Lobbying Effort Urges Davis to Oppose Recycling Bill

Trying to protect their products from new recycling requirements, powerful food conglomerates are spending up to $800,000 to lobby Gov. Gray Davis and others against expanding California’s landmark bottle law.

To aid their effort, the Grocery Manufacturers of America has hired a prominent former California congressman, Vic Fazio, who has been an advisor to the Davis administration, and a public relations firm that employs Davis’ former campaign manager as a consultant

The bill has yet to emerge from the Legislature, but the manufacturers already have won a highly prized private meeting with the governor to plead their case.

In memos obtained by The Times, the manufacturers, including Nestle USA, Kraft Foods, Quaker Oats and Procter & Gamble, outline in bold detail their strategy to influence Davis, who has veto power over changes in the recycling law.

The documents provide a rare window on the way that a powerful special interest tries to sway a fledgling administration. In this case, tens of millions of dollars--and the way Californians dispose of beverage containers--are at stake.

One memo, dated June 15, proposes winning the governor’s support through “Davis influentials” and by engaging pro-business Democrats against expansion of the law. The memo puts an $800,000 price tag on the campaign.

A second, undated memo from the PR firm suggests mobilizing support in certain legislative districts as part of a “ground campaign”: having “politically relevant individuals and organizations” contact key legislators by phone, letter or in person.

While such efforts are not unusual in high-powered legislative disputes like the quest to expand recycling, details of the battle plans seldom surface in public. California’s recycling program, the only one of its kind in the nation, requires a deposit on beer and soft drinks contained in aluminum, plastic and glass containers. Consumers pay 2 1/2 cents on small containers and 5 cents on larger ones.

The program was part of a delicately balanced 1986 compromise intended to end a two-decade fight over which containers should require refundable deposits.

Legislation by state Sen. Byron Sher (D-Stanford) to expand the program to cover more beverages, including sport drinks, tea and bottled water, was approved by the Senate in June and is pending in the Assembly Appropriations Committee.

The proposal (SB 332) is backed by environmental groups and retailers but opposed by many beverage makers, who contend that it could cost them millions of dollars by discouraging consumers from buying their products once they are required to pay a deposit.

As the bill headed for the Assembly in June, Chip Kunde, vice president of state affairs for the grocery manufacturers group, wrote the memorandum outlining a strategy for challenging the expansion to additional containers.

“Our strategy is to highlight the [recycling] program’s vulnerabilities in the public arena to create leverage in the political arena for the elimination of the expansion and need for reforms,” Kunde says in the memo.

Two important elements of the campaign, the document says, would be the hiring of Fazio to help get the food companies’ executives a meeting with the governor, and retaining Burson Marsteller, one of the nation’s premier public relations firms, to wage a media and grass-roots campaign. Garry South, Davis’ former campaign manager, is a consultant to the company.

A spokeswoman for the firm had no comment about the memorandum. South said he had no involvement in the bottle legislation.

Fazio, however, has played a part in the lobbying effort--a role that has prompted the Davis administration to clarify its ties with the former Sacramento-area congressman and a leading Democrat.

Now a Washington lobbyist, Fazio confirmed that he helped arrange the meeting between the governor and the food producers. Fazio said he has enjoyed a long friendship with Davis and most recently has served as an unpaid advisor to California’s Washington office, suggesting how to push state issues in the nation’s capital.

“I have never been employed by the governor or the state of California,” Fazio said last week. “I think I’ve thoroughly reviewed my actions and I think they are within reason.”

A spokesman for Davis said Fazio has had no formal relationship with the administration, although he acknowledged that last December Davis announced the appointment of the ex-lawmaker as his senior Washington advisor. The spokesman said the deal fell through but that was never announced.

“In terms of having a role, official or otherwise, he [Fazio] doesn’t have one. One doesn’t exist,” said Michael Bustamante, Davis’ press secretary.

He said there was nothing uncommon in Davis’ decision to meet with the grocery manufacturers group, because he routinely confers with major business interests.

Bustamante said the governor was not swayed by the session and has not taken a position yet on the bottle bill or discussed it with Sher.

Kunde, who attended the meeting, said the manufacturers came away feeling “it was productive from the standpoint that he listened. . . . He understood a lot of the issues,” although “he didn’t buy everything we said.”

But Bruce Young, a lobbyist for the California Retailers Assn., which includes some food stores and supports the bill, said he believes that the opponents gained an advantage by meeting with the governor before the measure was even on his desk. “Now, because of this meeting, we’re all trying to play catch-up,” Young said.