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Grocery Manufacturers Association fined $18 million for campaign finance violation

Grocery Manufacturers Association fined $18 million for campaign finance violation

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In what could be the largest penalty of its kind in U.S. history, the Grocery Manufacturers Association was fined $18 million Tuesday for failing to disclose its donors during a 2013 campaign seeking to defeat a Washington state ballot measure to require labels on genetically modified foods.

Washington State Superior Court Judge Anne Hirsch ruled that GMA intentionally set out to violate state law when it failed to disclose which companies had contributed to the campaign. As a result, what would have been a $6 million fine for simply breaking the law was tripled to $18 million, with the association also ordered to reimburse the state for all costs related to the trial.

In a statement, GMA pledged to appeal the decision.

"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 association said.

GMA spent more than $14 million in 2013 to defeat the ballot measure, which was rejected by Washington voters in November of that year. In a lawsuit, Washington State Attorney General Bob Ferguson accused GMA of violating state campaign finance law by failing to register its political committee and hiding the fact that several large companies contributed to $11 million to the effort.

The association acknowledged it initially failed to properly disclose the campaign's financial backers, saying it was following the advice of outside legal counsel. Ferguson countered that internal documents uncovered during the trial showed the association intentionally set out to hide the identities of its donors. Hirsch ruled against GMA in March and ordered a second trial to determine the size of the fine to be levied against the association. That fine was announced Tuesday.

"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," Ferguson said in a statement.

Ferguson, a Democrat, is up for re-election in next week's general elections and has pointed to his court battle against GMA as an example of his work on behalf of Washington residents. The association questioned his political motives in its statement.

"Attorney General Ferguson's continuing crusade against GMA has been a centerpiece of his fundraising appeals and re-election effort," the group said.

For his part, Ferguson pointed to the judge's comments about GMA CEO Pamela Bailey, who testified during the trail. Hirsch said Bailey was "combative at times. Bailey often would not answer direct questions and frequently answered questions with questions of her own, and gave lengthy explanations that appeared designed to lecture the court and counsel for the State."

Hirsch had similar criticism about GMA's former head lobbyist, Louis Finkel, who coordinated the association's campaign against the ballot measure. Finkel is now a lobbyist with the American Petroleum Institute.

The attorney general's office said the fine against GMA was the largest in history against an organization for violating campaign finance laws. The largest penalty in a Federal Election Commission case occurred in 2006 when Freddie Mac was fined $3.8 million for using its corporate resources for political fundraisers. In Washington state, the largest such case involved a $735,000 penalty in 2000.

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