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Coca-Cola Benefits from Contributions to the Bush Administration
Sofia Jarrin-Thomas
Activistmagazine.com
March 25, 2005
Contributions from Coca-Cola and its enterprises to federal candidates
and parties rose as much as 31% between 1998 and 2004, with the greatest
concentration of funds during the 2000 election, according to the
Center for Responsive Politics. Seventy-one percent of those contributions,
or $2,483,283, went to the Republican Party and GOP candidates. Relationships
between the soft-drink giant and Bush’s chums have indeed gone sweeter
since many issues affecting Coca-Cola’s assets are at stake: soda
consumption in schools, environmental standards, bottled water labeling,
and human rights concerns overseas.
Coca-Cola Company contributed as much as $200,000 to the Bush presidential
inauguration and was granted “Ranger” status for helping raise as
much as $200,000 in “bundles” of $2,000 contributions (the legal limit)
for the Bush campaign in 2004. The presidential inauguration might
well have been a time of celebration over a glass of Coke with plenty
of ice. The company reaped considerable profits during Bush first
term in office, $1.20 billion compared to a meager $927 million a
year ago in the last quarter alone, which according to Forbes left
Coke investors “not satisfied with only modest growth in revenue.”
In 2004, Coca-Cola Enterprises executives John R. Alm, President and
CEO, and Lowry F. Kline, Chairman of the Board, each gave as much
as $2,000 to the Bush-Cheney Primary and $7,500 to the Republican
National Committee. Mr. Kline also contributed $6,500 between 2003
and 2004 to the largest lobbyist in the industry, the American Beverage
Association (ABA) PAC, formerly known as the National Soft Drink Association.
During his busy schedule influencing policy makers, Mr. Kline has
also found time to serve as Vice-Chairman and CEO on ABA’s Board of
Directors.
The American Beverage Association, an 85-year-old Washington-based
trade association representing companies that produce, market and
distribute more than 95 percent of the soft drinks sold in America,
has lobbied for legislation that focuses on dietary practices instead
of regulations on the food industry itself. The association went against
efforts by Senator Patrick Leahy (D-VT) to introduce a bill in the
senate to amend the Child Nutrition Act of 1966 that would limit the
sale of soft drinks and snack foods in most schools.
In a press release in May of 2003, the American Beverage Association
recommended, “Policymakers who seek to place limitations on the sale
of soft drinks at school should know that many schools invest the
money they earn from the sale of beverages at school… Instead of advocating
another unfunded mandate on already cash-strapped schools that could
place a greater burden on local taxpayers, the soft drink industry
urges Congress to improve the health of America’s youth by supporting
daily physical education and improving the quality and quantity of
nutrition education at school.”
The soft-drink industries will certainly benefit from policies such
as the new Dietary Guidelines, issued by the federal government in
January 2005, which make recommendations on health-related issues
but do little to enforce them. On whether the government had any plans
to limit advertising and marketing of less-healthy food to children,
Tommy Thompson, Secretary of Health and Human Services, reminded reporters
at a news conference, “We have a Constitution that prohibits the limit
of speech, and we in this Administration believe very strongly that
people should have the opportunity to advertise. And we're not going
to in any way curtail the right to express people's opinions.”
According to the American Academy of Pediatrics (AAP) in a report
published in January 2004, “sugared soft drink consumption has been
associated with increased risk of overweight and obesity, currently
the most common medical condition of childhood.” Currently soft drinks
and fruit drinks are sold in vending machines, in school stores, at
school sporting events, and at school fund drives. "Exclusive pouring
rights" contracts, in which the school agrees to promote one brand
exclusively in exchange for money, are being signed in an increasing
number of school districts across the country, often with bonus incentives
tied to sales. Nearly 200 school districts across the U.S. have signed
contracts with soft drink companies to promote beverage sales at school.
