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POTOMAC PLACE

H. Ross Perot

 

H. Ross Perot left this world on July 9th (https://www.nytimes.com/2019/07/09/us/politics/ross-perot-death.html). During his 89-years on this earth, he had a significant impact on the nation. His independent candidacy for president in 1992 deprived George H.W. Bush of a second term, leading to William J. Clinton's election with a 43 percent plurality of the vote. Perot's 19 percent of the popular vote left Bush with 37 percent and a ticket home to Houston.

 

     Perot was a whirling Dervish, a person in perpetual motion with idea after idea bubbling to the surface of his keen and intuitive mind. I had the unique experience of meeting him and facilitating a profitable business arrangement for him and my employer when Perot was on the cusp of exploding into the public's eye. It all happened in 1965 when he took me to lunch one day at Washington's Mayflower Hotel.  

 

     At the time, I was year out of Georgetown Law School and working as a lawyer for the American Automobile Association (AAA). The previous year, I had worked as an advance man for President Lyndon B. Johnson and the First Lady, Lady Bird Johnson, on a series of campaign trips in Virginia, Indiana, and Kentucky during the president's successful campaign against Senator Barry Goldwater (R-AZ).

 

     During the 1964 presidential campaign and during the inaugural preparations I had worked with Jack Hight and was in his company at social events. As a result, I got to know him and his wife, Nell, two of the most gracious people you could meet. Jack had worked for the president when he was a senator from Texas. Following his Senate staffing days, Jack went to work for IBM in its sales division, where he worked with Ross Perot. In 1962, they left IBM together to co-found EDS Federal Corporation.

 

     In the spring of 1965, Jack called me and asked if he could get together for lunch. We did, and that was when he told me about the unfolding plans of his new company. At first I thought it was a job interview, because I was thinking about leaving the AAA. He asked me about my duties, the AAA's business activities, its structure, and how management decisions were made. I revealed what few people knew at the time, namely that the AAA was the largest booker of airline and cruise line tickets in its travel agency role, the largest printers and distributors of road maps, and one of the largest travel insurers in addition to its other related activities like emergency road service, sports and entertainment ticket sales, and other ventures aside from promoting pedestrian and motorists' safety. When I was finished, Jack smiled. "Well, that explains why they just had an IBM 360/65 installed."

 

     I knew that Jack, as nice a person as he was, had taken me to lunch for a reason. It obviously had something to do with the new computer that everyone at work was talking about. It was a huge thing that occupied most of the space on the fourth floor of the AAA's headquarters building that was then located at 17th and G Streets close to the White House. The 360/65 computer, IBM's largest and latest model, took a few days to install and also required the installation of a separate air conditioning system to offset the heat that it generated. I asked Jack how he knew about it and his particular interest.

 

     He told me that he learned about it through IBM sources and went on to explain that his new company was operating on a shoe string and may be interested in leasing the 360/65 from the AAA during the computer's evening down-time. He asked me to find out about the computer's operational status and to see if the AAA would be interested in considering a proposal. I was on good terms with Merritt Smith, the organization's secretary and his assistant, Jim Creel, who functioned as the business manager or chief of operations. I discussed it with them after lunch and they requested that I get more information. I got back to Jack Hight and informed him that there might be an interest and that I would require more information.

 

     A few days later, Jack invited me to lunch at the Mayflower Hotel to meet with him and his partner Ross. When I got there, they were waiting for me in the lobby, the image of the cartoon characters, Mutt and Jeff. Jack was my height, 6'2", and the guy he introduced to me as Ross was all of 5"6", but he was a bundle of energy.

 

     Perot had the most intense little eyes I've ever encountered. His intensity had you on the edge of your seat. He talked as if he was preaching to you. Did he ever talk! He talked all through lunch. Jack had told him that I had served in the Navy. Perot was a Naval Academy graduate who served at sea, while I was a petty officer who had served on shore-based communication stations. Our duty time overlapped, he getting out a year before me in 1957.  Jack had also told him that my wife was from Poughkeepsie, New York, where many new IBM executives and sales trainee's received their introduction to its staid corporate culture. We soon got down to business. Perot was thorough.  He had done his homework about AAA, and obviously had his own sources. He told me that he was going to make a lot of money for the AAA and make life easy for it. "We're going to pay AAA to use the computer, we're going to help train your programmers so that they can use that gizmo for things they never dreamed of, and we're going to pay for all your electric bills …" He went on and on for well over an hour.

 

     At the conclusion of the lunch, I was exhausted. I asked him if they could send me a written proposal. Ross looked at Jack and then back at me with a smile. "We just happen to have one with us," he said as Jack pulled a large envelope out of his leather portfolio.  I said good bye and walked back to the office looking over the proposal. The terms seemed excellent, but when I handed it over to Jim Creel, I told him that these guys are Texans and the money is obviously negotiable. Creel thought it was a pretty good offer and said he would explore it.

 

     A month later a contract was signed, and from 6 p.m. until 6 a.m. the New York State Medicare program records were computerized on the AAA's IBM 360/65.  In the months to come, the Medicare records of other states would also be processed. Further, my efforts were acknowledged with a nice pay increase.

 

     Three years later, in 1968, EDS went public and Perot and Hight became multi-millionaires. In time, Jack left EDS and became a venture capitalist, financing a multitude of new business ventures. He retired to Palm Beach, where he lived until his passing in 2004.

 

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