Minnesota businesses move quickly to put profits into politics, thanks to a U.S. Supreme Court ruling. Labor groups now may up the ante.
Minnesota businesses aren't wasting time flexing new political muscles to throw considerable financial support into statewide and even legislative races.
Thanks to a U.S. Supreme Court ruling in January that allows corporations to get more involved in politics, 13 companies, including Target, Best Buy and Pentair, have contributed more than $1 million to a pro-business conduit, MN Forward, in little more than a month. It has emerged as a leading fundraiser, supporting GOP gubernatorial candidate Tom Emmer with $195,000 in ads. This week, it plans to roll out a campaign in six legislative districts.
The move, which flared into controversy and customer backlash last week involving Target's $150,000 donation, also could stir uncharted waters in local races.
For example, St. Paul-based Securian Financial Group gave $100,000 to MN Forward on July 12. Two Securian lawyers are legislators seeking reelection. A former CEO of a Securian affiliate is running for a House seat.
Labor unions, which have long been allowed to spend money supporting or opposing candidates, haven't been shy in the governor's race, either. A leading group, Alliance for a Better Minnesota, has already spent $685,000 on ads critical of Emmer.
Experts say the Supreme Court ruling, which lets businesses for the first time steer profits into politics, could generate even more labor spending in response.
Securian's contribution to MN Forward bothers Steve Elkins, a DFLer who is running against incumbent state Sen. Geoff Michel, R-Edina, who works as a Securian attorney.
"You've got a corporation that has contributed $100,000 ... and I can't help wonder how much of that is going directly or indirectly back to Senate and House races" involving employees, Elkins said.
MN Forward's chair, David Olson, said the group is focusing on the governor's race, "but we will be doing some House and Senate work, as well." He wouldn't identify legislative races that will be targeted.
The law doesn't bar groups like MN Forward, created by the state Chamber of Commerce and Business Partnership, from spending money to ... support the employees of donors. Olson said MN Forward will probably stay away from spending money on the races involving Michel or state Sen. Charles Wiger, DFL-Maplewood, another Securian attorney running for re-election.
"There is no conflict as long as MN Forward would not give money on behalf of Michel or Wiger," Olson said.
Target's donation last month caught flak from gay activists for indirectly supporting Emmer, an opponent of same-sex marriage. Target responded last week that its gay-rights support is "unwavering."
On Friday afternoon, the Human Rights Campaign, a national gay rights organization, criticized Target and Best Buy, which also contributed $100,000 to MN Forward. Best Buy told employees last week that it "does not support candidates or campaigns based on party affiliation,'' but on issues important to the company and the retail industry.
Will local races be influenced?
The spending approved by the Supreme Court must be independent of a candidate's campaign. Companies don't have to abide by the contribution limits that apply to individuals, which has some observers fearful of a flood of corporate money tilting typically low-spending legislative races.
"Even $20,000 of direct mail in a legislative seat, that's a lot," said Hamline University Prof. David Schultz. The new rules raise the possibility that a corporation "could get a whole bunch of employees to run for office" and spend money to indirectly help them.
"At that point, you have completely transformed the race," Schultz said. "It is now not a $30,000 race, you've upped the ante and gotten so close to the line of a corporation directly supporting a candidate that it becomes indistinguishable. That's buying a seat."
Securian is one of the nation's biggest financial services providers. Its donation to MN Forward was matched by Best Buy, Davisco Foods International, which provides cheese to Kraft Foods, Polaris Industries, Hubbard Broadcasting, Regis beauty products, Federated Insurance and Target, which also offered brand consulting worth $50,000. Pentair, which provides swimming pool equipment, gave $125,000.
Red Wing Shoes, Cold Spring Granite, the Insurance Federation of Minnesota and Holiday Companies gave lesser amounts.
Two other pro-business conduits created in recent weeks, Freedom Club Victory Committee and Minnesotans for Personal Choice and Competition in Health Care, have raised little or no money so far. Freedom Club Victory recently terminated its efforts.
Securian Chairman and CEO Bob Senkler said in a statement that the company donated to MN Forward because "we like its focus on job growth and economic development."
Michel and Wiger "bring great pride to our company because of the time and effort they put into their roles as public servants," Senkler wrote. "Securian has no influence over MN Forward's decisions about supporting specific candidates and makes no attempt to guide those decisions."
On the labor side, Alliance for a Better Minnesota spent $2.5 million in the 2006 election. It has already raised $1.7 million for 2010 races.
It gets money from two pro-labor fundraising groups, one focusing exclusively on the governor's race. Those groups draw from the teachers union Education Minnesota and other public employee and trade unions. Major individual contributors include Democratic donors Alida Messinger, Vance Opperman and James Deal.
Michel said he learned of Securian's contribution after it was publicly disclosed and did not participate in any discussions leading to the decision.
"I'm thankful that the company encourages people to get involved and that the company is involved, as well," he said.
He said his opponent was "trying to make more of this than there is" and that fear of companies buying legislative seats is overblown.
Wiger said he knew nothing about his company's contribution. He doubts that heavy corporate spending would be effective in legislative races.
"If it had the scent of outside attack, that generally doesn't work and I think it would backfire, not only for that race but for the organization as well," Wiger said.
Pat Mazorol, a Republican, is running for a House seat in the same legislative district as Michel's seat. Mazorol was a CEO of Securian Trust before he resigned on June 30 to take a job with Bethel University.
Mazorol said he was unaware of the donation until he read about it in the newspaper.
Some Republican-leaning groups have sued to overturn state requirements for reporting corporate spending and to allow corporate profits to go directly to candidates.
Pat Doyle • 651-222-1210