Targeting Soft Money

Target’s $150,000 donation in early July to a conservative PAC called Minnesota Forward triggered an unexpectedly rapid and fierce public backlash. Progressive activists were not only looking to make an example out of a corporate donor in the wake of Citizens United v. FEC, which legalized corporate contributions to independent expenditure committees supporting or opposing federal candidates. They were also angered by the retail giant’s support for candidates like Republican Tom Emmer, who earned Sarah Palin’s endorsement by touting the need to preserve ​“traditional marriage.”

Within a month, MoveOn​.org threatened a national boycott and on August 6, a petition signed by 260,000 people was delivered to Target CEO Gregg Steinhafel. Signatories promised not to ​“shop at Target until it stops spending money on elections,” adding that ​“companies like Target should stay out of elections.”

Steinhafel’s public apology less than two weeks earlier had emphasized Target’s history of commitment to GLBT-friendly policies. It didn’t help. ​“Since Target has always been a leader in their treatment of their GLBT employees, we felt that this was a slap in the face to the community,” says Paul Guequierre, deputy press secretary for Human Rights Campaign (HRC), a national GLBT rights organization. After ​“good-faith discussions” with Target broke down, the group announced that it would donate $150,000 of its own money to progressive candidates in Minnesota, hoping to make equal marriage a major issue in the state governor’s race. 

Given Democratic gubernatorial candidate Mark Dayton’s support for marriage equality, this strategy may yield fruit in November. But by September, it became clear MoveOn’s boycott wasn’t having much impact. On September 2 – more than one month into the boycott– Target announced a 3-percent increase in sales for August 2010 over the previous year. (Sales might have been impacted if MSNBC had agreed to air a MoveOn ad urging viewers to join the boycott.) Nearly three weeks later, apparently unconcerned with a costly public backlash, 3M announced it was giving $100,000 to the same conservative PAC. 

That doesn’t surprise many campaign finance reform activists, who believe far-reaching change has to be based on broader public anger or congressional action. ​“Until we get a grassroots movement going, we’re really not going to change much of anything,” says Joan Mandle of Democracy Matters, a national student organization that has been pressing for a legislative response to Citizens United. While the Target campaign was good at raising consciousness about campaign finance and corporate political involvement, real change has to be systemic, she says. 

The progress of bills like the Fair Elections Now Act (FENA) – which would create a comprehensive public financing system at the federal level limiting private contributions to $100 and matching those contributions four-to-one with public dollars – encourages Mandle and other activists. The bill, introduced by Senator Dick Durbin (D-Ill.), and Reps. John Larson (D-Conn.) and Walter Jones, Jr. (R-N.C.) in the House, passed out of the House Committee on Administration on September 23 and awaits action on the House floor. ​“This is an historic achievement – to be this close with a public financing bill,” Mandle says. 

Ciara Torres-Spelliscy, a legal scholar with NYU’s Brennan Center for Justice, agrees. ​“Public financing at the federal level could be a huge game-changer,” she says. The law would ​“make it much easier for congressmen to make decisions on the merits of policy, not on who’s giving them contributions.” Without this legislation, however, the lesson from the Target controversy may simply be to spend quietly. ​“Corporations will take a lesson from Target: Don’t give it to a PAC. There are much less transparent ways to spend money on campaigns,” she says, adding that Minnesota’s laws on disclosure are relatively strict compared to federal laws. 

According to Larry Noble, former general counsel of the FEC who now practices campaign finance law, disclosure requirements since Citizens United (as well as recent FEC decisions) are limited. ​“If a corporation gives to an issue group or trade association which takes out an ad supporting or opposing a candidate, and does it independently of the candidate,” Noble says, ​“the donor is not disclosed unless they give for a specific ad.” Since Citizens United and a series of recent FEC rulings, there are no limits on the amount of money that can be donated to these groups. ​“Soft money is making its way back into the system,” he added. 

Dozens of groups similar to Minnesota Forward – what the Washington Post calls ​“super PACs” – are springing up around the country and contributing millions of dollars every week to hotly contested midterm congressional races. While it is too late to pass reforms affecting this election cycle, corporations like Target may be operating in a very different electoral environment in 2012. FENA’s bipartisan support in committee bodes well for the congressional session beginning in November. While corporations may view the Target episode as a cautionary tale that underscores the importance of donating discreetly, many lawmakers and citizens see it as just the latest example of what’s wrong with America’s campaign-finance system.