Junk Food Industry Lobbyists Sued for Money Laundering in Washington State

By Michele Simon, JD, MPH
(Eat Drink Politics)

In the final weeks leading up to Election Day, the debate over measure I-522 in Washington State is getting even uglier. As I recently explained, the Grocery Manufacturer Association, the nation’s largest trade group for the processed food industry, has been flexing its muscle to oppose the labeling of genetically-engineered food, both at the federal and state levels. Now, a lawsuit brought by a non-profit called “Moms for Labeling” alleges that GMA crossed the line by not properly disclosing who is behind the whopping $7 million-plus the trade group has donated to the No on 522 campaign so far.

The main goal of a lobbying organization like GMA is to pool the massive resources of its members, which include heavy-hitters such as Coca-Cola, PepsiCo, and General Mills; each has a huge stake in this fight. While last year in California, these companies donated millions to stop Proposition 37, this year, the game plan has changed. GMA is now doing industry’s dirty work by donating on behalf of its members and possibly violating Washington State’s lobbying rules in the process. Here is how the Seattle Post-Intelligencer explains the case:

Under Washington’s public disclosure law, any organization that “bundles” contributions must declare itself as a political action committee. Moms for Labeling is citing underground industry sources to support its claim that the Grocery Manufacturers Association is fronting for the companies that gave heavily in California last year.

While Superior Court judge Chris Wickham recently dismissed the lawsuit, the attorney for the No on 522 campaign may have overstated the decision when she called it a “complete victory.” The judge did not actually rule on the merits of the case, so the allegations that GMA is fighting with junk food companies’ money still stands. Instead, the judge said that the timing of the case wasn’t right, “not that there isn’t merit in the underlying claim.” In other words, as the Post-Intelligencer put it: “The basic issue of the suit — the public’s right to know where money spent in the I-522 campaign comes from — remains unresolved.”

While dismissing the lawsuit based on timing, Judge Wickam also hit the non-profit with a $10,000 sanction (plus defendant attorney’s fees) under a statute meant, ironically, to protect against frivolous lawsuits brought by large corporations to stop public interest groups from speaking out. Known as Strategic Lawsuits Against Public Participation, anti-SLAPP laws are designed to protect David from Goliath. But GMA turned the tables, accusing Moms for Labeling of making a “strategic attempt to suppress [its] political speech.” And the judge agreed.

Still, the attorney who filed the suit on behalf of Moms for Labeling, Knoll Lowney, says he’s not backing down. Last week, he filed a legal notice to give the state attorney general’s office ten days to file its own case, after which Lowney says Moms for Labeling will have met the requirements to bring the lawsuit again themselves. According to the letter, newly released 2012 tax filings show that GMA received contributions from member companies that it funneled to the No on Prop 37 campaign in California last year. “The new evidence we delivered to the attorney general makes it even more clear that No on 522 is illegally concealing its donors,” says Pam Johnson, co-chair of Moms for Labeling.

In addition, Lowney says sources within these companies told him the $7 million is the result of GMA’s soliciting “voluntary special assessments” (donations on top of usual dues) from its members. While his whistleblowers can’t say with certainty that the special assessments are for I-522, “everyone knows where the money is going.” That GMA has yet to issue a flat out denial is also suspect, Lowney says.

It’s really not hard to figure out. Just take a look at the executives running the show at GMA. The Board of Directors is a veritable who’s who of Big Food. For starters, Ken Powell, Chairman and CEO of cereal giant General Mills is board chair. Other notable GMA board members include:

• John Bryant, President and CEO of Kellogg
• Brian C. Cornell, Chief Executive Officer, PepsiCo Americas Foods
• W. Anthony Vernon, Chief Executive Officer, Kraft Foods
• J. Alexander M. Douglas Jr., Senior Vice President and Global Chief Customer Officer, Coca-Cola

Each of these companies relies heavily upon on genetically-engineered ingredients to make its products, so it’s really no mystery what’s going on. During the California fight, food companies suffered significant backlash for opposing Prop 37. No wonder these corporations want to let GMA be the public face of their opposition this time around. But doing so just may be a violation of law. The question is: will they get away with it?

Meanwhile, overall the opposition has donated $17 million to keep Washington State consumers in the dark. You can help support the Yes on 522 campaign by donating here.