STEVE FORBES

STEVE FORBES is leaving a candidate-meets-the-voters lunch with the Rochester (N.H) Rotary Club. As camera crews scramble into position, Mr. Forbes heads for the door. But a campaign aide points to some women dining in the restaurant. Forbes looks at them through his Coke-bottle glasses and turns away. Again, his aide points to the women. This time, Forbes walks over and introduces himself.

Almost any other candidate running for president would have galloped over without prompting. But as this little episode illustrates, Malcolm Stevenson Forbes Jr. is not your standard politician.

While Forbes may still be learning the art of politics, he has become the enfant terrible of the Republican contenders, an overnight political phenomenon in the 1996 campaign. The millionaire magazine mogul with a computer-nerd persona has emerged as the only one within striking distance of front-runner Sen. Bob Dole.

In true American fashion, the public is picking an underdog. The fascination may well be fleeting, but Forbes's sudden rise is unquestionably energizing the Republican race.

As one of the richest men in America, he likes to portray himself as the outsider taking on the political establishment. As editor in chief of Forbes magazine, he uses a multimillion-dollar yacht to put the hard sell on business tycoons to advertise in the publication. Forbes is now spending large sums of his money on advertising to try to sell his ideas to America.

The flat tax is Forbes's main issue. But it also leaves him open to charges that the biggest beneficiaries will be his fellow millionaires. In fact, lately his own taxes have become an issue.

Forbes refuses to release his income tax returns, despite calls by all the other candidates that he do so. He says he has paid income taxes every year that he has worked and now pays the "maximum" rate. Yet he won't disclose the details. He proclaims he doesn't want it to be a "distraction."

He prefers to discuss the elimination of the progressive income tax, what he calls "the death knell of the political class." Without the current income tax, he reasons, Washington would be a far simpler place. Scores of special-interest groups would move out of their "designer" offices. Although he says he would pare large chunks from the government, he loves to joke that he is in favor of one Washington program: "job retraining for the IRS."

The joke is part of his hokey sense of humor. He thanks the Rotarians for the "free lunch," noting that since he is of Scottish descent, "I appreciate that." When he laughs, it's a full-faced grin with no guffaw.

Among New Hampshirites, known for their tough evaluation of politicos, Forbes is winning converts. Before his 10-minute speech in Rochester, Fred Hall, a white-haired man who describes himself as "semi-retired," enters muttering, "He has a lot of questions to answer." By the time, Forbes is through, Mr. Hall says, "I like his attitude, he's got my ear."

After a Forbes visit to radio station WTSN, news director Don Briand enthuses: "It's the most excitement since Gary Hart entered the [1988] race."

Forbes does not capture voters with style. He gives "the speech" in a monotone - without notes - with only a few hand movements. He always seems to be wearing a dark suit and club tie. But there are few questions that stump him. And at times, he shows flashes of wit.

When a caller to the radio station asks him if he would accept the vice presidency, he replies, it would create a "constitutional crisis" since he couldn't be both president and vice president at the same time.

Even though he has never been involved in politics, Forbes is adept at stepping around a question. At a meeting at the Fisher Scientific Company in Hampton, N.H., he is asked about his commitment to the environment. He replies with vague answers about not letting emotion overtake science and the need for good cost-benefit analysis. Conservationists in the audience leave scratching their heads.

As he stumps across the nation, Forbes tells audiences he intends to slash government spending. Yet in the years he was chairman of the Board for International Broadcasting - which governs Radio Free Europe and Radio Liberty - the government agency's budget nearly doubled. The budget may have been inflated, however, by currency exchange swings and an ambitious construction effort.

Although this is Forbes's first run at any elective office, he showed an early proclivity to observe politics as a young boy. At the age of 7 he was following his father around New Jersey, where Malcolm Sr., was mounting an unsuccessful campaign for governor.

At the Brooks School, a private school in North Andover, Mass., Forbes was the feature editor of the school newspaper, the Brooks Shield. Mike King, the adviser to the school newspaper recalls Forbes as "very political."

Mr. King remembers that Forbes wanted to cover the turmoil roiling the nation over Vietnam. The Brooks's administration resisted, since it viewed the paper as a link to alumni and parents and did not want to alarm the adults. So one night as the Shield was closing, King found himself locked out of the newsroom.

"It was outrageous, they would not let me in," recounts King.

King says the incident was an early example "of Forbes taking a stand and standing up to the power structure." He calls Forbes "the only kid I have ever fought with," but adds, "he did it with style and fair play."

After graduating from Brooks with honors, Forbes enrolled in Princeton University in New Jersey. A history major, Forbes is best known at the school for starting a magazine, Business Today, which tried to relax tensions between students and businessmen. It is still published and read by 500,000 students nationwide.

