=Subscribers Only



SPORTS
Golf Lifestyle

BOOKS
Reviews & Excerpts


CITIZEN PEROT

CHAPTER FIVE

The Ultimate Insider

The spectacular stock success of Electronic Data Systems, and its booming run on Medicare contracts, further threatened the company's carefully crafted personality. That problem was resolved in 1968 by focusing on a new pool of employees--returning Vietnam veterans. Since his new employees knew little, if anything, about computers, Perot established a trainee program emphasizing system engineering, which EDS sorely needed. "Ross figured that while these people may not have gone to graduate school," says Tom Meurer, who arrived from the Air Force and was in the first trainee class, "they were married, and they were hungry to get a career going. These were people who knew how to work twenty hours a day."

"Pay was equivalent to service pay," recalls Rob Brooks, who arrived from the military in 1968. "We had no reference point to other industries, as to whether our work hours and routine were 'normal.' EDS became the norm for us. It was a great move for Ross--he got a group of kids willing to work hard who were used to taking orders without questioning authority."2

"We had thousands of Vietnam veterans," recalls Perot. "We [EDS] put a very high priority to hiring people coming right off the battlefield, because they were very mature. They were twenty-seven years old, and forty in terms of maturity. And no matter how much of a load we placed on them in the training program--and we tried to make it very rigorous--this was a huge cakewalk for them; nobody was shooting at them. And they knew what stress was--not getting shot at was not being under stress."3

An aggressive EDS recruiting program searched for the Vietnam vets. Of the 323 employees when the company went public, nearly 30 were recruiters. Dubbed the "Wild Bunch" by Perot, they had the company's most grueling schedule, traveling in ten-day stretches, with only three days of rest in between. He gave them their slogan: "Eagles don't flock. You have to find them one at a time." Recruiters lasted an average of two years before burning out. Using a twelve-page form, they would interview recruits fourteen hours a day in their hotel rooms, and then send only a select few to Dallas for even more extensive interviews. The recruits had to be approved by all they met, and even write an essay answering "What did you accomplish in your life from age six?" Only one in thirty had the fire for which EDS was searching.

The recruiters were selling both Perot and EDS, telling veterans that if they accepted the challenge, they too might find wealth. Keeping in mind the things he was searching for when he left the navy, Perot offered the veterans an opportunity to succeed based almost solely on hard work and achievement. (Perot, still careful with a dollar, had the new employees sign an agreement that if they left within a year, they had to repay the cost of their training, which ran to several thousand dollars.) "If we, the recruiters, did our job," recalls Rob Brooks, "the people were willing to pay us to work for EDS."4

As the number of returning veterans increased, EDS recruited directly on military bases, advertising in Stars and Stripes and holding seminars that hundreds attended. After the recruiters had worked the crowd, Perot walked in and gave a talk that was a folksy discourse on the American dream tempered by the challenge of the special EDS culture. "It's like a cold shower," Perot later remarked. "You're either attracted by it or repelled by it. If you don't like it, there are a lot of other opportunities."5 The company pulled between 80 and 90 percent of its recruits from veterans, giving it a military flavor unique among American corporations.6

"EDS attracts people who would love to be on a SWAT team," said Portia Isaacson, a former employee.7 "They are like the Marine Corps," commented business author Tom Peters. "Heck, they are the Marine Corps."8

By 1969, the year that Perot dropped a ban against hiring single men, the company had over 1,000 employees, and two years later the workforce had tripled. Although it was impossible for Perot to meet everyone arriving in Dallas and the satellite offices, he walked the floors, and if he saw something he didn't like, he told a manager. Perot also stopped by the trainee classes several times a week and gave pep talks about the EDS philosophy. "We had uncluttered minds," says Tom Meurer, "and Ross molded us, very effectively, into his view of industry and competition. He made us feel we were part of a special enterprise."9*

While the new recruits trained in computers, Perot used some for his personal projects. He had not sat still after the stock market conferred great wealth, but instead had formed the Perot Foundation for philanthropic bequests, and had also begun to indulge an interest in public affairs. New employees worked on such non-EDS projects as studying requests for which schools and hospitals were worthy of receiving money, considering real estate for EDS expansion, and investigating unsolicited requests for assistance that came across Perot's desk. "Ross almost created two different sections within EDS," recalls a colleague. "One was the straight business end--that was Meyerson, Alberthal, Fernandes, and the rest pursuing new accounts, operating the Medicare contracts, and expanding the client base. Then there was Ross, getting a letter from someone about a missing daughter, and he would pull four or five employees and form a team to follow up. If you performed well for him, then he kept going back to you for extracurricular events. And he loves to compartmentalize things. No one who works on a project knows all the pieces but him. He certainly did that in splitting assignments that were for him versus those that were just for EDS. There were people he liked who did a lot of work for him personally, but they did very little work for EDS."

