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The Buying of the President 2000

Malcolm “Steve” Forbes, Jr.

“Contrary to what some people would have you believe, there really is no difference between values and economics.” Steve Forbes told a crowd of 150 supporters in Sioux City, Iowa, in January 1996. “They’re one and the same.”

The line came from Forbes’ standard stump speech; he used the same words in appearances across Iowa and New Hampshire in his first run for the White House. For Republican primary voters who were concerned about family values, abortion, and social decay, Forbes had a simple message: America was poised on the brink of the greatest “economic boom and spiritual renewal” in its history.

All the nation had to do was seize the golden ring.

“We have to start not by being timid, but by being bold, by tackling and getting rid of one of the major obstacles on family life today and the major source of power in Washington, the major resource for the Washington culture, and that is the tax code,” Forbes told voters, in this case those hearing him in Portsmouth, New Hampshire. He called the tax code a monstrosity, a dead weight on family life, and blamed it for the rise in the number of families with both parents at work.

“No one outside of Washington could have consciously devised something more incomprehensible, more corrupting,” he said. “You can’t reform it. You can’t trim it. The only thing you can do with this monstrosity is to scrap it, kill it, drive a stake through the heart, bury it, and hope that it never rises again to terrorize the American people. And contrary to what certain Washington politicians say, we should replace it with a simple flat tax.”

Every four years, it seems, at least one candidate emerges in the presidential primaries with the latest political elixir to cure America’s ills. In 1980, Ronald Reagan pushed supply-side economics — “voodoo economics,” in the words of his primary rival, George Bush — all the way to the White House. In 1984, Gary Hart proposed scrapping the income tax in favor of a national consumption tax. In 1988, Pierre S. “Pete” Du Pont IV called for privatizing Social Security; George Bush called that one “a nutty idea.” Ross Perot changed the formula somewhat in 1992 — he offered himself, the independent candidate and man of means, as the solution to the problems he spelled out in his signature charts and graphs. And in 1996 it was the turn of a bespectacled, millionaire publisher from New Jersey to sell the latest quick fix to the electorate.

Forbes bears more than a superficial resemblance to those before him who built presidential candidacies on big ideas. His flat tax was backed by the same economists who were behind Reagan’s low-tax, high-growth platform. Like Hart’s national sales tax, Forbes’ proposal would scrap the Internal Revenue Code. Both Forbes and Du Pont are independently wealthy heirs who favor privatizing Social Security. And Forbes is the second major candidate in the 1990s who views the presidency as an entry-level position in politics — Perot, in 1992, was the first.

While Forbes has never held elective office, he’s done as much as any other candidate running to change the rules of campaign finance. By the time Forbes finally dropped out of the 1996 presidential race in March, he’d spent more money than anyone else: $35.5 million. Fully 90 percent of the money came out of his own pocket. Forbes, with a personal fortune at his disposal, chose to refuse federal matching funds, which allowed him to ignore the state-by-state spending limits established by the Federal Election Campaign Act. As a result, his 1996 campaign shattered federal campaign spending ceilings, highlighting the weakness of the laws.

The hefty bankroll he brings to the 2000 primaries has already made itself felt. His chief rival for the nomination, Texas Governor George W. Bush, has broken all fundraising records and eschewed spending limits to prepare for the expected Forbes onslaught, which is likely to reprise the strategy that catapulted Forbes into the position of Robert Dole’s chief rival in 1996.

Forbes may not have won the nomination, but he proved he was willing to open his wallet to get his message out. He pushed his vision of tax reform — a radical, untested scheme that would dramatically alter the sources of federal revenue. He saturated the airwaves in early primary states with commercials that relentlessly attacked Dole’s record in the Senate on taxes. He finished as the runner-up to Dole in the primaries, and even forced the Republican nominee to make a tax cut part of his presidential campaign.

All of which is quite a surprise for someone who wasn’t even expected to run in the early days of the 1996 election season. When the Center for Public Integrity prepared its first edition of The Buying of the President in 1995, Forbes’ name hadn’t yet surfaced as a potential candidate; all the other candidates who ran had already thrown their hats into the ring.

When Steve Forbes announced his candidacy in September 1995, he was the editor-in-chief of Forbes magazine, the linchpin of the family business he inherited from his father. The son followed in his father’s footsteps in more ways than one: Forbes, recalled his father, Malcolm, Sr., describing the presidency as “the Holy Grail; the gold at the end of the rainbow.” The elder Forbes, after graduating from college, moved to Ohio, partly because of the number of presidents the state had produced. Forbes’ father never made a run for the White House.

