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                                                                                COVER STORY, Page 38

ROSS PEROT

The Other Side of Perot


He surged to the top of the polls although voters knew little
about him. Now some cracks are starting to appear in the
billionaire candidate's carefully constructed facade.

By GEORGE J. CHURCH -- Reported by Laurence I. Barrett/
Washington, Richard Behar/New York and Richard Woodbury/Dallas


    "What made me a success in business would make me a
failure as a politician."

    -- Ross Perot to the Washington Post, 1969


    Some failure. Without even formally declaring his
candidacy, Perot has unleashed a hurricane of discontent with
politics -- and politicians -- as usual, sweeping up millions
of citizens in an emotional crusade that could conceivably
propel him all the way to the White House. Despite what may be
a temporary leveling off in his popularity, the Texan still
outpaces George Bush in the polls and leaves Democrat Bill
Clinton in the dust. No other independent candidate in modern
American history has mounted a more serious challenge to the
two-party Establishment.

    Paradoxically, Perot's spectacular rise has been fueled by
his image as an anti-politician, even though he has shown an
intuitive mastery of political skills. While some experts -- and
his rivals -- contend that a man who lacks years of hands-on
government experience stands no chance of cutting through the
gridlock in Washington, Perot's supporters have made his very
lack of an electoral resume into a virtue. Other candidates
debate proposals for coping with the deficit and various complex
issues. Perot vows that he can solve problems that have baffled
other politicians "without breaking a sweat," often adding, as
a precaution, that the steps he takes "won't be pretty."

    Until recently, Perot's can-do attitude alone has been
enough to satisfy the fired-up volunteers who have already
collected enough signatures to place him on the ballot in at
least 16 states. He has been vague, to say the least, in
specifying how he would go about setting things right in
Washington. Perot says he needs time to bone up on the issues
with a newly assembled team of experts.

    Meanwhile a natural law of American politics is beginning
to take effect: once a candidate is anointed as front runner,
he inevitably triggers enough intense scrutiny from the press,
opponents and voters to slow down his surge, at least for a bit.
The impeding effect is greatest on candidates about whom the
public and press know little, since negative revelations can
easily shatter their tenuous popularity. The latest example:
Clinton, who was declared a shoo-in for the Democratic
nomination before the New Hampshire primary but then was
staggered by bombshells about his alleged extramarital affairs,
draft status and experiment with marijuana.

    There are signs that something similar is beginning to
affect Perot, whose political views remain so undefined that
voters have no idea where to place him on the political
spectrum. This has worked to his advantage, as voters of all
stripes invest him with their hopes. So far, his supporters are
willing to take the chance that a tough businessman like Perot
can succeed where timorous politicians have failed. In any case,
they figure, he can't do any worse. But there is a much larger
segment of the electorate reluctant to take the plunge until
they know far more about Perot.

    Perot's political opponents are rushing to fill in the
blanks. The Bush campaign, in particular, has pushed the theme
that Perot was right when he told the New York Times in 1969
that "I'm a direct, action-oriented person, and I'd be terrible
in public office." Bush's people portray him as a thin-skinned
and ruthless man who tends to take his goals as holy objectives
to be reached by any means available, who sees rivals as evil
conspirators to be crushed, and who pursues astonishingly
meanspirited vendettas against anyone who crosses him, even in
petty matters. Vice President Dan Quayle even warned that "it
would be a very bad idea to replace a genuine statesman with
some temperamental tycoon who has contempt for the Constitution
of the United States."

    Reporters have been digging into Perot's carefully tended
story about his dramatic transformation from obscure computer
salesman into proprietor of one of the nation's largest
fortunes. Already some cracks are beginning to appear in the
facade. Perot, like some of the mainstream politicians he
derides, does have a credibility problem. He once remarked that
"I'm not a living legend. I'm just a myth." Which sounds
disarming -- except that some parts of the myth appear to be
self-created. Even some admirers concede that Perot is an
inveterate embroiderer of good stories. A less sympathetic way
of putting it is that for a supposedly down-to-earth, homespun
character, Perot is extremely conscious of his image and prone
to inflate it. Separating the facts from the exaggerations and
inventions is no easy task. But it needs to be done so that the
many Americans who look to Perot as a savior from incompetent,
self-serving politics can judge whether his image squares with
the facts.