One of those whom Ross took an instant liking to was twenty-eight-year-old Tom Meurer, the only liberal arts major in his EDS training course in 1968. Perot called Meurer into his office and asked whether he could develop a plan to utilize computers in the upcoming fall presidential campaign. Although Meurer had been at EDS for only six months and knew little about computers, he had taught United States foreign policy at the air force officer training school, making him the only EDS recruit with a political/history background. "So I spent a couple of weeks in the library, and came back to him with a game plan," recalls Meurer. "Perot took that and went to New York and made the presentation, which Nixon liked."10 But Nixon wanted more than just a Perot employee--he also wanted Perot's money. "I can give you money," Perot told him, "but I can do better than that--I can give you people."11

When he returned from New York, Perot again called Meurer into his office.

"Tom, would you like to work for Nixon?"

"Well, I never really thought about it."

"There's a guy called John Erlichman coming through here, and if you'd like to talk to him, I'd be glad to set it up."

Erlichman met Meurer a week later and invited him to be an advance man for Nixon (advance work involves setting up campaign rallies and appearances before the candidate's arrival). Perot told Meurer, "If you want to work for the campaign, you can, and I will pay for it. When it is over, you come back to the same place you were at in the company. You won't lose any time."12

Perot loaned seven EDS workers to the Nixon campaign.* Two other 1968 military recruits, Stuart Reeves and Vern Olsen (both now EDS senior executives), joined Meurer in advance work. Meurer and Olsen reported to Erlichman, while other EDS workers reported directly to Nixon aides Pete Flanigan and John Mitchell. Perot stayed informed of everything that transpired. He instructed Meurer to call him every evening with a status report. Meurer did so, and those daily conversations helped form a special bond between the two. Perot also stayed in touch with his other workers, summoning them occasionally to Dallas for updates on the campaign. "That's why he wanted to use our people," says a former executive. "Ross basically likes to inject himself into a situation, not to watch it from the sidelines. Those 'volunteers' were his way of knowing what was going on from the inside."

When Nixon won, Perot and the EDS "volunteers" attended the inaugural. For Perot, Nixon's victory was the beginning of a special relationship with the White House. Both Haldeman and Erlichman liked the work done by the EDS staff. Haldeman was impressed enough by Meurer to offer him a permanent position as a deputy assistant on the president's staff. Meurer decided to stay with Perot ("I was the only one of the Watergate crew that turned it down--those who stayed ended up in jail," recalls Meurer). Perot, impressed by Meurer's loyalty, made him part of his personal staff.

While Perot liked having Meurer around the EDS offices, he would sometimes "loan" him back to Nixon for special projects. Six months after the election, in response to an Erlichman request, Perot sent Meurer to spend several months on a computer project in California, with then Nixon domestic adviser Daniel Patrick Moynihan. In the fall of 1969, Erlichman called Perot and asked to use Meurer as an advance man when Nixon went on the road for early preparatory work for the 1970 congressional elections. Meurer covered everything from preparing campaign stops to setting Pat Nixon's trip to Peru after a major earthquake to taking the Nixons to the Texas-Arkansas football game in 1969.

But loaning Meurer and other EDS workers was only one way Perot built special leverage with Nixon. Starting immediately after the election, through Nixon's chief of staff, H. R. Haldeman, and presidential assistants John Erlichman and Alexander Butterfield, Perot began making proposals to boost Nixon's domestic popularity, particularly over the war in Vietnam.13 The administration's internal files are replete with scores of references to Perot's calls, submission of ideas, and requests for conferences, as well as meetings with Nixon.14*

Perot initially intrigued Nixon's aides--"The man bears watching," said special counsel Charles Colson.15 Perot's ideas ran a broad spectrum--from a telethon to a panel discussion. At one point he telephoned Haldeman, pushing a variety show, and wanted the White House to help get Bob Hope to appear (the show never happened).16 The memos reveal that Perot, in grander moments, even discussed buying the ABC television network to recast the news coverage.17 Later, he inquired through Erlichman if it was possible to buy The Washington Post, but Tod Hullin, Erlichman's assistant, informed him that "it is our understanding it is not for sale."18 (Perot is emphatic that most of the proposals mentioned in the administration's papers were actually proposed by White House officials and usually rejected by him.)19

In May, special assistant to the president James Atwater met Perot at EDS's office to discuss Perot's belief "that the turmoil on campus could be quieted if the moderate, responsible student leaders were encouraged to play more of a role in the life of their schools," thereby countering "the minority of revolutionaries." Perot offered to subsidize the costs of a program to "build the qualities of leadership in student moderates."20 To do this, he promised to transport 2,500 students to an Honor America Day, built around a celebration of the administration, though in the end he paid for only 300.21

But Perot's ambitious programs were meant to gain him more than entry to the White House or to enable him to boast to his Texas friends about his Washington connections. He often used his access for favors. Some were simple personal accommodations such as obtaining passes for friends to tour the White House; requesting that Erlichman allow Ross Jr. (then age ten) to attend the moon launch at Cape Kennedy (attendance was restricted to people over the age of sixteen, but Perot complained, "Senator Ted Kennedy was able to clear his young son for one of the recent launches, so apparently clearance is possible [at least for Democrats]");22 arranging for his mother to attend a presidential "prayer breakfast";23 or getting autographed pictures of Nixon (he received two, personally inscribed, after complaining that he had received one signed by a machine--"They will be treasured by the Perot family for many years to come," Perot wrote Nixon).24

