So You Want to Buy a President?

Ernest Gallo

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.


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