    SELF-MADE MAN -- AND MYTH

    By now many elements of Perot's biography have become a
standardized recitation: the son of a Texas horse trader (yes,
literally) and cotton dealer, Ross learned Norman Rockwell
values at home in Texarkana and as an enthusiastic Boy Scout.
An Annapolis graduate, he lost his zeal for the Navy because its
bureaucracy was stifling, and he tried to get out early. He
became a top salesman for IBM, but the company cut his
commissions so that he would not earn more than his managers;
worse, when he fulfilled his annual quota by Jan. 19, 1962, he
was forced to sit idly for the next six months. The computer
giant rejected his idea for a computer-service company.
Disgusted, he founded Electronic Data Systems (EDS) in June 1962
with $1,000 put up by his wife Margot. Only six years later, a
public sale of the stock made Perot a multimillionaire at 38.

    Trouble is, much of this story is open to dispute. Take
the tale that as a preteen Perot delivered the Texarkana
Gazette in a dangerous neighborhood, riding a horse so that he
could escape from customers who might try to mug him. In his
1990 book, Perot: An Unauthorized Biography, journalist Todd
Mason suggests that Perot actually rode a bicycle.

    A trivial matter? Not to Perot. For six months he
bombarded Mason and his editor, Jeffrey Krames, with letters and
phone calls from himself, his sister Bette and boyhood
acquaintances who insisted Perot did so ride a horse. He even
sent Krames a poster-size map of Texarkana, with his route
outlined block by block, and pretyped letters of retraction,
needing only a signature. He never got one.

    Reporters have dug up a 1955 letter from Ross to his
father, asking the senior Perot to use his influence to get his
son out of the Navy before the four-year hitch standard for
Annapolis graduates was over. Reason: he found the Navy "fairly
Godless" and was constantly offended by the blasphemous language
and moral laxity of his shipmates. Perot blithely ignores the
question of whether he could really have been that naive and,
as he often does when one of his stories is not believed,
produces another. The real reason he wanted out of the Navy, he
says, is that his commander pressured Perot to use part of a
sailors' recreation fund to decorate his quarters (the commander
has turned up and insists that he did no such thing). Critics
suspect that Perot simply thought he could make more money as
a civilian.

    He certainly did; he was in fact a whiz-bang salesman for
IBM and really did fulfill his annual quota for 1962 on Jan. 19
(by, he says, selling a single giant IBM 7090 computer). But
fellow IBM salesmen from that period say the rest of the story
is fantasy. IBM had no objection to salesmen earning more than
managers, they say, and many did -- with the blessing of the
managers, whose own incomes rose the more their salesmen
produced. Moreover, they say, IBM was not so stupid as to deny
itself revenue by forcing its best salesmen to sit idle. Says
Henry Wendler, who was Perot's branch manager in Dallas: "If you
sold 100% of your quota, you didn't stop there. You could go to
200%, 300%, 500% and get more commissions."

    Perot has acknowledged lately that Margot's $1,000 check
to get EDS started, which he keeps as a memento, represented
only the registration fee Texas required to charter a new
corporation. He and his wife had, and used, a great deal more
than that to launch EDS. Perot was making $20,000 a year as a
part-time employee of Texas Blue Cross-Blue Shield, and Margot
brought home a second salary as a full-time schoolteacher. This,
however, is a rare case of Perot deflating a tall story; more
distressing than any of the disputes about individual incidents
in his early career is his seeming ability to convince himself
of the truth of whatever he wants to believe. Mason quotes EDS
general counsel Richard Shlakman as saying, "A part of his
genius is that he can be self-delusional when most of us are
only hypocritical."


    CHARISMA OR TYRANNY -- OR BOTH?

