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Ross Perot and the State
“The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie,” Karl Marx wrote in The Communist Manifesto. Of course, there’s more to it than that, right? Well, now I don’t know. I’m going to share a bit more of the research I did on Ross Perot for my book. When I started to work on this chapter, I expected it to reveal Perot just as a kind of eccentric and funny figure at the margins of political life. I certainly didn’t expect it to be quite so revealing about the very core of American government and society.
Ross Perot’s run for the presidency in 1992, although presented as a populist challenge, came after long proximity to the central organs of executive power. As you may remember from my earlier post on the POW/MIA issue, this started in the Nixon administration. Perot’s business, Electronic Data Systems, required extremely large customers in order to profit and show the kind of growth that justified its hugely inflated share price on the market. (It traded at about 100 times earnings, part of a late 60s enthusiasm for tech.) The number of clients that needed and could afford the sort of data processing services EDS provided were relatively few: massive corporations, as well as state governments and the federal government.
Perot had a lot of trouble competing for corporate clients, but he had a lot of success with state governments who needed help with data processing after the passage of Medicare and Medicaid in 1965. He did so well with government contracts partly because he didn’t really compete at all: he used manipulation, favors, and insider deals to get no-bid contracts. While most of this wasn’t technically illegal, it did attract the ire of federal regulators, who were dismayed to learn about EDS’s the massive overcharging and substandard work EDS was performing. EDS became the target of federal investigations and audits. Perot clearly required a higher class of political support.
In 1968, the President of PepsiCo introduced Perot to Richard Nixon, and they had a meeting about what computer services could do for modern political campaigns. Perot lent EDS employees to the Nixon campaign. (He deducted that from his taxes, of course.) Basically the entire executive suite of EDS gave generously to the Nixon campaign. Perot, however, did not, but made big promises and landed himself on the board of the Nixon Foundation. With Nixon in the White House, Perot had a direct line to the President’s closest advisors, people like H.R. Haldeman, John Ehrlichman, and Henry Kissinger. Perot fit well into the ideological imagination of the Nixon presidency: he was Western, “self-made” and not part of the Eastern Establishment so despised by Nixon. This was just sort of All-American fellow Nixon believed he represented and ought to be in charge.
Perot used his White House connections to make the federal investigations into EDS business practices disappear. And then he started demanding federal contracts. In return, he helped out the Nixon administration with P.R. for the failing war effort, buying newspaper and TV ads for the POW/MIA “Go Public” campaign. But Perot quickly had his own ideas about how things should be done. His spectacles—like flying to Laos with a plane full of a gifts for POWs—started to exceed the Nixon’s needs and focus attention on himself. He also wasn’t delivering on all his promises: $50 million dollars for ads never materialized, nor did his contribution to the Nixon Library. Even with Perot jilting Nixon, the White House continued to help out with his business issues. They finally got fed up with him when he upstaged the White House with his own celebrations for returning POWs. All of a sudden, the new Secretary of HEW, Capsar Weinberger, was the model of probity and kicked Perot out of his office for demanding more contracts.
When he showed up as Weinberger’s office, Perot was in some business trouble. The old brokerage firm of F.I. Dupont looked like it was about to go under and drag all of Wall Street down with it. The Nixon administration convinced Perot to make an investment in Dupont to prop it up. It turned into a serious debacle, with Perot pouring a ton of his fortune into the firm. Over the same period of time, EDS lost most of its big corporate clients. Perot had lost some of the political protection that helped him out with the government audits and fines that were starting up again. So, Perot turned eastward again, not to D.C. and New York this time, but to the periphery of American empire: the Shah’s Iran. EDS worked out about $90 million dollars in business with Iran, but of course in order to do this he had to bribe his way through the Pahlavi family and Iranian Ministry of Health and Social Welfare. Note that this was not all that different from his business practices in the U.S., albeit maybe a bit more baldfaced.
This was now the late 1970s and we know what happened in the late 1970s in Iran. The people got fed up with the corruption of the Shah’s regime. There was massive unrest in the country and to try to appease it, the Shah made efforts to clean up corruption. The ministers Perot had bribed were arrested, as were some EDS employees. Much to the dismay of the State Department, Perot tried to organize a paramilitary squad, lead by a former Green Beret named “Bull” Simons he had met during the Vietnam years, to bust the employees out of jail. The plan came to nothing.— The revolution took care of it: a big mob freed everyone from the prison the EDS men were in, and they just walked to the Hyatt in Tehran and were driven out of the country. Perot then commissioned a book by thriller writer Ken Follett that presented the entire escape as being masterminded by his commandos. That was turned into a TV miniseries in the 1980s starring Burt Lancaster and Richard Crenna as Perot, which embellished the story even more, with lots of firefights and explosions.
This sort of confusion between Hollywood and reality was typical of the Reagan era, and Perot made a big contribution to that, but I’m going to leave that for the book. There were more paramilitary adventures. I’ll just say that Perot was well acquainted with one Lieutenant Colonel Oliver North.
What I think the Perot episode reveals in pretty startling fashion is the close relationship between the private sector and the highest reaches of U.S. government and the vulnerability of our system of government to what really is just corruption. Perot also reveals interesting things about our foreign policy and how it interacts with business. I believe the Perot also shows the predominance of the private sector over the state: Perot defied presidential administrations and usually got his way. He even carried out his own foreign policy, first against the wishes of the Nixon White House and then Carter’s State Department. The power of the government was pretty limited in its ability to reign him in. Presidents preferred to try to co-opt and cooperate with him: after being such a pain in the ass to Nixon, Reagan put him on his Foreign Intelligence Advisory Board, where, you guessed it, he became a real pain in the ass again.
But maybe the most crucial thing Perot reveals is the power of propaganda in American politics. The P.R. campaign on behalf of the POWs eventually turned into a national cult and a long-lasting reservoir of political power. Perot spent most of his professional life right at the center of the American power establishment, and still somehow created the impression that he was a populist outsider, riding in to dismantle the system of fat cat politicians and corruption. The fact of the matter is that Ross Perot was the system. He turned into a conspiracist, believing all sorts of paranoid fantasies and that the government was plotting to keep the POW/MIA issue under wraps (even though he had access to the highest levels of intelligence about it.) But he was the real conspirator the entire time, manipulating the offices of state to his own ends.