The cause of the change of heart: A fight over liquor taxes.
Costco was the driving force behind a Washington State ballot initiative in 2012 that ended the state monopoly on liquor sales and allowed big retailers — like Costco itself — to sell spirits in their stores. It was a huge boon for the company’s bottom line.
This year, Costco lobbied the legislature to eliminate a 17 percent license fee on retail sales to restaurants and bars, a big part of the wholesaler’s business. That’s far higher than the 5 percent fee paid by liquor wholesalers.
The measure passed the state Senate, with a small measure of Democratic support. But it died in the state House, where Democrats run the show.
So the three executives — Sinegal, Chairman Jeff Brotman and Senior Vice President John McKay — began funding Republicans. All three wrote $5,000 checks to the Leadership Council, an outside group that backs Senate Republicans. Combined, reports filed with the state campaign finance commission show that they have given $46,550 to Republican candidates since the beginning of the year.
By contrast, Sinegal, Brotman and McKay, along with two other Costco executives, have donated $15,600 to Democratic candidates over the same period. One Democrat who received big contributions from the top three executives, state Sen. Steve Hobbs (D), sponsored the bill to repeal the liquor tax.
The donations stand in stark contrast to Costco’s liberal reputation: Sinegal vouched for Obama’s economic accomplishments at the 2012 Democratic National Convention in Charlotte, and since 1990, just 4 percent of the $2 million he and his fellow Costco employees have given to federal candidates has gone to Republicans.
But back home, the tables are turned. Democrats faced an uphill climb to reclaim the Senate majority, which they lost when two conservative Democrats joined with Republicans to form the Majority Caucus Coalition. That caucus has 26 members out of 49 senators, meaning Democrats would need to win a net of two seats to retake control; privately, even most Democratic strategists believe that the chamber is out of their reach this election cycle.
Democrats control the state House by a wider margin, and Republicans aren’t making a major play to win back the gavel.
Blocking the measure created another strange-bedfellow relationship in Olympia, one between the Association of Washington Spirits and Wine Distributors and House Democrats. In federal elections, the liquor, beer and wine industries have tended to give more to Republican candidates than to Democrats, according to the Center for Responsive Politics.
But in Washington, distributors who want to force Costco and other retailers to pay taxes on sales to restaurants have overwhelmingly favored Democrats: This year, the distributors’ group has given $180,000 to Democratic candidates and just $25,000 to Republicans, the Seattle Times reported.