A court in Washington has ruled that the Grocery Manufacturers Association (GMA) violated the state's finance disclosure law when it funneled millions of dollars in dark money from its major corporate members to the campaign that defeated a 2013 ballot initiative to label food containing genetically modified organisms, or GMOs.
The GMA could face up to a $33 million fine if a trial court determines that members of its staff knew they were breaking the law when they attempted to hide the identities of processed food companies opposed to the ballot initiative, which would have required special labels for grocery items containing GMO ingredients.
In a summary judgment released on Friday, a judge found that the GMA failed to disclose the corporate donors in paperwork required by state law, with the intent of shielding the donors' identities from public view and eliminating their campaign finance filing requirements.
The ruling points to internal GMA records revealing that the trade group set up a strategic "defense of brands" account to collect anonymous donations from several major food firms while "shielding individual members" from public "scrutiny." GMA staff also advised member companies on how to dodge questions from the media about the money.
Major donors to the account included PepsiCo, Nestlé, Coca-Cola, ConAgra, General Mills, Campbell Soup Company and several others. Together, the companies donated $14 million to the "defense of brands" account," according to Washington State Attorney General Bob Ferguson. GMA gave $11 million from the account to the campaign opposing the GMO labeling initiative, but identified itself as the sole donor in state campaign finance filings.
The GMA could face a penalty equal to the $11 million in campaign cash that it attempted to conceal before voluntarily reporting the donations after Ferguson filed suit in 2013. If a trial court determines that GMA staff broke the law intentionally, then the penalty could be tripled.
"This landmark case has been a long fight for accountability," Ferguson said in a statement.
The court rejected the GMA's argument that Washington's campaign finance law is too vague and the state violated the group's First Amendment rights by singling it out for enforcement. The court agreed with the GMA, however, that there is some evidence that its staff did not realize they were breaking the law, leaving the question of intent -- and the amount of a potential fine -- up to a trial court.
Opponents raised about $46 million dollars to defeat the GMO labeling initiative and broke the state record for money spent on a single ballot initiative. Along with the GMA and its members, agrichemical companies such as Monsanto, DuPont and Bayer CropScience donated millions of dollars to block GMO labeling in Washington. Many of the same companies also spent millions to defeat a similar ballot initiative in California in 2012.
GMO labeling supporters raised $7.7 million with help from anti-GMO advocates and manufacturers of organic food and natural health products. Despite much heavier spending on the anti-labeling side, voters rejected the ballot initiative by a narrow margin of 51 to 49 percent.