In 1917, B.C. Forbes quit his job as a financial reporter in New York City and started his own magazine to report on business “doers and doings.” In his March 2, 1918, issue, for example, the fledgling publisher offered an early precursor of the magazine’s famed list of the 400 wealthiest Americans. B.C. Forbes listed the 30 richest people in the United States, along with an article that tried to put their holdings into some sort of perspective.

“John D. Rockefeller’s fortune passed the billion-dollar mark, I am told, three or four years ago, at the time Standard Oil Securities more than doubled the price ruling before the dissolution of the Oil Trust,” Forbes wrote of the robber baron who topped his 1918 list. “He is now credited with $1.2 billion. His income is estimated to work out at $2,739,726.02 a day, $114,155.25 an hour, $1,902.58 a minute, and $31.70 a second.” (As astounding as those figures are, bear in mind that a dollar in 1918 had more purchasing power than $10 does today.)

Lest anyone think he was fanning the flames of class envy, Forbes added, “Mr. Rockefeller’s wealth, if it could be turned into cash and distributed equally — which it couldn’t — would give every man, woman and child in the U.S. $10 each.” Rather, the founder of the magazine set a tone to which it remains faithful to the present day: the celebration of wealth.

B.C.’s son, Malcolm, joined the business in 1947 after fighting in World War II, where he received a Bronze Star and a Purple Heart for his bravery at the Battle of Aachen. His son, Malcolm Stevenson Forbes, Jr., was born on July 18, 1947.

Although his father was already involved with the family’s magazine by the time he was born, Steve spent much of his early years following his father’s on-again, off-again pursuit of political office. When Steve was four he was already on the campaign trail with his father’s 1952 race for a Republican seat in the New Jersey state Senate. Forbes won and wasted no time in looking beyond. He captured the Republican nomination for governor in 1957, but lost in the general election to Democrat Robert Meyner.

Politics rubbed off on young Steve. During his father’s campaigns, Steve developed an interest in politics, although it was more an affinity for numbers and statistics than for meeting people and pressing the flesh.

“He used to flip me out,” Forbes’ father once said of his son. “When I was running for governor and state Senate, Steve could tell me county by county what they had done in past years.”

Malcolm Sr. took control of Forbes magazine in 1957, the same year his political career ended. He was far more successful as a publisher; he built the publication into one of the most successful business magazines in the world. In 1961 he hired James Michaels as editor, and, under Michaels’s stewardship, Forbes gained a reputation as a magazine with a skeptical, contrary perspective that didn’t base its reporting on business hype or trends. Meanwhile, Malcolm spent his time courting advertisers for the magazine, an activity he made into a family affair.

On autumn Saturday mornings in the 1960s, the elder Forbes required that the boy entertain corporate executives on The Highlander, the company yacht. Young Steve and his brothers spent their weekends memorizing the names of guests, fetching drinks, and awkwardly attempting small talk. Occasionally he and his brothers were obliged to put on kilts and play the bagpipes.

“My father made sure that we knew that there’s nothing wrong with salesmanship,” Forbes told Fortune magazine in 1996 in reference to the yacht parties. “At a very early age, we were expected to know, as my father put it, where our bread was buttered.”

He attended Princeton University in the tumultuous 1960s, but it was business, certainly not protest, that he saw “Blowin’ in the Wind.” He founded a student business magazine and mocked the counterculture, antiwar movement when he had the chance. After a local altercation between student protesters and the police, he wrote: “We found it a refreshing sight to see the cops, their
clubs a swingin’, disrupt a band of willful ruffians disrupting an entire university.”

In 1970, Forbes graduated from Princeton as had his father before him, and wrote a telling entry in his senior yearbook. He said that he wanted to attend business school, get involved in publishing, and “dabble in politics.” Forbes skipped business school, but still managed to fulfill the two other goals.

Upon graduation, Forbes won a coveted place in the New Jersey National Guard, which kept him away from possible military service in Vietnam. His military obligation dispensed with, Forbes moved back to New Jersey, near Timberfield, the family’s estate, and set right off to work with his father. There was no question that he would take over the business. He started as a research assistant at the magazine in 1970, and became associate editor in 1976.

In the 1970s, Forbes’ father drew attention to himself by pursuing an extraordinarily extravagant lifestyle. He drove Harley-Davidson motorcycles, collected Faberge eggs, dated actress Elizabeth Taylor, and on his 70th birthday threw a $2 million birthday bash for himself in Tangiers. The self-promotion brought a higher profile for Forbes magazine and bigger profits.

By 1982, Steve Forbes was the magazine’s deputy editor-in-chief and heir apparent to the Forbes throne. Forbes still jokes about his rise. In 1996 he told a reporter: “As my father liked to say, there is nothing wrong with nepotism so long as you keep it in the family.”

