U.S. lawmakers are investigating whether the Chinese government is attempting to control one of America’s beacons of free market capitalism — Forbes Global Media Holdings.
Republicans on the House Permanent Select Committee on Intelligence began probing the issue in late 2021, according to government documents obtained by The Washington Times.
Forbes Global Media Holdings denies being singled out by the intelligence committee, and a spokesman for the company told The Times that any suggestion of Chinese government influence over Forbes’ operations is “completely unfounded.”
But concern among some committee Republicans over the prospect of such influence grew last year as executives at the New Jersey-based publisher of Forbes Magazine worked on a deal with a China-based special acquisition firm, or SPAC.
That company, Magnum Opus Acquisitions Limited, reportedly received funding from an entity run by the Chinese Communist Party.
In a Nov. 23 letter to Mike Federle, Forbes Global Media Holdings CEO, the GOP side of the intelligence panel asked the company to “assist” in an “investigation related to China’s malign influence activities against U.S. corporations.”
“It is essential for you to be informed of any malign influence efforts related to your company and how such efforts impact American economic and security interests,” then-Rep. Devin Nunes, California Republican, wrote in the letter, a copy of which was obtained by The Times.
Mr. Nunes, who was the intelligence committee’s ranking Republican at the time, has since retired from Congress.
But a committee source, who confirmed the authenticity of the letter, also told The Times this week that the investigation is continuing under the panel’s current ranking Republican, Rep. Mike Turner of Ohio.
The November Nunes letter, along with a lengthy response that Forbes Global Media Holdings provided to the committee in December, have not previously been reported.
An examination of documents by The Times gave no indication that the U.S. Securities and Exchange Commission (SEC), which is reviewing the Magnum Opus proposed deal with Forbes, has been notified formally about the intelligence-panel probe.
Under the $630 million deal, which Forbes announced in August 2021, the iconic business media brand would transition into a publicly traded company on the New York Stock Exchange as part of a merger with the Hong Kong-based Magnum Opus.
SPACs, which have enjoyed a recent vogue on Wall Street, are companies that have no operations of their own but are formed to raise money through an initial public offering expressly for the purpose of buying or merging with an existing company.
Magnum Opus is identified as a SPAC that received some of its initial financing by the Chinese government. According to SEC filings, institutional seed money for the company was provided by China’s sovereign wealth fund, the China Investment Corporation (CIC).
A March 2021 SEC filing described the CIC as “a wholly state-owned company incorporated under the laws of the People’s Republic of China.”
With total assets worth more than $1 trillion, the CIC is one of the world’s largest sovereign wealth funds.
But some in the U.S. national security community question whether the entity is a conduit through which the ruling Communist Party seeks to wield influence over Chinese finance firms investing in public and private companies around the globe.
Such influence is seen to be increasingly present in Hong Kong, formerly an autonomous, pro-democracy city-state that has had political crackdowns and harsh media restrictions imposed upon it by China’s ruling communists in recent years.
SEC filings show that the CIC owned a roughly 5.8% stake of Magnum Opus when the deal with Forbes Global Media Holdings was announced last year, although the filings also show that the CIC has since disposed of its shares.
Recent reports maintain that Magnum Opus has since raised funding for the Forbes deal from more than a dozen other investors.
The DailyMail.com reported last month that Magnum Opus had raised $400 million for the deal from 19 investors, most of whom are based in Hong Kong or elsewhere in China.
The prize of Forbes
Forbes, which boasts an average of nearly 115 million monthly users of its various internet platforms and publishes a printed magazine with an audience of at least six million, is known for its promotion of free-market capitalism. Its own ad campaigns for many years jokingly described the publication as a “capitalist tool.”
The publication was founded more than a century ago by Scottish immigrant newspaperman B.C. Forbes and is perhaps best known today for its pro-capitalist rankings, such as the “30 under 30” list of richest young Americans.
Steve Forbes, the grandson of the company’s founder and a former Republican presidential contender, is listed as the “Editor-in-Chief of Forbes Media,” on the website of Forbes magazine. Randall Lane is listed as the “chief content officer.”
Mr. Forbes did not respond to a request for comment for this article.
Forbes Global Media Holdings announced the pending Magnum Opus deal on the magazine’s website in August as a transaction that “will enable Forbes to further capitalize on its successful digital transformation, using technology and data-driven insights to create more deeply engaged audiences, and associated high-quality and recurring revenue streams.”
Others have questioned the transaction.
“This deal raises serious and grave concerns about Forbes, which is truly the mouthpiece of democracy and capitalism, and is effectively being taken over by the Chinese,” a senior source at Forbes told the DailyMail.com last month.
Forbes Chief Communications Officer Bill Hankes sharply disputed that sentiment when asked for comment by The Times.