Not all the favors, however, were innocuous. One arose when EDS lost a part of its Medicare contract in Southern California, worth $1 million a year in revenue, to California Blue Shield. HEW secretary Bob Finch noted that "Perot [was] mad as hell...as a result, and bitched to WH [White House]."25

Although Finch thought that EDS had simply lost the contract because its charges to process the claims were too high, the White House ordered him to intervene and try to overturn the deal and return it to Perot.26 Finch and Frederick Malek, a Nixon aide, intervened on Perot's behalf "but became involved too late to turn it around with-out inordinate flak," concluded Haldeman assistant Gordon Strachan.27 Although the contract was not renewed, the Social Security Administration released $400,000 to EDS that it had previously refused to pay because of a question of overcharges on processing Texas Blue Cross claims. Malek concluded that Perot "won one and lost one" with the administration at HEW.28

Another problem Perot wanted addressed by the White House involved 36.3 acres that he had rented from the Army Corps of Engineers. Adjacent to public land at the Grapevine Reservoir in Denton County, Texas, Perot's $110-a-year lease expired at the end of 1968. The Army Corps of Engineers decided not to renew it, claiming that the land was needed for increased tourism and that Perot had repeatedly violated the terms--blocking public access to the shoreline with a fence; landscaping the land for his private use; and using the property to corral his horses. An investigation by the Department of the Army concluded, "What is involved here is an effort by Mr. Perot, under the guise of a grazing lease, to create a private area bordering the reservoir for his personal use. That violates important policies concerning public use of government lands."29

At this point, the White House got involved. Erlichman wrote to Lieutenant General William Cassidy, chief of engineers for the Department of the Army, "It has been called to our attention that the lease of Mr. H. R. Perot of Dallas...has not been renewed." Erlichman said he had "carefully reviewed the facts" and it was "most difficult for me to understand" why the land should not be re-leased to Perot.30 Tom Cole, an assistant to presidential adviser Arthur Burns, left no doubt about the importance in a memo to Erlichman aide Ed Morgan: "H. R. Perot of Dallas, Texas, was the most substantial Nixon backer in 1968. Besides outright financial contributions, a number of Perot's employees' time was donated to the campaign.... Perot is extremely interested in having this lease approved. I leave the matter in your good hands."31 The White House carried the day, and a few months later the matter was solved completely to Perot's satisfaction.32

As the land dispute was pending, Perot met with Nixon to discuss his most ambitious plan. He offered to spend $50 million on buying television time to boost Nixon's image--Perot thought television was "the most powerful social instrument ever developed."33 On May 16, 1969, Perot met with Nixon and Haldeman about the best use of his $50 million and proposed airing a national town meeting, the same idea he would raise in his 1992 presidential campaign. Haldeman wrote in his diaries, "P[resident] anxious to do something, not sure what. Perot the same."34* Roger Ailes, then a Nixon aide, worked up some of the prime-time costs.

During this time, Nixon appointed Perot as one of eight directors of the newly formed Richard Nixon Foundation, whose goal was the construction of the Nixon Library.35 Two months later, presidential adviser Pete Flanigan urged interior secretary Rogers Morton to have Perot fill a vacancy on the Naval Academy Board of Visitors, since he "has been a generous and imaginative supporter of the Administration and President Nixon's campaign."36 Perot was made chairman, although the White House, trying to keep a low profile on its relationship with Perot, was insistent that no press release be made on the appointment.37*

By now, White House officials were so comfortable with Perot that they now approached him with their own ideas. Erlichman solicited his views on what "specific national goals [should] be achieved by our bicentennial" as well as the possibility of holding "town meetings all over the country [to] discuss our national goals..."38 When Nixon aide Alexander Butterfield asked Perot if he would be interested in uniting different private groups into a single organization to push the idea that "the silent majority speaks out in support of national unity, peace with honor, etc.," he reported to Nixon that "Ross is more than amenable."39

Near the end of Nixon's first year in office, Perot was approached about establishing a "pro-Vietnam Committee," but agreed only to become a member.40 Perot's service on that panel coincided with his own burgeoning interest in the war. Murphy Martin, a popular Dallas news anchor for the CBS affiliate, WFAA, was partly responsible for Perot's enthusiasm.41 In 1969, Martin took four women whose husbands were missing in action to Paris, where they tried to meet the North Vietnamese negotiating team. When he returned to Dallas, he put together a documentary, and he asked Perot to preview it in the hope that he might agree to sponsor the show. "In it was a young man, Ricky Singleton," recalls Martin, "whose mother was one of the four ladies that went to Paris. And that young man had never seen his father. And Perot leaned forward and said, 'Do you mean that boy has never seen his dad?' Well, you know how Ross feels about his own father. As a result of that, he sponsored our show. About a week later, Perot said to me, 'Why don't we form an organization, United We Stand, in support of the POWs and MIAs.' And we did it."42

