SACRAMENTO – A rogue industry. A gun to our head. Blackmail.
This story also ran on the San Francisco Chronicle. It can be republished for free.
That’s how enraged lawmakers described soft drink companies – and what they did in 2018 when they signed a legislative treaty preventing California’s cities and counties from levying taxes on sugary beverages.
Despite its tarnished reputation, the deeply pocketed industry continues to exert political influence over the country’s most populous state, spending millions of dollars on politically affiliated lobbyists, and distributing campaign contributions to virtually every state legislature.
The result? Bills long rejected by Coca-Cola Co., PepsiCo and other beverage manufacturers continue to fail. Just two weeks ago, a measure that would have reversed the 2018 deal, so vehemently protested by lawmakers, was postponed without a hearing.
“Big Soda is a very powerful lobby,” said Eric Batch, vice president of advocacy for the American Heart Association, which has asked lawmakers nationwide to crack down on sugary beverages that health lawyers claim to cause diabetes, obesity and other costly medical issues Actions contribute conditions.
“They spent a lot of money in California preventing groups like ours from adopting good policies,” added Batch. “And they have been doing this for a long time.”
Over the past four years, soft drink companies have spent approximately $ 5.9 million lobbying California lawmakers and donating to their campaigns or favorite charities. A California Healthline analysis of the campaign funding records from January 1, 2017 through December 31, 2020 found that the American Beverage Association, Coca-Cola, and Pepsi gave almost every state official – from Governor Gavin Newsom to about five – sixths of the 120 -member legislature.
The American Beverage Association declined an interview request to discuss their political contributions and this year’s bill that would have turned the soda tax moratorium they helped create. Coca-Cola and Pepsi have not returned any comments.
In 2018, the industry spent $ 8.9 million to drive a statewide election, sponsored by the California Business Roundtable, that would have made it difficult for cities and counties to collect taxes – not just taxes on sugary beverages – by serving two would have to be approved – thirds of the voters instead of a simple majority. The legislature at the time feared local governments would face a higher threshold to choose from in taxes and fees that would fund libraries, public safety and other services, and said they had no choice but to negotiate with industry.
In a deal dubbed “extortion” and “Sophie’s Choice” by several lawmakers, lawmakers agreed to pass a law banning new local taxes on sugary beverages by January 1, 2031, if industry and other supporters so Drop the electoral measure. Back then-Gov. Jerry Brown, who had had dinner with industry executives a few weeks earlier, signed the bill.
The California deal was a coup for Big Soda that apparently didn’t pay a political price: Legislation that would have imposed a state tax on sugary beverages died a year later, as did a bill that would have put health warning labels on sugary drinks and others who would have banned sodas in the counter aisles of grocery stores.
This year’s bill, which would have restored the ability of cities and counties to put soda taxes in front of voters, is as good as dead.
“You play the political system,” said Congregation member Adrin Nazarian (D-North Hollywood), the author of AB 1163. Nazarian hopes to revive the measure before April 30, the deadline by which the political committees will legislate for EU can hear year.
“It is one thing for us to make a bad political decision,” he said. “It is a different matter to send a signal to all industries that will use this loophole against us. How many more times will we do that? “
Public health advocates point to such taxes to reduce consumption of soda, sports drinks, fruit juices, and other sweet beverages. They cite studies that show that the more they cost, the fewer people will buy them. On average, a can of soda contains 10 teaspoons of sugar, almost the full recommended daily amount for someone who eats 2,000 calories a day. Some energy drinks contain twice as much.
Four California cities – Albany, Berkeley, Oakland, and San Francisco – had soda taxes that were allowed to persist prior to the 2018 Legislative Deal. Boulder, Colorado; Philadelphia; Seattle; and the Navajo Nation also have soda taxes, with proposals under consideration in Rhode Island and Washington, DC
The revenue stream from taxes could help fund financially troubled health departments exhausted from the covid pandemic, health lawyers say.
For example, San Francisco spent $ 1.6 million of its soda tax revenue last year on local programs that feed residents affected by school closings and job losses. Seattle used its soda tax revenue to give grocery vouchers to its hardest hit residents.
Nazarian said he expected his attempt to reverse the soda tax moratorium to be an uphill battle, but he’s frustrated that the bill was denied even a hearing.
