Retailers Target and Best Buy have been lampooned by some customers for six-figure donations to the gubernatorial campaign of Rep. Tom Emmer through the group MN Forward. But they've actually been spreading the money around the past few years.
Target has sent more election contributions to Democrats in Congress than to Republicans in four of the past six years.
In the two-year election cycle that ended in 2006, Target gave 55 percent of its $410,000 in federal political action committee (PAC) gifts to Republican candidates and 43 percent to Democrats. In the 2008 cycle, with Democrats in charge, Target gave 52 percent of its $480,000 to Democratic candidates and 48 percent to Republicans, according to the Center for Responsive Government, which tracks campaign donations.
"They're trying to buy access and influence," said Larry Jacobs, a political scientist at the University of Minnesota's Humphrey Institute, and a national authority on campaign finance. "Even though big business generally prefers the Republican candidates ... with the Democrats controlling Congress and the White House, you'll see money flowing to the 'in' party. Now you've got a gubernatorial race, and they're helping the Republican candidate."
Target gave the money to the Republican-leaning MN Forward, in accordance with a recent U.S. Supreme Court decision that allows corporations to support specific politicians through business-advocacy organizations. That led to protests by angry customers and organizations who note that Emmer opposes civil unions among gays and has been twice arrested for drunken driving and supported legislation that would weaken penalties.
Yet Target, which usually supports Republicans, has been more generous to Democrats as they took control of Congress in recent years. Recently, the retailer successfully lobbied for an amendment sponsored by Sen. Richard Durbin, an Illinois Democrat, to the financial reform law that will cut big retailers' cost of doing business by billions annually.
The Durbin amendment will limit the amount that big banks can charge retailers for the electronic "interchange fee," or "transaction swipe," the banks get for processing credit transactions.
Interchange fees now cost merchants up to 2 percent of each debit and credit card transaction, according to the National Retail Federation. The retail lobby estimates that U.S. retailers paid $48 billion in interchange fees in 2008, triple the total paid in 2001.
The Durbin amendment orders bank regulators to establish fees that only cover "reasonable and proportional" costs.
It was a popular year to stick it to big banks, who got bailed out by the federal government in 2008-09. And now the big bankers are angry with the Wal-Marts and Targets.
"It's an unconstitutional price-fixing bought and sold ... by an industry lobbying for competitive advantage at a time that banks are unpopular," said Bill Cooper, CEO of TCF Financial Corp. "Why should Congress get involved in this? It was a free market and some retailers paid more and some less, depending upon the volume of business. This is unconstitutional, and we're going to pursue it."
Not so, said Paula Prahl, the Best Buy executive in charge of public affairs. "The U.S. consumer pays eight times more than European customers for the same [card-swipe] fee," Prahl said. "We believe this is an important issue for customers and for our business and thus supported it."
Best Buy, which has a small PAC, pretty much spreads it around among the parties.
Target declined to discuss specific lobbying activities other than to say the company supports candidates of different parties on a variety of issues.
"Target does not give to candidates based on their vote on a particular bill or issue," the company said in a prepared statement.
Even TCF, which gave overwhelmingly to Republican candidates in the past, is giving more to Democrats lately. In the current, two-year cycle TCF has given 54 percent of the nearly $50,000 sent to federal candidates to Democrats, according to federal records.
Business interests long have fought through lobbyists and donations over legislation. The argument usually centers more on whose ox is getting gored than political philosophy. But the wholesale giving now permitted by the Supreme Court decision puts political giving in a bigger, more controversial spotlight.
Jay Kiedrowski, a former top Wells Fargo executive who also was Minnesota finance commissioner in the 1980s, says corporations may come to regret their newfound ability to make huge donations to candidates through business-promotion outfits like Minnesota Forward.
Under the old system, businesses and unions would form political action committees through which individuals donate and then the committees vote on who gets the dough. Unions give mostly to Democrats and business tends to give more to Republicans.
Kiedrowski recalled that his boss, the late Gov. Rudy Perpich, worked closely with the Minnesota Business Partnership and many Republican business leaders, even though they gave contributions to opponents and through PACs. The giving was limited by law and fairly modest.
"We've never had corporations give away money like this," said Kiedrowski, now at the Humphrey Institute. "Target is in new, controversial waters. Lately, Target is better known for political contributions than community giving. If there's a Democratic governor elected, it will be interesting to see if they can work together."
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