“Forbes is and always will be fiercely independent, and any suggestion that the Chinese or any other government would have any influence is completely unfounded,” said Mr. Hankes, who also dismissed the view that Republicans on the House intelligence committee have targeted Forbes for investigation.
The November letter sent by Mr. Nunes was merely a “general inquiry,” Mr. Hanks said in an email to The Times, adding that there has been no further correspondence with the committee since Forbes Global Media Holdings responded to the letter in December.
In announcing the Magnum Opus deal, Forbes Global Media Holdings said the entire management team of Forbes would run the company going forward.
But concern about Chinese influence over Forbes began as far back as 2014, when another Hong Kong-based investment group called Integrated Whale Media bought a majority stake in Forbes.
A December 2017 Washington Post op-ed by China expert and author Isaac Stone Fish argued that the purchase was followed by “several instances of editorial meddling on stories involving China.”
Mr. Fish pointed specifically to Forbes’ decision that year to discontinue publishing articles by Communist Party critic Gordon Chang. Mr. Fish also noted the case of former Forbes contributor Anders Corr, who claimed a Forbes editor emailed him in 2016 saying that it was “not accurate to say China impoverishes its people or to label [Chinese President] Xi Jinping a dictator.”
Intelligence committee probe
The allegations of influence at Forbes have factored into the investigation by House intelligence committee Republicans into the publication’s dealings with Chinese companies.
Mr. Nunes raised the issue specifically in his Nov. 23 letter, which included more than two dozen questions about Forbes’ policies for protecting against Chinese government influence.
“Since the 2014 purchase of Forbes by Integrated Whale Media, there have been accusations of censorship against China critical narratives and retaliation against employees who produce them,” Mr. Nunes wrote. “Have you investigated these accusations?”
A response provided to the Intelligence Committee on Dec. 16 by Forbes’ legal team at the Washington law firm Holland & Knight, said such “accusations have been investigated and are not based in fact,” according to a copy of the document obtained by The Times.
The response, which is marked “CONFIDENTIAL,” says Forbes “decided to phase out its ‘Opinion’ channel to focus more on fact-based policy reporting” in 2017, stating that “a contributor named Gordon Chang was cut as part of this process.”
It also said Forbes removed a post by Mr. Corr in 2017 “because it was poorly executed,” and that his term as a contributor was ended “due to a history of reporting that did not meet Forbes’ standards.”
Mr. Hankes, the chief communications officer at Forbes, said in his more-recent comments to The Times that the magazine “continues to publish articles critical of China that are readily available online.”
He pointed to the example of a January 2022 Forbes article that highlighted abuses of press freedom in China. The article focused on a list of abuses presented by the “One Free Press Coalition” ahead of the recent Winter Olympics in China.
Topping the list was the case of Hong Kong media entrepreneur and democracy advocate Jimmy Lai Chee-ying, who was arrested and jailed as part of a recent crackdown by Chinese authorities on political and media freedoms in Hong Kong.
In addition to questions about Forbes articles on China, the November Nunes letter also sought information about whether anyone from Forbes has engaged in interactions with Chinese government officials, most notably from the State Council in Beijing.
The council oversees the same CIC that provided initial funding for Magnum Opus.
“Has anyone from Forbes ever had a meeting with anyone from the Chinese State Council Information Office? If so, who and what was the context?” Mr. Nunes asked.
Forbes responded through Holland & Knight’s letter that “to the best of the company’s knowledge, no person at Forbes has met with anyone from the Chinese State Council Information Office.”
A source familiar with the correspondence said it has been shared with the U.S. Treasury Department’s Committee on Foreign Investment in the United States (CFIUS), a multi-agency executive branch investigative arm that examines takeovers or purchases of U.S. companies by foreign entities for U.S. national security questions.
CFIUS did not respond to a request for comment from The Washington Times.
The SEC declined to comment, although SEC Chairman Gary Gensler recently raised concern about Chinese companies trading in U.S. capital markets in general.
Mr. Gensler suggested in a September op-ed published by The Wall Street Journal that his primary concern is less about Chinese government influence than a potential lack of transparency in Chinese companies that engage in deals with U.S. companies and investors.
“I don’t believe China-related companies currently are providing adequate information about the risks they face — and thus the risks that American investors in these businesses face,” Mr. Gensler wrote, adding that many Chinese companies “establish contractual relationships with shell companies in foreign jurisdictions, like the Cayman Islands” that in turn raise capital on U.S. stock exchanges without “actually confer[ring] ownership of the operating company to American investors.”
“I worry that some investors don’t realize they’re putting their money into a Cayman shell rather than a company operating in China,” he wrote.
Whether the SEC approves the Magnum Opus deal with Forbes remains to be seen.
Filings indicate that a late-March deadline for Magnum Opus to complete the acquisition and take Forbes public could be extended if the SEC has not approved the deal by then.
Magnum Opus did not respond to a request for comment.
• Joseph Clark contributed to this report.