An excerpt from the second edition of Marion Nestle’s book, Food Politics: How the Food Industry Influences Nutrition and Health, out now.
Do campaign contributions, trips, and presents buy corporate influence over government decisions? Much evidence suggests that they do, and in proportion to the amounts spent. Here, I present just two especially intriguing examples that involve.
Fighting the Banana Wars
Bananas are the most popular fruit among Americans; per capita consumption is about 75 annually, and nearly all are imported from Central America by Chiquita Brands International. This company, formerly known as United Fruit, has dominated global trade in bananas for a century and has an exceptionally rich history of influence over the U.S. government. The head of Chiquita Brands, Carl H. Lindner, gives generously to both political parties. In 1998, he gave $176,000 in soft money to Democrats and $360,000 to Republicans, ranking him fourth on the Mother Jones list of the top 400 political contributors that year.27 In 1999–2000, his contribution of $500,000 placed him second among the leading donors of soft money to Republicans, but he also gave $250,000 to Democrats. He contributed both donations through the American Financial Group, an insurance business. All told, Mr. Lindner’s enterprises were worth at least $14 billion at the turn of the twenty-first century.
In the late 1990s, Chiquita Brands encountered a problem with the European Union (EU). In an effort to strengthen the economies of former colonies, the EU had imposed limits on imports of bananas from everywhere else, a policy that Chiquita Brands believed was responsible for some of its financial difficulties. In response to pressure from Chiquita’s sympathetic allies in Congress, the U.S. trade representative filed a formal complaint with the World Trade Organization (WTO), arguing that quotas on bananas violated international trade agreements. When, in retaliation, the United States imposed high tariffs on certain European luxury goods, the WTO supported that action and ordered the EU to comply with trade accords.
The methods through which Chiquita Brands achieved this remarkable victory have been described by investigative reporters for Time magazine who “followed the money” and documented how “$5.5 million in campaign contributions . . . bought Chiquita access in Washington” and got the Clinton administration to “mount a global trade war on Lindner’s behalf.” The reporters noted that the government’s decision to wage a trade war over bananas differed significantly from its handling of issues related to other agricultural products and was especially noteworthy because Chiquita already controlled 20% of the European banana market, even with the trade restrictions. They considered the unusual intervention an attempt to strengthen the WTO’s ability to negotiate international trade disputes. Alternatively, it seemed possible that the White House was engaging in a collegial effort to help the company compensate for having lost $350 million in income from 1999 to 2000 and more than $1.3 billion since the EU imposed the quotas. Late in 2000, the EU offered to drop the colonial preference and establish import quotas, but Chiquita rejected that proposal, blamed the Clinton administration for the company’s financial difficulties, threatened bankruptcy, and sued the EU for $525 million. Soon after the Republican administration of George W. Bush took office in 2001, its trade negotiators pushed the Europeans to make concessions to Chiquita, saving it from threatened bankruptcy and, for the moment, ending a nine-year conflict—the latest episode in the company’s long history of success in influencing the U.S. government to solve its problems.
Getting Sweet Attention
A second example concerns sugar, a top-of-the-Pyramid food that provides calories but no other nutrients. As explained in Part I, government dietary guidelines suggest moderation (meaning limits) in sugar consumption. Nevertheless, for more than 200 years, the United States has controlled the price of sugar, at first to raise revenue but later to protect the economic interests of domestic producers. For this commodity, the relationship between agricultural policy and health is unusually complex. As a result of an elaborate system of price-support programs and import tariffs and quotas codified during the Depression and the early years of World War II, Americans pay artificially high prices for sugar, a practice that cost consumers $1.9 billion in 1998. Since 1985 the price of a pound of raw sugar has ranged from 8 to 14 cents higher in U.S. markets than in world markets, and by the time sugar is sold at retail prices, this difference doubles.
From a nutritional standpoint, higher sugar prices might be a useful disincentive to consuming soft drinks, desserts, and candy, but from a financial standpoint, the policy is highly undesirable. Besides the harm it causes consumers, the windfall benefits a surprisingly small number of sugar producers. In 1991, for example, 1,700 farms raised sugarcane and 13,700 raised sugar beets in the United States, but 42% of the sugar subsidies went to just 1% of these growers.31 The owners of these few farms give generously to both political parties. The Fanjul family, for example, controls about one-third of Florida’s sugarcane production and collects at least $60 million annually in subsidies. The Fanjuls contributed more than $350,000 to the two political parties—more to Democrats than to Republicans—through their Flo-Sun companies in 1997–1998. In 2000, Alfonso Fanjul hosted a dinner attended by President Bill Clinton that raised more than a million dollars for the Florida Democratic party.
Sugarcane production is concentrated in two Southern states, Florida and Louisiana, where working conditions of migrant canefield workers from Caribbean countries have raised human-rights concerns. Environmentalists view the Florida canefields as blocking the free flow of water into the Everglades. Sugarcane companies, in particular those owned by the Fanjul family, have successfully resisted attempts to mandate improvements in working conditions or the return of canefields to marshland in order to protect the Everglades. The same investigative reporters for Time magazine who were mentioned in connection with the banana wars also described how the Fanjuls used their political connections to avoid having to pay for cleaning up the Everglades. Even if their account misrepresented the family’s actions (as one critical response has claimed), the Fanjuls indisputably have unusual access to the highest levels of government.
The most stunning example of such access is documented in, of all unexpected places, the Starr Report—the 1998 account by Independent Counsel Kenneth Starr of the relationship of President Clinton with a young White House intern, Monica Lewinsky. According to Mr. Starr, on the afternoon of the President’s Day holiday, Monday, February 19, 1996,
The President told her [Ms. Lewinsky] that he no longer felt right about their intimate relationship, and he had to put a stop to it . . . At one point during their conversation, the President had a call from a sugar grower in Florida whose name, according to Ms. Lewinsky, was something like “Fanuli.” In Ms. Lewinsky’s recollection, the President may have taken or returned the call just as she was leaving . . . the President talked with Alfonso Fanjul of Palm Beach, Florida, from 12:42 to 1:04 p.m. The Fanjuls are prominent sugar growers in Florida.
Reportedly, Mr. Fanjul had called the President on a federal holiday because Vice President Gore had just announced a plan to tax Florida sugar growers. The proposed tax would help pay for federal efforts to restore parts of the Everglades that had been polluted by sugarcane runoff. Furthermore, the House was debating whether to phase out sugar subsidies. The Time reporters noted that the tax was never passed. Their account concluded, “That’s access.”
In these two instances, financial contributions bought access to government officials and resulted in policies favorable to donors. Given that level of connection, it is understandable that agency officials would not want to do battle over a matter so seemingly trivial as the use of the verb moderate rather than limit in guidelines about sugar consumption. The job of food lobbyists is to make sure that the government (1) does nothing to impede clients from selling more of their products and (2) does as much as possible to create a supportive sales environment. We have seen that they accomplish this goal most effectively through personal contacts established through the revolving door, as well as through financial contributions. In the next chapter, we will see how food companies engage food and nutrition professionals in marketing campaigns by encouraging them to emphasize the health benefits of products or to minimize potentially adverse effects.
Reprinted from “Food Politics: How the Food Industry Influences Nutrition and Health” by Marion Nestle courtesy of University of California Press. Copyright 2013.
Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.
