Thursday, June 28, 2007
Monday, June 18, 2007
PBS Frontline on Ernest Gallo
http://www.pbs.org/wgbh/pages/frontline/president/players/gallo.html
Ernest Gallo is the hard-charging patriarch of the family-owned E&J Gallo Winery in Modesto, California. The company is the largest winemaker in the world, and the producer of several popular brands including Carlo Rossi wines and Bartles & Jaymes wine coolers. It is also a political powerhouse which over the years has given millions of dollars to candidates of both parties. For all its success, the business has in some ways kept a low profile. Eighty-six year-old Ernest Gallo gives few interviews and the winery offers none of the tours and tastings found at other California vineyards.
Ernest Gallo was born in 1909 in the Sierra Nevada foothills of California, the first son of Italian immigrants. He grew up learning his father Joe's grape-growing business along with his two younger brothers, Julio and Joe. In 1933 the family was scarred by a tragedy when the boys' parents were found dead, an apparent murder/suicide in which the elder Joe shot his wife and then himself. Following his parents' deaths, Ernest became head of the family and the business. Ernest oversaw the winery's sales operations, Julio handled production, and youngest brother Joe was an employee. Ernest pushed to build the company, aiming at a broad national market and driving himself and his employees hard. He sometimes worked sixteen-hour days and took long sales trips around the country by car. In 1936, he reportedly was hospitalized six months for exhaustion.
With the end of Prohibition, the Gallo brothers set out to dominate what was then a relatively small and down-market American wine industry. Ernest wanted the company to be the "Campbell Soup company of the wine industry" and effectively marketed cheap, fortified (20% alcohol content) wines like White Port and Thunderbird in inner city markets. A radio jingle for perhaps the Gallos' most notorious product went like this: "What's the word? /Thunderbird/ How's it sold?/ Good and cold/What's the jive?/ Bird's alive/ What's the price?/ Thirty twice." According to author Ellen Hawkes, who wrote an unauthorized history of the Gallo family called Blood and Wine, Ernest later delighted in telling the story of driving through a tough, inner city neighborhood. Seeing a man on the sidewalk, Gallo rolled down his window and called out, "What's the word?" The immediate answer was, "Thunderbird."
As the company grew, eventually becoming the largest winemaker in the country and then the world, it struggled to shed its low-rent image. A New Yorker cartoon about winedrinkers captured the dilemma. The caption reads, "Surprisingly good, isn't it? It's Gallo. Mort and I simply got tired of being snobs." The drawing warmed the heart of Ernest Gallo and now hangs in his Modesto, California office. Ernest Gallo's approach to the political system is guided by the same lack of snobbishness. He goes wherever the market is and gives substantial campaign donations to both Republicans and Democrats. He and his late brother Julio -- who died in a 1993 auto accident -- used to divide the political chores in the same way they divided their winery responsibilities. Julio gave more to Republicans and Ernest largely to Democrats.
The Gallos learned the value of political connections as they built their wine empire and dealt with liquor regulators at the national, state, and sometimes county levels. They contributed to the campaigns of then-Congressman Leon Panetta, US Senator Alan Cranston, and California Governor Pete Wilson. In 1978, Cranston pushed an amendment custom-tailored to allow the family to spread inheritance tax payments out over several years through the Senate. The move saved the Gallos millions of dollars. As the family has grown, so has its fortune, and Ernest has long been anxious to protect the business he plans to leave to his heirs. He wrote recently, "I look forward to [my grandchildren] coming into their winery.
The 1978 measure was dubbed "the Gallo wine amendment" by Kansas Senator Bob Dole. In 1986, however, when Congress was changing the tax code, Dole took a different tack. When Dole supported a second tax amendment lobbied for by the Gallos, his PAC received $20,000 from Ernest, Julio and their wives in one day. The amendment passed and Bob Dole was on his way to cementing his relationship with the Gallos, who according to federal campaign records, have since become his top career benefactors. The Gallos have contributed $381,000 to Dole over the years and about $900,000 to foundations with which the Senator has been connected.
Ernest Gallo has also been helpful to President Clinton who made him a co-chair of a fundraising lunch in San Francisco last September. Ernest raised $100,000 in a matter of days for that event. This was only weeks after Ernest had had a private meeting with the President, according to The Los Angeles Times, to discuss Chilean wine imports. The Gallo support for President Clinton and Majority Leader Dole paid off. Not only did Congress delay any action to increase Chilean wine imports this fall, but it passed increased funding for a wine promotion program that gives Gallo millions of dollars to promote its wines overseas. A bipartisan group of Senators derided the program this past October as one of a "dirty dozen" examples of corporate welfare, but the program has survived and its funding has been increased.
