A New York pension fund trustee seeks policy change just before retailer's annual meeting.
On the eve of Target Corp.'s annual shareholders meeting, a trustee of a pension fund with 1 million shares of company stock called for the retailer to change its policy on political contributions.
Bill de Blasio, who sits on the board of the New York City Employees Retirement System (NYCERS), also asked that the fund vote against any Target director who refuses to voluntarily stop contributions, such as the $150,000 donation Target made in 2010 to a political action committee supporting Minnesota Republican governor candidate Tom Emmer.
The gift to Minnesota Forward, the PAC that supported Emmer, came after a Supreme Court decision allowed unlimited corporate donations to independent organizations that could support or oppose political candidates. The Minnesota Forward contribution caused a backlash among Target customers and employees who found Emmer's opposition to gay rights offensive.
Target voluntarily changed its political giving process after the Emmer episode led to boycotts, bad publicity and some slippage in the stock price. But those changes did not go far enough for De Blasio, who works as New York's public advocate and helps control the city employees $40 billion pension fund.
"I write to express deep concern regarding the City's investment in Target Corp.," De Blasio said in a letter to New York City Comptroller John Liu dated Tuesday. "The company's experience in political spending, and the lack of effective reforms taken by the company after the controversy ...make the company a leading candidate to receive a shareholder resolution regard [sic] political spending. ...
"I ask that you consider withholding votes from relevant Target Corp. directors, in the absence of a change in policy on political spending."
The Minnesota Forward donation spurred threats of shareholder resolutions to limit political donations at Target and dozens of other companies across the country, including Best Buy and 3M, which also gave to Minnesota Forward.
A shareholder resolution for more transparency in political contributions failed at 3M's most recent shareholders meeting, but garnered nearly one in three votes, a sign of shareholder concern.
Target directors meet with shareholders Wednesday at an outlet in Pittsburgh. The political donations policy is not on the agenda, nor are there any shareholder proposals to limit or change the company's political donations rules.
What De Blasio and others want is a ban on spending corporate dollars on any political activities except the company's political action committee and company lobbying. While De Blasio will not attend the meeting, Mike Dean, the director of Minnesota Common Cause, said at least 10 Target shareholders or their surrogates are expected to try to question the board of directors about political spending.
Dean will attempt to speak to the board in behalf of a shareholder group called the Tides Foundation.
"We want to make the case that political spending is not good for business," Dean said in an interview from Pittsburgh. "You're going to offend your customer base no matter who you give to."
But the nation's second-largest retailer has not yet agreed to stop contributing corporate dollars to political causes, nor did it agree to make public its donations to trade associations that funnel the money to politicians.
"Following the 2010 election, Target conducted a thorough evaluation of our processes and established a Policy Committee to review and provide greater oversight to future corporate political giving," the company said in a statement Tuesday. "Moving forward, we will evaluate our giving based on business, team member and stakeholder objectives. Target believes that engaging in civic activities is an important part of operating a national retail business and believe we operate best when working with policymakers on both sides of the aisle."
Target's donation to Emmer through Minnesota Forward became one of the country's most scrutinized political contributions. Critics of unlimited campaign spending have since turned to greater public disclosure of contributions as a way to keep corporate political gifts in check.
The ability to give undisclosed donations to trade associations that then funnel the money to campaigns has now become a sticking point in the campaign finance battle.
Whether threats by major investors to vote against sitting directors or to introduce shareholder resolutions will make a difference remains to be seen.
"We're hoping it doesn't get to that," said Dean.
Jim Spencer • 202-408-2752