The Grocery Manufacturers Association must pay $18 million in civil fines for concealing the true sources of contributions received from food companies to oppose a 2013 food labeling initiative, a Washington state judge ruled Wednesday.
Thurston County Superior Court Judge Anne Hirsch found that the Washington D.C.-based food industry group "intentionally violated" state campaign finance disclosure laws in its efforts to oppose Initiative 522.
Because the judge found that group intentionally violated the law, her civil penalty of $6 million will be tripled to $18 million. The Attorney General's Office said it's believed to be the largest campaign finance penalty in U.S. history.
The Grocery Manufacturers Association, which collected money from the nation's top food and beverage companies, along with five corporations, raised $22 million to defeat the ballot measure, which would have required labeling of genetically modified foods in the state. Voters narrowly rejected the proposal in the state's costliest initiative fight.
"I took this case to trial because the GMA needed to be held accountable for their arrogance and willful disregard of Washington state campaign finance laws," Washington Attorney General Bob Ferguson said in a statement Wednesday.
The Grocery Manufacturers Association said it "intends to vigorously pursue its legal options to correct this injustice."
"GMA believes that there is no basis in law or fact to support this unprecedented, inequitable and clearly excessive penalty - nearly 18 times higher than any other Washington State public disclosure fine," the group said in an emailed statement Wednesday.
It said its decision not to disclose member companies that contributed to the Non 522 campaign "was at most an inadvertent technical violation of the State's vague and complex disclosure law." The group lashed out against Ferguson, saying his "continuing crusade against GMA has been a centerpiece of his fundraising appeals and re-election effort."
Ferguson sued the trade association in 2013, alleging it collected money from member food companies and concealed the source of $11 million in campaign contributions.
In March, Thurston County Superior Court Judge Hirsch ruled that the group violated state campaign finance disclosure laws. Her ruling Wednesday followed a four-day penalty phase trial in August to determine what fine the group would pay.
State attorneys had argued that 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.
The state noted 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
The association has argued that 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.
Hirsch wrote Wednesday that she didn't find credible the testimony of GMA executives that the group did not intend to violate Washington campaign finance law.
Nestle SA, PepsiCo Inc. and Coca-Cola Co. were among those that contributed to the account and about $11 million was spent from that account to defeat the ballot measure.
La Corte contributed from Olympia, Washington.
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