Complaint Lodged with IRS over Question 3
The Recorder, November 1, 2016, by Richie Davis
The nonprofit Center for Consumer Freedom Co. has complained that in its promotion of ballot Question 3, the Humane Society of the United States is furthering the business interests of its board member, Whole Foods co-founder and co-CEO John Mackey.
In a letter last week to IRS Exempt Organizations Director Mamara Ripperda, Will Coggin, managing director of Washington, D.C.-based Center for Consumer Freedom, complained, “Question 3 is written in such a way that will unquestionably benefit Whole Foods and Global Animal Partnership,” the “cage-free” certification program of which Mackey is also co-founder. “Whole Foods sells only ‘cage-free’ eggs and pork, and Global Animal Partnership certifies only ‘cage-free’ eggs and pork. Question 3 would ban the production or sale in Massachusetts of eggs and pork that are not produced or raised in ‘cage-free’ facilities.”
Wayne Pacelle, the CEO of HUSU, the Washington-D.C. organization that is behind the ballot question calling that Coggin says would “effectively ban the sale of almost all and pork in the state by 2022,” is also a board member of Global Animal Partnership, which he claims tax forms show derives 91 percent of its revenue from Whole Foods.
“The effect would be to prohibit the sale in Massachusetts of approximately 85 to 90 percent of eggs and pork produced in the United States,” argues Coggin. “In essence, Question 3 eliminates Whole Foods’ competitors from the marketplace for eggs and pork in an entire state. If Question 3 passes, it is unclear whether Whole Foods’ competitors would be able to stock compliant eggs and pork products in Massachusetts by 2022. To be able to do so, the egg and pork suppliers of other supermarkets would have to invest millions of dollars in building new farming facilities. The resulting increases in wholesale, and thus retail, prices would give Whole Foods a clear competitive advantage over other supermarkets in Massachusetts. ”
The Center for Consumer Freedom, which is “devoted to promoting personal responsibility and protecting consumer choices,” opposes ballot Question 3, just as it opposed HSUS-initiated similar Proposition 2 on the California ballot in 2008, because it believes, as Coggin says, “it takes choice away from consumers.”
The center is partially funded by “restaurants, food companies and thousands of individual consumers,” according to its website.
“The Humane Society is putting millions of dollars into this initiative, and based on the evidence here — and this why we’re calling more investigation – it would certainly appear to benefit (Macke’s) interest,” Coggin said. “What this measure would do is ban 85 or 90 percent of pork and eggs from being sold in Massachusetts and would definitely benefit Whole Foods and harm his competition, places that sell regular eggs, bacon and sausage.”
Coggin said, “What’s being used here is charitable funds from a group he sits on the board of. The appearance certainly, to us, stinks.”
The complaint to the IRS contends, “Question 3 does not serve any conceivable charitable purpose. The measure hurts average Americans by limiting their food choices and likely increasing costs; it hurts farmers and retail businesses by eliminating a supply chain; and ‘cage-free’ environments expose animals to incidents of inter-animal fighting and lead to higher animal mortality rates. In light of the potential effect on the market for eggs and pork, it appears that Whole Foods Market and Global Animal Partnership may have conspired to reduce the supply of eggs and pork in Massachusetts, which would violate both federal and state antitrust laws.
“Based on this evidence, HSUS’s expenditure of at least $2.1 million of tax-exempt funds has the primary purpose of benefiting Mr. Mackey, a ‘disqualified person’ of HSUS … in his capacity as co-CEO of Whole Foods Market. (To the best of our knowledge, Whole Foods Market is not a disqualified person of HSUS, because Mr. Mackey and his family do not own at least 35 percent of WFM’s stock.)”
According to HSUS Massachusetts Director Stephanie Harris, the only farming operation that would be directly affected if Question 3 is approved by voters — as appears likely — is Diemand Farm in Wendell, which maintains that its egg-laying hens are treated humanely.
You can reach Richie Davis at firstname.lastname@example.org
or 413-772-0261, ext. 269