Meanwhile, Ernest has taken the same hardball approach to family as he has to politics. In 1989 Ernest won a bitter court battle with his brother Joe who claimed that his elder brothers had denied him the share in the family business left to him by his parents. Joe was also barred from marketing a brand of cheese using the family name Gallo. As a result, the elderly brothers, to whom family had once meant so much, are now estranged.
Ernest Gallo is the hard-charging patriarch of the family-owned E&J Gallo Winery in Modesto, California. The company is the largest winemaker in the world, and the producer of several popular brands including Carlo Rossi wines and Bartles & Jaymes wine coolers. It is also a political powerhouse which over the years has given millions of dollars to candidates of both parties. For all its success, the business has in some ways kept a low profile. Eighty-six year-old Ernest Gallo gives few interviews and the winery offers none of the tours and tastings found at other California vineyards.
Ernest Gallo was born in 1909 in the Sierra Nevada foothills of California, the first son of Italian immigrants. He grew up learning his father Joe's grape-growing business along with his two younger brothers, Julio and Joe. In 1933 the family was scarred by a tragedy when the boys' parents were found dead, an apparent murder/suicide in which the elder Joe shot his wife and then himself. Following his parents' deaths, Ernest became head of the family and the business. Ernest oversaw the winery's sales operations, Julio handled production, and youngest brother Joe was an employee. Ernest pushed to build the company, aiming at a broad national market and driving himself and his employees hard. He sometimes worked sixteen-hour days and took long sales trips around the country by car. In 1936, he reportedly was hospitalized six months for exhaustion.
With the end of Prohibition, the Gallo brothers set out to dominate what was then a relatively small and down-market American wine industry. Ernest wanted the company to be the "Campbell Soup company of the wine industry" and effectively marketed cheap, fortified (20% alcohol content) wines like White Port and Thunderbird in inner city markets. A radio jingle for perhaps the Gallos' most notorious product went like this: "What's the word? /Thunderbird/ How's it sold?/ Good and cold/What's the jive?/ Bird's alive/ What's the price?/ Thirty twice." According to author Ellen Hawkes, who wrote an unauthorized history of the Gallo family called Blood and Wine, Ernest later delighted in telling the story of driving through a tough, inner city neighborhood. Seeing a man on the sidewalk, Gallo rolled down his window and called out, "What's the word?" The immediate answer was, "Thunderbird."
As the company grew, eventually becoming the largest winemaker in the country and then the world, it struggled to shed its low-rent image. A New Yorker cartoon about winedrinkers captured the dilemma. The caption reads, "Surprisingly good, isn't it? It's Gallo. Mort and I simply got tired of being snobs." The drawing warmed the heart of Ernest Gallo and now hangs in his Modesto, California office. Ernest Gallo's approach to the political system is guided by the same lack of snobbishness. He goes wherever the market is and gives substantial campaign donations to both Republicans and Democrats. He and his late brother Julio -- who died in a 1993 auto accident -- used to divide the political chores in the same way they divided their winery responsibilities. Julio gave more to Republicans and Ernest largely to Democrats.
The Gallos learned the value of political connections as they built their wine empire and dealt with liquor regulators at the national, state, and sometimes county levels. They contributed to the campaigns of then-Congressman Leon Panetta, US Senator Alan Cranston, and California Governor Pete Wilson. In 1978, Cranston pushed an amendment custom-tailored to allow the family to spread inheritance tax payments out over several years through the Senate. The move saved the Gallos millions of dollars. As the family has grown, so has its fortune, and Ernest has long been anxious to protect the business he plans to leave to his heirs. He wrote recently, "I look forward to [my grandchildren] coming into their winery.
The 1978 measure was dubbed "the Gallo wine amendment" by Kansas Senator Bob Dole. In 1986, however, when Congress was changing the tax code, Dole took a different tack. When Dole supported a second tax amendment lobbied for by the Gallos, his PAC received $20,000 from Ernest, Julio and their wives in one day. The amendment passed and Bob Dole was on his way to cementing his relationship with the Gallos, who according to federal campaign records, have since become his top career benefactors. The Gallos have contributed $381,000 to Dole over the years and about $900,000 to foundations with which the Senator has been connected.
Ernest Gallo has also been helpful to President Clinton who made him a co-chair of a fundraising lunch in San Francisco last September. Ernest raised $100,000 in a matter of days for that event. This was only weeks after Ernest had had a private meeting with the President, according to The Los Angeles Times, to discuss Chilean wine imports. The Gallo support for President Clinton and Majority Leader Dole paid off. Not only did Congress delay any action to increase Chilean wine imports this fall, but it passed increased funding for a wine promotion program that gives Gallo millions of dollars to promote its wines overseas. A bipartisan group of Senators derided the program this past October as one of a "dirty dozen" examples of corporate welfare, but the program has survived and its funding has been increased.
