Steve Forbes' Skeleton Closet
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"My father once spent $5 million on a birthday party for himself in Tangiers. Why can't I spend a few more running for President?" -- Steve Forbes
"I am a male. I am white, a Protestant, an Ivy Leaguer, rich, business-oriented, without practical political experience. It couldn't be worse, but at least I'd like to be free to fall down on my own arse, without any help from conservatives." -- Steve Forbes
"Nobody wants to get chased down the street by a mad billionaire with a squash racket." -- Alex Castellanos (Phil Gramm's media adviser)
"In their late 40s, Forbes mens' hormones seem to change. Pop started riding motorcycles. I would say running for president qualifies." -- Steve Forbes
Malcolm Stevenson Forbes, Jr., (our candidate's full name) grew up on "Timberfield", the family's 40-acre estate in Far Hills, New Jersey. His wealthy and flamboyant father -- Malcolm Forbes -- dabbled in politics (two failed races for Governor) and forced his kids to play the bagipipes -- while wearing kilts -- for guests on Highlander, the family yacht. Steve went to boarding school in Massachusetts (The Brooks School) and then Princeton, the most effete of the Ivy League schools.
Steve Forbes, now 48, began working for his father's magazine at age 22, and has been living on the family homestead since 24. He inherited Forbes Magazine and now pays himself over $1.2 million per year. He has never had to work for anyone -- except Dad -- in his life.
Father Malcolm was a showman who knew to to make money (off his celebrity and aura of wealth) by very publicly spending money, riding balloons and motorcycles, collecting Faberge eggs and throwing a famous 70th birthday party with 600 belly dancers, 200 Berber horsemen, three jets to bring guests, and pal Elizabeth Taylor in attendance. Less publicly, he was widely rumored to be having homosexual affairs in his later years, not that there's anything wrong with that. (His wife divorced him in 1985.) In fact, a young man named George Warnock, claiming to have slept with Malcolm Forbes, has written allegedly blackmailing letters to Malcolm, and more recently, Steve. Steve Forbes confirms that he received such a letter. (Warnock was sentenced to a year in prison for extortion.)
No job requires more management skills than the presidency. But at the only two positions where Steve has managed people, his efforts have been controversial at best.
His main experience, of course, has been running Forbes Magazine. (His brother took over during the 1996 race.) Steve increased the number of ad pages at Forbes past competitors such as Fortune, through deep discounts and aggressive salesmanship. However, in 1992, a magazine article charged that Forbes Magazine was actually losing money, a charge that Steve denied. Since then, everyone agrees that Forbes Magazine is the industry leader in ad sales -- in fact it sells more ad pages (4,500) than any other magazine in the world.
On the other hand, Fortune Magazine (which sells 3,200 pages a year and is "very profitable") charged in a 1996 article that Forbes got those ads with a policy of not printing bad news about companies that advertise. They document several stories that Forbes or his publisher rewrote or killed to avoid offending big advertisers. That doesn't bode well for his independence from the influence of big money interests.
Forbes also fired his secretary of 13 years, Ann Barton, just before her 65th birthday, and has written editorials in favor of allowing forced retirement at that age. When she sued him for age discrimination, he responded viciously, giving a long deposition attacking her competence and attitude, even though she had been his personal secretary for 13 years. When the judge ruled against Forbes in a preliminary hearing, he settled out of court. This isn't a big scandal, as some of the press implies, but it shows a heavy hand in managing people.
His mean streak also shows in his choice of campaign staffers -- notably Carter Wrenn and Tom Ellis, two men behind years of Jesse Helms' most vicious campaigns until Wrenn fell out with Helms in 1994. Forbes' heavily negative campaign ads show their strong influence.
His resume trumpets the fact that "Mr. Forbes is the only writer to have won the highly prestigious Crystal Owl Award four times. This prize was given by USX Corporation to the financial journalist whose economic forecasts for the coming year proved to be most accurate." Competitor Fortune Magazine brought that claim down to earth in an article pointing out that the award was for a gag competition after an annual banquet USX threw, where people guess at certain economic indicators. They quote two 2-time winners who thought the whole thing was a joke and thought it was pretty funny for Forbes to brag about it. The award is no longer given, incidentally.
Steve's other managerial experience was in the mid-80s, when his Republican connections got him appointed head of the board that oversaw Radio Free Europe. According to an inspector general's report cited in Newsweek, the agency was "rife with uncontrolled spending and lax management." Forbes claims that real spending was reduced, but Bob Dole remembers that Forbes "was always coming and asking me for money [for Radio Free Europe and Radio Liberty.]
