Will Vermont Be Able To Defend Its GMO Labeling Law On Donations Alone?

Jun 9, 2014

Vermont’s effort to require labels on foods made with genetically modified ingredients has garnered lots of out-of-state attention – and cash.

According to data from the Agency of Administration, money from out-of-state donors makes up the majority of the state’s "Food Fight Fund," the holding account for money that will ultimately help the state defend the law in court.

As of the first week of June – a month after Gov. Peter Shumlin signed the GMO bill into law – the fund had raised just over $15,000, and $9,808 of that came from outside Vermont. That’s good news for a fund that will be the first line of defense in the state’s legal battle with national food conglomerates.

The $15,000 currently in the fund is not nearly enough to pay for a lawsuit expected from large national food corporations.

Most donations come in chunks of less than $50, though Montpelier-based state IT contractor Jamie Gage, who is working on the technology supporting the fund, has given more than $500 to the fund. The state says those donations were tests of the credit card processing system and Gage plans to reverse them.  Notably absent from the list of donors are two of the law’s most high-profile supporters: Shumlin and Sen. David Zuckerman, P-Chittenden.

The fund is going to be the first stop for the attorney general’s office when it comes time to spending money on a lawsuit against the state’s first-in-the-nation legislation.

Jim Reardon, the commissioner of finance and management for the state, said that with enough donations, the state would not have to resort to other means to fund the lawsuit.

“If we collect a sizeable amount of donations and the donations are sufficient to cover all of our litigation costs, then those funds are used first,” he said.

But the $15,000 currently in the fund is not nearly enough to pay for a lawsuit expected from large national food corporations. That lawsuit, according to testimony by Assistant Attorney General Bridget Asay, could add up to as much as $5 million if the state loses the case. If the state wins the case, defense costs could still add up to about $1 million.

A lawsuit from large national corporations could add up to as much as $5 million if the state loses the case. If the state wins the case, defense costs could still add up to about $1 million.

The state authorized the attorney general’s office to devote any unbudgeted settlement revenues to the case as well. About $2.7 million in settlement revenues is devoted to funding the Attorney General’s office, Reardon said. After that amount is met, additional settlement money – up to $1.5 million in fiscal year 2016 – could be devoted to the Food Fight Fund.

But that’s as far as the state’s plan goes for funding any lawsuits related to the GMO labeling bill.

What if the pool of donations is depleted and the state uses all $1.5 million in settlement revenues?

“Well, we’ll cross that bridge when we get there,” Reardon said. The current plan only extends through fiscal year 2016, which ends in June 2016, so a new funding plan will be needed if a lawsuit is ongoing.

Reardon said additional settlement revenues would have to be part of the discussion if more funds are required, but shifting budget plans is not abnormal.

“This is one of the things that people don’t realize,” he said. “Budgets aren’t something that is set in stone. Budgets are established based on estimates of both revenues and expenditures.” Often, the state has to add or subtract funds based on changing numbers, Reardon said. An especially pricey - inexpensive – lawsuit would simply factor in to the state’s new math.

Even though the pool of donations is small right now, the money is expected to flow a bit faster if and when the threat of a lawsuit becomes a reality.

“We do anticipate that once [a lawsuit] is filed and there’s more publicity across the state and across the nation, that we would expect that donations would increase into the fund,” said Sarah Clark, deputy commissioner of finance and management.

Updated June 10 at 2:25 p.m. to reflect Gage's role in the fund.