Meanwhile, Ernest has taken the same hardball approach to family as he has to politics. In 1989 Ernest won a bitter court battle with his brother Joe who claimed that his elder brothers had denied him the share in the family business left to him by his parents. Joe was also barred from marketing a brand of cheese using the family name Gallo. As a result, the elderly brothers, to whom family had once meant so much, are now estranged.
Saturday, June 16, 2007
Donna Gabaccia on "Business, Nation, and Alcohol Niche"
Donna Gabaccia, "As American as Budweiser and Pickles: Nation-Building in American Food Industries ," in Warren Belasco and Philip Scranton (eds.), Food Nations : Selling Taste in Consumer Societies, New York, Routledge, 2002
Biographies in the 24-volume, 17,000-entry American National Biography show that foreigners were more likely to become leaders in food industry than in American business generally.
Nativity shaped businessmen's lives in the late nineteenth and early twentieth century in significant ways. Many commestibles produced on a large scale never become icons of American eating: wine, but not condesed milk, white flour, or canned peaches became the focus of intense consumer scrutiny, distrust, and regulation.
Xenophobia and cultural conflicts associated with nation-building characterized the early years of American consumer society, preventing the free expression and celebration of the mutliculturalism that has now become such a familiar part of American consumer marketplace and sense of national identity.
Under many respects, the activity of foreign-born food businessmen did not differ from that of natives:
The food industry were routinized industries, specializing in bulk and mass production;
Many of the technical innovations that made mass production possible in American food industries came from Europe;
[Entrepreneurs recognized and pursued political connections that would be beneficial to their companies' success; ]
Entrepreneurs sought national markets for their products;
Foreigners in American food industries showed the same creativity in packaging, branding, and marketing exhibited by the natives who made cold cereals a popular new American breakfast worldwide;
The most striking difference between the foreign born and the native born was the concentration of the foreign-born in a distinctive alcohol niche in the American economy. This alcohol niche alone explains foreigners' relatively high representation in Ameican food industries.
WHY THE PIEDMONTESE???
Something other than cultural capital or ethnic self-segregation produced the alcohol niche (e.g., Italian immigrants had a rich tradition in baking, but failed to achieve dominance in that industry).
Foreign entrepreneurs moved into alcohol production because natives and immigrants of British and even Irish origin were abandoned it: a cultural revulsion against alcohol developed among many middle-class and working-class Anglo-Americans with the Second Great Awakening of evangelical Protestantism in the 1830.
Conflicts over alcohol production and consumption soon became a major dimension of the food fights of the country's early consumer society (see the reform initiatives aiming at changing slum-dwelling immigrant food habits). Historians of temperance and prohibition movements have alway acknowledged the xenophobic elements they contained.
Although mass-produced and marketed nationwide, alcoholic beverages clearly did not become American as a result (by labeling only some mass-produced foods as clearly "American," the food fights of early consumer socieety held the potential for shaping American business practices into the twentieth century--the great challenge for the Gallos has been to attempt to turn wine into an "American" consumer good...)
A strong and growing market for alcoholic beverages, coupled with a politically powerful movement to purge the American nation of the problems associated with alcohol abuse, created a paradoxically business climate in the United States in the nineteenth century. Only foreigners seemed willing to assume the risks of investment under these conditions, and the association of alcohol with foreigness became so pronounced that it affected business practices even in less controversial food industries.
LABOR OR CULTURAL CAPITAL???
Immigrant entrepreneurs faced typical problems in industrializing the production of alcohol. An American market for wine--fueled by wealthy plantation owners and urban merchants alike--had already existed before the American revolution, as steady imports of wine and spirits reveal. Efforts to produce wine from native grapes repeatedly failed, while distilling alcohol from corn and other native grains expanded rapidly. Industrialization in the next century produced a steadily growing market for wine among Americans eager to emulate the consumption habits of Europe's aristocracies, among immigrants with more plebeian traditions of wine drinking, and among bohemians rejecting Victorian Anglo-American respectability.
Haraszthy attempted traditional wine-making on a large scale but also experimented with new growing and processing technologies, with an all-Chinese workforce, and with the construction of huge underground vats for processing and aging wines.
