Beverage companies spend $1.675 million to defeat Berkeley soda tax
by Frances Dinkelspiel
The No on Measure D campaign on Oct. 8 covered the Ashby BART station with signs — on the floor, on the walls, and next to the ticket machines. BART workers accidentally took down some of the signs Wednesday night, but they will be reinstalled. Photo: Marian Mabel
Any traveler who walked into the Ashby BART station Wednesday night would have been barraged by “No on Measure D” ads. They were plastered on the walls across from the trains, pinned to spaces near the ticket machine, and laid out on the floor of the station.
It’s known as saturation advertising and the No on Measure D campaign is using it across Berkeley to get its message across. There are ads in bus shelters. There are ads on Berkeleyside. There are ads in the Daily Californian and on SF Gate. There are campaign signs pinned to posts and stuck in medians around town.
Get used to it. Newly filed campaign disclosure reports show that the No on Measure D campaign has spent $1.675 million so far trying to defeat a 1-cent-per-ounce tax on sugary beverages, which is about $275,000 more than was previously disclosed.
The American Beverage Association California PAC, which is funding the campaign, donated $1.4 million but has actually spent more. The campaign is also carrying $947,433 in accrued expenses. The bulk of the money is going to campaign literature, advertising, a website and campaign, and public relations consultants.
That comes to $21.43 for each of Berkeley’s 78,144 registered voters. In comparison, the beverage industry is spending $15.50 per registered voter in San Francisco, according to the San Francisco Chronicle. (The stakes for soda manufacturers are higher in Berkeley, where the measure only needs a 50% majority to pass; in San Francisco, a two-thirds majority vote is needed.)
The amount of money spent dwarfs previous Berkeley political campaigns, and distorts the electoral process, according to Daniel Newman, the president and co-founder of MapLight, a nonpartisan research organization in Berkeley that reveals money’s influence on politics.
“When one side has more than 10 times as many resources as another, it starts to make a mockery of what our democracy is supposed to be like,” said Newman. “If one side has 10 times more money to send mailers, and pay people to have conversations with voters, it creates distorted conditions for voters to effectively decide on what laws they want.”
Roger Salazar, a spokesman for the campaign, would not directly answer whether the amount of money the beverage industry is spending in Berkeley would turn off voters. He pointed out that the Yes on D campaign is also using seasoned campaign consultants, and that all the city officials running for re-election are using their bully pulpit to push the tax — a legal tactic, but one, as he put it in a previous interview, that gives “moral authority” to the campaign. The beverage industry must overcome that, he said. In addition, the Berkeley City Council spent $60,000 to conduct a poll about the proposed 1-cent-tax-per-ounce measure, he said.
“They’ve got government sponsorship,” said Salazar. “We are going to be informing voters about the flaws and impacts of this misguided venture.”
Council did spend $60,000 on two polls, but the questions that were posed covered a range of issues, not just the soda tax.
Only a small portion of the $1.675 million declared recently was spent in Berkeley, according to campaign finance documents reviewed by Berkeleyside.
Dustan Batton, who works for Rodriguez Strategies, the Los Angeles-based consulting firm that is running the Berkeley campaign, paid $622 to stay at the Durant Hotel, according to campaign filings. The campaign has paid Wong Property Management $11,040 for rent, and $1,020 to Parking Concepts for parking.
Two print shops were paid for printing campaign literature: Zee Zee Copy and Alliance Graphic got a combined $4,239. The campaign has paid Berkeleyside $9,393 for advertising. It has also taken out ads that cover two full pages in the Daily Californian.
Here are some of the major expenditures, according to campaign filings:
• TV ads: $327,453, with $96,236 going to KGO and KPIX
• Radio spots: $17,848
• BART advertising: $46,750, according to Alicia Trost, BART’s communication manager
• Campaign literature: $603,470
• U.S. Postal Service: $62,287
• Its website: $63,832
• Polling: $44,000
• Travel: $17,164 on airline tickets and $5,863 on hotels
• Office supplies: $7,845
• It has paid a San Rafael law firm, Nielsen Merksamer Parrinello Gross & Leoni, around $59,000 to prepare campaign finance reports for both Measure D and San Francisco’s Measure E.
• It paid $530,578 to EWC Media Services to place local ads. In addition to blitzing the Bay Area with ads, the No on D campaign has sent out at least seven mass mailings, which is defined by Berkeley election law as those going to more than 200 households.
There may have been more. In recent days, the No on D campaign has been passing out a flyer that features excerpts from two anti-soda tax op-eds that were published on Berkeleyside in the Opinionator section. Berkeleyside’s logo is prominently featured at the top of the page. Many Berkeley residents have been confused by that campaign literature, and have asked Berkeleyside whether the news site has taken a position to oppose Measure D. Berkeleyside does not take editorial positions. The flyer is a production of the No on Measure D campaign.