Perot had already been discussing the formation of United We Stand. "Ross was thinking in broad terms," says Tom Meurer. "He had this feeling--'We have this war over there, and we've elected a president, and whether you agree with the guy or not, we've got to get behind him.' And that became United We Stand."43 At the White House, Perot spoke to Alexander Butterfield "to make sure before he moves that his actions will not conflict with ours."44 According to Butterfield, Perot first suggested "a dues-paying organization which hopefully would grow and grow and grow...the money to be used for producing year-round educational television programs which give equal time to pro and con views on 'great national issues.'"45 Perot wanted to start United We Stand with a separate advertising campaign that would include coupons at the bottom of the ads, where people would fill in their names, addresses, zip codes, and Social Security numbers. He intended to computerize the membership rolls by congressional districts, hold programs on such issues as tax reform, and put government "back in the hands of the people"--themes that would recur in his 1992 organization, United We Stand America. Beyond United We Stand, Perot also suggested a massive advertising campaign (full-page ads in a hundred of the largest papers and magazines, plus Boy Scouts delivering handouts door to door) to encourage Americans to write letters in support of the POWs. Perot offered to take the letters personally to the Paris peace talks.

Butterfield consulted with Haldeman, Erlichman, Secretary of State Kissinger, and Bryce Harlow, Nixon's political counselor, before recommending that the White House approve both plans. Even though they were "massive in terms of size and cost," Butterfield concluded they were "highly commendable in principle."46 Forming his own public pressure group, however, did not mean that Perot would implement every White House idea for polishing Nixon's image. In one instance, Perot initially refused to cooperate with a Nixon request to pay for the manufacturing and distribution of a silent majority pin. Disappointed, Haldeman noted that Perot thought the phrase silent majority was passĒ and Perot had determined that "any of his resources which are expended for pins, buttons, bumper stickers, decals, etc. should emphasize a theme which will best serve the long-term objectives...and that theme (for Ross) is United We Stand.' He has already had something like 1 million bumper stickers made and the same approximate number of decals."47 Perot finally did agree to distribute the silent majority pins with his own united we stand mailings, but only reluctantly and after persistent requests from the White House. Butterfield told Haldeman, "This morning I swallowed my pride and made one final call to the Perot headquarters...."48

In general, however, Perot was cooperative (although he sometimes insisted, to the consternation of some aides, that "the president has to ask me" before he undertook a project).49

Yet Haldeman was able to coax Perot to set his massive ad campaign to coincide with Nixon's November 3, 1969, speech on Vietnamization and a new United States policy. "What Haldeman wanted," recalls Meurer, "was a White House announcement, and then a rising groundswell from below. It was very much orchestrated."50 Perot approached several New York advertising firms in order to launch his blitz of full-page newspaper ads as well as television spots but was told two weeks was too little time. He returned to Dallas, called Merv Stauffer and Tom Meurer into his office, and instructed them to create the campaign. "We pulled recruits from all over EDS," remembers Meurer, "and around the clock for one week, we wrote, printed, and delivered maps to newspapers so those ads could be run."51 They also filmed astronaut Frank Borman for a special about Vietnam, which aired about a week later. The White House worked with Perot to ensure the campaign was helpful. William Safire, then a Nixon speechwriter, approved the ad copy for the newspapers, while Alexander Butterfield reviewed the television script.52 Nixon's staff quickly discovered that Perot had a short attention span and was ready for another challenge the minute one was completed. "Having wrapped up final plans for this Sunday's program at noon today, he's already bored!" one aide wrote to Haldeman.53

Those November ads included coupons that encouraged people to show their support for the president by sending donations directly to United We Stand. At the end of the television special, Frank Borman made another appeal for money, saying, "Your personal check or IOU...stands for a positive expression of confidence in America.... Send your checks or IOUs immediately to United We Stand."54 No accounting was ever made public, even though within two weeks of the advertising blitz, Perot told Alexander Butterfield that he had received "a minimum of three million coupons to date."55

Administration officials were not concerned if Perot profited from the projects. They were convinced that Perot and United We Stand would continue to be a unique ally. Haldeman thought that his November work had been "almost unbelievable" and that Perot was "an amazing resource," though his "problem is his total lack of sophistication" [emphasis in original].56 Nixon thanked Perot personally in early December.57

It was shortly after that meeting with Nixon that Perot became involved in his first venture that captured the public imagination--an audacious idea to deliver medicine and food, at Christmas, to American POWs in North Vietnam. According to Perot, the idea originated with Henry Kissinger and his deputy Alexander Haig--"The government asked me to do it," he said.58* Actually, Perot came up with the ambitious plan on his own, in a conversation with Murphy Martin. "We were sitting in his office on Exchange Park, about ten days before Christmas," recalls Martin. "We were frustrated, having been stonewalled at almost every turn for what we were trying to do for the POWs. And just as conversation, I said, 'It's a shame we can't just pack up a Christmas dinner and send it to each one of them' [there were 1,420 known POWs at the time]. And he leaned forward over the desk and said, 'Let's do it!' That's how it started."59 Perot had already sent Tom Meurer, with two POW wives and a couple of reporters, to Vientiane, Laos, on December 10 to generate some press coverage over the issue of captured Americans.