Haraszthy seemed to grasp a necessary connection of business and politics in the United States yet remained curiously blind to American moral values as expressed through politics. His closest political ties in the late 1850s were to proslavery Democrats who despised his enthusiasm for his Chinese workforce and may have had doubts about the morality of alcohol as well. Haraszthy also disastrously misinterpreted California politicians' economic boosterism for a committment to state-sponsored economic development (a common-enough pattern in Europe). In 1861, as a member of a commission appointed by California's governor to investigate wine-making possibilities in the state, Haraszthy traveled widely throughout Europe and the Mediterranean and returned with over 100,000 vine cuttings purchased on credit for $12,000.
Within the alcohol niche, businessmen of foreign origin obviously faced special business risks. It seems quite likely that they responded by keeping leadership and ownership of their businesses strictly within their families, sometimes over several generations. When Haraszthy began his Buena Vista winery, his widowed father and three sons became his only business associates until failure forced him into incoproration. Strategically (and as a Catholic), he encouraged two of his sons to marry daughters of the native California rancher, wine maker, and political figure, Mariano Guadalupe Vallejo, and sent one to france to train as a champagne maker.
Family-owned and managed businesses were of course common in the United States in the nineteenth century. Family savings--not banking or ethnic community associations--long remaineed the main source of capital for food industry entrepreneurs regardless of origin. Beginning in the late nineteenth century, however, raising capital through incorporation and public ownership, bureaucratic managament by paid corporate experts, and consolidation into ever-larger trusts and conglomerates began to redefine the national and supposedly American genius for big business. Foreigners and natives made different choices already in the nineteenth century, raising questions about the impact of xenophobia and food fights on business strategy more generally during this transition. Differently managerial cultures apparently marked native- and foreign-origin food businesses well into the twentieth century. Corporate and bureaucratically managed enterprises, along with their products, increasingly defined what seemed modern and "American" in American business. By contrast, familist and foreign strategies of business characterized both smaller mom-and-pop enterprises and the much larger enterprises associated with the alcohol niche and foreigness in the food fights of America's emerging consumer society.
Biographies in the 24-volume, 17,000-entry American National Biography show that foreigners were more likely to become leaders in food industry than in American business generally.
Nativity shaped businessmen's lives in the late nineteenth and early twentieth century in significant ways. Many commestibles produced on a large scale never become icons of American eating: wine, but not condesed milk, white flour, or canned peaches became the focus of intense consumer scrutiny, distrust, and regulation.
Xenophobia and cultural conflicts associated with nation-building characterized the early years of American consumer society, preventing the free expression and celebration of the mutliculturalism that has now become such a familiar part of American consumer marketplace and sense of national identity.
Under many respects, the activity of foreign-born food businessmen did not differ from that of natives:
The food industry were routinized industries, specializing in bulk and mass production;
Many of the technical innovations that made mass production possible in American food industries came from Europe;
[Entrepreneurs recognized and pursued political connections that would be beneficial to their companies' success; ]
Entrepreneurs sought national markets for their products;
Foreigners in American food industries showed the same creativity in packaging, branding, and marketing exhibited by the natives who made cold cereals a popular new American breakfast worldwide;
The most striking difference between the foreign born and the native born was the concentration of the foreign-born in a distinctive alcohol niche in the American economy. This alcohol niche alone explains foreigners' relatively high representation in Ameican food industries.
WHY THE PIEDMONTESE???
Something other than cultural capital or ethnic self-segregation produced the alcohol niche (e.g., Italian immigrants had a rich tradition in baking, but failed to achieve dominance in that industry).
Foreign entrepreneurs moved into alcohol production because natives and immigrants of British and even Irish origin were abandoned it: a cultural revulsion against alcohol developed among many middle-class and working-class Anglo-Americans with the Second Great Awakening of evangelical Protestantism in the 1830.
Conflicts over alcohol production and consumption soon became a major dimension of the food fights of the country's early consumer society (see the reform initiatives aiming at changing slum-dwelling immigrant food habits). Historians of temperance and prohibition movements have alway acknowledged the xenophobic elements they contained.
Although mass-produced and marketed nationwide, alcoholic beverages clearly did not become American as a result (by labeling only some mass-produced foods as clearly "American," the food fights of early consumer socieety held the potential for shaping American business practices into the twentieth century--the great challenge for the Gallos has been to attempt to turn wine into an "American" consumer good...)
A strong and growing market for alcoholic beverages, coupled with a politically powerful movement to purge the American nation of the problems associated with alcohol abuse, created a paradoxically business climate in the United States in the nineteenth century. Only foreigners seemed willing to assume the risks of investment under these conditions, and the association of alcohol with foreigness became so pronounced that it affected business practices even in less controversial food industries.
LABOR OR CULTURAL CAPITAL???
