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When politics and branding don't mix

Target has landed in hot water for donating to a group that's been backing a conservative candidate in the Minnesota governor race -- exactly the kind of political giving that was greenlighted by the Supreme Court in January when it ruled that corporations can donate as much as they want to political campaigns.

The candidate, Republican Tom Emmer, opposes gay-marriage. And Target had contributed $150,000 to the group MN Forward, which was running TV ads backing Emmer.

There was immediate outrage. Gay rights advocates were furious with the retailer, which provides health benefits for domestic partners. Moveon.org began organizing a petition threatening to boycott.

On Thursday, the retailer's chief executive Gregg Steinhafel wrote a letter to employees apologizing, saying Target was "genuinely sorry" for how it handled the contribution. Steinhafel added the retailer would have a review process for any future donations.

In his letter, Steinhafel also wrote, "The diversity of our team is an important aspect of our unique culture and our success as a company, and we did not mean to disappoint you, our team or our valued guests."

Chief executives often support presidential candidates -- for instance, Fred Smith from FedEx helped John McCain in 2008. Donations from one company's employees can lean heavily to one party or the other -- Goldman Sachs staffers gave generously to Obama. But political contributions directly from a company are a different story. It's controversial to talk about corporations as "legal persons" with rights. And Americans overwhelmingly opposed the Supreme Court's ruling in Citizens United v. Federal Election Commission.

Critics of the Supreme Court's ruling worried the decision would open the floodgates of corporate political donations. But Target's misstep means that companies, especially those with highly cultivated brands, will have to tread very carefully.

By Jia Lynn Yang  |  August 6, 2010; 11:16 AM ET
Categories:  Campaign finance , Target  
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