AG: GMA to pay $1.1M in costs, fees in historic campaign finance case

Saturday, March 4, 2017



From the Office of the State Attorney General

In a letter opinion, a Thurston County Superior Court judge ordered the Grocery Manufacturers Association to pay nearly $1.1 million in costs and fees stemming from Attorney General Bob Ferguson’s campaign finance lawsuit. GMA has previously been penalized $18 million for its intentional violations of Washington law, the largest campaign finance judgment in history.

“GMA willfully disregarded Washington state campaign finance laws,” Ferguson said. “The record-setting penalty illustrates how egregious GMA’s conduct was. It has been a multi-year effort to hold them accountable.”

Judge Anne Hirsch ordered GMA to pay the state’s requested attorney fees, which she held to be “reasonable and appropriate,” as well as litigation and investigation costs.

“The State asks for over a million dollars in fees and costs,” Judge Hirsch’s letter reads. “GMA presents three challenges to the State’s cost bill. The court rejects those challenges and awards the fees and costs as requested.”

The case arose from Ferguson’s investigation of the finances of opposition to voter Initiative 522, which would have required labeling of genetically modified organisms, or GMOs, in food sold to consumers.

Ferguson filed the lawsuit against GMA in October 2013. In March 2016, Judge Hirsch granted the Attorney General’s Motion for Summary Judgment and ruled that GMA violated state campaign finance laws when it failed to register and report its political committee, which opposed I-522.

GMA was identified as the largest contributor to the “No on 522” political committee in campaign disclosure filings. However, over 30 members of GMA actually financed the opposition campaign through a special, earmarked account but were not initially identified as individual donors.

In her November 2016 ruling, Judge Hirsch found GMA’s violations were intentional, writing: “In light of all the evidence in the record, it is not credible that GMA executives believed that shielding GMA’s members as the true source of contributions to GMA’s Defense of Brands Account was legal.”

Judge Hirsch found that the testimony of GMA President and CEO Pamela Bailey “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.”

In 2013, GMA raised over $14 million for a new “Defense of Brands” account. These funds came as a solicitation and were above and beyond regular member association dues. PepsiCo, for example, contributed nearly $3 million to the account. Nestle and Coca-Cola contributed nearly $2 million each.

GMA then contributed $11 million of that $14 million to “No on 522.” In an effort to shield individual companies from required disclosure, the money was listed as coming from GMA, not the actual donors, such as Pepsi, Nestle and Coke.

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.”

Senior Assistant Attorneys General Linda Dalton and Garth Ahearn and Deputy Solicitor General Callie Castillo handled this case for the state.

The Attorney General’s Office enforces the state’s campaign finance disclosure law to ensure free, open and fair elections in Washington state. Since becoming Attorney General, Attorney General Ferguson has devoted more agency resources to campaign finance casework.



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