This Protest Rally Is Brought to You by Big Soda

PHOTO: The Coalition for an Affordable City, also called "No on E," is a group dedicated to striking down Proposition E, often referred to as the soda tax, which San Francisco voters will vote on Tuesday.PlayABC News
WATCH When Grassroots Protest Rallies Have Corporate Sponsors

Grassroots protest rallies are a dime a dozen in San Francisco, but it’s rare they have corporate sponsorship.

That’s one thing that suggests The Coalition for an Affordable City may not be what it seems.

The Coalition for an Affordable City is not dedicated to fighting San Francisco’s soaring rent costs or rampant gentrification, or any of the countless other economic traumas resulting from the city by the Bay’s reinvention as the capital of the new digital economy.

Nope, the Coalition for Affordable City has other priorities. The group has spent more than $9 million to defeat a single item on Tuesday’s local ballot in San Francisco. Proposition E would impose a tax on sugary drinks -- $0.02 per ounce -- and earmark the proceeds for programs to educate children about healthier lifestyle choices as part of a city effort to reduce childhood obesity.

“The Coalition for an Affordable City is a fake AstroTurf front group of the American Beverage Association, which is funded largely by Coca-Cola and Pepsi, Dr. Pepper, Red Bull and Sunny D,” said San Francisco Supervisor Scott Weiner, one of the authors of Prop E.

Bay Area writers and bloggers have accused the “No on E” campaign of creating the illusion of community support by hiring people to hold signs at their rallies -- even people who don’t live or vote in San Francisco. Our team decided to look into it. When a "Nightline" producer found a Craigslist ad looking for paid sign holders in the San Francisco Bay Area, she called and asked about the job. A staffer from the “No on E” campaign told our producer that the job paid $13 dollars an hour and that it didn’t matter that she lives in New York. The campaign offered her the job.

Indeed the primary financial backer of the No on E campaign is the American Beverage Association, the soda and beverage industry’s powerful lobbying arm.

“We’re basically saying that taxing grocery items is the wrong approach,” said "No on E" spokesman Roger Salazar. Salazar insists the group is not in any way trying to conceal its connection to the industry.

“It’s not a front group,” Salazar said. “There isn’t any secret about it. It’s really not the issue. The main issue is, is the measure right for San Francisco and we don’t believe it is.”

Salazar claims the group has a city-wide coalition of small business owners who disapprove of what is known as the soda tax.

“We have over 1,000 businesses that have signed up as part of the coalition,” Salazar said. “We don’t think that it's the government's place to tell us what we got to be eating and drinking. It’s not their choice, it’s ours.”

But some of the businesses listed on the coalition’s “No on E” endorsement list told “Nightline” they actually support Prop E.

Sam Ong, the owner of Smoking Warehouse Barbeque in Potrero Hill, said the “No on E” campaigners told him the proceeds from the tax may not go to the intended childhood health programs. But when told that was false, and the tax dollars are actually earmarked for child health education, he said, “then I’m for it.”

At Goood Frickin’ Chicken, another restaurant on the coalition’s endorsement list, the manager pointed out the restaurant has a sign in their window in support of Prop E. A manager at Danah Enterprise Smoke Shop gave a similar answer and the owner confirmed he was in support of Prop E. Another restaurant on the coalition’s list, Joe’s Cable Car Burger Joint, is boarded up and appears to have been closed for over six months.

When asked about these businesses, the “No on E” campaign was able to hand over records of endorsement from all of them, including Joe’s Cable Car Burger Joint.

“We have signed cards for every one of these businesses that we have on this list,” Salazar said. “I can’t help if they closed after we went and talked to them.”

"Nightline" also found businesses that do oppose the tax. Taylor Peck, the co-owner of the Fizzary, an artisanal soda and candy shop, is literally the poster boy for the campaign, lending his face and name to the “No on E” campaigns ads.

“The tax would definitely slow business down,” Peck said.

Self-interest aside, supporters of the proposition, who are being outspent 30-to-one, have trouble believing there’s genuine grassroots campaign against the soda tax.

“There are people in San Francisco who aren’t necessarily going to vote for a soda tax, but the idea that there’s a movement is completely ridiculous,” said Maureen Erwin, the leader of the city’ pro-soda tax campaign, “Choose Health SF”, or “Yes on E”. “In San Francisco, we have people take to the streets over real things like social justice issue, marriage equality. People aren’t going to take to the streets in San Francisco to pay for a little more for their fizzy drinks.”

Over the past few years, more than 30 other communities have tried to pass sugary beverage bans or taxes, and the American Beverage Association has poured millions into the fight to strike them down.

“Every time someone proposes a soda tax anywhere in the U.S., the big soda companies come in with millions and millions of corporate dollars to spread misinformation and try to prevent communities from addressing their public health views.” Wiener says, “That’s what they’re doing here”

The No on E campaign rejects any claims its campaign is disingenuous — or even just merely self-interested.

“Is this really the right priority for San Francisco?” Salazar asks. “Other problems like housing affordability, homelessness, crime, safe streets—all of these are bigger issues that need to be worried about instead of trying to figure out whether or not they have the regulate what you can eat and drink.”

The American Beverage Association’s national office told “Nightline” in a statement, “We oppose taxes or other discriminatory proposals that single out our products…. We are completely transparent in our engagement in these debates.”

They also accused the pro-soda tax campaign of being funded by billionaire Michael Bloomberg, but Bloomberg’s office denied making any contribution to the San Francisco initiative.

“If San Francisco passes the soda tax, it sends a very powerful message that Big Soda can be beaten, but it also will make our city healthier,” Weiner said. “It will help us to fund nutrition programs, physical activity programs, and we’ll be a leader once again to promote a healthier community.”

If San Francisco voters don’t pass the soda tax ballot, the proposition is also on the ballot in nearby Berkeley. While the San Francisco measure requires a two-thirds majority to pass, the Berkeley measure needs only a simple majority and voters there take an especially dim view of corporate interference in politics.