Minnesota Governor Race is Test Case for Campaign Spending After Citizens United Ruling

WASHINGTON, Aug. 11, 2010— -- The stage is set in Minnesota for a gubernatorial campaign which is expected to be a major test case of unrestricted corporate and interest group election spending following the Supreme Court's ruling in the Citizens United case earlier this year.

Democrat and former U.S. Sen. Mark Dayton narrowly defeated three primary challengers Tuesday to move to a face-off with Republican state Rep. Tom Emmer and Independence Party candidate Tom Horner in November. One of the men will replace outgoing Republican Gov. Tim Pawlenty, who chose not to seek a third term.

For Minnesotans, the choices could not be more distinct, reflecting the deep partisan divide across the country. Dayton has proposed raising state income tax rates to levels already among the highest in the country, while Emmer wants to cut taxes and shrink state government in the face of a historic budget deficit. The men are vying for an office that has been held by generally moderate and progressive leaders for decades.

"I don't think you'll find a starker choice anywhere in the U.S.," said Steven Schier, political science professor at Carleton College. "And Mark Dayton's tax plan is such that it's going to attract a lot of corporate spending in the campaign… because the business community is really hostile to income tax hikes on high wage earners."

Several major Minnesota-based corporations, including Target Corp., Best Buy and snowmobile maker Polaris, have unambiguously moved to support Emmer in a way they have not supported any candidate before, spending hundreds of thousands of dollars in the primary, even though Emmer ran largely unopposed.

The pro-business political group MN Forward, established in the wake of Citizens United, collected the business donations and spent the money on advertisements supporting the conservative candidate. Target Corp. donated $150,000, Best Buy gave $100,000 and Polaris gave $100,000 during the reporting period ending July 6.

"You've got a wealthy Democrat facing off with a relatively poor Republican but who has corporations weighing in on his behalf," said David Schultz, an expert in campaign finance and election law at Hamline University.

Corporate Campaign Spending Spikes in Minnesota

Schultz estimates the fall campaign could see up to a 50 percent increase in corporate and union campaign spending this year compared to the last election – a sign of what could come in other hotly contested races across the country as well.

"Third party spending reached the millions of dollars in the primary. I've never seen that before in Minnesota. And it was almost exclusively driven by the Citizens United case," Schultz said.

But experts say the Minnesota gubernatorial campaign also illustrates some of the pitfalls facing companies in their increased, explicit involvement in election year politics.

Target Corp. sparked a firestorm in recent weeks after gay rights advocates, employees and some customers protested the company's financial support for Emmer, who opposes same-sex marriage. The company's CEO Gregg Steinhafel later apologized.

Schultz said much of the backlash at Target may have been due to the image they have been publicly cultivating with their customers. "You didn't see much backlash at Best Buy or Polaris because they aren't billing themselves as socially-responsible," he said.

"Different businesses will face different public relations problems with their political contributions," said Schier. "Going forward after the Target flap, I think you can expect fewer conspicuous corporate donations from high-profile businesses."

Still, corporate, union and interest group campaign spending in Minnesota is not likely to abate, Schier and Schultz said. Voters can expect a "deluge" of TV ads and "carpet bombing of political messages" from now through November.

Congressional Democrats have attempted to impose new disclosure requirements on corporate and interest group spending in the wake of Citizens United, but so far those efforts have faced stiff Republican opposition.

The most recent ABC News/Washington Post poll finds that 80 percent of Americans opposed the Supreme Court's decision lifting the campaign spending restrictions. Seventy-two percent have favored a legislative attempt to reinstate some limits the court lifted.