Lady Gaga has ended her exclusive relationship with Target. She has decided to walk away from a lucrative business arrangement because of her political agenda. Gaga, and some liberal special interest groups, are drawing attention to their political beliefs by waging war on one of America’s most recognized and respected businesses.
In 2010, Target, a Minnesota-based corporation, made contributions to Minnesota Forward, an independent expenditure organization. Minnesota Forward listed its mission as “to ensure that private-sector job creation and economic growth are at the top of the agenda during the 2010 campaign.” The organization then ran ads in support of Tom Emmer, a candidate for governor. Target’s donations were made to promote pro-growth economic policies, not to comment on social policy. Target did not make these political contributions based on their beliefs regarding homosexual rights. Target made a business decision to promote pro-growth economic policies (and by the way, these policies wouldn’t have just benefitted Target, they would have benefited Target’s customers as well). These facts are getting lost in the debate.
Corporate leaders have a duty to take actions that are in the best interests of their shareholders. Fostering a pro-growth economic climate in the state in which they are headquartered falls squarely within the business judgment rule.
Since the Supreme Court decided the case of Citizens United v. FEC, corporate political spending has been the topic of heated debate. The Supreme Court made clear that political speech cannot be silenced, no matter who the speaker is. Small businesses, non-profits, corporations and labor unions may engage in political speech. Liberals seem to have no problem with political speech, as long as it supports their agenda (i.e. labor union support of President Obama). However, when an entity, whether a non-profit like Citizens United or a corporation like Target, seeks to promote responsible economic policies, the liberal special interests get offended.
In a post-Citizens United world, corporations can engage in political speech (even before the decision, they could do so in at least 26 states). When it is in the best interests of their shareholders, corporations can — and should — exercise their First Amendment rights. In the few short months that Mark Dayton has been governor, we’ve seen that Target was right to support Emmer. Dayton has proposed a budget that increases individual and corporate taxes. Rather than make necessary spending cuts, he is attempting to balance his budget on the backs of those individuals and corporations that choose to reside in Minnesota.
When the cost of doing business increases, it is ultimately born by the consumer. Target, or any business, will pass along increases in taxes, fees and regulatory compliance costs to the customer. It may be subtle — you may notice that the price of a loaf of bread has increased by 10 cents, or perhaps that bicycle your daughter wants has gone up by three dollars — but there’s no avoiding the fact that you will pay more. This war against corporations is really a war against consumers. In the end, nobody wins.
Who’s leading this assault? First and foremost, Lady Gaga — she’s an entertainer, a business, and a brand. According to Forbes, Lady Gaga brought in $62 million last year. If consumer prices go up, that doesn’t really faze her.
Liberal interest groups including Moveon.org and the Human Rights Campaign (HRC) have attempted to organize boycotts of Target for its political expenditures. I guess liberal speech, like that of Moveon.org and HRC, is permissible, but speech that doesn’t support their agenda is not. I’m not sure whether their boycott is having any real impact — the lines at my local Target sure don’t look any shorter.
Liberal politicians have not remained silent. Senator Chuck Schumer (D-NY) sought to demagogue the issue by claiming that “when you buy toothpaste now, the money you spend can be used directly for television ads attacking people that you believe in without you even knowing.” Focusing his attention on Target, he argued “if you’ve ever shopped at Target, the money you spent on toothpaste might be part of the $150,000 Target donated to run TV ads for an anti-gay, anti-minimum wage candidate in Minnesota.” The message is simple, Senator Schumer’s speech should be protected, and anyone who disagrees with his agenda should be demonized.
Target made a business decision to put its support behind a candidate who would encourage pro-growth policies in a state. Ms. Gaga has made a business decision to walk away from a lucrative arrangement with Target. That’s her choice, however misguided it may be. But where is Gaga going to go? Best Buy made similar contributions in support of Emmer. Circuit City has shut its doors. Walmart? I’m sure she’ll find a reason to shoot that one down too. I guess I’ll just have to head down to K-Mart to buy the next exclusive Lady Gaga album.
Chris Berg is an attorney in Washington, D.C. He has provided advice to organizations including the Republican National Lawyers Association and the Young Republican National Federation. He previously served as a political appointee to the Department of Labor’s Office of Labor -Management Standards. He currently serves as Assistant General Counsel to Citizens United.