The 1969 Christmas delivery to Vietnam was the type of project Perot relished. The odds seemed greatly against him, and he almost single-handedly mobilized dozens of workers at EDS and chartered two Braniff jets. One jet was loaded, in nine days, with thirty tons of gifts, food, and medicine.* Some of the items included in the cargo were Bibles, thermal blankets, inflatable rubber mattresses, underwear, vitamins, and more than fourteen hundred Christmas dinners (according to an internal administration document, those dinners were "canned...and neatly packed by the Boy Scouts"). Perot also brought fifty Honda motorcycles and five hundred Sears, Roebuck catalogs in the hope he might be able to barter with village chiefs for information about MIAs.

That same plane--carrying two dozen journalists and an eight-person team from the Red Cross, as well as Perot, Murphy Martin, Tom Marquez, and several other EDS employees--flew to Vientiane (the closest U.S. embassy to Vietnam) to wait while North Vietnam decided whether it would accept the gifts. The second plane flew to Paris with the wives and children of POWs, who were to make a direct appeal to the Vietnamese embassy. Unknown to the press and public, the administration was secretly helping. "We were able to give Ross a good bit of behind-the-scenes assistance during the past week," Alexander Butterfield wrote to the president. Assistance had been given to a "most appreciative" Perot from diverse government branches, including Defense, Customs, the Surgeon General's Office, and even the Postal Service.60 "It had to be closely coordinated with the federal government," Perot later admitted. "But nothing could occur that would make it look like a government effort or it would have no credibility with the Vietnamese."61

While the White House was initially pleased with Perot's gambit, officials soon fretted about his independence and there were indications that he might not adhere to the strategy that had been mapped out. "The assumption all along was the North Vietnamese would not allow Ross and his 2 gift-laden planes into North Vietnam," Butterfield wrote to Nixon in a confidential memorandum on the afternoon of Saturday, December 27, 1969. "After widely publicizing their repeated refusals, Ross was to leave the goods with orphaned children in South Vietnam and herd his entourage home by way of India and Europe...holding numerous enroute press conferences to continue high-lighting Hanoi's 'thoroughly unreasonable' rejection of food, clothes, medicine, etc. and its 'inhumane treatment of captured persons.' We hate to see him divert from his plan, but have little hope now that he won't."

The reason for Butterfield's concern was that in Vientiane, Perot spontaneously told the press he intended to turn the cargo over to North Vietnamese orphans if he could not deliver it to the POWs. The White House was stunned, sending a cable to Perot urging him to change his mind, since it would cause "considerable undue embarrassment...for it would be only a matter of days before the Communist propaganda machine would turn the gesture into an admission of war crimes guilt on our part..."62 Perot preferred his own alternative and ignored the White House entreaty. He persisted until the North Vietnamese rejected his offer, claiming they would only accept "American goods through the normal delivery channel,"--i.e., Moscow.

But Perot was not dissuaded. Again the White House was worried. Butterfield sent another confidential memo to Nixon, saying that "Ross is [now] seriously considering releasing the goods to the Soviets--something which we have asked him not to do. Henry [Kissinger] is quite concerned for if Ross does as Hanoi suggests, the generous 'private citizen' act of giving food, gifts, and medicines to the U.S. POWs will be lost to a heavy dramatization of Soviet benevolence. There is just no reason why we should make the Soviets look good on this one."63 On the day Perot's plane was to leave Vientiane for Moscow, Haig and Kissinger again sent urgent cables to Perot, virtually pleading with him not to go. "And Perot said, 'Wrong! We are going to Moscow,'" Tom Meurer remembers. "We just kind of disappeared to do our own thing."64 "The White House just didn't understand Ross," says a former EDS executive. "They just thought he was some wealthy guy who would write checks for them and do their bidding. But Ross doesn't spend his money unless he has some control over how it is used, and once you put him in the game, Ross sets his own rules. He's not very good at any position but coach, and that is difficult to be when you are supposed to be doing it for the president."

The White House was so irritated with Perot's unpredictability that it even tried, unsuccessfully, to cancel the plane's clearance for takeoff. Once airborne, Perot discovered the direct route to Russia was blocked, since India and Pakistan had denied him the right to fly through their airspace. The North Vietnamese also added another restriction: They would not accept packages weighing more than 3 kilos (6.6 pounds) and larger than nine-by-twelve inches. This meant that most of the cargo would have to be repackaged. The North Vietnamese thought that would stop the flying caravan, which, to their dismay, had started to receive international press attention. But Perot had the plane fly to Anchorage, Alaska, where Meurer had radioed ahead for assistance. At the airfield, they were met by military units, local volunteers, and even some Boy Scouts. The gifts and medicine were weighed and repacked into small parcels. Despite the Alaskan winter, the volunteers finished the task in under ten hours. "Perot never had any doubt that we could get it done," recalls Murphy Martin.65

Moscow, however, remained out of reach, as the Soviets now refused to allow the plane to land. So Perot flew over the North Pole to Copenhagen instead. The North Vietnamese had set a deadline of December 31. Perot tried everything, including meetings with the Soviet ambassador and a late-night telephone call to Soviet premier Aleksei Kosygin, but the deadline finally expired. "The American ambassador was of no help," says Tom Meurer. "We just thought that the American government had decided to close everything down before it got out of control."66

Although Perot did not deliver the cargo, the entire event was a public relations coup, casting the North Vietnamese as callous and focusing international attention on the POWs. Much to Perot's delight, conditions for American prisoners improved inside the North Vietnamese camps. The episode also made Ross an instant celebrity. "It focused world attention on Perot," says Martin. "And he continued to ride the crest."67 He did his first tour of the talk-show circuit. "Some of us started to think that the trip had been more about Perot than about the POWs," says one former White House official. "And that trip made us realize that he actually thought he knew what to do, better than anyone else. He never considered the possibility that anyone else could be right. When it comes to foreign policy and people's lives, that cowboy approach could be dangerous."