In the fall of 1969, Forbes knew he would graduate within the year from Princeton. He says he thought the war was a "mistake", though he never protested it, and knew he faced three choices: if he were drafted, he'd get two years of active duty; if he enlisted, he faced 3 years of active duty; and if he joined the National Guard, he'd get 6 months of active duty and then five and a half years of reserves. Of course, he "avoided duty" (his words) by joining the National Guard, the same dodge that other rich kids Dan Quayle and George Bush, Jr. used.
Forbes claims he isn't beholden to money interests because he is so rich. Think again. Early in the 1996 race, he started hosting $1,000 a plate fundraisers for big money supporters: one meeting alone (at New York's Waldorf Astoria Hotel) raised $1.2 million, and all told he received $4.2 million in that campaign. Should he win, he could raise unlimited money from special interests, since he didn't have to accept the legal limits to qualify for matching funds. And he could use that money to pay himself back.
That's right, pay himself back. Unlike Ross Perot, Steve Forbes did not contribute a penny to his campaign. He LOANS it money ($39,400,000 as of 9/30/98) so that if he is elected or comes close enough to have clout, various big money interests can pay him back. And they've already begun.
After all, Forbe's is an expert at wheedling and cajoling the wealthy for money, as his ad page sales prove. With no political experience, we can't show that he has done political favors for contributors. But his magazine has certainly given editorial favors to big advertisers, which is a good predictor of Forbes' political approach. Forbes is the only mainstream magazine (as opposed to small trade journals) whose advertising executives -- led by Forbes himself -- review every article. On several occasions, he has ordered his editors to rewrite or kill stories that were unflattering to Forbes' major advertisers. They don't do it all the time -- Forbes Magazine is in fact famous for some viciously nasty articles on big companies, including some advertisers - but then politicians don't reward every contributor, either. Otherwise, they wouldn't have an incentive to keep giving..
Though he brags about being an outsider, Forbes quickly was waffling on the issues with the best of them. In the 1980s, he attacked proposals to crack down on illegal immigrants by sanctioning employers who hired them. "An important portion of this country's prosperity is now dependent on illegals," he wrote. In 1996, when the public mood had shifted against immigrants, he made cracking down on immigrants a big campaign issue. This year, with George Bush Jr. pulling major Hispanic votes, he'll probably switch back.
Forbes also repeatedly opposed a constitutional amendment requiring a balanced budget, and in fact never felt a balanced budget was as important as lowering taxes. But in December 1995, as his campaign began to get attention, he came out in favor of a balanced budget amendment. Now that he has figured out that Republican stalwarts are very conservative, he has shifted far to the right, challenging Dan Quayle and John Ashcroft for the title of the most conservative Republican presidential candidate.
Forbes Inc. has a land development branch that owns 4 developments -- three in Colorado, and one called Land Of The Ozarks in Warsaw, Missouri -- about 150 miles from the Whitewater development. The land business was started by Steve's father Malcom in 1971 and has advertised in the magazine since, with ads making pitches like "own your own ranch in the Colorado Rockies."
The problem is, buyers DON'T really own the land. Forbes, Inc. uses a largely discredited form of contract called the "installment contract for deed." Purchasers buy their land on a contract that only gives them the deed after 10 years of payments - and heft interest charges. What that means is, if they miss even one payment, Forbes can (and does) take it back without any need for foreclosure proceedings. And if the person wants to sell the land before 10 years is up? Too bad. At least 237 buyers missed payments and lost their property back to Forbes. To settle a lawsuit, Forbes eventually refunded the money paid in by all 237.
That isn't the only problem with the land developments. Another large group, who actually completed their contracts, is suing over the annual $216,000 in fees that just one of the developments - Forbes Park - charges its residents. And others who have moved onto their land complain that rules for garbage disposal and maintenance aren't enforced, so that ruins of half-built homes and outhouses litter the development.
A group drove down to a Steve Forbes campaign rally in Colorado during the last campaign and gave him a letter detailing their complaints. No agreement has been reached and at last report they were planning a lawsuit.
Very, Very Rich. Steve is worth AT LEAST $439 million, according to Fortune Magazine, and is heir to a fortune of perhaps $1.4 billion. He owns an island in Fiji, a Boeing 727, a chateau in France and of course a major league yacht.