Immigrant entrepreneurs faced typical problems in industrializing the production of alcohol. An American market for wine--fueled by wealthy plantation owners and urban merchants alike--had already existed before the American revolution, as steady imports of wine and spirits reveal. Efforts to produce wine from native grapes repeatedly failed, while distilling alcohol from corn and other native grains expanded rapidly. Industrialization in the next century produced a steadily growing market for wine among Americans eager to emulate the consumption habits of Europe's aristocracies, among immigrants with more plebeian traditions of wine drinking, and among bohemians rejecting Victorian Anglo-American respectability.
Haraszthy attempted traditional wine-making on a large scale but also experimented with new growing and processing technologies, with an all-Chinese workforce, and with the construction of huge underground vats for processing and aging wines.
Haraszthy seemed to grasp a necessary connection of business and politics in the United States yet remained curiously blind to American moral values as expressed through politics. His closest political ties in the late 1850s were to proslavery Democrats who despised his enthusiasm for his Chinese workforce and may have had doubts about the morality of alcohol as well. Haraszthy also disastrously misinterpreted California politicians' economic boosterism for a committment to state-sponsored economic development (a common-enough pattern in Europe). In 1861, as a member of a commission appointed by California's governor to investigate wine-making possibilities in the state, Haraszthy traveled widely throughout Europe and the Mediterranean and returned with over 100,000 vine cuttings purchased on credit for $12,000.
Within the alcohol niche, businessmen of foreign origin obviously faced special business risks. It seems quite likely that they responded by keeping leadership and ownership of their businesses strictly within their families, sometimes over several generations. When Haraszthy began his Buena Vista winery, his widowed father and three sons became his only business associates until failure forced him into incoproration. Strategically (and as a Catholic), he encouraged two of his sons to marry daughters of the native California rancher, wine maker, and political figure, Mariano Guadalupe Vallejo, and sent one to france to train as a champagne maker.
Family-owned and managed businesses were of course common in the United States in the nineteenth century. Family savings--not banking or ethnic community associations--long remaineed the main source of capital for food industry entrepreneurs regardless of origin. Beginning in the late nineteenth century, however, raising capital through incorporation and public ownership, bureaucratic managament by paid corporate experts, and consolidation into ever-larger trusts and conglomerates began to redefine the national and supposedly American genius for big business. Foreigners and natives made different choices already in the nineteenth century, raising questions about the impact of xenophobia and food fights on business strategy more generally during this transition. Differently managerial cultures apparently marked native- and foreign-origin food businesses well into the twentieth century. Corporate and bureaucratically managed enterprises, along with their products, increasingly defined what seemed modern and "American" in American business. By contrast, familist and foreign strategies of business characterized both smaller mom-and-pop enterprises and the much larger enterprises associated with the alcohol niche and foreigness in the food fights of America's emerging consumer society.
Tuesday, May 29, 2007
Photographs -- Center for Migration Studies -- http://cmsny.library.net/
1.
[American Bankers' Association visits Andrea Sbarbaro's Pompeiian villa at Italian-Swiss Colony, Asti, California, ca. 1905] [picture]. (1905) [Titles]
2.
[Andrea Sbarbaro, founder of Italian-Swiss Colony Wines of Asti, California, ca. 1905] [picture]. (1905) [Titles]
3.
[Home of an executive of Italian-Swiss Colony Wines, Asti, California, ca. 1906] [picture]. (1906) [Titles]
4.
ITALIAN SWISS COLONY (ASTI, CALIF.) [Subjects]
5.
ITALIAN SWISS COLONY (ASTI, CALIF.) -- PHOTOGRAPHS. [Subjects: Returns 8 items]
6.
[Italian-Swiss Colony Distillery and Canteen, Asti, California, ca. 1906] [picture]. (1906) [Titles]
7.
[Italian-Swiss Colony vineyard and buildings, Asti, California, ca. 1905] [picture]. (1905) [Titles]
8.
[Italian-Swiss Colony Wine warehouse, San Francisco, California, ca. 1906] [picture]. (1906) [Titles]
9.
[Largest wine tank in the world, 25 meters long, 11 meters wide, and 25 meters deep, holds 20,000 liters, Italian Swiss Colony Wine Company, Asti, California, ca. 1906] [picture]. (1906) [Titles]
10.
[Pietro Carlo Rossi of the Italian-Swiss Colony wine manufacturing firm, San Francisco, ca. 1906] [picture]. (1906) [Titles]
[American Bankers' Association visits Andrea Sbarbaro's Pompeiian villa at Italian-Swiss Colony, Asti, California, ca. 1905] [picture]. (1905) [Titles]
2.
[Andrea Sbarbaro, founder of Italian-Swiss Colony Wines of Asti, California, ca. 1905] [picture]. (1905) [Titles]
3.
