Politics blog

PDC refers another I-522 financing complaint to attorney general to allow bigger fines

OlympianApril 24, 2014 

The state Public Disclosure Commission has referred a second campaign finance complaint to the Attorney General’s Office that grew out of last year’s failed initiative drive to label genetically modified foods in Washington.

The case referred to Attorney General Bob Ferguson on Thursday is against Food Democracy Action!, a national pro-labeling group that spent $295,662. FDA-WA failed to report until after the Nov. 5 election any of its efforts to drum up local support including its use of electronic newsletters dating to July. (See PDC documents here.) 

“Given the amount of money that was raised and the apparent efforts made to raise it … there certainly is a showing that the violations were multiple, that the dollar amounts were substantial and it deserves referral to the attorney general,’’ PDC citizen member Grant Degginger, a Bellevue-based lawyer, said during the commission’s hearing on the matter in Olympia.

The vote was 3-0 with commissioner Katrina Asay of Milton and commission chairman Amit Ranade of Seattle also voting for the referral. The commission would have been limited to penalties of up to $10,000.

A separate case against the Yes on 522 campaign for failing to report in-kind contributions is in negotiations for a settlement, according to Linda Dalton, senior assistant attorney general advising the PDC. She said an agreement could be brought to the commission at its next monthly meeting. (See PDC documents here.) 

The complaint against the Yes on 522 committee is for failing to report $127,067 of in-kind contributions – including $97,000 spent by Ben & Jerry’s Ice Cream on Facebook ads ($95,000) and free ice cream ($2,000) as well as $29,279 spent by PCC Natural Markets on newsletter ads and other expenses backing I-522.

Both of those cases are dwarfed by one filed by Ferguson last year against the Grocery Manufacturers Association, which is accused of concealing about $10.6 million in contributions to the No on 522 campaign. (See Ferguson's last statement here.) GMA failed to register as a PAC before it accepted donations from GMA members, who had given to the association as a way of avoiding being identified individually publicly – as they had been during a campaign against California’s labeling initiative in 2012.

GMA filed a countersuit against the PDC and Ferguson in January to overturn the Washington statute it is being prosecuted under. Ferguson says the $10.6 million (revised upward from an initial $7.2 million) is the single largest campaign violation in state history, and a hearing on GMA motions to dismiss some or all of the case is scheduled for June 13 in Thurston County.

The two complaints against labeling proponents stem from a single complaint letter to the PDC sent by Rob Maguire, an attorney for the No on 522 committee, in late October, just before the election.

A lawyer for the Food Democracy Action! group, Greg Wong, spoke to the commission meeting by phone and argued for leniency for the group, which had not acted in Washington before. He said the commission should treat the case just as it had handled a complaint against the One America Votes advocacy group in 2011 after that group spent $134,000 on legislative and initiative campaigns. 

In One America's case, Wong noted that the commission imposed a fine of $3,000 and suspended half of it. But Dalton, the PDC lawyer, said the cases were not comparable.

Although it raised $150,000 by July, FDA-WA did not register as a PAC until one week after the election, or three months late – and its late November disclosures included one $10,000 donation from a Washington resident.

Much of the group’s money was given to the Yes on 522 campaign, which had reported getting at least $200,000 in direct contributions.

The rejection of GMO labeling by Washington voters followed a similar defeat of labeling measure in California. But efforts are continuing across the country.

Just on Tuesday, the Vermont Legislature became first in the nation to directly approve a labeling law that Gov. Peter Shumlin says he will sign. Two other states have approved measures that do not take effect until enough other states have acted, and at least two dozen have proposals introduced this year, according to news accounts.

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