The Perot who returned home now seemed more aggressive with the White House. He told Nixon aides that he had several issues he would discuss only with the president--including that the "federal government can do so much more than it is now doing," and that the man he had met in Southeast Asia who directed the Red Cross "is bordering on insanity." He also wanted to complain about the "flak" he claimed he was receiving from Kissinger.68 White House aides were not anxious for him to see Nixon, but Perot insisted. After several weeks, Butterfield told Haldeman, "I went through some stalling motions which I fear are getting a little old-hat to Ross. He cut me short by saying, 'Either the President would like to get a firsthand report on this matter or he wouldn't. It's as simple as that. We're both busy men, so there is no sense in wasting either person's time.'"69 Just before midnight on Thursday, January 29, Perot called Butterfield at his home. He again demanded a meeting with Nixon. Butterfield was concerned by "Ross's statements to me to the effect that he has been deluged with queries by the press as to his precise connection with the White House--and more importantly, the White House's influence on his 'POW relief activities'..."70

Despite the advice of his advisers that he only send Perot a thank-you letter for the Christmas trip, Nixon decided to meet with him. The day before, Butterfield briefed Nixon, warning him that "upon several occasions he [Perot] has expressed to me his utter amazement over the fact that since his return from the round-the-world trip (in which he spent more than $600,000) 'no one seems to be particularly concerned, grateful, or even curious.'"71 Butterfield suggested Nixon emphasize "our continuing interest in his support," and the "need to keep his activities totally independent of the White House."72

On Sunday, February 1, Perot went to the White House (to mollify White House aides, he agreed to keep his Washington trip a secret).73 Nixon congratulated him on his Christmas trip, but Perot had other things on his mind. He proposed small "action teams" that would tackle problems in the State Department and HEW and, most important to Perot, on the POW issue.74 The president told Perot the ideas were good ones, but within a week the administration had put them on the back burner. Sensing he had been given the brush-off, Perot declined to help Chuck Colson with a public relations project. In a formal letter to Haldeman, he said that his first priority was to United We Stand. "I want my reasons in writing so that there could be no confusion about my thinking," he wrote.75 According to a former cabinet officer, "We realized that unless it had his name on it, he wasn't going to do as much for us anymore. He was starting to like the limelight."*

Encouraged by the success of his Christmas trip, in the spring of 1970 Perot returned to Laos. Besides some EDS employees (Meurer and Marquez) and a press contingent (Martin) he also took some wives of missing American servicemen. In Laos, Perot claimed to have met with U.S. embassy and Pathet Lao officials, and said he learned that large numbers of American POWs were held in Laos (see Chapter 13, "Missing in Action," for a fuller discussion). Perot continued to Saigon, where he visited North Vietnamese and Viet Cong prisoners of war. Later that autumn, back in the States, he mobilized United We Stand to hold rallies across the country to generate support for the POWs. In one of his more dramatic moves, he built replica bamboo cages simulating the conditions in which U.S. prisoners were sometimes kept by the North Vietnamese, and displayed them on the steps of the Capitol before sending them on a nationwide tour.76*

At the White House, there was growing unease about Perot, but Charles Colson, special counsel to the president, was one of the few who had taken an outright dislike to him. "Ross Perot came in and dazzled Alex [Butterfield] and the President, that he could get the POWs back; he came in with a big POW kick. The guy was an amazing operator. I didn't know anybody in the whole four years that I was in the White House who was able to muscle themself in quicker into the President's own confidence.... The President was absolutely taken with this guy, totally."77

Colson had direct reason to be upset, as he had been the one charged by Haldeman with coordinating yet another Perot pledge, $10 million, to form a conservative, pro-Nixon think tank. Colson had lawyers establish a general framework to be funded by Perot. Perot went to Colson's office, and after they exchanged pleasantries, Colson asked him if he was going to put up the money. "Yes," Perot told him.78 "So, we got everything set up," recalled Colson, "and I called him up and said, 'We're ready to start funding it.' He came up with one stall after another. It was absolutely amazing. But all the while he was stalling, he was still getting in to see the President. He'd call up Alex Butterfield or he'd show up at seven o'clock in the morning...and say, 'I'd like to meet the President at seven-thirty.' They'd walk him in through the French doors from the Rose Garden, and he'd visit the President and go out."79 After six months of trying to get the money, Colson said, "my patience was running out," and one night, before a White House white-tie dinner, Colson confronted Perot. Perot sat on a sofa in Colson's office, as Colson, still in his shorts while getting dressed, challenged him. "'If we don't see some money within a week, I'm going to decide that you're nothing but a phony.' He left my office.... He never put up a nickel. He parlayed that offer...into access, which ended up costing him nothing. It is one of the most effective con jobs I ever saw in the White House."80