[Home of an executive of Italian-Swiss Colony Wines, Asti, California, ca. 1906] [picture]. (1906) [Titles]
4.
ITALIAN SWISS COLONY (ASTI, CALIF.) [Subjects]
5.
ITALIAN SWISS COLONY (ASTI, CALIF.) -- PHOTOGRAPHS. [Subjects: Returns 8 items]
6.
[Italian-Swiss Colony Distillery and Canteen, Asti, California, ca. 1906] [picture]. (1906) [Titles]
7.
[Italian-Swiss Colony vineyard and buildings, Asti, California, ca. 1905] [picture]. (1905) [Titles]
8.
[Italian-Swiss Colony Wine warehouse, San Francisco, California, ca. 1906] [picture]. (1906) [Titles]
9.
[Largest wine tank in the world, 25 meters long, 11 meters wide, and 25 meters deep, holds 20,000 liters, Italian Swiss Colony Wine Company, Asti, California, ca. 1906] [picture]. (1906) [Titles]
10.
[Pietro Carlo Rossi of the Italian-Swiss Colony wine manufacturing firm, San Francisco, ca. 1906] [picture]. (1906) [Titles]
Tuesday, May 08, 2007
Tuesday, April 10, 2007
Does the "Gallo Law" exempt the winery from estate taxes?
A Staff Report by the Straight Dope Science Advisory Board
Nov. 26, 2002
Dear Straight Dope:
Is it true that vintners Ernest and Julio Gallo got friendly politicians to pass a law for one day that allowed them to pass a large portion of their assets to family members without paying estate or gift taxes and the following day, after the exchange, the law reverted to its original state? The professor of a tax class I took around 1987 mentioned it, saying people referred to it as the "Gallo Law." --Bob Brown, Boston, MA
SDSTAFF Veg replies:
Some people might call it the "Gallo Law," Bob, but it's usually referred to as the "Gallo Wine Amendment." The story behind it just goes to show that when you make a fortune, make sure you give some of it to a politician or two--and it doesn't matter what party they represent, because, in the end, they're all members of the Green party.
Ernest Gallo has been the head of E&J Gallo Winery in Modesto, California, since 1933, when his parents died. (It was an apparent murder-suicide, in which Ernest's dad killed his mum and then turned the gun on himself.) His brother Julio handled production, and their other brother Joe was an employee.
Gallo wanted his company to be the "Campbell Soup company of the wine industry." Early on, Campbell's probably wasn't too happy with the comparison, since Gallo sought his goal by selling fortified wines like Thunderbird and Ripple. But Gallo's efforts succeeded. His company became the largest winemaker in the country, and eventually the world.
As the company grew, the Gallos gave lots of money to politicians--Julio gave more to Republicans and Ernest gave more to Democrats, but let's face it, it all came out of the same wine vat. One of the many recipients was Democrat Alan Cranston, a California senator. The Gallos helped Cranston win a tough re-election bid, and in 1978 Cranston returned the favor. A Washington law firm custom-tailored some legislation to allow the family to spread inheritance tax payments over several years. Cranston submitted the new tax rule as an amendment to another bill and helped push it through the Senate (which wasn't that difficult--Cranston brought the bill to the Senate floor on a rare Saturday session where it was passed with only a handful of senators present). The measure was dubbed the "Gallo Wine Amendment" by then-senator Bob Dole of Kansas.
Dole was a Republican and Cranston was a Democrat, but the story hops over to the other side of the aisle eight years later. In 1986, the Democrats were rewriting the tax code (again). The Gallos decided that an amendment on the table could lower their inheritance taxes further still, so they lobbied for it. And who did they lobby but the very guy who had derisively labeled Cranston's amendment eight years earlier: Bob Dole. We don't know was said in private, but what a coincidence that when Bob Dole supported this second amendment, his political action committee (PAC) received four $5,000 checks from Ernest, Ernest's wife, Julio, and Julio's wife.
The favorable tax treatment authorized by the amendment expired in 1990--maybe that's where your professor got the idea that the Gallo law expired the next day. He may also have confused the Cranston Gallo law with the Dole Gallo law. Easy enough to do--as you can see, there are a lot of Gallo laws.
Ernest Gallo later helped raise $100,000 in a matter of days for a fundraising event for President Clinton, making it clear once again that he's willing to hop to the other side of the aisle whenever necessary. In this case it was apparently necessary because the U.S. was considering increasing Chilean wine imports. The fundraising effort--as well as additional contributions over the years to Senator Dole (who had become the Senate majority leader), foundations he supports, and his PAC totaling more than $1 million--apparently worked. Not only did Congress delay action to increase Chilean wine imports, but it increased funding for a program that gave Gallo millions of dollars to promote its wines overseas.