Forbes inherited the business in 1990 when his father died. By that time, the flagship family publication was among the top business magazines in revenue. Today the magazine takes in about $315 million a year and employs about 600 people. Besides Forbes magazine, Forbes Inc. now owns and operates a host of publications, including American Heritage; American Legacy, which covers African-American history and culture; Forbes Global Business & Finance; Forbes FYI, a lifestyle magazine for corporate executives; four magazines on trends in technology — Forbes ASAP, The Gilder Technology Report, Invention & Technology, and Executive Edge—as well as Forbes Digital Tool, a web business magazine.

Forbes also inherited Timberfield, a ranch in Colorado, a castle in France, a palace in Morocco, a Boeing 727 jet called Capitalist Tool, and a total worth estimated at $439 million.

Forbes’ long-shot campaign for the presidency has everything to do with his acquired wealth — he was born to money, sheltered by it, taught to worship at its altar. Today, the presidential candidate makes no apologies for where money has taken him in life. He dismissed questions about the propriety of using his own fortune to bankroll his presidential ambitions, telling reporters in the 1996 campaign that the criticism “has been there since day one, but the key is the message.”

But ever since he first arrived on the political scene as an adviser to Christine Todd Whitman in her first gubernatorial campaign in New Jersey, that message has been inextricably entwined with wealth.

In the summer of 1993 it appeared that Christine Todd Whitman had had her moment in the sun. In November 1990, Whitman, then a little-known county official, had shocked Senator Bill Bradley, and much of the national political establishment, by capturing 47 percent of the vote and nearly unseating him. Whitman rode on a wave of voter discontent created by Governor James Florio’s massive tax hike; she had bumper stickers printed that read, “Get Florio, Dump Bradley.”

Three years later, she would take on Florio directly, but an unfocused message and a series of gaffes set her back in the polls. She turned to some of her top advisers and friends for help.

Steve Forbes had known Whitman since the two attended the exclusive Far Hills Country School. In 1952, as children, they presented a pair of dolls to Richard Nixon’s daughters when the vice presidential candidate made a campaign swing through New Jersey. Their estates are both located in Somerset County, and the two both sent children to the same private school where they had been classmates. So when Whitman asked Forbes to aid her campaign, he was happy to oblige, and served as her chief economic adviser.

Forbes’ economic philosophy derives largely from the supply-side economists who provided the intellectual argument for Ronald Reagan’s tax policies. In 1978, Jude Wanniski, a former editorial writer for The Wall Street Journal, published a political and economic treatise titled The Way the World Works. Wanniski argued that broad, across-the-board tax cuts, limited government spending, and a stable currency would unleash an entrepreneurial golden age in the United States. As part of an effort to popularize his ideas, Wanniski organized meetings with a loosely connected group of New York investment bankers, politicians, and Washington insiders. Among the participants were economist Arthur Laffer and Representatives David Stockman of Michigan and Jack Kemp of New York. Conservative Washington journalist Robert Novak was a sometime participant in the talks. Occasionally, Forbes — who by then was working as an editor at Forbes — would attend meetings and listen attentively.

Rather than being a vocal participant, Forbes sat awkwardly on the fringes of the group as “an interested observer,” Wanniski told the Center. “He showed up to meetings and scribbled notes in his notebook.”

The emerging philosophy became known as “supply-side economics,” and Forbes — despite his awkward reticence — became a disciple of the cause. Wanniski’s treatise “could do for the Republican Party what Marx’s manifesto did for communism,” he wrote in the magazine after attending several sessions.

Forbes dusted off the supply-side theories for Whitman. With some help from Lawrence Kudlow, a former official in the Reagan administration, he drew up a plan for a 30 percent across-the-board tax cut that became the centerpiece of Whitman’s campaign against Florio. Politically, the plan played well with New Jersey voters, reminding them of the tax increases that Florio had championed in his first year of office. Whitman argued that the tax cuts would create hundreds of thousands of new jobs and pave the way for a revival of the state’s economy. She hammered away at the tax issue and won the election.

For Forbes, his old friend’s victory proved that the appeal of tax cuts as a political platform had outlived the Reagan administration. It also did something else. Late in 1994, with Whitman’s economic program already in effect, New Jersey was on the upswing. While there were other factors in the state’s improving fortunes — 1994 was a good year for the nation’s economy generally — New Jersey companies spent $1 million on a 37-page glossy magazine promotional spread touting the state, the tax cuts, and the governor who pushed for them.

The publication that landed that $1million in advertising revenue? Forbes.