The proliferation of campaign signs has also been a problem. The city of Berkeley has sent the No on Measure D campaign two letters informing it that its signs are illegally placed in Berkeley. Berkeley’s sign ordinance does not allow campaign signs on wooden utility poles, public sidewalks, median strips, fire hydrants, curbs, or any traffic control fixture.
On Oct. 2 and then again on Oct. 6, Berkeley noted that there were No on Measure D signs on at least six different roundabouts or median strips.
(Note: Just hours after the No on D advertising was plastered around the Ashby BART station, the film on the floor and other ads were mistakenly taken down by BART workers, said Trost. The workers thought they were unauthorized. They should be put back in the next few days.)
The campaign — and a similar one in San Francisco — is being run by Goddard Gunster, a Washington, D.C.-based public relations firm, according to Salazar. The firm has had a role in defeating numerous soda tax initiatives across the country, including one proposed by New York state and a portion size cap in New York City. A previous incarnation of the firm made the “Harry and Louise” commercials that helped derail President Bill Clinton’s effort to overhaul health care.
The No on D campaign has sent Goddard Gunster at least $863,305, according to the campaign filings. But it is difficult to tell from the campaign expense reports exactly how much the PR firm has kept, for it has passed on significant amounts of that money to subcontractors. For example, Goddard Gunster has paid $530,578 to EWC Media Services, which places local ads.
The campaign is also using three different political consulting firms. Rodriguez Strategies of Los Angeles is running the ground campaign in Berkeley, said Salazar. The No on D campaign has paid it around $109,273, according to campaign reports. The campaign hired Salazar’s firm, Alza Associates, to talk to the press, and has paid the firm $12,090. Other firms include First Tuesday, a South Carolina firm that has been paid $75,000.
The campaign has used Amplified Strategies, a Seattle-based direct mail company that has worked with Goddard Gunster and the American Beverage Association on numerous other campaigns. Amplified Strategies worked on an anti-soda tax campaign in Washington state, as well as against California’s Prop. 37, which would have required labeling of genetically modified foods.
It appears as if two of the No on Measure D campaign’s public faces moved to the East Bay expressly to fight the proposed soda tax. Dustan Batton and Leon Cain work for Rodriguez Strategies of Los Angeles. Cain filed a lawsuit against the city of Berkeley in August objecting to some of the language council used in the ballot argument. An Alameda County Superior Court judge ruled that the wording did not comply with the law and ordered the city to change it. Cain recently moved to Berkeley from San Francisco and only registered to vote here Aug. 4, according to the East Bay Express. The lawsuit was filed Aug. 15, 2014.
Batton lived in the Los Angeles area until recently, according to his LinkedIn profile, and now resides in Walnut Creek. He worked as a public affairs consultant for the American Beverage Association from May 2012 to March 2013. He was the lead organizer for a soda tax campaign in El Monte, Calif., which was defeated 76% to 24%, according to Batton’s profile. As of Thursday afternoon, his Twitter profile still identified Los Angeles as his location.
Batton started to work for Rodriguez Strategies, which is running the No on D campaign, in February 2013, according to LinkedIn. He recently appeared as the campaign spokesman at a forum hosted by the Claremont-Elmwood Neighborhood Association on Oct. 6. Batton identified himself as a lobbyist at that meeting, according to people who attended.
The soda industry has experience defeating proposed soda taxes
The willingness of the beverage industry to move people to Berkeley and to pour close to $2 million into the campaign to defeat the proposed soda tax should come as no surprise. The beverage industry has spent $117 million since 2009 to squash or roll back soda taxes, according to the New York Times. The beverage industry has defeated more than 30 initiatives around the United States in those years.
Nationwide, the fight has been funded by political action committees of the American Beverage Association, a trade organization made up of the world’s largest beverage companies and businesses that sell their products. They include the Coca-Cola Company, PepsiCo, Dr. Pepper-Royal Crown Bottling Co., Canada Dry Bottling Co. of New York, the Can Manufacturers Institute, 7-Eleven Convenience Stores, and Yum! Brands (KFC, Pizza Hut and Taco Bell).
The brands include Honest Tea, Snapple, Tropicana, Minute Maid, Aquafina, Mountain Dew, Starbucks coffee drinks, Fuze Tea, Odwalla, Glacéau Vitaminwater, Hawaiian Punch, 7-Up, Coca–Cola and many more.
The American Beverage Association has also gotten prominent non-profits to remove their support of soda taxes in exchange for large donations, according to news reports. In 2010, the soda industry offered to pay Philadelphia $10 million if its city council backed away from a plan to tax sugary beverages. Council agreed, and the soft drink industry donated $10 million to the Children’s Hospital of Philadelphia.
Salazar said the beverage industry wants to help people reduce their sugar consumption, just not through local legislation. The soda industry has reduced the calories in many of its drinks by 10% in the last 10 years, and just recently pledged to reduce it an additional 20%, he said.
“From our perspective, it’s bad public policy,” said Salazar, of local legislation. “There are ways you can promote healthy lifestyles. We don’t believe taxing people is the way to do it.”