"That type of confrontation wouldn't bother Ross in the least," says one of his former colleagues. "Whatever you say to him one-on-one, he will just deny your version if he doesn't like it. Not only will he say what he wants, but Ross could look you in the face and say he never met Colson or doesn't even know who Colson is, and he could almost convince you he's right." Perot, in 1992, countered that the think tank was Colson's idea and that he rejected it since it did not have anything to do with the POWs.81 He further says that Colson was constantly approaching him with "unusual" proposals, and was upset because Perot always said no. At least one administration official, communications director Herb Klein, corroborated Perot's version. "I was afraid that Colson, in his fashion, would try to exploit him [Perot] in a way which was not good for the effort and not good for Ross Perot himself, and I think that occurred on a couple of occasions."82

Although Colson was at the heart of some growing dissension in the administration regarding Perot, the pro-Perot faction still held sway. His failure to deliver on his $50 million media promise and the $10 million think tank was simply an aberration, his boosters thought. The administration kept inviting Perot to White House dinners; it sent officials to Dallas to solicit his advice on national issues, kept him abreast of public opinion polls, and even allowed him to brief the Joint Chiefs of Staff on his Vietnam trip.83 In February, the same month that Perot refused to help Colson, Nixon named him one of eight recipients of the Distinguished American in Voluntary Action award.84 Three months later, Nixon appointed him to the Advisory Committee on the Arts for the John F. Kennedy Center for the Performing Arts (Margot Perot was also later given an appointment to that same committee).85 Later, when a limited, bound edition of Nixon's inaugural address was sent to a select list, Rose Mary Woods, Nixon's personal secretary, wrote to Perot that "no list of friends who should receive them would be complete without your name" and that Nixon wanted Ross to have it "as a reminder of his deep appreciation for your friendship and support over the years."86

Behind the scenes with the administration, Perot continued pushing for preferential treatment on a variety of personal and business matters, and delayed helping unless he saw progress on pending requests. For instance, the White House formed the Townhouse Operation in 1970 to raise large donations from wealthy contributors for funding Republican congressional candidates in the fall elections. Perot initially told Nixon's personal attorney, Herbert Kalmbach, that he would give $250,000.87 But White House officials were soon grumbling as Perot attached conditions to his gift--that he "personally meet individually with every candidate we propose...to assure himself (1) that they have a 'plan to win' and (2) that they are philosophically and personally acceptable." He also demanded that Haldeman call him to confirm that his contribution was a priority, and that he "in no way be identified as a contributor to these candidates." He further insisted that "the HEW situation vis-a-vis his company must first be resolved" (Perot was trying to get HEW to drop its investigation into EDS's Medicare contracts).88 Holding out the promise of contributing $25,000 to Ronald Reagan's gubernatorial race, he met with Reagan to complain about the loss of EDS's Medicare contract in Southern California. Perot did not make a contribution.89 Nor did he give any of the $250,000 to the Townhouse Operation, prompting Jack Gleason, a Nixon staffer responsible for fund-raising on that project, to comment, "At least the oilmen keep their word."90

Despite its aggravation with Perot, the administration continued to help him. In the spring of 1971, John Erlichman awarded EDS a $62,000 contract to conduct a "state of the art" study on controlling costs in future national health care programs. The contract, signed by Nixon's deputy assistant Kenneth Cole and EDS president Mitch Hart, was not advertised for bids, nor was it announced in the Department of Commerce's Business Daily, despite government regulations requiring such published announcements (all civilian contracts valued at over $10,000 had to be published).91 When that news became public the following year, the administration acknowledged that it had placed EDS into a "preferred" position for substantially more federal health care business, and that it was unusual for the White House to issue such a unilateral contract.92

Although concerned about press criticism, the White House did not back away from Perot. For instance, when Perot tried to persuade Congress to scrap the Social Security Administration's model computer system in favor of using EDS as its sole processor of claims, the White House applied pressure. "There was never anyone raising doubts about our [model system] until the Nixon administration came in, and then there was some interest in our dropping our own model system and letting him [Perot] have a really free hand," recalled Robert Ball, then commissioner of Social Security.93