In 1995, Jude Wanniski was distressed. Jack Kemp, whom he hoped would carry the torch for supply-side economics, had announced early in the year that he would not seek the Republican nomination for president. Bob Dole, the party’s front-runner, had a mixed record at best on the issue of taxes. Senator Phil Gramm of Texas, who had hoped to run as the true conservative, had already lost a straw poll in Louisiana to Pat Buchanan, whose protectionist views on trade put him at odds with supply-side dogma. None of the other candidates seemed viable.

If not most, certainly many Americans who are registered as Republicans or Democrats find themselves in the same situation when looking at the candidates for the White House. The wish that someone else was running is one that goes unfulfilled. Unless one happens to have a friend like Steve Forbes.

Wanniski urged Forbes to run as Kemp’s replacement to promote his tax-cutting agenda. Before he pushed the idea in earnest, he called three members of the Political Club for Growth, a group of Wall Street brokers and investment bankers who used to meet informally with Wanniski in the late 1970s. All three — Ted Forstmann, the millionaire leveraged-buyout financier; Lawrence Kudlow, who’d helped Forbes design Christine Todd Whitman’s tax-cutting plan; and Dick Fox, a Philadelphia real estate developer — were enthusiastic and offered their financial support. Wanniski tracked down Forbes on summer vacation with his family and set out the reasons he should run.

Forbes was at first reluctant. Business Week reported that he visited Gramm in his Senate office to see if his views matched those of the supply-siders but came away disappointed. Forbes also asked Kemp’s former chief of staff, William Dal Col, to help him decide whether he should run. Dal Col, who at the time was the president of Empower America, a conservative advocacy organization, didn’t discourage him. Later that spring Forbes started to put together his own organization with Dal Col as the campaign manager.

In the fall, members of the Political Club for Growth gathered in the Manhattan office of Richard Gilder, a partner in the investment firm Gilder, Gagnon and Howe and a charter member of the group, to hear Forbes speak.

“Steve made a terrific presentation and really got people excited,” Daniel Gressel, the manager of Teleos Asset Management, a hedge fund, said at the time in an interview with The Wall Street Journal. “We think of ourselves as the growth wing of the party, and Steve’s message really resonates with us.”

Forbes formally declared his candidacy for the presidency on September 22, 1995.

Given that the centerpiece of Forbes’ 1996 campaign was a radical overhaul of the tax system that would have benefited individuals like Gressel the most, it’s little wonder that the candidate’s message resonated with him.

Forbes’ version of the flat tax, which he’s still pushing in his second run for the White House, is a tax only on wages and salaries. Income from dividends, capital gains from the sale of stocks and other assets, pensions, Social Security benefits, interest from savings and the like, all would be exempt from taxation. At the same time, high-income earners would be taxed at the same rate as lower income earners — a flat 17 percent. Itemized deductions would be eliminated, including those for charitable contributions and interest on home mortgages. Instead, individuals would get a standard deduction of $13,000; for married couples, the deduction would total $26,000. For each dependent, a taxpayer could claim another $5,000 deduction. Thus, Forbes trumpets his plan by noting that for a husband and wife with two children, the first $36,000 in income would be tax-free.

Steve Forbes has not made his own tax returns public, so to understand how his flat tax would benefit the wealthy, consider his rival for the Republican nomination, George W. Bush. In March 1999, Bush announced that the year before, he had taxable income of $18.4 million. Most of that amount came from capital gains when he sold his share of the Texas Rangers for $14.9 million. (Bush had bought into the baseball team in 1989 for $500,000.) Much of the rest of his money came from various trusts and investments he owns; his salary as governor totaled $97,890. Bush ended up writing a check to the Internal Revenue Service for $3.8 million.

Under Forbes’ flat tax, none of the profit from selling the Rangers would be taxable. None of the millions his other investment trusts earned would be, either. Bush’s total income would be $97,830. After taking the deduction for himself and his wife and his two dependent children, he would pay the flat 17 percent tax on what remained.

Bush would have owed the IRS just $10,521.

Forbes’ signature line in his 2000 campaign is “Steve Forbes: He wants you to win.” But who’s the “you” in his slogan?

Of Forbes’ top 10 patrons, six are Wall Street investment bankers, who earn the lion’s share of their income speculating in the stock market. All that income would be tax-free.

Heirs to large fortunes, on the other hand, would see the estate tax eliminated. That would be particularly beneficial to millionaires like Forbes: Since his father died in 1990, the family has been paying off the estate-tax bill in installments, according to an August 1999 article in The Washington Post. Perhaps that’s why Forbes is so adamant about eliminating the estate tax. His campaign’s website says that estate taxes are “regressive taxes that hurt working families, small-business owners, and especially farmers who want to pass their farms on to their children.”

