As a result of her finding that GMA hid the donations intentionally, Judge Hirsch tripled GMA’s $6 million penalty to historic $18 million.

In September of 2018, the state Court of Appeals upheld all of Judge Hirsch’s ruling except the tripling of GMA’s penalty. Today’s ruling from the state Supreme Court reinstates the $18 million penalty and remands the case back to the Court of Appeals.

Former Deputy Solicitor General Callie Castillo, former Senior Assistant Attorney General Linda Dalton, Senior Assistant Attorney General Garth Ahearn, Deputy Solicitor General Karl Smith and Solicitor General Noah Purcell handled this case for the state. Castillo argued the case before the state Supreme Court.