The Influence Industry: Scotts Miracle-Gro goes out on a limb with political donation

August 8, 2012

In an election year filled with secret campaign money, the Scotts Miracle-Gro Company has made the unlikely choice to go public with a big political donation.

The Ohio-based company, familiar as the producer of a ubiquitous plant fertilizer, is now a political player, donating $200,000 in June to the Restore Our Future super PAC supporting Republican presidential candidate Mitt Romney.

That makes Miracle-Gro among the first public companies with well-known consumer brands to publicly enter the new world of campaign funding. That world has been reshaped by the 2010 Supreme Court decision Citizens United v. Federal Election Commission, which allowed direct corporate spending on election campaigns.

Spending by interest groups active in the presidential race has risen dramatically as a result of that landmark ruling. But the vast majority of donors that have been publicly disclosed are rich individuals and private companies that don’t have much to lose by aligning with a political party because they don’t mass-market brand products to consumers who might disagree with the contributions.

At the time of the Supreme Court’s decision, Democrats and their allies warned that it could lead to large companies with billions in quarterly profits unleashing their massive bank accounts on political campaigns. So far, big public companies have been shy about taking advantage of the looser restrictions. Many have decided not to donate, while others have given to groups that are not required to disclose their donors.

James Hagedorn, Miracle-Gro’s chairman and chief executive, made the choice to support Romney with company funds, said Jim King, a senior vice president at the company. The company’s lobbyists presented Hagedorn with options for contributing in the presidential race, including ways to keep the company’s name private.

“His point of view was, ‘If I’m going to do it, I’m going to do it in the light of day,’ ” said King, who spoke for the company.

The company would benefit from a Romney presidency, King said, citing the Republican’s policies on corporate tax reform, business regulation and federal spending, and the belief that Romney could revive a weak economy.

Before new laws were passed in 2003, big companies routinely made large donations to the political parties.

The current corporate hesitancy to donate publicly stems in part from the experience of Target Corp. in 2010. After donating to support a Minnesota gubernatorial candidate who opposed gay marriage, Target faced a nationwide boycott.

Another controversy has underscored the risk: The fast-food chain Chick-fil-A has been targeted with protests in recent weeks for comments by its chief executive and donations it made to groups opposing gay marriage.

The Miracle-Gro donation has drawn little attention, but an unscientific sampling of shoppers at a District garden store recently pointed to the potential to alienate at least some consumers.

“It’s a plant fertilizer — it’s not for growing political parties,” said Joan Harris, of Georgetown.

Another customer, graduate student Alanna Tievsky, said she would likely “think twice” in the future about buying the fertilizer. “If there were two options and they were the same price, I would definitely buy the other one,” said Tievsky, who said she supports President Obama for reelection.

King said the company anticipated some backlash but thought the benefits outweighed the risk. “Just as many people applaud you and say ‘I’m going to buy your products for life,’ ” King said.

Hagedorn’s father, Horace, a Madison Avenue marketing genius, created Miracle-Gro and founded the company in 1950. Together with his siblings, James Hagedorn owns 30 percent of the company, giving him a tight hold on power.

Perhaps the biggest reason why Miracle-Gro made the donation may be Hagedorn himself. A former F-16 fighter pilot known for making analogies to war fighting, Hagedorn has shown a willingness to take controversial stances, such as firing workers who won’t agree to quit smoking as part of a plan to cut health-care costs.

Although he lives in New York, Hagedorn has been more involved in Ohio politics. He is a registered Republican who broke with the party to endorse former Ohio governor Ted Strickland (D) in his 2010 reelection race, taping a campaign commercial for him.

“Why would Jim Hagedorn and Republicans support a Democrat?” Hagedorn says in the ad. “Ted Strickland understands the issues that business people deal with.”

Recently, Hagedorn has been proving his Republican bona fides in the wake of Strickland’s defeat. Last year he started raising money to help the winner of the governor’s race, John Kasich, pass a budget.

Hagedorn has met Romney twice, once for a one-on-one meeting during the Republican primary and again at a fundraiser where he made a $2,500 personal donation to the candidate.

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