How Big Sugar gets what it wants from Congress
Tuesday, September 20, 2011 at 5:03 am
Many of the most influential American agricultural interests are headquartered in specific parts of the country: The majority of peanuts come from Georgia, corn from Iowa and sugar from Florida. But even though agricultural interests have a significant presence in only a small number of congressional districts, they play an inordinately large role in the political landscape of the entire country.
The majority of sugar cane might be grown in South Florida, but the industry’s political reach extends far beyond the state.
Legend has it that then-President Bill Clinton even interrupted his breakup with Monica Lewinsky to take a call from one of Big Sugar’s top dogs — Alfonso “Alfy” Fanjul. Fanjul and others in his family own Flo-Sun, based in West Palm Beach. The company, along with U.S. Sugar Corp. (headquartered in Clewiston), are the two largest producers of raw cane sugar in the country.
Flo-Sun — through subsidiaries such as Florida Crystals, Domino Foods Inc. and C&H Sugar Company — also has milling and refining operations around the world, with a global production capacity of about 7 million tons of sugar per year. U.S. Sugar’s refined production is less than 1 million, but its subsidiary Southern Gardens Citrus is one of the largest suppliers of not-from-concentrate orange juice in the United States.
As one of Florida’s top agricultural commodities, sugar has a lot to lose from regulations and a lot to gain from agricultural legislation. So the top companies spread campaign donations fairly evenly between Republicans and Democrats across the country, and are often rewarded with support.
During the 2010 cycle, U.S. Sugar donated $12,400 to then-Rep. Allen Boyd, while PACs and individuals working with Flo-Sun gave $16,000 and American Crystal Sugar gave $10,000. Sugar companies have also given heavily to Reps. Dennis Ross, R-Lakeland, and Tom Rooney, R-Stuart. Ross’ second-largest contributor has been Flo-Sun; individuals working for the company donated at least $13,000 to his campaigns since 2009.
It is no surprise, then, that Boyd (before losing his 2010 reelection bid), Ross and Rooney have all crusaded against environmental regulations. The three have been especially vocal about the EPA’s “numeric nutrient criteria,” which could potentially affect agricultural interests including sugar, whose nutrient-laden effluent often makes its way into state waterways, causing noxious algal blooms and fish kills.
According to OpenSecrets, Big Sugar gave more than $4.2 million to federal candidates and party committees during the 2008 election cycle alone, 63 percent of which went to Democrats.
Companies with ties to Florida Crystals (which has contributed nearly $4.5 million to campaigns since 1991) gave at least $100,000 to now-Gov. Rick Scott’s gubernatorial campaign. The head of Florida Crystals also hosted a large campaign fundraiser for Scott only four weeks after he blasted the company’s rival — U.S. Sugar — over its role in a planned Everglades restoration project.
Adam Putnam, meanwhile, was one of the group’s largest recipients in 2002, when he was running for reelection as a congressman. Big Sugar donated at least $61,000 to Putnam’s successful 2010 campaign to become the Florida agriculture commissioner. Shortly after taking office, Putnam sought to delay a ban on sugary drinks in Florida public schools.
The lobbying arm of U.S. Sugar is enormously powerful. In 2009, crop producers spent more than $20.5 million on federal lobbying. The American Sugar Alliance, which represents both the Sugar Cane Growers Cooperative of Florida and the Florida Sugar Cane League, was responsible for $1.3 million of that sum.
“We have been blessed in that the support for farm policies and sugar policies has not been a partisan issue,” says Phillip Hayes, director of media relations for the American Sugar Alliance, which includes Florida Crystals. “When you talk to Republicans and Democrats, the vast majority of people in Congress support U.S. sugar policy. They recognize that you can walk into any coffee shop and pick up free packets of sugar. We have an ample supply of inexpensive sugar, and most of it is homegrown and most members of Congress want to hang on to that success story.”
“We have been in litigation on the flipside of United States Sugar most of the time over the past 20 years, maybe a little more,” says David Guest, an attorney with the environmental law firm Earthjustice. “So we are intimately familiar with the sugar companies. We know how they work.”
Guest says that Big Sugar operates differently than most agricultural industries — trading cash in the form of campaign donations for political favors in the form of subsidies. If the companies gain enough legislative support, they can ensure that agricultural legislation is written to their specifications, keeping sugar prices and subsidies high.
“They are unlike any other industry in Florida in that they aren’t in the agricultural business, they are in the corporate welfare business,” says Guest. “They get massive amounts of free services with hundreds of millions of dollars. There is a legal requirement imposed where consumers pay extra for their products … and when those programs were being reviewed and repealed in years past, it was sugar only that managed to escape the repeal.”
With its heavy contributions to congressional campaigns, sugar interests have proven skilled at getting their way — especially when it comes to the most important piece of legislation affecting the industry, the U.S. Farm Bill.
This comprehensive bill, which is passed every five years or so by Congress, usually amends or repeals certain provisions of preceding agricultural acts. For Big Sugar, this often translates into lavish subsidies that some theorize they’d go bankrupt without.
The next Farm Bill will be voted on in 2012, and it might look different than in years past. But Big Sugar isn’t worried.
“The whole process is the great unknown. We don’t know what the bill will look like,” says Hayes. “But there will be some reductions. Specifically with sugar, though, sugar is in a pretty good situation. … Sugar has operated at no cost to taxpayers since 2002 and we project that it will remain that way till at least 2021.”
As Hayes points out, federal legislation calls for the sugar program to be operated on a no-cost basis. But it’s costing someone: namely, candy companies that would prefer that the cost of sugar be lowered. The U.S. is mandated to import sugar from 41 countries across the globe, 38 of which are developing, but the government restricts those imports through a series of quotas — pushing U.S. sugar prices to between two and three times the global market rate.
As a result, a handful of sugar producers pocket around $1 billion a year in excess profits. A portion of that revenue is eventually placed back into the political system, a win for both Big Sugar and lawmakers across the country.
Without the high costs brought on by sugar policy, U.S. sugar companies argue they could lose their market share to Brazil, Australia or Thailand. Extensive lobbying and campaign contributions are merely insurance for companies Guest calls the “corporate welfare kings” of America.
Sugar isn’t explicit about its lobbying efforts, but it makes sure to cite the importance of “education.”
“Sugar always works to educate members of Congress about the benefits to sugar policy,” says Hayes. “What we like to say is that sugar policy is clearly working for everyone it touches.”
This report was produced as part of a collaborative investigative effort to expose the influence of corporate money on the political process by members of The Media Consortium, in partnership with the We the People Campaign. To read more stories from this series, visit CampaignCash.org or follow #CampaignCash on Twitter. Sign up for our Campaign Cash email newsletter by clicking here.