On June 16, 1970, a Nixon White House aide I named Jack Gleason called Ross Perot to ask for money. Months before, Perot had agreed to contribute $ 250, 000 to a secret fund set up by the Nixon administration to finance Republican Senate candidates running in the fall elections. To the exasperation of the White House, however, Perot had not delivered. Gleason was calling to remind him of his pledge.
Over the course of the 30-minute conversation, Perot told Gleason he would send the money, but only in return for a favor. Perot’s company, Electronic Data Systems (E. D. S.), was having trouble landing a lucrative contract with the U. S. Department of Health, Education and Welfare. If his contract were to come through, Perot said, he would be willing to make the contribution. Otherwise he would have to pass.
Even by the standards of the Nixon administration, Perot’s request for presidential intervention in his business dealings struck Gleason as reckless, and for the White House to comply would have been baldly illegal. Worried, Gleason immediately called White House chief of staff H. R. Haldeman, who recommended that Gleason keep Perot at arm’s length. Next, to cover himself, Gleason wrote a memo to fellow aides Harry Dent and Herbert Kalmbach explaining the various stipulations the White House would have to meet to get money from Perot. “The HEW situation vis-h-vis his company must first be resolved,” Gleason wrote. In addition, Perot had asked to meet personally with all candidates who might benefit from his contribution to “assure himself that they have a ‘plan to win.'” Last, Perot insisted that “he in no way be identified as a contributor to these candidates.” Keeping Perot’s identity secret, Gleason wrote, would be “fairly manageable although tricky considering the sum that we are looking for.”
Gleason’s apprehension about the fund-raising scheme proved to be warranted. The administration’s covert effort to finance Senate candidates — dubbed ” Operation Townhouse” for the building in downtown Washington from which it was run — would later result in the criminal convictions of a number of White House aides, including Kalmbach, Dent, and Gleason himself. Obscured by the larger scandal of Watergate, the details of Operation Townhouse are, 25 years later, largely forgotten. Yet they remain instructive, not only for how they reflect on the Nixon administration, but for the light they shed on the ethics of Ross Perot.
On the only occasion he has been asked by a reporter about his involvement in Operation Townhouse, Perot flatly denied shaking down the executive branch for favors. “It was a fantasy land,” Perot told Michael Sznajderman of the Tampa Tribune last year. “Only God knows what they wrote in those memos.” Maybe. On the other hand, there are a number of reasons to believe Jack Gleason’s memo is accurate, beginning with the single phrase attributed directly to Perot. (It is Perot-like, to say the least, to demand that the candidates he supports have an explicit “plan to win.”) But the evidence extends beyond idiomatic similarities. Gleason, it turns out, was but one of a number of people in the Nixon White House Perot approached for special access to public funds.
Alexander Butterfield, a former Air Force colonel who worked as an assistant to H. R. Haldeman, fielded many of the calls Perot placed to the White House during the early 1970s. According to Butterfield, “the intimation was always there” that Perot would be willing to trade political contributions for help securing contracts for E. D. S. When it came time to deliver those contributions, Butterfield told me, Perot invariably balked, and instead demanded more favors. “I think all of us that had anything to do with Perot in ’69 and ’70 came away shaking our heads and understanding that he was in no way dependable,” Butterfield says. “We all felt he was an a — hole, a complete a — hole.” In an interview several years ago, Butterfield recalled that dealing with Perot and his incessant “intimations” finally became too much to take, even for a disciplined career military offcer. “I lost my temper two times when I was in the White House,” Butterfield said. ” Once, on the phone with Ross Perot — I was out of control.”
Another former Nixon aide, who insists on remaining nameless, remembers Perot as equally insistent and considerably more blunt. During a telephone conversation in 1970, Perot told the aide he would be willing to make a major contribution, then explained that his company had a contract pending with “It really astounded me,” recalls the aide. “I assume he doesn’t speak Latin, but it was as close to a quid pro quo as I ever got. There was no subtlety — no subtlety. I’d been through the ’68 campaign, and some people made some oblique hints of things they would like, but nobody ever said, ‘Oh, I’ve got a contract pending.'”
To the aide who spoke with him, Perot’s open invitations to bribery were threatening as well as almost comically inept. “A guy who comes on to you that strong, there’s no telling where the mayhem will end,” the aide says. ” That’s the kind of thing that makes criminal defense lawyers rich. For all he knows, I could have been from the U. S. attorney’s office. It was a massive lack of judgment. If you find yourself with a nutcase like that, you steer clear of him. Think what you want about the Nixon administration, but it wasn’t that stupid.”
Stupid or not, according to Ron Walker, the former head of Nixon’s advance team, the White House had trouble keeping Perot at bay. “Toward the end of the first four years” of the administration, Walker says, “Ross started to get arrogant and began to make demands about private meetings with the president.” Some of those demands were made to H. R. Haldeman, who noted in a January 1972 diary entry that he’d told Perot “I’d see what we could work out. ” Others were more direct. A memo from aide Gordon Strachan indicates that Perot was told to “goddamn stop calling.”
