Target Corp targeted for political donation
* Target could be test case of corporate giving backlash
* Republican candidate opposed to gay rights fuels furor
By Andrew Stern
CHICAGO, Aug 3 (Reuters) - In a challenge to corporations' newfound right to make unlimited campaign donations, U.S.-based retailer Target (TGT.N) found itself in the cross-hairs of a boycott effort fueled by anger at a Minnesota candidate strongly opposed to gay rights.
MoveOn.org, the Democratic political advocacy group, widened a petition drive on Tuesday it had begun last week to its five million members from Target's home state of Minnesota to drum up opposition to Target's recent $150,000 donation to a pro-business group, called MN Forward.
"Most Americans think corporations shouldn't be meddling in democracy, and Target is the test case for that," MoveOn.org spokeswoman Ilyse Hogue said, adding there had been a strong response with 200,000 members signed up so far.
MoveOn.org was among the critics of January's Supreme Court 5-4 ruling that corporations and labor unions can directly spend on political campaigns. President Barack Obama reacted by pledging to push for legislation to set limits and head off "a new stampede of special interest money in our politics."
In Minnesota, MN Forward has financed a TV advertising campaign backing Republican Tom Emmers for governor of Minnesota. Emmers has pledged to cut taxes and spending, though it is his strong opposition to gay rights such as gay marriage and domestic partner benefits that has drawn fire.
The protests were dramatized by a Minnesota woman, whose son is gay, who returned $226 worth of merchandise to a Target store. The video of her vociferously telling the store manager why has been a much-watched video on YouTube.
The boycott, which analysts say has so far had a limited if nonexistent impact on Target stores or its stock price, puts Target in a spotlight usually reserved for larger discount rival Wal-Mart Stores Inc (WMT.N). Walmart has often been the focus of anger by unions and other groups focused on wage rates and working conditions.
There was an initial backlash from Minnesota's gay rights community when Target's $150,000 donation became publicly known, but the boycott has not materialized, said political analyst David Schultz of Hamline University in St. Paul.
"They took a lot of heat. The question is, will the heat turn into anything?" Schultz said.
"If it's just about Tom Emmers, people outside Minnesota aren't going to care. But if it's about corporate contributions and about gay rights, then it might get somewhere," he said.
Other corporate executives will be watching to see if Target feels any pain, he said. If not, they will feel freer to donate however they wish ahead of U.S. mid-term elections in November.
U.S. voters in November will elect all 435 members of the House of Representatives and fill 37 of the 100 seats in the Senate. Democrats now control both chambers, but Republicans are expected to pick up seats and possibly gain control of the House.
"There needs to be a careful thought process behind what candidates to support and who to make donations to. (A donation) could ruffle the feathers" of some customers, said Matt Arnold, an analyst who follows retailers at Wall Street firm Edward Jones.
In the meantime, "this is merely noise that shouldn't have any material impact on the business," Arnold said.
Target Chief Executive Gregg Steinhafel responded to the local outcry in Minnesota with a note to employees explaining the company was only acting in its business interest to cut taxes. He wrote that Target did not support all the positions of candidates it backs, and had an "unwavering" commitment to gay employees.
MoveOn.org and others opposed to corporate giving to campaigns want to frame the issue as executives having an unfettered capability to donate to whomever they wish without getting the approval of shareholders or customers.
"It just so happens that Target is giving to a candidate with views far out of step, I think, with most Americans," Hogue said. "But our members would react with similar outrage on the principle that corporations are not people, and that corporate money is not free speech and democracy works best when everyone has an equal voice."
(Additional reporting by Brad Dorfman, editing by Philip Barbara)