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Appeals court upholds $18M fine against grocery industry group for violating Washington campaign law

UPDATED: Wed., Nov. 11, 2020

By Jim Brunner Seattle Times

An appeals court has upheld a record-setting $18 million penalty imposed on a national grocery-industry group for violating Washington campaign-finance laws during a 2013 fight against a food-labeling initiative.

In a unanimous ruling Tuesday, the Washington State Court of Appeals found the Grocery Manufacturers Association’s (GMA) violations “serious and significant” and “represented an intentional attempt to conceal the identity of companies donating millions of dollars in a contentious ballot campaign.”

The case stemmed from the hard-fought 2013 battle over Initiative 522, which would have required labeling of genetically modified organisms, or GMOs, in food products sold in Washington. Voters narrowly rejected the measure, with a record $22 million spent by the “no” campaign.

GMA — which has since changed its name to the Consumer Brands Association —spent more than $11 million to defeat the initiative. But its contributions were disclosed only as coming from the association, not the companies that bankrolled the effort, such as PepsiCo, Coca-Cola, Nestle and General Mills.

Washington Attorney General Bob Ferguson sued, saying the group had failed to properly register as a political committee and flouted transparency laws. His attorneys unearthed internal GMA documents showing the trade group had sought to insulate individual companies from public blowback by hiding their names.

After the lawsuit was filed, GMA agreed to disclose the donors, but Ferguson’s office argued the damage was done, as the group had hidden the information for much of the 2013 campaign.

“Dark money has no place in Washington elections,” Ferguson said in a statement Tuesday. “This decision confirms that our courts take intentional violations of our campaign finance laws seriously. My office will continue to stand up for Washingtonians’ right to know who is influencing our elections.”

The grocery group’s attorneys had argued the state’s penalties were excessive and a violation of its constitutional rights.

In a statement Wednesday, the Consumer Brands Association said it was “eager to close the door on one of the last legacy issues of the Grocery Manufacturers Association and put this case behind us.”

But the statement added: “The ruling is clearly disproportional to other campaign finance violations of its kind, and we will continue to exhaust a series of legal options.”

Tuesday’s appeals court ruling confirmed previous decisions in the long-running case.

In 2016, after a trial, Thurston County Superior Court Judge Anne Hirsch sided with the state and imposed a $6 million fine — which she tripled to $18 million because she found the campaign-law violations to be intentional.

That ruling was appealed all the way to the state Supreme Court, which in April affirmed the trial court ruling but sent the case back to the Court of Appeals to reconsider GMA’s contention that the $18 million penalty was unconstitutionally harsh.

The appeals court on Tuesday said the penalties were justified.

“Because of GMA’s intentional actions, Washington voters were deprived of knowing that multiple companies were spending millions of dollars to

defeat I-522 and the identity of those companies,” the three-judge panel wrote in its decision.

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