After he graduated from Princeton, Forbes faced the prospect of the draft. He says he felt Vietnam was a "mistake," but he did not participate in antiwar marches. With a lottery number of 190 in a year when the Selective Service System was drafting men with numbers up to 195, Forbes joined the National Guard in Trenton, N.J. "I showed up at the door and they said they needed cooks, so I was a cook," he recalls.

After college, Forbes went to work for his father's magazine. He showed an interest in politics but not elective office. In 1992 he became involved with Empower America, a conservative group.

Later, the Empower America connection led him to his run for the White House.

In August 1994, he was attending the Empower America annual meeting in Teluride, Colo. The organization was floundering. With 40 to 50 "big money" people in a room, he talked about where he saw America heading.

At the meeting was Jude Wanniski, a Reagan economist who was trying to convert Sen. Bob Dole (R) into a supply-sider - an advocate of lower business taxes to boost productivity. After Forbes's speech, Mr. Wanniski's wife, Patricia, leaned over and suggested, "Let's forget about Dole and talk Steve into running."

On their way back to Newark, on Forbes's jet - appropriately named Capitalist Tool - they sat in the plush leather seats around a table in the plane. "I told him what Patricia said and how she said it and suggested he really start thinking about a career in politics," recalls Wanniski.

Wanniski suggested Forbes run for Sen. Bill Bradley's seat and then aim for the presidency in 2000. "By the year 2004 to 2008, he'd be president," says Wanniski. Typical of Forbes, he insisted that Wanniski write it all down, sign and date it. "I remember how carefully he folded it - almost reverently. He collects things for the Forbes's archives," recounts Wanniski.

In the middle of the night, Wanniski suddenly realized Forbes would not have to wait. Aside from the fact they were friends, he was attracted to Forbes's optimism. "The American people always elect a president who is prone to crazy ideas on ways we can improve ourselves," says Wanniski. Forbes's reply: "It might be fun." In September, after a summer of meetings with friends and advisers, he announced his candidacy.

Forbes quickly told his supporters they shouldn't consider money an obstacle. He would ante up $25 million. He could do this because he had inherited a 51 percent interest in Forbes Inc., the parent of Forbes magazine. His Federal Election Commission filing says Forbes paid himself $1.35 million last year. Fortune magazine estimates Forbes's net worth at $439 million or among the 300 richest Americans.

His campaign headquarters in Bedminster, N.J., reflects that wealth with its colonial styling and suburban setting. Inside, there is a photo collection of Forbes with ex-presidents, Margaret Thatcher, and Pope John Paul II.

As staffers arrive at the building, there is some consternation: the post office is leaving plastic buckets of mail outside the building. In the mail are thousands of dollars of checks.

Forbes lives nearby with his wife, Sabina, and their five daughters at "Southdown," a gracious colonial clapboard house. It was assessed in 1994 at $1,045,900. Although the house is in an exclusive community, Forbes has reduced his property taxes by taking advantage of a law that allows anyone making $500 or more on farming to be taxed at a lower rate.

In 1994, the farm had income of $9,124. As a result, according to local property records, in 1994 he paid only $2,061 on 449 farm acres and $46,142 on his 70.6 non-farm acres.

In contrast to his flamboyant father, Forbes likes to relax with a good book on American history. His good friend Ken Tomlinson, editor in chief of Readers Digest in Pleasantville, N.Y., says he often "conspires" to have political discussions when their families gather. "When Steve starts talking, pretty soon it's a history lesson," says Mr. Tomlinson.

How Forbes does in the coming weeks will determine if he gets his own page or just a footnote in the history of the 1996 campaign.

Candidate Forbes

On Taxes...

Would replace income tax system with 17 percent flat tax, with no taxes on earnings under $36,800 for family of four. Would eliminate mortgage-interest and charitable deductions and cut capital-gains tax.

On Balanced Budget...

Faults what he sees as an overemphasis on bringing down the deficit, saying growth spurred by low taxes is more important.

On Abortion...

Has no plans to ban abortions, but would restrict late-term abortions. Opposes public financing of abortions and favors requiring that a minor get parental consent to have one.

On Affirmative Action...

Opposes race-based quotas.

On Bureaucracy...

Would strip Education, Energy, Commerce, and HUD "of all but their most essential functions" and eliminate a "whole alphabet soup of agencies."

On Education...

Supports vouchers for public, private, or religious schools, and giving parents choice of schools.

On Environment...

Backs law requiring government to compensate people whose property values are lowered as a result of regulation.

On Immigration...

Has long advocated a liberal immigration policy, saying more people in the work force create more competition and lower labor costs.

On Gun Control...

Favors expanded rights for police to frisk people on the streets for guns if they are suspected of having one illegally.

On Term Limits...

Supports them.

On Welfare...

Favors two-year limit on aid to recipients able to work and requirement to take government sponsored job if other work is unavailable. Favors requiring unwed teen mothers to live with parents or guardian if possible, and limiting benefits to single women if they have more children.