The Ross Perot you don't know

Washington Monthly, May, 1992 by Peter Elkind

Selling, not managing, has always been Ross Perot's genius. At IBM he broke so many sales records that the company started capping his commissions. One can just imagine a younger Perot making a sales pitch, sitting across a desk from some executive who has never heard of a computer, leaning forward, looking oh-so-earnest, selling not just a machine but a promise of a new world. When it came time to start his own business, that salesmanship helped him parlay his $1,000 investment-the minimum required to incorporate under Texas law-into an empire. But what Perot's mythmakers sometimes forget is that this bootstrap philosopher owes much of his success to the federal government.

Electronic Data Systems Leasing Corporation, which Perot founded in 1962 on his 32nd birthday, struggled for its first four years. When EDS moved into its own building and put its name up outside, some people wandered in expecting to find a restaurant named "Ed's." Then, in 1965, the federal government got into the health insurance business; Perot quickly began capturing lucrative state contracts to computerize systems for paying Medicare and Medicaid claims. Profits soared.

Perot's EDS was a tight ship, captained by people as smart and tough as he. In accordance with a written dress code, his male employees wore dark suits, white shirts, and subdued facial hair. But beneath the corporate gloss was a strict, sometimes nasty meritocracy. Employees who won a critical bidding war with IBM received cash and stock bonuses "while they were still sweating," as Perot put it. The less successful were expelled with equal speed.

Identifying with his troops, Perot ate in the EDS cafeteria and attached his personal fortunes to the company's. That strategy proved a smart one. Less than two years after EDS went public in 1968, the paper value of his interest-about 78 percent of EDS -leapt to $1.5 billion.

If money was the game, Perot, after eight lively years, had won. In 1970 he freed himself from day-to-day affairs at EDS while retaining the title of chairman. Now he would have the time to exercise his salesmanship skills more broadly.

North Dallas sporty

"America's first welfare billionaire," Ramparts magazine called Perot in the sixties. But the nuanced way he has treated those billions is a quality those Ramparts editors might grudgingly respect. When EDS stock nosedived in 1970, costing Perot a one-day paper loss of $450 million, he said he would be more upset if one of his children had broken a finger. Most rich Texans think that wealth is a way of keeping score. To Perot, money is primarily a tool, a lever to force the world in the direction he wants it to go.

It has been written, wrongly, that Perot buys his clothes off the rack at K-Mart. He is not ostentatious, but neither is he an ascetic. His 22-acre estate in North Dallas, guarded round-the-clock by an elaborate security system and armed guards, includes a pool, a gymnasium, a tennis court, and stables. In 1984 he sold EDS to General Motors for $2.5 billion, but he continues to live by rules of thrift. He doesn't want anything he can't use, and he insists on getting value for his money, whether it's being spent on cigarette boats or charity.