By the time of the congressional investigations into EDS's state Medicare contracts in 1971, White House officials were finally concerned about overt interference, stalling Perot on his continuing demands for a meeting with HEW secretary Elliot Richardson. Kenneth Cole wrote to Haldeman aide Gordon Strachan, "It would not be wise to arrange a meeting.... Perot has been pushing anxiously requesting this meeting since Mar of '71."94 Cole had visited Perot in Texas, and later reported that Perot was "consistently bitching about HEW" and felt that "HEW [was] trying to screw him."95 In private notes made later by Strachan, Cole indicated that Perot wanted to meet with Richardson because of his concern over the "investigation on the Hill indicating hanky panky that started EDS--4 months of hearings--EDS did illegal things at start; exercising undue influ[ence] (monopoly) on market."96 At another point in the notes, Cole noted that "Perot believes [he is] home free on [the] hearings." Events showed Perot's confidence in the administration was not misplaced. Even without allowing Perot to meet Richardson, the White House made its feelings clear to Richardson and other HEW officials. The Social Security Administration dropped its complaints against EDS regarding its charges on state Medicare contracts, and the congressional investigation eventually fizzled without that help. While the SSA said that EDS's failure to open its books to auditors made it difficult to determine whether its costs were reasonable or not, it nevertheless concluded that EDS's costs seemed reasonable when compared to those of other plans. "We're not interested in profits, just costs," said an SSA spokesman.97 The following year, it was as though the fight with the Social Security Administration had never taken place. EDS was back in business, with HEW awarding it another large contract, and the only concern for Nixon aides being whether the award would seem connected to Perot contributions to Nixon's campaign (Perot had not given any money, although EDS officials had secretly given more than $200,000 to Nixon's reelection).98

But despite the favors, the tension between the administration and Perot worsened in early 1971. The White House was annoyed with what it viewed as Perot's cycle of promising more than he could deliver, getting a favor in return, and then not following through. It was also bothered by his abrasiveness when it did not take his advice on issues. Perot, on the other hand, felt the White House had taken his help for granted and started ignoring him. "The one thing the guys in the White House want is a puppet they completely control," he says. "And I have never been willing to be their puppet."99 When he bumped into then United Nations ambassador George Bush, he complained "that he hasn't been getting very much White House attention of late," and also griped that during a recent Life magazine interview, when Nixon was asked to name people he frequently spoke to, he did not mention Perot.100 When Perot later met political strategist Murray Chotiner, he was "miffed" no one had asked him to participate in the upcoming 1972 reelection campaign.101 "It is difficult to please Perot," wrote one Nixon aide.102 In an attempt to mollify Perot, Nixon's deputy assistant Dwight Chapin wrote a seven-point memo in February 1971, urging that Perot be consulted more on issues such as the Family Assistance and Welfare Program, the long-range economy, and the notion of the "volunteer army." Chapin also noted that somebody should talk to Perot about his recent complaint that he was not on Nixon's Christmas card list. "If all of the above is taken care of," Chapin wrote, "I am sure that Perot's problems with us will diminish rapidly."103

But the suggestions in the Chapin memo were ignored. "We were getting tired of Perot telling us how to run the government," recalls one White House official. "And nobody had been keeping count on what he had done for us recently, so it was very possible that it had turned into a one-way street, only benefiting his desire to be a player." Eventually, Haldeman asked his top aide, Gordon Strachan, to make an "assessment of H. Ross Perot in terms of commitments and delivery of money or material and Perot complaints and administration responses.104* Strachan consulted with thirteen Nixon aides and administration officials who had dealt with Perot. Even when Perot had delivered on his promises, there were caveats. His donation of seven men to the 1968 campaign had led to the IRS fight over his subsequent tax deductions for their services, and the administration had to "intervene to obtain a settlement." After he "became obsessed with the humanitarian POW issue in December 1969, [h]e played off Hughes, Haig, Colson, and Butterfield to the point where Alex told Perot that he didn't understand the issues and should 'goddam stop calling.'"

Strachan also highlighted instances in which Perot had made promises and then failed to perform. He had pledged $250,000 for the 1970 congressional elections "but delivered nothing"; he promised $50 million "for the benefit of the President" and $10 million for a pro-Nixon think tank but did not give anything; he committed $500,000 to the National Center for Voluntary Action (Margot was on the board of directors) but "withdrew this pledge," since he "would not give a dime to the Administration until the POW's are free"; he did not contribute any money to the Nixon Foundation, though he was on the board of trustees; and in a private campaign to enhance Nixon's popularity, he failed to "produce a [nationwide] motorcade or delivery of letters," and though he agreed to "put 500,000 names on computer, Perot [again] did not deliver (in 1992, Perot claimed he did not give the addresses because the administration wanted them "for political purposes").105 According to Nixon aide Richard Moore, Perot was a "lot of big talk, [and] turned out to be B.S."106 When Perot called Haldeman in early 1972, Haldeman wrote in his notes that Perot complained he had "never had a personal relationship with the P[resident]...[and] he really supports the P[resident] and he would like to feel he had a relationship with him.... This is actually a little farfetched because Perot, of course, has reneged on almost everything he's promised to do for us, but I told him I'd see what we could work out."107

But there was one area of the Strachan memo where Perot's interests had melded ideally with those of the administration. It was an investment by Perot of $5 million in November 1971 in the giant Wall Street brokerage firm of du Pont--Glore, Forgan. Nixon administration officials, concerned about the weak condition of Wall Street brokerage firms and the effects on the market if one failed, encouraged Perot to make the investment. Perot, on the other hand, motivated by his desire to expand his business far beyond Medicare and Medicaid, and intrigued by the allure of conquering Wall Street, made the worst business decision of his young career.

Click here to read a review of this book.

[an error occurred while processing this directive]


Copyright 2000-2002, Bloomberg L.P.
Terms of Use | Privacy Notice