A recent crisis at Target Corp. has raised new questions about how American companies and politics will fare after a court ruling lifted restrictions on corporate giving earlier this year.
The U.S. Supreme Court's Jan. 21 ruling in Citizens United v. Federal Election Commission overturned a provision that barred corporations and unions from paying for political ads made independently of candidate campaigns, arguing that the provision was a violation of corporate First Amendment rights. The ruling opened the door to unprecedented amounts of corporate money in U.S. politics.
Target's debacle began with a $150,000 contribution to MN Forward, an independent group that has run ads supporting Minnesota Republican gubernatorial candidate Tom Emmer. The donation sparked outrage because of Emmer's history of opposition to gay rights as a state legislator.
The retailer has twice apologized to employees and customers and insisted that the contribution was made to support the candidate's business platforms. In an e-mail, Target CEO Gregg Steinhafel said that his company's support of the LGBT community is "unwavering" and called inclusiveness a "core value of our company." But failure to take greater corrective action has led gay rights activists to call for protests and boycotts at Target stores nationwide.
According to an NPR article, Target's foray into this uncharted campaign finance territory could be costly for the corporation. The article cites lost sales, customers and markets as lessons to be learned by Target and other corporations about the risks of greater political activity.
Target's contribution became known because MN Forward is required to identify its donors; most advocacy groups — and most corporations — aren't held to this same standard of public disclosure.
A Senate filibuster prevented Congress from passing a broad disclosure bill in July. According to NPR's article, nondisclosure allows corporations to channel money through independent groups and thus take a secret stance on polarizing social issues without attracting national attention. Supporters of the DISCLOSE Act argued that the legislation would bring greater transparency to campaign financing, according to a USA Today article.
The legislation failed to win any Republican support in the Senate. According to the USA Today article, critics of the DISCLOSE Act — which would require groups funding political ads to reveal their donors and CEOs and union chiefs to appear in any ads they fund — argued that it was really intended to protect incumbent Democrats from criticism during the mid-term election season.
Should corporations be required to disclose their political contributions?