Minn. judge upholds law that revealed Target donation

MARTIGA LOHN | Associated Press

ST. PAUL, Minn. — A federal judge refused on Monday, Sept. 20 to interfere with a new Minnesota law that revealed political donations from Target Corp. and other companies, saying the public has an interest in knowing who speaks and who pays for those messages as the election approaches.

U.S. District Judge Donovan Frank denied a temporary injunction in a lawsuit brought by supporters of Republican gubernatorial candidate Tom Emmer, including an anti-abortion group and an anti-tax organization. They sued to overturn the law on free speech grounds and had asked Frank to suspend the disclosure requirements immediately.

Frank answered with a firm no.

“Invalidating the election laws at issue here would likely result in corporations making independent expenditures without any reporting or disclosure on the eve of the upcoming general election on November 2, 2010,” his ruling said. “This result so close to the election would clearly harm the state, Minnesota voters, and the general public interest.”

That came the day before independent political funds, including those collecting corporate dollars, are required to file their latest campaign finance reports with state regulators. They must list donors who gave more than $100 and show how they’re spending their money.

The law was enacted in May after a U.S. Supreme Court ruling early this year freed businesses to spend company money on elections, overturning restrictions on corporate political spending in about half the states, including Minnesota. State lawmakers responded by enacting disclosure requirements so that corporate campaign spending would be public.

The lawsuit from Minnesota Citizens Concerned for Life, the Taxpayers League of Minnesota and a travel agency contended that the reporting requirements were so burdensome that they amounted to a ban on free speech.

During election years, businesses and independent groups must submit five reports and disclose large donations within 24 hours for the three weeks leading up to the primary and the last two weeks before the general election. In off years, one report is required. The registration requirement is triggered when businesses or independent funds spend more than $100. Penalties for violations can be as high as $25,000.

Frank said the state law does not restrict corporations from spending freely on political speech as long as they follow the disclosure requirements.

“The law at issue here is not a ban, but rather a disclosure law,” his ruling said.

Joe La Rue, the Terre Haute, Ind.-based attorney for the groups that sued, had no immediate comment.

Attorney General Lori Swanson said the decision will help voters.

“This ruling lets average voters know who is financing elections in Minnesota,” she said in a statement.

The lawsuit also challenged the state’s prohibition on corporations contributing directly to candidates and political parties. But Frank said that ban wasn’t invalidated by the Supreme Court ruling, which revolved around with corporate independent expenditures made with the input or knowledge of candidates or political parties.

Target’s donation attracted national attention because it seemed to conflict with the company’s gay-friendly reputation. The Minneapolis-based retailer donated $150,000 to MN Forward, a business-oriented political fund supporting Emmer, an outspoken opponent of gay marriage, in the governor’s race.

—  John Wright

HRC counters Target money in Minn.

MARTIGA LOHN  |  Associated Press

ST. PAUL, Minn. — A Democratic-backed political fund, a Minnesota gay rights organization and Democratic candidates will split a $150,000 donation as part of a push to elect gay marriage supporters in the state, after Target Corp. donated the same amount to a Republican-friendly group.

Human Rights Campaign president Joe Solmonese told The Associated Press in an interview Friday, Sept. 10 that the donation is partly a response to Target’s donation to a group helping Republican Tom Emmer in the governor’s race. Emmer opposes gay marriage, and the Target contribution set off a national backlash among liberals and the retailer’s gay employees and customers.

The Washington-based gay rights organization may spend more in Minnesota, which Solmonese said he views as one of the next states that could legalize gay marriage. Solmonese was set to deliver the keynote speech at the Human Rights Campaign’s annual Twin Cities dinner in Minneapolis on Saturday.

“We’ve understood long before the Target situation that Minnesota was poised, as is New York, to be the next state to win marriage equality,” Solmonese said.

He added: “The scope of our work here is certainly going to move beyond the $150,000.”

The Human Rights Campaign will give $100,000 to WIN Minnesota, a political fund backing Democrat Mark Dayton; $20,000 to the gay rights group OutFront Minnesota to mobilize voters; and $30,000 to state candidates, including Dayton. The group announced its plans to give the money last month after Target declined to match its initial donation with another donation to help candidates who support gay rights.

Solmonese said the Minnesota donation excludes funds given separately to Democratic congressional candidates from the state, including Rep. Tim Walz and Tarryl Clark, who is challenging GOP Rep. Michele Bachmann.