This gives him major advantages as a candidate. Not only does it free him from the frantic money begging of Dole, Gramm, Alexander and Lugar, but he is also free of the spending limits they agreed to in order to get federal matching funds. Those limits prevent them from spending more than the limit in each state, including New Hampshire and Iowa which have disproportionate impact. In 1996 Forbes spent well more than the limit in each.
In 1996 he spent just under $38 million on a very short campaign. This time, he's gearing up for even more.
Unlike other 1996 candidates, Forbes refused to release his tax returns. (Clinton and Dole released decades of tax returns.) While we can sympathize -- who wants reporters critiquing your tax deductions? Remember Clinton's donated underwear? -- released returns and required financial reports have in fact revealed a number of the best known financial scandals out there. Without them, we wouldn't know about Hillary's $100,000 commodities gain, Lamar Alexander's many financial fast deals, or how much Elizabeth Dole earned speaking to companies that lobbied her husband. If Steve Forbes wants to play in the political world, he should play by the same rules.
Steve has said he has no burning desire to be president. By all accounts, he was talked into it by a group of friends who are true believers in supply side economics, including Jude Wanninski (whom Steve hired as an editor), millionaire financier Ted Forstmann, and National Review editor Larry Kudlow.
Even as Republicans were hugely successful in 1994, supply siders were falling out of favor. No other declared candidate carried their banner, and supply side favorites such as Jack Kemp sat out (though of course he was picked as Dole's VP). It's always sad to see someone used for their money, but it's also scary to think of a possible president with no strong feelings about politics, who already is letting a small clique with fairly radical economic ideas pull his strings.
Of course, as the national enjoys the achievement and results of a balanced budget for the first time in a generation, even spending cuts are not a guaranteed popularity booster. But if Forbes does win, expect to see these theories become policy.
Forbes has gained a lot of attention with his radical flat tax proposal. He would also gain about $200,000 a year in tax savings if the plan passed.
This isn't a mark against Forbes, but it is an intriguing incident that could become someone else's scandal. On November 25, 1995, Forbes' New York campaign headquarters were burglarized. Computers in the office were turned on, and computer disks were 'rifled through". The campaign staff claimed that it 'appeared to be an effort to obtain information relating to Forbes' effort" to get on the NY ballot, though a police detective said "it was not a sophisticated break-in. This is not a semi-Watergate."
Why? Probably because the writer went off the conspiracy deep-end. But his supporters will tell you it's because the story listed Caspar Weinberg, Chairman of Forbes and one of Steve Forbes' friends, as one of several Republicans who keep chunks of money in Swiss Bank Accounts -- just like Vincent Foster allegedly did. With Forbes about to run for President, the theory goes, this was too hot to publish in his own magazine. If you like this kind of stuff, you can read the actual article, which was published in the August 1995 issue of Media Bypass, a small conspiracy zine.
"Forbes' Candidacy Appeals to Bankers", American Banker, September 29, 1995 p3
"Richie Rich On the Stump", Newsweek, July 24, 1995 p47
"What Makes Steve Run?", Jeanie Russel Kasindorf, Fortune, February 5, 1996
"That Prestigious Silver Owl Award", Fortune magazine, by james Aley, March 4, 1996 p58
"Forbes: Dropping Big Bucks in IA", Time, September 29, 1995 p35
"Steve Forbes: If Dollars Were Votes", Business Week, October 9, 1995 p36
"Hey Jude: Steve Forbes, GOP Savior?", Ruth Shalit, New Republic, July 3, 1995 p14
"Steve Forbes: Front and Right", National Review, October 23, 1995 p67
"Forbes Is Profitable", MediaWeek, January 6, 1992 p5
"A Brass Knuckled Gentleman", Richard Stengel, Time, December 4, 1995
"Insiders Running Outside", Paul Kaihla, Maclean's Magazine, October 2, 1995 p30
"Forbes Record Is In His Writings", Ronald Brownstein, LA Times News Service, The Record, January 25, 1996 pA18
"Buying Power", Howard Fineman and Mark Hosenball, Newsweek, January 29, 1996 p21
"Knock 'Em Flat", Nancy Gibbs, and "Rich Man's Game", Richard Lacayo, Time, January 29, 1996 p22
"Forbes Settled Bias Suit Before Start of Candidacy", Douglas Frantz, The New York Times, January 28, 1996
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