Reporting from Washington — The bull's-eye is still on Target's back.
Last week, faced with waves of protests, retailer Target Corp. apologized for its $150,000 donation to an organization backing a Republican candidate with a long record of opposing gay rights.
But the controversy has not gone away. Though the public demonstrations have died down, the company is in closed-door discussions with the largest gay activist organization in the country, Human Rights Campaign, which is demanding that the company make an equivalent or greater donation to groups supporting gay rights candidates.
The group has found a potential lever: the threat to come out against the construction of two new Target stores in San Francisco, where gay rights groups have exceptional political influence.
As the talks with Target continue, activists on both sides of the political spectrum are trying to gauge whether the case will have a chilling effect on corporate participation in campaigns. A recent Supreme Court decision gave companies and unions explicit authority to spend funds on elections.
Some analysts think Target's experience may make companies more reluctant to get involved, but many others — including prominent business lobbyists — say the more likely result is that more corporations will seek out ways to contribute anonymously.
The Target controversy was sparked when the Minnesota-based company decided to donate to a business organization, MN Forward, that backed GOP gubernatorial candidate Tom Emmer, a vocal opponent of gay marriage. When the contribution was made public, Target faced immediate complaints from employees and calls for a national boycott by liberal groups.
One Minnesota woman got so mad that she made a video of herself cutting up her Target charge card. The video was broadcast on MSNBC and was seen by hundreds of thousands on YouTube.
Two members of the San Francisco Board of Supervisors had a stormy meeting with Target officials. The supervisors raised their voices when a company executive explained that it was "a business decision" to contribute to the group supporting Emmer.
"We were very upset," said Supervisor Bevan Dufty, who said he asked the Target executive to convey his dismay to corporate headquarters. "You can't take two dates to the prom," said Dufty, who is gay. "You can't brand your company as one that values [gay and lesbian rights] and then make contributions to candidates who spend every waking breath to make us second-class citizens."
Target's chief executive, Gregg Steinhafel, apologized and pledged that future contributions would be closely reviewed by Target's board.
Steinhafel said the contribution from the corporate treasury was intended to support Emmer's stance on economic issues. Ads run by the group were focused on budget policy, not social issues.
"I realize our decision affected many of you in a way I did not anticipate, and for that I am genuinely sorry," Steinhafel wrote to Target employees.
Behind the scenes, however, the controversy has not subsided.
In daily telephone calls, Fred Sainz, vice president of Human Rights Campaign, said he was talking with top Target executives about "making it right."
"Among the bullets in our gun is their continued relationship with the LGBT [lesbian-gay-bisexual-transgender] community," Sainz said. "Gay and lesbian customers are among Target's most loyal customer base." The company is seen by many in the gay community as "the progressive alternative" to Walmart.
Human Rights Campaign has also targeted Best Buy Co., another company that donated to MN Forward.
Best Buy spokeswoman Sue Busch Nehring said the donation "was focused solely on jobs and an improved economy.…We've learned from this and we will review the process we use to make political contributions to avoid any future confusion."
A conservative group, ResistNet.com, urged conservatives to support Target while it is under attack. "Target is just exercising their freedom under the recent Supreme Court ruling that allows corporations to speak out during elections. Bravo, Target, for standing up against tyranny in this current administration!" according to a statement on its website.
It is not only corporations that have new freedom to spend and collect funds. A labor-backed group was on the air last week with ads describing past drunk driving incidents involving Emmer.
Dirk Van Dongen, the head of the National Assn. of Wholesaler-Distributors, said he thought the Target controversy would have little effect on corporate political contributions, noting that businesses can give anonymously to trade associations and other nonprofit campaign efforts.
He anticipated strong participation by business this election year because of a widespread impression that Washington's power structure has produced an anti-business, anti-growth climate.