—  John Wright

Groups challenging law that revealed donations by Target, Best Buy to anti-gay candidate

MARTIGA LOHN  |  Associated Press

ST. PAUL, Minn. — The future of a new Minnesota law that let the public know about polarizing political donations from Target Corp., Best Buy Co. and other companies rests with a federal judge who will decide whether to suspend the disclosure requirement on free speech grounds.

U.S. District Judge Donovan Frank said Friday, Aug. 20 he will rule within a month on a request for a temporary injunction to suspend the law, which could free corporations and other independent groups to spend on this year’s election without revealing their identities. Abortion opponents Minnesota Citizens Concerned for Life, the anti-tax Taxpayers League of Minnesota and a travel agency brought the lawsuit last month.

Their attorney, Joe La Rue of Terre Haute, Ind., said Minnesota’s disclosure requirements for independent spending are so onerous that they amount to an unconstitutional ban on free speech. Under a law that took effect June 1, Minnesota makes corporations and other independent political groups register with state campaign finance regulators. They’re also required to file public reports naming their donors and itemizing their expenditures five times this year.

“These are the burdens that the Supreme Court said you cannot put on people who want to exercise their free speech rights,” La Rue said during a three-hour hearing.

State Solicitor General Alan Gilbert said the law doesn’t block corporations and independent groups from spending unlimited amounts, as long as they disclose their spending. He said the public debate over Target’s donation shows that the law works.

Under the new law, a business-oriented political fund called MN Forward collected more than $1 million since June, including $150,000 from Target. When MN Forward disclosed its donors as required twice last month, Target became the focus of a national backlash from liberals and gay rights supporters because of MN Forward’s support for Republican gubernatorial candidate Tom Emmer, a vocal gay marriage opponent.

“The public has a compelling interest in information regarding sources of political spending so they can make informed decisions in the political marketplace,” Gilbert said.

The Legislature unanimously passed the disclosure law after a recent U.S. Supreme Court ruling allowed corporations to spend company funds directly on elections, wiping away prohibitions on corporate campaign spending in Minnesota and about half the states. The statute applies to independent expenditures, or those made without a candidate’s input or knowledge.

In Target’s case, the company wasn’t required to disclose the donation, but MN Forward was. But the new law allows companies themselves to spend on campaigns if they register and follow the disclosure requirements.

La Rue said the law requires corporations to account separately for such political spending, violating their right to spend general corporate funds on elections.

Frank interrupted the attorneys frequently with technical questions, at one point asking both sides whether a temporary injunction would mean the end of disclosure for this election cycle.

Assistant Hennepin County Attorney Dan Rogan said lifting the law could lead to a flood of corporate money into the election in October, without voters knowing who was behind the messages. Minnesotans will elect a new governor and the entire Legislature in November.

If the law is struck down, the earliest that the Legislature could replace it would be next year.

—  John Wright

Shareholders urge Target, Best Buy to increase oversight of campaign contributions

MARTIGA LOHN  |  Associated Press

MINNEAPOLIS — A few Target Corp. and Best Buy Co. institutional shareholders weighed in Thursday, Aug. 19 on the flap over the companies’ political donations in Minnesota, urging the boards of both retailers to increase their oversight of campaign contributions.

Walden Asset Management and Trillium Asset Management Corp., both of Boston, and Bethesda, Md.-based Calvert Asset Management Co. filed shareholder resolutions with both companies. Together, the three firms control less than 1 percent of each company’s outstanding shares — 1.1 million Target shares worth $57.5 million and 344,000 Best Buy shares worth $11.3 million — but they are moving the debate over the political giving to a new arena.

Target gave $150,000 and Best Buy $100,000 to a business-focused political fund helping a conservative Republican gubernatorial candidate in Minnesota, triggering a national backlash from gay rights groups and liberals. The companies made the donations after a recent U.S. Supreme Court ruling freed them to spend corporate funds on elections. The candidate, state legislator Tom Emmer, opposes gay marriage and other rights for same-sex couples.

“A good corporate political contribution policy should prevent the kind of debacle Target and Best Buy walked into,” said Trillium vice president Shelley Alpern. “We expect companies to evaluate candidates based upon the range of their positions — not simply one area — and assess whether they are in alignment with their core values. But these companies’ policies are clearly lacking that.”

The shareholders said the donations don’t mesh with corporate values that include workplace protections for gay employees and risk harming the companies’ brands. Walden senior vice president Tim Smith said such giving can have “a major negative impact on company reputations and business.”

