CNBC reports that the Grocery Manufacturers Association (GMA) "has been ordered to pay $18 million for violating campaign-finance laws to conceal the identities of corporations that poured $11 million into defeating a 2013 food-labeling initiative in Washington."
Thurston County Superior Court Judge Anne Hirsch described the violations as “intentional," which allowed her to triple the original $6 million fine to $18 million "for punitive damages." Additionally, CNBC reports, "the grocers group will have to pay the state’s trial costs and attorney’s fees." Hirsch said that GMA's argument that its its actions were unintentional as “not credible.”
In fact, CNBC writes, "Internal GMA documents showed the trade group wanted to insulate individual companies from consumer blowback they might receive for opposing food labeling. The grocery industry believed it could evade disclosure and distributed talking points to members advising them to deny they were funding the anti-I-522 campaign."
The CNBC story notes that "the case stems from the hard-fought and expensive 2013 campaign over Initiative 522, which would have required labeling of genetically modified organisms, or GMOs, in food products sold in Washington. Voters narrowly defeated the measure, with a record $22 million spent on the 'no' campaign.
"GMA was the largest donor, spending more than $11 million. But its donations were disclosed only as coming from the association, not the companies that bankrolled the effort, such as PepsiCo, Nestle and General Mills."
GMA decried the fine, and promised to appeal, saying there was “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.”
Thurston County Superior Court Judge Anne Hirsch described the violations as “intentional," which allowed her to triple the original $6 million fine to $18 million "for punitive damages." Additionally, CNBC reports, "the grocers group will have to pay the state’s trial costs and attorney’s fees." Hirsch said that GMA's argument that its its actions were unintentional as “not credible.”
In fact, CNBC writes, "Internal GMA documents showed the trade group wanted to insulate individual companies from consumer blowback they might receive for opposing food labeling. The grocery industry believed it could evade disclosure and distributed talking points to members advising them to deny they were funding the anti-I-522 campaign."
The CNBC story notes that "the case stems from the hard-fought and expensive 2013 campaign over Initiative 522, which would have required labeling of genetically modified organisms, or GMOs, in food products sold in Washington. Voters narrowly defeated the measure, with a record $22 million spent on the 'no' campaign.
"GMA was the largest donor, spending more than $11 million. But its donations were disclosed only as coming from the association, not the companies that bankrolled the effort, such as PepsiCo, Nestle and General Mills."
GMA decried the fine, and promised to appeal, saying there was “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.”
- KC's View:
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I went back to look at the stores from 2013, and even then it seemed really, really clear that GMA was doing everything it could to avoid being transparent. It only released the names of funders of the campaign under pressure from the state's attorney general.
Ironically, GMA now is accusing that attorney general of only pursuing the case so aggressively as a way of furthering his own political ambitions. First of all, everybody in politics has ambitions ... which doesn't necessarily mean that every case they pursue is just to improve their political standing, nor that a case is illegitimate just because a politician pursues it. (I'd bet real money that GMA would not be so cynical about the ambitions of a politician who agreed with it.)
I mean, give me a break.
Three years ago, I wrote the following about this case:
The broader message to every company and organization, I believe, is that if you oppose transparency, if you look to operate in the shadows, if you look to prevent the dissemination of information, you are going to find yourself on the wrong side of history. Maybe not today, maybe not tomorrow, but soon...
We are living in a transparency-driven world, and organizations better get used to it.
In Washington State, apparently, "soon" is now. Time to pay the piper.