So, Bob, we see again that money is the grease that keeps the wine presses operating. I don't know about you, but after all this politics, I could use . . . well, normally I'd say a glass of wine, but right now I'd prefer some less sullied beverage. You think politicians get contributions from the makers of lemonade?
--SDSTAFF VegStraight Dope Science Advisory Board
Nov. 26, 2002
Dear Straight Dope:
Is it true that vintners Ernest and Julio Gallo got friendly politicians to pass a law for one day that allowed them to pass a large portion of their assets to family members without paying estate or gift taxes and the following day, after the exchange, the law reverted to its original state? The professor of a tax class I took around 1987 mentioned it, saying people referred to it as the "Gallo Law." --Bob Brown, Boston, MA
SDSTAFF Veg replies:
Some people might call it the "Gallo Law," Bob, but it's usually referred to as the "Gallo Wine Amendment." The story behind it just goes to show that when you make a fortune, make sure you give some of it to a politician or two--and it doesn't matter what party they represent, because, in the end, they're all members of the Green party.
Ernest Gallo has been the head of E&J Gallo Winery in Modesto, California, since 1933, when his parents died. (It was an apparent murder-suicide, in which Ernest's dad killed his mum and then turned the gun on himself.) His brother Julio handled production, and their other brother Joe was an employee.
Gallo wanted his company to be the "Campbell Soup company of the wine industry." Early on, Campbell's probably wasn't too happy with the comparison, since Gallo sought his goal by selling fortified wines like Thunderbird and Ripple. But Gallo's efforts succeeded. His company became the largest winemaker in the country, and eventually the world.
As the company grew, the Gallos gave lots of money to politicians--Julio gave more to Republicans and Ernest gave more to Democrats, but let's face it, it all came out of the same wine vat. One of the many recipients was Democrat Alan Cranston, a California senator. The Gallos helped Cranston win a tough re-election bid, and in 1978 Cranston returned the favor. A Washington law firm custom-tailored some legislation to allow the family to spread inheritance tax payments over several years. Cranston submitted the new tax rule as an amendment to another bill and helped push it through the Senate (which wasn't that difficult--Cranston brought the bill to the Senate floor on a rare Saturday session where it was passed with only a handful of senators present). The measure was dubbed the "Gallo Wine Amendment" by then-senator Bob Dole of Kansas.
Dole was a Republican and Cranston was a Democrat, but the story hops over to the other side of the aisle eight years later. In 1986, the Democrats were rewriting the tax code (again). The Gallos decided that an amendment on the table could lower their inheritance taxes further still, so they lobbied for it. And who did they lobby but the very guy who had derisively labeled Cranston's amendment eight years earlier: Bob Dole. We don't know was said in private, but what a coincidence that when Bob Dole supported this second amendment, his political action committee (PAC) received four $5,000 checks from Ernest, Ernest's wife, Julio, and Julio's wife.
The favorable tax treatment authorized by the amendment expired in 1990--maybe that's where your professor got the idea that the Gallo law expired the next day. He may also have confused the Cranston Gallo law with the Dole Gallo law. Easy enough to do--as you can see, there are a lot of Gallo laws.
Ernest Gallo later helped raise $100,000 in a matter of days for a fundraising event for President Clinton, making it clear once again that he's willing to hop to the other side of the aisle whenever necessary. In this case it was apparently necessary because the U.S. was considering increasing Chilean wine imports. The fundraising effort--as well as additional contributions over the years to Senator Dole (who had become the Senate majority leader), foundations he supports, and his PAC totaling more than $1 million--apparently worked. Not only did Congress delay action to increase Chilean wine imports, but it increased funding for a program that gave Gallo millions of dollars to promote its wines overseas.
So, Bob, we see again that money is the grease that keeps the wine presses operating. I don't know about you, but after all this politics, I could use . . . well, normally I'd say a glass of wine, but right now I'd prefer some less sullied beverage. You think politicians get contributions from the makers of lemonade?
--SDSTAFF VegStraight Dope Science Advisory Board
Sunday, April 08, 2007
Photographs -- The Healdsburg Museum & Historical Society
Subject: Re: Information Request: Historical Photographs of the Italian-Swiss Colony, Asti, CA
From: "Daniel Murley" healdsburgmuseum@sbcglobal.net
Date: Mon, March 26, 2007, 8:36 pm
Greetings Simone,
We at the Museum do have many photographic images of the wine industry and some of Italian Swiss Colony.
The number is prohibitive to send you all.
If you could check our website: http://www.healdsburgmuseum.org/ there are some examples. You could also be specific in topical representaion in the images ie. picking, crushing, buildings, people, equipment etc ?