The Target resolution urges the board to review the effect of future political contributions on the company’s public image, sales and profitability and to consider the cost of backing a candidate whose politics conflict with the company’s public stances.

Spokeswoman Amy Reilly said Minneapolis-based Target had nothing to add to previous statements on the matter, including an apology from Chief Executive Officer Gregg Steinhafel.

A spokeswoman for Richfield, Minn.-based Best Buy didn’t immediately respond to a message.

The three investment companies together submitted the resolution to Target, while Calvert and Trillium filed the Best Buy shareholder proposal. One of Trillium’s clients, the Portland, Ore.-based Equity Foundation, divested a small Target holding of 170 shares on Wednesday.

—  John Wright

Conservatives warn of backlash if Target gives in to gay pressure

MARTIGA LOHN  |  Associated Press

ST. PAUL, Minn. — Conservative activists said Friday, Aug. 13 that Target Corp. won’t quell the controversy over its corporate donations if the retailer gives in to demands from the left to renounce involvement in political campaigns or to help gay-friendly candidates.

Charlie Weaver, a leader of a political organization supporting a conservative Republican gubernatorial candidate in Minnesota, said the pressure from gays and liberal organizations on Target amounts to “thuggery.”

“This is simply an attempt to intimidate companies from doing what the Supreme Court said they’re entitled to do, exercise their free speech,” said Weaver, treasurer of MN Forward, a campaign group that got $150,000 from Target last month.

A GOP state lawmaker said the controversy, including protests and calls for a boycott by gay leaders, has put Target in a bind.

“They’re darned if they do something and they’re darned if they don’t,” said Rep. Marty Seifert, a Republican from Marshall.

Contributors to a conservative Facebook page on the controversy also warned the company of a backlash from the right.

“I will not boycott Target unless they crater to the demand of the gay activists,” said one writer. The page grew exponentially on Friday from fewer than 500 fans to more than 9,000 as the controversy moved into its third week.

The conservatives’ admonitions come as liberal groups demand that Target balance the earlier donation that helped GOP gubernatorial nominee Tom Emmer, an outspoken critic of gay marriage. Target CEO Gregg Steinhafel’s issued a statement of apology last week, and gay and liberal organizations have been negotiating with corporate officials for an equal donation or another concession.

Protesters have kept the pressure on by rallying almost daily outside Target’s Minneapolis headquarters or its stores since the donation became known.

The flap has revealed new implications of a recent Supreme Court ruling that appeared to benefit corporations by clearing the way for them to spend company funds directly on political campaigns. Target’s donation to a business-oriented group supporting Emmer was one of the first big corporate contributions to come to light after the decision.

The retail chain has gone from defending the donation as a business decision to apologizing and saying it would carefully review its future giving.

“Target is receiving criticism and frustration from their customers because they are doing something wrong, and that should serve absolutely as an example for other companies,” said Ilyse Hogue, director of political advocacy for the liberal group MoveOn.org, which is pressing Target to formally renounce involvement in elections.

Criticism has also come from local government officials in San Francisco, one of the urban markets where Target plans to open new stores.

The company is in talks with the Human Rights Campaign, a national gay rights organization. The group is also demanding donations from electronics retailer Best Buy Co., which gave $100,000 to the same group backing Emmer.

Fred Sainz, the group’s vice president for communications, said he is optimistic both companies will respond. Target has long cultivated a good relationship with the gay community in Minneapolis, and its gay employees have protested the political donation.

“The repair has to be consistent with the harm that was done,” Sainz said.

MN Forward is staffed by former insiders from Republican Gov. Tim Pawlenty’s administration and has also backed a few Democratic legislators. The group has continued to collect corporate money after the backlash against Target, bringing in $110,000 through Tuesday from businesses including Holiday Cos. gas stations and Graco Inc., a maker of pumps and fluid handling equipment. Weaver said the group’s sole focus is job creation, not social issues.

A Target spokeswoman said the company had nothing to add to Steinhafel’s statement of apology. Emmer has said he views the Target giving as an exercise in free speech and wants to keep his campaign focused on economic issues.

Conservatives are watching to see whether Target bends to the pressure, said Kelly O’Keefe, a brand expert at Virginia Commonwealth University in Richmond, Va.

“They’re likely to raise the ire of a different constituency of customers and get themselves in a never-ending cycle of alienating people,” he said. “A better thing is for them to swear off any future investment in elections.”

—  John Wright