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Posted at 04:01 PM ET, 08/10/2010

Amount spent to defeat soda tax a mystery

The American Beverage Association spent $313,000 to directly lobby against Council member Mary M. Cheh's proposal to assess a 1-cent per ounce tax on soda, according to records filed with the Office of Campaign Finance.

But lawmakers and voters may never know the full extent of the beverage industry's successful campaign against the tax this spring. Under city law, the American Beverage Association does not have to report how much it spent on its flashy advertising campaign, revealing what some consider to be a major weakness in local election and ethics laws.

In the weeks leading up to the D.C. council vote on the budget, the beverage industry aired numerous radio spots and took out full and half-page ads in local newspapers, including The Washington Post, demanding that the council vote down the tax.

Cheh, at the time, argued "big soda" was spending millions to undermine her proposal, which was designed to pay for a new law requiring that schools serve students healthier meals.

Ellen Valentino, executive vice president of the beverage association, denied it was a seven-figure campaign, but added the the industry would spend "whatever it takes to get the message out."

Because of the pressure generated from the advertising campaign, council members convinced Cheh and D.C. Council Chairman Vincent C. Gray to scrap the proposal. Gray, however, successfully pushed to instead have city's 6 percent sales tax assessed on soda so the Healthy Schools Act could be funded.

When it filed its lobbyist disclosure form with the Office of Campaign Finance last month, the American Beverage Association wrote 0.00 in the line requesting "advertising and publication" expenses.

David Zvenyach, Cheh's chief of staff, said the industry took advantage of a loophole in disclosure laws that allows organizations to shield the true extent of their lobbying efforts

According to D.C law, lobbying is defined as "communicating directly with any official in the legislative or executive branch of the District government with the purpose of influencing any legislative action or an administrative decision."

The law states organizations also have to report "total expenditures on lobbying," but it exempts communication made "through the instrumentality of a newspaper, television or radio of general circulation."

"We follow the law," said Tracey A. Halliday, vice-president of communications for the American Beverage Association.

But Zvenyach said the industry's decision not to report its advertising as lobbying validate Cheh's efforts to toughen disclosure laws. Because the industry targeted its ads at the public - not directly to lawmakers, it's exempt from having to report those costs, Zvenyach said.

What was included in the lobbyist's report were numerous expenditures to consultants for "grassroots advocacy." The largest single expenditure went to the Mellman Group, a polling and research firm, and Goddard Claussen Public Affairs, a consultant firm.

The industry also appears to have partnered with local distributors to drum up opposition to Cheh's proposal.

During a council hearing on Cheh's bill, representatives of the soda industry packed the hearing room to argue the tax would threaten their livelihoods. The report shows the American Beverage Association paid the Capital Heights office of Pepsi Inc. about $5,000 for "grassroots advocacy" and "informational materials."

The association also paid K Consulting LLC $2,952 for "testimony" before the council. The group's president, Lisa Katic, testified before the council May, saying she was nutritionist who opposed the soda tax, according to city records.

--Tim Craig

By  |  04:01 PM ET, 08/10/2010

Categories:  Tim Craig, Tim Craig

 
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