By Phuong Le
The Associated Press
OLYMPIA — A lawyer for Washington state has asked a judge to penalize a food industry group, alleging it concealed the source of $11 million in campaign contributions to oppose a 2013 food labeling initiative.
The Grocery Manufacturers Association — which collected money from the nation’s top food companies — and five corporations raised $22 million to defeat the measure, which would have required labeling of genetically modified foods in the state. Voters narrowly rejected the proposal in one of the state’s costliest initiative fights.
Washington Attorney General Bob Ferguson sued the association in October 2013, saying it collected money from member companies to oppose the initiative and engaged in a scheme to shield those contributions from public scrutiny.
The trade association disputes that and said it did not intentionally violate the state’s disclosure law.
Ruling to come
Thurston County Superior Court Judge Anne Hirsch heard arguments Friday and said she will rule later.
The state is asking her to side with it without a full trial, while the association is seeking to dismiss the lawsuit.
Senior assistant attorney general Linda Dalton told the judge the group violated state campaign disclosure laws by failing to register as a political committee, and “it must be held accountable.”
Dalton said the trade group set up a separate account, collected more than $14 million from companies and used most of that money to oppose Initiative 522 without disclosing the true source of the contributions to the state.
Nestle SA, PepsiCo Inc. and Coca-Cola Co. were among those that contributed to the account. About $11 million was spent from that account to defeat the ballot measure.
Dalton cited board meeting minutes and other internal documents to show the group wanted to protect individual companies from attack, particularly after some received criticism for opposing a similar GMO-labeling measure in California. She noted many companies that contributed also were on the trade group’s board.
“There’s no hiding the ball here,” said Matthew Gardner, representing the food industry group.
He rejected the state’s argument that there was a scheme to defraud and said the state misinterpreted or took out of context many of those documents.
The association argues it set up a separate account in 2012, before Washington’s ballot measure was filed, to decide how to confront labeling proponents at both the state and federal level.
The group said its members did not know dues would be used specifically to oppose I-522. It also argued it was exercising its First Amendment right to speak on behalf of its members.
The group said the state’s disclosure law is too vague and the way the state interpreted that law was unconstitutional.
The Grocery Manufacturers Association registered a committee with the state Public Disclosure Commission days after Ferguson filed the state’s lawsuit, though the group said it did so under pressure.
The state is seeking potentially millions of dollars in penalties. Under one scenario, the state argued the court should award, at a minimum, a penalty of about $14 million — the amount it said the group concealed from the public.