    Perot's basic idea in starting EDS was to provide computer
services to companies that did not have their own machines by
leasing idle time on computers owned by others (or, later, by
EDS) and writing the programs to put that time to use. One of
its first big contracts, to process the Medicare-Medicaid claims
being handled by Texas Blue Cross-Blue Shield, was not exactly
an arm's-length deal; it was signed while Perot was still
employed by the Blue plans, a clear conflict of interest. The
company went on to win a great deal of state and Federal
Government business, provoking some complaints from competitors
and bureaucrats that it relied on political pull rather than on
submitting the lowest bids. But Perot seems to have pushed EDS
to its spectacular growth primarily by identifying and filling
a genuine business need and by giving the company what even some
of his critics call charismatic leadership. He inspired his
subordinates to prodigious labor by setting clear goals that
they were free to achieve any way they thought best. After Perot
sold EDS to General Motors, he and chairman Roger Smith joked
that Smith had given Perot permission to shoot the first GM man
who visited EDS with a manual of company procedures.

    But if EDS was a loose organization in some ways, it was
phenomenally regimented in others. Perot bound employees by what
has been compared to a system of indentured servitude: they had
to sign agreements specifying that if they quit or were fired
for cause within two years, they would repay EDS up to $9,000
in training expenses. Men were obliged to wear a dark suit,
white shirt and tie and to cut their hair short; in 1983 the
U.S. district court in Seattle ordered reinstatement of a
computer programmer that it found EDS had fired "for the sole
reason that he would not shave his beard." Perot's recent
declaration that as President he would not put a known
homosexual or adulterer into the Cabinet was no surprise to
those who know him; he followed the same hiring practices at
EDS. A former employee says she knew of instructions to
recruiters not to hire anyone with a weak handshake because he
might be a homosexual. Marital infidelity was punished by
firing. Says a Houston oilman who knows Perot: "One of the
scariest things about Ross is his tendency to exclude everybody
who doesn't look or think like him."

    Women were not excluded from Perot's EDS; in fact, 44% of
its employees were female. But only about 5% of the managers
and supervisors were women. One reason probably was that for
many years Perot hired for key positions mostly young military
men who were being mustered out (they were, after all,
accustomed to regimentation). They created an atmosphere of
foxhole camaraderie that women could not readily fit into. A
woman employee says she was told that women had not been in the
work force long enough to acquire the training and skills needed
to become EDS executives. After Perot left, however, GM suddenly
found many it deemed capable. Women now fill 31% of the
management and supervisory jobs at EDS -- and, it is only fair
to note, 25% of those positions at Perot's new company, Perot
Systems.

    Even in business, Perot's authoritarian style did not
succeed in organizations he could not totally dominate. After
selling EDS to General Motors, he was for two years not only a
director of the auto company but also its largest single
stockholder. He made many criticisms of the stodgy GM
bureaucracy that, like his criticisms of Washington today, were
perfectly valid; it was quite true that GM took longer to design
and produce a new car (six years) than the U.S. did to fight and
win World War II. But he could never make the company move --
a bad augury for a presidential hopeful who would have to deal
with a federal bureaucracy that is even bigger, more rigid and
more expert at sidetracking would-be reformers.

    A major reason for the failure, say other directors, is
that Perot never tried to build coalitions within the board or
even to draft a detailed plan for reform; he just carped and
nagged. A senior executive who agreed with many of his
criticisms says he was rebuffed when he tried to work with
Perot. His explanation: "I learned that you can't be 90% for
Ross Perot. You have to be with him all the way." GM in 1986 got
so fed up with Perot that it paid him $700 million for his stock
just to get him out and shut him up.

    In the political arena, as at GM, Perot is coming under
heavy fire for relying on exhortation without offering specific
programs. But Perot thinks a leader's job is to set goals and
drive his followers to reach them by any means necessary. His
formula at EDS was "a teaspoon of planning, an ocean of
execution." Subordinates setting out to reorganize a customer's
data-processing procedures were told only to "do what makes
sense." That approach succeeded spectacularly at EDS, where
goals could be simple and Perot could rely on well-understood
rewards and punishments. It is questionable whether it would
work in government, where goals can be complex or even
contradictory (design a health-care system that covers everybody
but holds down costs) and President Perot could not fire the
leaders of Congress for failing to get desired legislation
passed.