As for corporations, Forbes would slash their income tax rate from 35 to 17 percent. As with the flat tax for individuals, many deductions that are important to the middle class would disappear. For example, the write-offs that corporations can take for offering fringe benefits like health insurance would disappear, which might tempt employers to stop offering medical coverage for their employees. Similarly, the share of Social Security and Medicare taxes that employers pay could no longer be written off.

Forbes’ flat tax would also eliminate the unlimited write-off for interest; while the deduction helped fuel the leveraged-buyout craze of the 1980s, eliminating it wholesale would hammer companies that are carrying a lot of debt. Similarly, it would abolish tax breaks for research and development costs, which would hurt high-technology companies.

While those deductions would disappear, others would be added to the code. Depreciation would disappear, allowing corporations to immediately write off the entire cost of capital investments in land, construction, and machinery. Business expenses, including travel and entertainment costs (even three-martini lunches), would be fully deductible.

As Fortune magazine pointed out in a 1996 article, one of the companies that would benefit most from rewriting the corporate tax rules would be none other than Forbes, Inc. The closely held firm carries little debt, has relatively few employees, and no research and development expenses. What’s more, Forbes could write off the entire cost of entertaining wealthy advertisers on board his yacht. As advantageous as the tax would be to Forbes, he nonetheless has to live under the rules of the current system. He’s proven to be quite adept at that as well.

Forbes attacks the current tax code on the grounds that it allows the rich and powerful to carve out loopholes for themselves while average Americans bear the brunt of the tax burden. He speaks from personal experience.

To encourage family farms, federal tax law allows cattle farmers to enjoy substantial write-offs on their business expenses. On top of the federal tax break, New Jersey cattle farmers get a property tax break if they own at least five acres of land and generate at least $500 in revenue a year. Which helps explain why Forbes is in the cattle business. His New Jersey farm meets the state’s revenue test, with about $5,500 in yearly income, and he gets the federal write-offs for raising cattle, too.

Forbes raises three different breeds of show cows: Polled Herefords, Galloways, and belted Galloways. “You don’t make money selling hamburger meat,” Forbes told Fortune magazine in 1996. “You make money breeding show cows; that’s the name of the game.”

If Forbes did not stock his land with show cows, his property would be valued for tax purposes at $9 million according to a local land assessor. The assessor estimated that, with the cows, Forbes’ land is assessed at only $160,531. On the 449 acres of his land with cows grazing, Forbes pays just $2,215 in real-estate taxes. On the smaller 70.5-acre plot without cattle, Forbes pays $50,000.

Forbes’ bending of the tax code isn’t limited to cattle. Just months after the 1996 election, when he failed in his attempt to “bury the tax code,” he brought in tax attorneys to figure out a way to keep his ad campaign running on a year-round basis.

The resulting nonprofit organization, Americans for Hope, Growth, and Opportunity (AHGO), was designed to continue broadcasting his message and seek a broader base through television, radio, and the Internet. It solicited money, bankrolled ads featuring Forbes, and sent out press releases detailing the candidate’s political views on issues of the day. William Dal Col was the president of Americans for Hope, Growth, and Opportunity; he switched over in 1999 to serve as manager of the 2000 campaign, the same post he held in 1996.

Forbes launched and operated AHGO in near-total secrecy. Because it has not applied for tax-exempt status, AHGO is shielded from the scrutiny that a tax-exempt organization receives. Tax-exempt organizations, for example, must make significant portions of their tax returns public; Forbes’ not-for-profit corporation is under no such legal obligation.

Al Olsen, the accountant who prepared the tax return for AHGO in 1997, said he thought that Forbes’ intent was indeed to avoid disclosing the organization’s finances. “They told me I had to file a Form 1120,” Olsen said in an interview with the Center for Public Integrity. “They used their own lawyer.”

Had AHGO filed Form 990, as required for tax-exempt organizations, he would have been required to include all of its sources of revenue. AHGO listed its donors (by last name and first initial) on its website, but when the Center asked Dal Col to provide the full names and the amounts and dates of their contributions, he refused.

The Forbes campaign was no more eager to release AHGO’s tax returns than it was to disclose Forbes’ own returns. Paul Sullivan, an attorney for Forbes, did not respond to the Center’s request for a copy of the most recent tax forms filed by Americans for Hope, Government, and Opportunity.

In the 1996 presidential campaign, Forbes was coy about more than just his tax returns. He avoided talking about social issues altogether. He hardly ever mentioned abortion, saying only that he opposed a constitutional amendment to outlaw the procedure and that before abortions could be restricted, the hearts and minds of the American people would need to be changed. Forbes even antagonized one of the Republican Party’s strongest grassroots groups. After learning that the Christian Coalition had attacked his position on abortion, he snapped that the group “doesn’t speak for all Christians.” While his statement was certainly accurate, it was hardly the best way to drum up support in the Iowa primary, where the organization that Pat Robertson founded still has considerable clout among voters. In 1988, incidentally, Forbes dismissed Robertson as a “toothy flake” in a column he wrote.