In the meantime, Nixon’s staff attempted to appease the demanding Texan. “E. D. S. was a very good company, and obviously Ross had helped the president in his election in 1968,” says Walker, “so any of those things we could do to include the Post Offce and some others that [Perot hoped to secure contracts with], we would certainly say, “‘Look, this is someone who we think has a really good company.’ So without telling anybody to do it, we would simply suggest that he be given a good look.”
And indeed he was. In 1972, for instance, E. D. S. entered a bid to process Medicare claims in Ohio and West Virginia. Perot’s company was awarded the contract after a personal review by the secretary of Health, Education and Welfare, Elliot Richardson. Months later, with no competitive bids offered, the White House paid E. D. S. $ 62,000 to do work for the president’s Domestic Council. During the same period, the White House also pressured offcials in Texas to pay E. D. S. $ 400,000 that Perot claimed he was owed under a contract with the state’s Social Security office.
Not every favor, however, was so grand in scope. In his memoir Witness to Power, Nixon domestic adviser John Ehrlichman describes Perot as a ” frequent visitor” to the White House. On one occasion, Ehrlichman wrote, Perot “called to tell me that he had built a small fishing cabin on the shore of a Bureau of Reclamation lake in Texas some years before, but now the Bureau was trying to cancel his lease. It was my pleasure to try to save his cabin for him.”
Such special considerations, of course, were not meant as charity. Perot had promised on many occasions to provide contributions to the Nixon administration, both for Operation Townhouse and for other purposes. “How could I spend $ 50 million to help you?” Perot asked the president during his first term. In 1970, the year E. D. S. reached its peak value on the stock market, offers like this didn’t seem entirely outlandish, and the White House Was at first eager to cash in on Perot’s support. But getting the money proved more diffcult than expected. In a memo to Harry Dent, written in July 1970, Jack Gleason expressed frustration that, despite many promises, the notoriously cheap Perot had not produced a dime in contributions. “At least the oilmen keep their word,” Gleason noted bitterly.
A quarter century later it is still not clear how much money Perot gave to the Nixon administration, though at least one published report indicates he contributed $ 450,000 to Operation Townhouse. It is clear that Perot has long been sensitive about the subject. In the mid-1970s, a business writer named Eaton McCartney was preparing a profile of Perot for Harper’s. Midway through his research, which included gathering information on Perot’s contributions to the Nixon adminiktration, McCartney got a call from a man who claimed to have inside knowledge of the billionaire’s financial dealings. McCartney agreed to meet the caller at his office, in a bank building in Manhattan. “About 20 minutes into the interview,” McCartney remembers, “the doors burst open and these two E. D. S. guys came marching in, scared the s — out of me. They said, ‘What are you doing, why are you writing this story’ and started doing an inquisition on me. I’ve never had an experience like that. It was obviously a set-up and it certainly had an effect.” Harper’s later killed his story on Perot.
Perhaps more than most businessmen, Perot had ample motive to seek favors from politicians. At times, close to half of his company’s revenue came from government, usually in the form of contracts to handle the paperwork for social welfare programs like Medicare and Medicaid. Less than a decade after it was founded, E. D. S. took in more business from state-run Medicaid programs — which, on average, produced higher profits than private-sector contracts — than any other data-processing company in the country. Later, E. D. S. expanded its client list, administering programs for workmen’s compensation, black4ung benefits, and food stamps. At some point along the way, Perot seems to have realized that it is hard to get rich off welfare without the cooperation of Congress.
By the early 1970s, Perot had become a major player in congressional elections. In 1972, two E. D. S. employees secretly gave $ 100,000 to finance a presidential bid by House Ways and Means chairman Wilbur Mills. Although Mills didn’t get far in the race, it didn’t matter. At the time, Perot needed all the friends in Congress he could get, since, only a year earlier, a House subcommittee had begun to look into allegations that E. D. S. had routinely overcharged on government contracts. In 1974, Perot gave a total of $ 90,000 to various candidates, becoming the largest single contributor to House and Senate races that year. Not surprisingly, in his giving, Perot paid special attention to members who might help him get business, including those on the House Appropriations subcommittee for HEW. His generosity did not go unnoticed either by reformers, who later cited it as proof of the need for tougher campaign-finance laws, or by cash-strapped politicians. In 1974, Sen. Ted Stevens of Alaska introduced an amendment to an appropriations bill that was clearly designed solely to protect Perot’s Medicare contracts.
It is not surprising that the Ross Perot who emerges from the records and memories of many of those who knew him in the 1970s bears little obvious resemblance to the Ross Perot who is running for president in 1996. In his public life, the new Ross stands firmly against — indeed, defines himself in opposition to — all the sordid trappings of Washington, very much including dishonest back-room deals and clumsy attempts at graft. Yet in substance, it is without mistake the same man, exhibiting as always the same contempt for any process he cannot control. Which is worth remembering as Ross Perot enters the presidential field once more. As Perot himself put it during the 1992 presidential debate in St. Louis, “I think the American people will make their own decisions on character. . . . I think they need to clearly understand the backgrounds of each person.”
By Tucker Carlson
