Speaking fees.

• Author: Hayward, Allison R.

It's Forbes vs. Forbes at the FEC.

The Federal Election Commission has filed suit against Steve Forbes and Forbes Inc. for campaign finance violations during the publisher's 1996 presidential campaign. Forbes wasn't sipping coffee with shadowy foreign businessmen. Instead he wrote a biweekly column in Forbes magazine and had the audacity to discuss current events in that column. For this, the FEC, which claims it is so chronically underfunded that it has to dismiss most of the complaints it receives because it lacks the resources to prosecute them, has filed a complaint in federal court in New York claiming that, by publishing these columns, Forbes (the magazine) made an illegal contribution to Forbes (the candidate).

Interestingly, the FEC recently persuaded hostile appropriators in Congress to fully fund the agency's requested 1999 budget of $36.5 million (up from $31.6 million the previous year). To lead off 1999 with a case that is certain to draw attention to the commission's quixotic litigation strategies shows some nerve.

Did Forbes - or Forbes - violate the law? Federal law prohibits corporate contributions to federal candidates. Contributions may be in the form of money or in-kind services, such as the publication of a campaign advertisement. Corporate "expenditures" made in coordination with a candidate are also considered illegal contributions. Congress understood that this blanket rule could impose unacceptable restrictions on media activities, and so it made an exception to the definition of "expenditure" for news stories, commentaries, or editorials distributed by any broadcasting station, newspaper, magazine, or other periodical.

Fearing that this could in time become a loophole for political parties and candidates (who could establish newspapers or magazines to take advantage of the rule), Congress dictated that the exception would not apply to media outlets "owned or controlled by any political party, political committee, or candidate" unless the item in question represented a bona fide news account which was "part of a general pattern of campaign-related news accounts which give reasonable equal coverage to all opposing candidates."

According to the FEC's complaint, while a candidate for president Forbes disseminated his opinions about issues "on which he was also relying in his presidential campaign" in his "Fact and Comment" column in Forbes magazine. "Those issues included, among others, the flat tax, capital gains...