The shooting of 17-year-old Trayvon Martin in Florida is reverberating today in an unlikely place: the executive suites of major corporations.
In recent days, advocacy groups have targeted more than a dozen corporations over their financial support for the conservative organization that encouraged states to pass the “Stand Your Ground” legislation cited as a defense for George Zimmerman, the man charged with second-degree murder in the Feb. 26 shooting.
The advocates are celebrating decisions by several major food and beverage companies to sever financial ties with the organization, the American Legislative Exchange Council (ALEC). Coca-Cola, PepsiCo, McDonald’s, Kraft Foods and Wendy’s have cut their support for the group, although all played down any connection to the Florida shooting.
The tension in corporate boardrooms over the case is the latest example of the pitfalls companies can sometimes face when they donate to political and lobbying groups, even those that seem safely below the radar of public consciousness.
The ALEC controversy is now sparking a broader debate about corporate participation in politics and the polarized state of political discourse. At a minimum, it has strengthened calls for companies to develop clear policies explaining their spending.
“I would caution companies to be very aware of where their money is going,” says Nell Minow, director of GMI Ratings, which provides corporate governance information to investors, corporate auditors and regulatory agencies. “Companies are going to realize they can take a real reputational hit with this kind of affiliation.”
She and others recall the tempest that erupted in 2010 around Target after the company donated to a nonprofit group supporting a Minnesota gubernatorial candidate who was known for opposing gay rights initiatives.
The Supreme Court decision that year in Citizens United v. Federal Election Commission gave corporations the right to contribute directly to groups active in election campaigns.
But most major corporations have not jumped at the chance. Rather, publicly traded companies have largely continued to donate through nonprofit lobbying and political groups — many recently formed — that are not compelled to reveal their donors.
Oops — looks like the other shoe dropped with respect to Citizens United.