February 12, 2014

Hire Rick Berman’s For-Profit and His Nonprofit Will Go to War for You

By CREW Staff

Rick BermanFor much of the last decade, the sugar industry and the manufacturers of high fructose corn syrup (HFCS) have been at war, fighting over health claims regarding their respective products.  In September 2009, one of corporate bully Rick Berman’s nonprofit front groups, the Center for Consumer Freedom (CCF), joined the fight, launching “a new million-dollar ad campaign designed to put an end to the blatant inaccuracies being propagated by the sugar industry about high fructose corn syrup.”  The campaign included three weeks of TV ads on MSNBC, Fox News, CNN, and CNBC; full-page ads in USA Today, the New York Times, the Los Angeles Times, and Crain’s Chicago Business; as well as the launch of the website,

Though CCF’s ad campaign clearly took the side of the corn refiners, Berman refused to name the companies and trade groups funding his activities.  At the same time, Audrae Erickson, the president of the Corn Refiners Association (CRA), told the Los Angeles Times that her organization had not contributed any funds to CCF’s ad campaign.  “You would expect the food industry to defend such a widely used ingredient,” Erickson said. “It benefits consumers not to be scared away from an ingredient that’s been in the food supply for more than 30 years.”

In fact, documents released as part of a lawsuit between the industries — highlighted in articles published today by the Washington Post and the New York Timesmake clear the CCF ad campaign was bought and paid for by the CRA.  The Washington Post notes:

A September 2009 e-mail from Audrae Erickson, then the chief executive of the Corn Refiners Association, detailed a plan to keep the industry’s role secret. Erickson wrote officials at Cargill, attaching copies of forthcoming television and newspapers ads developed by the Center for Consumer Freedom, an advocacy group directed by Richard Berman, a well-known Washington lobbyist who specializes in using nonprofit groups for corporate messaging.

“As you know, our sponsorship of this campaign remains confidential,” Erickson wrote. “We are funding Berman & Co. directly, not the Center for Consumer Freedom which is running the ads. If asked, please feel free to state the following: ‘The Corn Refiners Association is not funding the Center for Consumer Freedom.’” Berman and Co. declined to comment for this article, citing ongoing litigation.

Read the full e-mail here (Exhibit 6).

Why did the CRA want to keep its relationship with Rick Berman secret?  One reason may be that it wanted to create “the Washington echo chamber effect” in which supposedly neutral third parties produce statements and reports supporting a special interest’s argument, allowing them to then cite that support.  For instance, in an e-mail  (Exhibit 8) replying to a Berman and Company employee’s description of how they were responding to a critical academic study, CRA’s Erickson wrote, “Agreed, we cannot look too orchestrated.”

A second reason may be that they didn’t want to be tarnished by Berman’s bad reputation.  In another e-mail (Exhibit 25) released in the lawsuit, executives for Cargill — a major corn refiner — discussed “how to fit Richard Berman into our strategy.”  In the e-mail, Cargill’s Bill Brady described how the CRA board had “voted to authorize spending up to $100,000 to hire Berman initially for one specific task: to identify hidden links between the sugar industry and anti-HFCS scientific research.”  Later in the e-mail, Brady noted, “I realize that this is far less than Richard proposed and what you recommended, but the reality is that Richard makes some board members (and communication committee members) nervous, and they want to see how he handles this before committing more resources to him.”  Though the discussion was about hiring Berman (and presumably his consulting firm, Berman and Company), like the ad campaign, the research commissioned from Berman appears to have gone out the door under the CCF name.  On CCF’s website, a report titled “When Sweet Goes Sour” purports to reveal the “Sugar Association’s campaign of opposition research against high fructose corn syrup.”

The sugar vs. high fructose corn syrup documents offer a rare peak behind the curtain of how Rick Berman’s for-profit and nonprofit organizations intertwine.  They also raise serious questions about the propriety of his enterprise.  In 2012, Bloomberg reported on how, shortly after Smithfield Foods hired Berman’s PR company to help fight off a union drive, one of Berman’s nonprofits, the Center for Union Facts, launched a campaign against the union.  Marcus Owens, the former director of the tax-exempt organizations department at the Internal Revenue Service (IRS), told Bloomberg that Berman’s for-profit/nonprofit set up appeared to be “a clear violation of the requirements for tax-exempt status.”  Berman’s “web of organizations clearly, in my view, is operating for his private benefit and for the private benefit of his clients,” said Owens.

Learn more at CREW’s BermanExposed website and read CREW’s IRS complaint against the Center for Consumer Freedom here.

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