Coca-Cola Benefits from Contributions to the Bush Administration
Sofia Jarrin-Thomas
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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