While the flat-tax plan in 1996 was undeniably popular among the financial elite (Patrick Buchanan memorably dismissed them as the “Chablis and Brie” wing of the GOP), it didn’t draw the social conservatives to Forbes’ campaign. They listened for the core issues: abortion, family values, and school prayer. Forbes did not give them what they wanted to hear, and his campaign ultimately suffered for it. He was determined not to let that happen in 2000.

A year after the 1996 election, Forbes addressed a convention of the Christian Coalition, where he declared that “life begins at conception.” Early on in his 2000 campaign he changed his stump speeches to include a plug for a constitutional amendment that would ban abortions. He publicly promised to only appoint federal judges who passed an abortion litmus test. And on his campaign’s website, Forbes now describes himself as an advocate of school choice and a proponent of “cultural renewal,” an adaptation of the family values theme.

“You don’t succeed unless you’re attentive to your customers,” he said in 1998, when asked to explain the change.

The millionaire has courted social conservatives in the same way he attracted attention to his campaign in 1996: with lots of his own money. While Congress debated whether to ban “partial birth” abortions in 1997, Forbes financed radio advertisements in seven states in support of the ban. And when his old friend Christine Todd Whitman, who’s drawn fire from religious conservatives for her pro-choice views, vetoed a partial-birth abortion ban in New Jersey, Forbes turned on her. He ran commercials in the state pushing for the legislature to override her veto.

In the 1996 campaign, Forbes argued that economics were inseparable from values, and that if the flat tax were implemented, everything else would fall into place. This time around, he’s changed his tune. When he was asked what he would do if he had to choose between outlawing abortion and imposing a flat-tax plan, he said he would outlaw abortion.

That may be more a rhetorical nicety than a real reflection of Forbes’ priorities. “If Forbes had his choice,” said former adviser and confidant Jude Wanniski in 1998, “economics is all he’d want to talk about.”

In any case, Forbes is getting what he wants. His 2000 campaign has received a boost of support from the Religious Right. He’s hired Steve Scheffler, a former field director for the Christian Coalition, and Nancy Streck, a Christian Coalition activist who backed Buchanan in 1996, to work on his campaign. Prominent social conservative leaders such as Paul Weyrich and Richard Viguerie are now on his side, as well as former Christian Coalition chairmen from California, Georgia, and Louisiana.

Viguerie, a former aide to Barry Goldwater in 1964, helped to organize and establish the “New Right” movement in the 1970s, the precursor to today’s religious conservative wing of the Republican Party. Viguerie, a pioneer in the political direct-mail business, was once dubbed the “King Midas of the Right.”

Weyrich started the conservative Heritage Foundation and did his part to organize evangelical Christians into an active block of the Republican Party, a group he termed the “Moral Majority.” In endorsing Forbes, Weyrich urged “pro-family conservatives” to fall in behind Forbes, who has “the financial resources to win the White House in 2000.”

He has that in spades.

Despite the fact that he’s never won a statewide election, let alone a national one, Forbes personifies the relationship between money and higher office. His inherited fortune, and his pledge to spend as much of it as he had to get his message out, gave him instant credibility in 1996. After winning early primary elections in Arizona and Delaware, he saw his economic agenda become the main issue of the Republican campaign. Pressured by the popularity of Forbes’ candidacy, front-runner Bob Dole crafted his own plan to cut taxes and ran on that issue in the general election.

Forbes’ 2000 strategy consists of more of the same: spend and spend some more. Just as he did in 1996, Forbes is refusing federal matching funds and will once again flout the spending limits. By the end of September 1999, the Forbes campaign had spent $18.9 million, more than any other candidate except for George W. Bush, and far more than most candidates had even managed to raise by that point in the race.

That largesse fulfilled a promise that Forbes’ campaign manager made early in 1999. William Dal Col pledged that Forbes would spend “whatever it takes to get the message out.” While other candidates have raised money at $1,000-a-head appearances, Forbes can sell off a few assets to free up even more money to spend on the campaign. He sold the high-maintenance Boeing 727 before the 2000 race, put the family island in the South Pacific up for sale in 1997, and in 1999 was prepared to begin selling public shares in Forbes Digital Tool, Forbes, Inc.’s business news website.