    STRONG ARMS AND SKULDUGGERY

    Still more disturbing is Perot's abiding belief in
paramilitary, and often secret, action that is, to put it
politely, not overly finicky about staying within the confines
of the law. He denies suggesting that Dallas police cordon off
sections of minority neighborhoods and conduct house-to-house
searches for drugs and weapons, an idea that would seem
prohibited by constitutional rules on searches and seizures. But
reliable journalists insist that he did advocate such a sweep,
and more than once. Moreover, it is of a piece with his openly
stated belief that a war on drugs should be fought as a genuine,
literal war. He has at various times suggested blowing up
drug-carrying ships and bombing heroin producers in Southeast
Asia. Perot also had an association with Bo Gritz, an ex-Green
Beret. Gritz has contended in a book that Perot once told him
he had government clearance to hire an antidrug operative.
According to Gritz, Perot said, "I want you to uncover and
identify everyone dealing cocaine between Colombia and Texas.
Once you're sure you've got them all, I want you to wipe them
out in a single night like an angel of death." A Perot spokesman
denies the two were ever associated in actual operations, and
dismisses some of the other stories.

    That Perot has a penchant for getting involved in secret
activities seems undeniable. He put up the money for some of
Oliver North's efforts to buy the freedom of American hostages
in the Middle East (and lost at least $300,000 that was taken
by middlemen who disappeared). In 1981 Perot agreed to a
suggestion by agents of the U.S. Customs Service that he finance
a drug sting in the Caribbean. The idea was to set up a landing
strip on a foreign-owned island where agents would gather
information on drug-carrying flights that would be induced to
put down there. Customs could not operate an undercover
enterprise in a foreign country, however, without clearing it
through the U.S. ambassador and the government involved, and it
did not want to do that. So a Customs agent proposed that Perot
build the landing strip and have his employees serve as
unofficial agents. "Nobody would know who they were," says Frank
Chadwick, a retired Customs official who was then special agent
in charge of the Houston Customs office. "We would not be
beholden to report to the U.S. State Department in the foreign
country." Perot, he says, seemed ready to invest $1 million to
$2 million and even assign an employee (another former Green
Beret -- Perot keeps a number of them around) to scout potential
sites. But Customs headquarters in Washington turned down the
idea.

    Perot's best-known and most extensive unofficial
operations, of course, have been those involving U.S. prisoners
of war, real or imagined, in Vietnam. The operations began with
his shipment of a planeload of food and clothes to them at
Christmas in 1969, an unexceptionable venture that made him a
hero (even though the shipment did not get through). For a while
after the peace accords of 1973, he became convinced that there
were no more Americans being held prisoner in Vietnam, but
later he became equally positive that there were and are -- why
he has never made clear. He speaks darkly of secret informants
who would talk publicly only under subpoena, but has refused to
give their names to a congressional subcommittee that pledged to
subpoena them. In 1985 he contravened U.S. policy by proposing
to pay $10 million for each American that the Vietnamese
released, and in 1987 he made a trip to Hanoi, where, government
officials grumble, he came close to violating the Logan Act,
which forbids a private citizen to conduct foreign policy. Among
other things, they say, he prematurely informed the Vietnamese
about a forthcoming visit by an official emissary, General John
Vessey, and talked about potential U.S. aid -- "major
development projects," says one official -- beyond anything
Vessey was authorized to discuss. Richard Childress, a former
National Security Council official who dealt with both Perot and
the Vietnamese, accuses Perot of "confusing the Vietnamese and
the American people" by blundering into delicate negotiations
that "he tried to take over."

    Perot last week canceled a scheduled appearance before a
Senate committee to tell his side of the story; the committee
is now trying to decide whether to subpoena him. But Perot, a
confirmed conspiracy theorist, has made it plain that he
believes government officials have been engaged in a far-ranging
plot to prevent an honest investigation into whether American
POWS are still being held in Vietnam, for fear it would expose
drug-smuggling operations they conducted to finance a secret war
in Laos. Perot may have got that idea from Christic Institute,
a leftish public-interest law firm that filed a suit making
similar charges (the suit was dismissed in 1988 by a federal
judge in Miami, who forced Christic to pay $1 million in court
costs as damages for making frivolous charges). The generally
conservative Perot and the left-leaning Christic are the oddest
of allies. Nonetheless Christic general counsel Daniel Sheehan
confirms that he drove Perot around Washington in a battered
blue Volkswagen to call on secret sources.

