March 14, 2011— -- Two of the nation's most prominent retailers, Target Corp. and Best Buy, quietly have revamped their political expenditure policies following a stinging controversy from the 2010 election campaign that continues to reverberate.
The changes, appearing in policy statements on the companies' websites last month, said that proposed political donations must align with the companies' core values, not just their business interests, and be reviewed by internal committees that include a diversity of viewpoints.
Last year, Target sparked outrage among some employees, customers and community groups for contributions supporting a Republican Minnesota gubernatorial candidate who opposed same-sex marriage and greater legal protections for gays and lesbians. The company is based in Minneapolis.
Best Buy and several other companies also donated to the conservative political action group, MN Forward, but received less criticism.
The revised policies are signs that some businesses that took advantage of the freedom to give directly to campaigns from their corporate bank accounts after the Supreme Court's Citizens United ruling, are taking steps to avoid unwanted negative attention in 2012, experts said.
"Companies said, 'We dipped our toes in the water, Target got burned on this one, but there are ways to learn from this going forward and use this new freedom to our advantage," said business ethics and campaign finance expert David Schultz of Hamline University School of Business.
"For retail businesses, political expenditures could become a new marketing tool if they use them wisely," he added. "What they seem to be doing here is setting up political expenditure criteria that parallels the same type of marketing approach they're using, consulting a variety of groups to figure out what spending might enhance their public image."
At Target, a committee of senior executives representing a "variety of perspectives" will weigh the need to promote business-friendly policies with "any other considerations that may be important to our team members, guests or other stakeholders," the company said on its website.
Best Buy said it will convene a similar committee to review corporate political contributions, basing its decisions not only on the interests of the business and shareholders but also employees, customers and the company's "core values."
Some critics of the companies' 2010 contributions say the new revisions don't go far enough.
Lady Gaga, who signed a deal with Target to sell the deluxe edition of her new album, "Born This Way," backed out of the partnership last week in protest over the policy.
Lady Gaga Breaks With Target
"She and Target didn't see eye to eye on Target's policy of political donations and how they affect the LGBT community," a source close to Gaga told gay magazine The Advocate.
Gaga and gay rights groups protested Target's $150,000 contribution to MN Forward, which supported Tom Emmer, a socially conservative candidate who ultimately lost to Democrat Mark Dayton.
Target CEO Gregg Steinhafel later apologized for the donation, saying at the time, "Our decision affected many of you in a way I did not anticipate, and for that I am genuinely sorry."
Company officials also sought to reassure critics by pointing out that Target has been a regular donor to gay and lesbian community organizations.
"We were very surprised and disappointed by the statements made by Lady Gaga's organization related to her partnership with Target," Target said in a statement last week.
"Target remains committed to the LGBT community as demonstrated by our contributions to various LGBT organizations, our recently established Policy Committee to review our political giving and our respectful, inclusive workplace environment."
A spokeswoman for Best Buy declined to discuss the changes to the company's policy.
The businesses are eager to put the incident behind them, said Schultz, and cultivate a proactive public relations strategy for political contributions ahead of the 2012 presidential campaign.
"After this incident, I think companies are going to look for ways to use political contributions more to their benefit," said Schultz. "In 2012, we might see more businesses merge their politics, marketing and retail together, some even being willing to voluntarily disclose this to use it to their advantage."