In 1997, for example, the Colorado Springs school district signed
with Coca-Cola, giving each of their schools from $3,000 to $25,000
per year, the contract required at least 70,000 cases of soda to be
sold per year, according to the Polaris Institute, a think tank in
Canada designed to “fight for democratic social change in an age of
corporate driven globalization.” After the first year, when only 21,000
cases had been sold, the district began an intensive marketing campaign,
including encouraging principals to allow students to drink soda in
classrooms. No contradiction can be found to encourage children to
familiarize themselves with the new Food Pyramid while being offered
a Coke to quench their thirst right after PE class period.
In response to health concerns of our children, Coca-Cola recently
announced the release of a new product that defies science, Coca-Cola
Zero, a zero-calorie cola. In contrast, our French comrades passed
a law banning vending machines for food and beverages in all public
and private schools, which will take effect September 1, 2005.
While sodas still make up about 85% of Coca Cola’s business, it has
begun entering the global water market with force. Coca Cola’s global
water business grew by 68% in 2002. Net profits for the company for
all enterprises were $3 billion in 2003.
The Natural Resources Defense Council reports that water sales have
nearly tripled in the last decade, to about $4 billion in 1997, rising
from 4.5 gallons per year for the average American in 1986 to 12.7
gallons per year per person in 1997. Much of this consumption is correlated
to the public’s view of how bottled water might be safer and healthier
than tap water, yet most bottled water is sourced from city and town
water supplies, that is, from tap water.
In August 2003, the Grocery Manufacturers of America filed a lawsuit
to block a new Maine state law that would require bottled water labels
to identify their water source. The GMA said that it wanted “uniformity”
in labeling and held that Maine should not be allowed to make its
own laws that would supercede Food and Drug Administration laws requiring
bottlers to use “purified water” labels. Conversely, the Maine law
would require bottled water labels to identify the name and geographic
location of the water body, well, or public water supply from which
the water was obtained. The case stated that the law would hurt sales
and goodwill and would conflict with “the reality that purified water
is very different from tap water.” Coke’s CEO Douglas Daft sits on
the GMA’s board of directors.
Research by NRDC has found that contaminants might still be found
in bottled water after the bottling process and sometimes, as a direct
result of it. In March 2004 in Great Britain, for example, Coca-Cola
was forced to withdraw its Dasani purified water product as a "precautionary
measure" because the process it used to treat Thames water raised
levels of bromate, a cancer-causing chemical, above European legal
standards. The fiasco earned Coca-Cola the 2004 Ig Nobel Prize, a
spoof award overseen by the Annals of Improbable Research at Harvard
University, “for using advanced technology to convert liquid from
the Thames into ‘Dasani’.”
Meanwhile, in the United States, the Bush administration has made
repeated efforts to weaken various clean water protections, according
to several environmental organizations. When the Bush administration
announced in 2003 that they were considering withdrawing Clean Water
Act protection from some waters, most states, including 17 Republican
governors, expressed serious concern over the possibility of reduced
federal protection. Further budget cuts will also limit states’ ability
to enforce standards for water pollution prevention. EPA’s proposed
budget reduction in clear water spending went from $1.3 billion in
FY 2004 to $850 million in FY 2005.
At the international level, Coca-Cola has had a couple of rough years.
In Colombia, human rights groups have shed light on the gross abuses
of union workers in Coke’s bottling companies by paramilitaries, prompting
a worldwide boycott of Coca-Cola products by activists and non-profit
groups. In the State of Kerala, India, a Coca-Cola plant’s contamination
and depletion of groundwater water supply incited public outrage.
A locally elected village council finally exercised their authority
to refuse to renew Coca-Cola’s industrial license in the area in April
2003, a move that Coca-Cola has contested with the Government of Kerala.
With such series of unfortunate events, Coca-Cola’s public officials
naturally want to show thanks to Bush junior’s administration for
offering their support in business affairs. After all, enduring government
and corporate relations will allow Coca-Cola to continue “helping
people all over the world live healthier lives through beverages.”
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