    A special target of Perot's has been Richard Armitage, at
the time an Assistant Secretary of Defense, now a State
Department official. In 1986 Perot called on both Vice President
Bush and President Reagan to urge them to fire Armitage. Just
what Armitage did to arouse the Texan's wrath, other than
blocking Perot, is not clear. He was named in the Christic suit
but produced a factual refutation of several charges; among
other things, he proved that he was in Washington at a time when
Christic and Perot said he was in Bangkok arranging drug
smuggling. Armitage did once have a Vietnamese mistress and
years later used Pentagon stationery to write a character
reference for her when she was convicted in Washington of
running a gambling operation, which he concedes was a stupid
move. It may also have aroused Perot's moralistic antagonism.
Perot to this day keeps a picture of Armitage and the woman and
shows it to visitors, without making clear what relevance it
might have to drug smuggling or pows.


    MY WAY OR THE HIGHWAY

    Armitage is certainly not the only person subjected to the
lash of Perot's righteous wrath. Perhaps the most frightening
of Perot's characteristics is his tendency to use all his
wealth and influence to conduct vendettas against those who
cross him. Critics contend that on most occasions Perot is so
convinced he is absolutely right that he believes those who
oppose him are not just mistaken but evil, and feels perfectly
justified in going after them hammer and tongs. Some examples:

    -- In 1980 Perot, vacationing in London, got news that
Bradford National Corp., a New York-based firm, had wrested a
Texas Medicaid contract away from EDS. Perot could not accept
the idea that EDS had lost fairly. He flew back to convene an
EDS meeting in Dallas, at which, says author Mason,
"eavesdroppers outside the third-floor conference room heard him
shouting, `I want to find the son of a bitch who let this happen
and get him out of the company!'" Though the principal question
was whether EDS or Bradford had submitted the lower bid, Perot
and his aides dug up and deluged the state with an enormous
amount of negative information about Bradford and Arnold
Ashburn, the Texas bureaucrat who awarded the contract. The
state eventually gave the contract back to EDS but absolved
Bradford of any wrongdoing and paid it $3.1 million to walk
quietly away.

    -- Displeased with the widely praised Vietnam Memorial in
Washington, Perot, who helped finance the design competition,
asked for an audit of the books of the committee raising money
to build it. No impropriety was ever found. The controversy
illustrates that Perot's munificent charitable gifts are often
given with strings attached, and there are instances of his
pulling on the strings to withdraw the gifts.

    -- Angered because a tenant of a house he owned in Dallas
had missed a monthly rent payment, Perot filed a suit citing
that and "certain unsavory actions" (never specified). He won
a judge's authorization for guards to search the house three
times a day; they apparently found nothing much. A former cop
who participated in the searches says no one without Perot's
money and clout could ever have got away with that. Trivial as
the incident might seem to those not involved, it revives
shivery memories of how Richard Nixon, a friend of Perot's, used
the vastly greater power of the White House to harass the people
on his enemies list.

    A fuller, more complicated picture of Ross Perot has begun
to emerge. To date there is no single misdeed, no terrible
indiscretion or any personal quirk that could be considered
disqualifying. Rather, as is often the case, Perot's strengths
are mirror images of his weaknesses. Is he a decisive, can-do,
fiercely driven man who would help solve the nation's problems?
Or is he an overly ambitious, thin-skinned tyrant who would only
make things worse? Beyond what he really is, there is also the
question of how in the end he is seen by the electorate. Is
public frustration running so high that faults crippling to a
more conventional candidate will be overlooked? Whatever the
answers to these questions, one thing is very clear: Perot will
not have an easy time getting to the White House. George Bush
and Bill Clinton will see to that. The American people are not
likely to give the presidency to someone unless they know him
-- or at least think they know him -- almost intimately. The
U.S. political system is bizarre in many respects, but it does
test the temperament and tenacity of the candidates. In the end
it is likely that the Ross Perot of November will look a good
deal different from the Ross Perot of June.