The prospect of another Forbes spending spree in 2000 sparked an historic fundraising “arms race” with George W. Bush. Even before the formal campaign began in 1999, the Bush campaign decided that to compete with Forbes’ money, it also would have to ignore the spending limits set by federal law. Forbes created a situation in which, for the first time since the campaign finance system was erected to tame spending in 1974, two candidates were willing to raise and spend so much money that they would completely sidestep the campaign finance system.

Forbes’ campaign is remarkable not only for the amount of money he’s willing to spend, but also for the way in which he spends it. While there’s nothing all that original about negative advertising, Forbes has shown that he’s willing to hire the best to dish out dirt on his opponents. In the 1996 campaign he hired campaign strategists Carter Wrenn and Tom Ellis — who crafted attack ads for the archconservative Senator Jesse Helms of North Carolina — and swamped Bob Dole with a torrent of negative commercials. By the end of February 1996, Forbes had spent $20 million on ads, most of which bashed Dole’s record in the Senate, contrasting the front-runner’s “Washington values” with his own “conservative values.”

In 2000 the Forbes campaign was ready to repeat that strategy against front-runner George W. Bush. After his strong second-place showing in the Iowa straw poll, Forbes saw an opportunity to catch up with the Texas governor, and the Forbes campaign began polling Bush supporters in an apparent effort to find which stories would most damage Bush’s popularity. When the Bush campaign warned Forbes against launching a mudslinging campaign, Forbes declared that if Bush did not want heat on the issues, “he should stay out of the kitchen.”

In 1996, Forbes found that his checkbook could even substitute for popular support. To get on the ballot of the New York state primary, he needed tens of thousands of signatures statewide, but he didn’t have the time, the campaign staff, or the grassroots support to make the deadline. The solution was to pay a consulting firm, New York Strategic Planning, Inc., of Clifton Park, New York, to do the legwork. He made the ballot and paid the firm $1.4 million for its work.

This time around Forbes has been just as willing to use his money to solve problems. As early as 1998, he needed to hire a high-impact player to jump-start his efforts on Iowa, whose crucial caucus in 2000 would solidify the front-runners of the presidential campaign. Forbes’ solution was to recruit Iowa Republican Party chairman Steve Grubbs, and he did it with typical wealthy excess.

He dazzled Grubbs with the full Forbes VIP treatment: a special flight to Boston and a cruise on The Highlander in the company of former First Lady Nancy Reagan and former British Prime Minister Margaret Thatcher. Grubbs signed on with the campaign, a major leap for Forbes in buying his way into a race Bush already dominated.

Forbes often tells his audiences that he is “spending” his own money, but that’s not entirely correct. In 1996, Forbes financed his presidential campaign almost entirely through more than $37 million in personal loans. The loans remained on the campaign’s books until early 1999, when Forbes forgave them. This time around, Forbes is simply giving money to his presidential campaign, though he could switch back to lending mode — or some combination of cash and loans — whenever he chooses.

Forbes’ list of top donors reads like a “Who’s who” of Wall Street. Six of his top 10 patrons are Wall Street investment banks or individual investment bankers. They are: the Equitable Companies and its subsidiary, Donaldson, Lufkin and Jenrette, Inc. (No. 2); Fleet Securities and its subsidiary, Quick & Reilly Group, Inc. (No. 4); Bear Stearns Company, Inc. (No. 5); Forbes’ old friend and patron, Richard Gilder, and his firm, Gilder, Gagnon, Howe & Company (No. 7); Merrill Lynch & Company, Inc. (No. 8); and Castle Harlan (No. 9). John Castle, the firm’s founder, used to work for Donaldson, Lufkin and Jenrette.

Richard Gilder was an early member of Jude Wanniski’s group of supply-side devotees, and he helped run the Political Club for Growth. He and his firm also gave more than $360,000 to Newt Gingrich and GOPAC. In 1996 the treasurer of the Political Club for Growth, Lisa Britton Nelson, also served as GOPAC’s executive director. Gilder also chaired Forbes’ two most lucrative fundraisers for the 1996 and 2000 election cycles — both held at the Waldorf-Astoria in Manhattan.

Carl Lindner, Forbes’ No. 5 career patron, is the chairman and chief executive officer of American Financial Group, Inc., an Ohio-based insurance company that owns part of Chiquita Banana Brands International, Inc. Lindner has enough money to spread his campaign contributions around to both Republicans and Democrats; since 1991, Lindner and his companies have given more than $1 million in soft money to the Democratic Party, and more than $3 million in soft money to the Republican Party. He has contributed money to both Senator Jesse Helms of North Carolina and to the Democratic National Committee. In 1998, Mother Jones magazine ranked Lindner and his wife Edyth as the fourth biggest political donors in the United States. As in 1996 Forbes is again the beneficiary of Lindner’s largesse.