I look forward to hearing from you and hopefully we can supply you with the images you need.
Sincerely,
Daniel
Daniel F. Murley
Curator
The Healdsburg Museum
Healdsburg, CA 95448
(707) 431-3325
Simone Cinotto wrote:
Dear Sirs/Madams,The writer is an Italian historian teaching at the Universities of Turin, and specializing in Italian American Studies. My complete vita with publications is online at http://simonecinotto-cv.blogspot.com/
My current research project is an exploration of the presence of Italian immigrants in California's winemaking before and after Prohibition. I am especially interested in detailing the function of ethnicity in the labor and entrepreneurial experiences of Italian American winemakers. The project has been funded by the local administration of Piedmont (the wine region in the Italian northwest) and its end result will be a book published in both Italian and English.
I spent the whole month of December 2006 doing research in California, visting libraries and archives such as the Bancroft Library of UC at Berkeley, the Shields Library of UC at Davis, the San Francisco Public Library, the Sonoma County Regional Library at Healdsburg, the University Library of California State Polytechnic University, Pomona, and the Charles E. Young Research Library of UCLA. Unfortunately, during my stay, I was unable to visit the Healdsburg Museum & Historical Society. Now I am in the process of writing the book.
The purpose of this letter is the following: we wish to include a photographic section into the book. We have a modest amount of funds we can devote to cover the expenses of reproduction and, if applicable, rights or other fees. Since the book will deal at length with the case study of the Italian Swiss Colony at Asti, we would be very much interested in including photographs documenting work and everyday life at the Colony, in particular from the period between its foundation (1881) and the early 1920s.
Since I learnt the photographic collections at The Healdsburg Museum & Historical Society contain photos of many northern Sonoma County wineries, we would much appreciate if you may provide us with any relevant information re the possibility to order reproductions of photographs of the Italian-Swiss Colony and publish them into my book.
Needless to say, I will be more than glad to provide any further information you may want to receive on my book, its intended audience, and projected uses.
I will be looking forward to hearing from you soon. Thank you for your attention.
Best regards,
Simone Cinotto
From: "Daniel Murley" healdsburgmuseum@sbcglobal.net
Date: Mon, March 26, 2007, 8:36 pm
Greetings Simone,
We at the Museum do have many photographic images of the wine industry and some of Italian Swiss Colony.
The number is prohibitive to send you all.
If you could check our website: http://www.healdsburgmuseum.org/ there are some examples. You could also be specific in topical representaion in the images ie. picking, crushing, buildings, people, equipment etc ?
I look forward to hearing from you and hopefully we can supply you with the images you need.
Sincerely,
Daniel
Daniel F. Murley
Curator
The Healdsburg Museum
Healdsburg, CA 95448
(707) 431-3325
Simone Cinotto
Dear Sirs/Madams,The writer is an Italian historian teaching at the Universities of Turin, and specializing in Italian American Studies. My complete vita with publications is online at http://simonecinotto-cv.blogspot.com/
My current research project is an exploration of the presence of Italian immigrants in California's winemaking before and after Prohibition. I am especially interested in detailing the function of ethnicity in the labor and entrepreneurial experiences of Italian American winemakers. The project has been funded by the local administration of Piedmont (the wine region in the Italian northwest) and its end result will be a book published in both Italian and English.
I spent the whole month of December 2006 doing research in California, visting libraries and archives such as the Bancroft Library of UC at Berkeley, the Shields Library of UC at Davis, the San Francisco Public Library, the Sonoma County Regional Library at Healdsburg, the University Library of California State Polytechnic University, Pomona, and the Charles E. Young Research Library of UCLA. Unfortunately, during my stay, I was unable to visit the Healdsburg Museum & Historical Society. Now I am in the process of writing the book.
The purpose of this letter is the following: we wish to include a photographic section into the book. We have a modest amount of funds we can devote to cover the expenses of reproduction and, if applicable, rights or other fees. Since the book will deal at length with the case study of the Italian Swiss Colony at Asti, we would be very much interested in including photographs documenting work and everyday life at the Colony, in particular from the period between its foundation (1881) and the early 1920s.
Since I learnt the photographic collections at The Healdsburg Museum & Historical Society contain photos of many northern Sonoma County wineries, we would much appreciate if you may provide us with any relevant information re the possibility to order reproductions of photographs of the Italian-Swiss Colony and publish them into my book.
Needless to say, I will be more than glad to provide any further information you may want to receive on my book, its intended audience, and projected uses.
I will be looking forward to hearing from you soon. Thank you for your attention.
Best regards,
Simone Cinotto
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