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Citizens Get United

Lady Gaga broke ties with Target because of their anti-LGBT political spending, but now we must fight for more corporate transparency laws so citizens can see who is spending money and where.

Published: March 24, 2011

This column appeared in The Advocate.

Recently, Lady Gaga parted ways with retailer Target Corporation because she disagreed with Target’s political spending in the past election. Last year, Target supported Tom Emmer, an antigay Republican candidate governor of Minnesota. This race turned out to be a squeaker, nearly going into a recount before Emmer conceded the loss. But the antigay political spending riled up many Americans, including Lady Gaga.

Here’s a little background. In January 2010 the Supreme Court, in the Citizens United case, changed the law to allow corporations like Target to spend money on political ads. Minnesota was one of many states that had previously banned corporate political spending, so it had to quickly change its laws to require disclosure of such spending. Incidentally, as the Brennan Center noted in its recent report “Transparent Elections After Citizens United,” Minnesota has some of the strongest political disclosure laws in the country. When Target spent $150,000 ($50,000 of it was an in-kind donation) on the governor’s race, average citizens could look it up on the web to verify it.

When the public realized what Target had done, the Human Rights Campaign, which fights to provide equal rights for LGBT Americans, asked Target to support pro-gay candidates as well. Target refused. At nearly the same time, MoveOn organized a widespread boycott of the retailer. Videos from the boycott went viral and included scenes of customers returning merchandise to the store as well as flash mobs singing,“Target ain’t people, so why should it be, they can mess around in our democracy?”

But HRC and MoveOn were not the only ones troubled by Target’s spending. Three of its institutional investors wrote to Target asking how corporate treasury money had made it into the governor’s race, noting the “misalignment between the political spending” and the company’s professed corporate values. These same investors kept pressure on Target, asking for more internal controls over political spending. In January 2011, Target announced it would only make political expenditures that are approved by an internal policy committee. This is a step in the right direction.

But for those who feel Target still hasn’t taken responsibility for the antigay political spending, this change isn’t nearly enough. Lady Gaga clearly falls into this category. According to press reports, Lady Gaga asked Target to make amends for its political spending in 2010 by showing support of gay rights. When Target refused, Lady Gaga walked away from a lucrative deal to sell her new album, Born this Way, at the retail chain.

The whole Target saga — including the latest tiff with Gaga — shows there are all sorts of risks wrapped into corporate political spending, which Citizens United blessed, including alienating business partners, investors, and consumers. It also shows that we need new rules so political spending by publicly-traded companies better reflects not just the whims of corporate managers, but also the interests of shareholders who own the company.

Policy changes in securities law, like the federal Shareholder Protection Act would provide shareholders with the ability to vote on political spending before it happens — instead of scrambling to protest after the money has already been spent. And the bill would require every publicly-traded company that spends on politics to report that spending to the investing public on a periodic basis.

Or at the very least the SEC should update corporate disclosure forms to require more transparency about where publicly-traded corporations spend their money in politics. We only know about Target’s spending in Minnesota because of that state’s superlative disclosure law. If Target spent in other states, most likely the public—including investors—would be none the wiser.

Until we get serious about making sure that corporate law keeps up with the Citizens United rights of corporations to spend on politics, the public will be left with few options. Until then, we’re left with boycotts, the arduous task of going company by company asking for changes in behavior, or relying on a pop singer to take the courageous stand to turn her back on a big box retailer who still hasn’t fully regained its good name as a good corporate citizen.