Barely a month after winning an $18 million penalty against a national grocery industry group that violated state campaign-finance laws, Washington Attorney General Bob Ferguson has signed off on a settlement that cuts the fine in half.
Under the settlement announced Wednesday, the Consumer Brands Association will pay $9 million, including $6 million to the state and $3 million to state food charities — and drop an expected appeal to the U.S. Supreme Court. The group also formally apologized.
The settlement will finally end a long and twisty legal battle stemming from a 2013 ballot initiative that sought to require labeling of genetically modified food products.
The grocery trade group, then called the Grocery Manufacturers Association, spent more than $11 million to defeat Initiative 522. But documents unearthed by Ferguson’s office showed the group sought to conceal the identities of corporations that wrote big checks to fund its campaign, including Coca-Cola, General Mills and Nestlé.
Ferguson’s office sued, initially seeking a penalty of $44 million. The state won its case at trial, obtaining a $6 million fine, which a judge tripled to $18 million, ruling that the campaign-finance violations were intentional.
The grocery group fought the case through years of appeals, arguing the unprecedented penalty was overkill for belatedly disclosing campaign donors.
In January, the state Supreme Court upheld that $18 million penalty. Writing for the court majority, Chief Justice Steven González said the grocery industry’s violations “struck at the core of open and transparent elections.”
But the ruling came on a divided, 5-4 vote, raising the prospect that the conservative majority on the U.S. Supreme Court might strike down the fine — and even put the state’s campaign-finance laws in jeopardy.
Ferguson, in an interview, acknowledged that risk weighed heavily in his decision to settle.
“I did not want to snatch defeat from the jaws of victory in this case,” he said, noting the nation’s high court has struck down major campaign-transparency laws in other states. Last year, the court nixed a controversial California law aimed at revealing donors to nonprofit groups in an effort to identify anonymous “dark money” influencing elections.
“To have lost on that issue before the U.S. Supreme Court would have significantly altered our campaign-finance laws,” Ferguson said, defending the reduced settlement as still the largest such penalty in state history, and the largest his office is aware of in the nation.
The $3 million for food insecurity charities in the settlement will be split evenly between Food Lifeline and Northwest Harvest.
In its apology as part of the settlement, the grocery group said it “accepts responsibility” for failing to disclose donors “in a timely manner” and failing to register as a political committee as required by Washington law. “We acknowledge the ruling of the Washington Supreme Court and apologize to the voters of Washington State,” the group stated.
In a statement posted to its website, the Consumer Brands Association said it was ready to move on from “this nearly decade-old legacy litigation that was inherited by our new team and new organization.”
The statement added: “Our agreement with the state of Washington not only saves our association millions of dollars, it directs $3 million to hunger relief charities Food Lifeline and Northwest Harvest, causes aligned to our industry’s values.”