Nazarian, like lawmakers before him, is facing a strong anti-tax environment in US politics, said Tatiana Andreyeva, director of business initiatives at the University of Connecticut’s Rudd Center for Food Policy & Obesity. While more than 40 countries – including the United Kingdom, Mexico, Portugal and South Africa – have imposed national taxes on sugary beverages, national and state efforts have stalled here.
There is also the political power of the soda industry.
“Look at how much money they are spending fighting all these proposed bills,” said Andreyeva, who has been studying the soda industry since 2007. “We have seen dozens and dozen of bills at the state and local levels. There is always a lot of resistance in the industry. They are well funded, they will organize and it is very difficult.”
In California, soft drink companies spent $ 4.4 million over the past four years lobbying lawmakers and state officials, treating them with dinners and sporting events. They hired seasoned political firms manned by ex-government employees who know how the Capitol works and who often already have relationships with lawmakers and their aides.
For example, the American Beverage Association had Fredericka McGee on its payroll as a top lobbyist in California until earlier this year. She had worked for five congregation speakers. McGee is now Chief of Staff to Los Angeles County Supervisor Holly Mitchell, a former state lawmaker who chaired the 2018 Senate Budget Committee that oversaw the deal to ban new local soda taxes.
In addition to lobbying, the industry spent just over $ 1.5 million on contributions to lawmakers, including large checks made out to charities on their behalf.
The largest contributions went to the legislature with the greatest influence.
Pepsi and Coca-Cola donated a total of $ 25,000 to charities on behalf of Speaker Anthony Rendon, according to the state’s Fair Political Practices Commission, which tracks donations known as “divested payments.” This is on top of the $ 35,900 that Rendon has raised from the industry in his campaign account over the past four years.
Senate President Pro Tem Toni Atkins cashed $ 26,000 campaign checks from Coca-Cola and Pepsi and accepted a $ 5,000 donation to one of their charities from the Coke bottling facility in their San Diego district.
In a statement emailed, Rendon described the sugary beverage issue as complex and said he co-authored laws in 2015 that imposed a tax on sugary beverage traders. It died on the committee.
“I want us to do something to reduce our consumption of sweetened beverages,” said Rendon. “Those bills were hard to pass, but I think it’s easy to tie them to contributions.”
Atkins made no comment on Big Soda’s political power, but said in a statement emailed it would review the Nazarian bill “on his merits” when it comes to the Senate.
Nazarian bill is being deferred in the Convention’s Revenue and Taxation Committee, under the direction of Autumn Burke (D-Inglewood). A Burke spokesman did not return calls and emails asking for comment.
Burke also received money from soda companies, which raised approximately $ 22,000 from Coca-Cola, Pepsi, and the American Beverage Association from 2017 to 2020.
Reluctant to admit defeat, public health groups are mobilizing grassroots efforts to get a hearing on the Nazarian bill. They say California needs to address the disproportionate health effects of sugary beverages on black and Latin American communities, which only got worse.
“If lawmakers were to look at data and use data as a decision-making criterion for lifting a local tax ban, they’d have to support it,” said Michael Dimock, president of Roots of Change, a program run by the Public Health Institute. “But they don’t look at the data. Something else is affecting them. “
Elizabeth Lucas from KHN contributed to this report.
How California Healthline Compiled Data on Soda Company Policy Spending
One of the ways soft drink companies influence the political process is by donating funds to campaigns. Hiring lobbyists; Provide elected officials with drinks, meals, and event tickets; and to make charitable contributions on behalf of the legislature.
Via the California Secretary of State’s website, California Healthline downloaded campaign submissions from the American Beverage Association PAC, Coca-Cola Co. and PepsiCo – the three largest submissions from January 1, 2017 to December 31, 2020.
To track lobbying, we created a table of expenses reported on lobbying disclosure forms, also available on the American Beverage Association Secretary of State, Coca-Cola and Pepsi website. We found details of how much the industry paid lobbying firms and which lawmakers or employees accepted gifts.
To find out how much these companies donated to charity, California Healthline pulled data on “Divested Payments” from the California Fair Political Practices Commission website. These are payments that special interests may make to a charity or organization on behalf of a legislature. Sometimes some of these payments will also show up on lobbying forms. We compared the negotiated payments against the lobbying reports to make sure we didn’t double count any money.