Lindner is no stranger to Republican politics and to the benefits he can achieve by playing the game. In 1995, Bob Dole, a longtime recipient of Lindner’s campaign contributions, tried to weigh in for Chiquita in a trade dispute with the European Union about the importation of its bananas. And Lindner served as a mentor to one of the most infamous alleged influence peddlers of all: Charles Keating, the savings-and-loan operator who turned to five U.S. senators — later dubbed the “Keating Five” — for help when federal regulators began investigating his investments.

Another insurance provider, Conseco, Inc., is No. 10 on Forbes’ patron list. Stephen Hilbert, its chairman, president, and chief executive officer, is one of the nation’s highest-paid chief executives. Conseco, which has been described as “the Wal-Mart of financial service companies,” sells supplemental health, life, and group medical insurance; annuities; and other insurance products. Among its 30 insurance-related subsidiaries is Green Tree Financial Corporation, the top lender to owners of mobile homes in the United States.

Seven of Conseco’s executive officers and a member of its board of directors have given either to Forbes’ campaign, to Americans for Hope, Growth, and Opportunity, or both. None of them responded to inquiries from the Center about their contributions.

Forbes’ two top patrons are members of the extended “Forbes, Inc., family.” Employees of Forbes, Inc., and their family members are Forbes’ No. 1 career patron, having given a total of at least $38,000 to his various political committees — in addition to the $44 million put in by their boss. Behind Forbes, Inc., is Fisher Investments, Inc., a money management firm based in Silicon Valley. Kenneth Fisher, the company’s chairman and chief executive officer, is a columnist for Forbes magazine.

Former Reagan administration officials are among his patrons as well. They include Commerce Secretary Robert Mosbacher, USIA Director Charles Wick, and Chief of Protocol Selena Roosevelt. Caspar Weinberger, the former secretary of Defense, has also given generously. In 1993 Weinberger became the chairman of the board of Forbes, Inc., and he writes a column for Forbes magazine.

Forbes has also received money from 35 individuals listed by his magazine as among the 400 richest Americans, including John T. Walton, whose fortune consists largely of Wal-Mart stock; Leonard Lauder, the chairman and chief executive officer of Estee Lauder, Inc., the cosmetics firm; and William Wrigley, Jr., the president and chief executive officer of the Wm. Wrigley Jr. Company, which makes Juicy Fruit and Doublemint gum. All three inherited their billion-dollar fortunes; all three would face hefty capital gains taxes if they sold off their stakes in their companies, or large estate-tax bills if they bequeath their wealth to their heirs.

Little wonder, then, that they support the bespectacled magazine editor from New Jersey, whose magazine reports on the “doers and doings” of the business world and whose tax proposals would save them hundreds of millions, perhaps billions, in taxes. After all, Steve Forbes wants them to win, too.

Top Ten Career Patrons

1.  Forbes, Inc., New York***
$44,062,787

2.  The Equitable Companies, New York***
$26,000

3.  Fisher Investments, Woodside, California/Kenneth Fisher family***
$25,000

4.  Fleet Securities, Inc , New York***
$20,000

5.  The Bear Stearns Company, Inc , New York
$19,000

5.  Lindner family, Cincinnati
$19,000

7.  Gilder, Gagnon, Howe & Company, New York***
$17,500

8.  Merrill Lynch & Company, Inc., New York
$15,240

9.  Castle Harlan, Inc., New York/John K. Castle family***
$14,000

10.  Conseco, Inc., Carmel, Indiana
$13,000

This list is based on individual and PAC contributions to Forbes’ 1996 presidential campaign, individual contributions of $1,000 and above to Americans for Hope, Growth, and Opportunity, Inc ; individual contributions to the federal AHGO PAC, and individual and PAC contributions to Forbes’ 2000 presidential campaign through June 30, 1999.
Sources: Federal Election Commission; Center for Responsive Politics, Americans for Hope, Growth and Opportunity.
1.  Includes loans by Steve Forbes to the 1996 campaign that have since been forgiven; candidate contributions by Steve Forbes to the 2000 campaign; and contributions from Forbes family members and employees of Forbes, Inc.
2. Most of these contributions came from employees of Donaldson, Lufkin & Jenrette, a 73 percent owned subsidiary of Equitable.
4. Most of these contributions come from employees of Quick & Reilly, a subsidiary of Fleet Securities.

*** NOTE: Donors marked by (***) have given $1,000 or more to AHGO. The Forbes campaign has thus far refused to disclose exactly how much each donor gave to AHGO. The above figures attribute $1,000 to each AHGO donor; however, such donors could have given far more than the amounts listed.