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Source: Washington State News

GMA intentionally shielded its members as the true source of campaign contributions  

OLYMPIA — The Washington State Court of Appeals today unanimously upheld the $18 million penalty in Attorney General Bob Ferguson’s lawsuit against the Grocery Manufacturers Association over its intentional violations of Washington’s campaign finance laws.

GMA, a trade organization of large corporations, including PepsiCo, Inc, Nestle USA, Inc, and The Coca Cola Company, funneled millions of dollars into the state to oppose Initiative 522 without proper disclosure of the source of the funds, with the express intent to “shield individual companies from public disclosure and possible criticism.” GMA is now known as the Consumer Brands Association.

“Dark money has no place in Washington elections,” Ferguson said. “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 Public Disclosure Commission is pleased to see courts continue to confirm that Washington state’s strong campaign-finance laws have serious consequences for those who attempt to conceal the source of campaign funding,” PDC Chair David Ammons said.

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.”

In April of this year, the Washington State Supreme Court affirmed that GMA’s violations were intentional and reinstated the trial court’s $18 million penalty. It remanded the case back to the state Court of Appeals to consider GMA’s argument that the penalty is excessive under the state and federal constitutions. Today’s ruling confirms the penalty is not excessive.

Case background

The lawsuit against GMA, filed in October of 2013, accused the organization of collecting over $14 million for a new “Defense of Brands” account from its members — including PepsiCo, Nestle, Coca-Cola and others — and then contributing $11 million of that money to the “No on 522” campaign without disclosing that the money came from its member companies. Instead, the money was listed as coming from GMA, not the actual donors.

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 November of 2016, Thurston County Superior Court Judge Anne Hirsch ruled that GMA violated state campaign finance laws. In addition, she found that GMA did so intentionally. As a result of her finding that GMA hid the donations intentionally, Judge Hirsch tripled GMA’s $6 million penalty to $18 million.

In September of 2018, the state Court of Appeals upheld all of Judge Hirsch’s ruling except the tripling of GMA’s penalty. In April 2020, the state Supreme Court reinstated the $18 million penalty and remanded the case back to the Court of Appeals to consider whether the fine was unconstitutionally excessive.

Former Deputy Solicitor General Callie Castillo, former Senior Assistant Attorney General Linda Dalton, Senior Assistant Attorney General Garth Ahearn, Deputy Solicitor General Karl Smith and Solicitor General Noah Purcell handled this case for the state. Purcell argued the case before the state Court of Appeals.

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The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Visit www.atg.wa.gov to learn more.

Media Contact:

Brionna Aho, Communications Director, (360) 753-2727; Brionna.aho@atg.wa.gov

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