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                                                                                U.S. POLITICS, Page 62

Ross Perot's days at Big Blue


As a young and ambitious IBM salesman, he alienated many of
his colleagues with his sharp-elbow tactics

By RICHARD BEHAR/DALLAS


    You can tell a great deal about tycoons from those
pivotal moments before they became rich. Ross Perot's launching
pad was IBM, where he spent his late 20s and early 30s
(1957-62) selling computers from the firm's Dallas office. In
mid-1962 Perot quit to start Electronic Data Systems, the source
of his $3 billion fortune.

    TIME has tracked down more than 20 former IBM salesmen and
managers, most now in their 60s and 70s, who worked closely with
Perot in those early years. Some of their memories are fading,
a number of key players are dead, and documents are virtually
nonexistent. But the picture the retirees paint, while sometimes
sketchy, shows Perot to have been more ruthless and petty in his
early business dealings than is commonly known.

    What do these allegations have to do with a person's
fitness to serve as President? Though no one is accusing Perot
of extramarital affairs or dodging the draft, the charges aired
by his former IBM colleagues help define that elusive quality
called character. Voters may in fact decide that they are not
bothered by a candidate who uses his elbows in the
rough-and-tumble world of business. But whether a candidate
likes it or not, running for President opens him to wide-ranging
scrutiny. The examination can be particularly painful for a
newcomer like Perot, who is not accustomed to living in the
microscopic world that veteran politicians have learned to
accept early in their career.

    Before they would talk, many sources asked for anonymity,
fearing that Perot would harass them. In the end, most of these
IBMers conceded great respect for Perot's sales ability and
drive. But they strongly disliked or distrusted their colleague.
"He was a money-hungry guy," recalls ex-salesman Ogden Kidd,
now 63. "He was not a team player, and he was not comfortable
working within the framework of business ethics that IBM had
adopted at the time." Or, as another, more forgiving salesman
puts it, "He was practicing '80s ethics in the 1960s."



    Seed Money for EDS. An aggressive salesman can sell
customers things they don't need and can't afford. One of the
most enduring myths about Perot is that he sold so hard in his
final year with IBM (1962) that he achieved his sales quota in
mid-January. Less known is the fact that he reached this quota
-- and pocketed a commission estimated at $30,000 (nearly
$150,000 in today's dollars) -- from the "sale" of a single
computer that was never actually installed.

    The computer was a 7090 -- then IBM's most complex and
costly machine, which retailed for up to $5 million and leased
for $70,000 a month. The buyer: a newborn college in Dallas,
the Graduate Research Center of the Southwest (GRC), which was
later absorbed into the University of Texas system. School
records show that the institution's trustees approved the order
in January 1962, despite the fact that the school didn't yet
have a campus. In 1964 the computer was ready for shipment, but
the school could neither afford the machine nor find any space
for it. Moreover, college officials estimated that the research
computer was so powerful -- and their needs so minor -- that
they could use it less than 15% of the time by mid-1965.

    The college met its requirements by canceling its order
for a 7090 and instead buying an IBM 1401 -- a simple
nonresearch "baby computer" (price: $80,000) that is roughly 100
times less powerful and used for different purposes. "It's like
the difference between a BB gun and a cannon," says a former top
salesman, Ken Crider, who was "shocked" that IBM management
allowed Perot to walk away with a commission on the original
order.

    The paperwork on the deal no longer exists, but a former
IBM executive claims to have reviewed it after Perot resigned.
"The proposal stated that GRC would start renting time on other
people's equipment, until such time as it made sense to install
a 7090," he says. "But IBM doesn't take provisional orders like
that." This executive says IBM management in Dallas covered up
the incident by quietly absorbing Perot's commission. Why? To
save the hide of another colleague, who had approved the deal.



    A Texas League Squeeze Play. One of Perot's best accounts
was the Southwestern Life Insurance Co., which he inherited in
1958 from fellow salesman Jim Cox, who was promoted to a post
in California. Some months earlier, Cox had received an order
from Southwestern for a 7070 computer, then IBM's largest
commercial unit. Perot had 90 days either to declare the deal
dead (and get Cox to return a $10,000 partial commission) or to
agree to try to install the machine himself for what was known
as an installation commission. If he accepted the risk and
failed, however, Perot would be required to pay IBM back the
$10,000.

    Cox, now 66, bitterly recalls that just as the 90-day
period was ending, Perot demanded that Cox return his
commission. "The account required almost constant attention, and
Ross just let the deal die," says Cox, who feels that Perot then
"would have resold ((the computer)) to Southwestern in a few
months and kept 100% of the money. He was extremely devious."

    Cox says Perot relented only after Cox surprised his
superiors by requesting the right to install the computer
himself from California. "I was going to take it all the way to
the top of IBM," he says. "There are very few people who have
really tried to cheat me on anything. And, in Ross's mind, he
wasn't cheating me at all. That's the frightening part."



    Making Soup of Campbell. When Perot finally installed the
7070 at Southwestern, he received roughly $25,000 as a
commission, which he wanted to keep for himself -- to the
consternation of his IBM partner, Dean Campbell. When the two
first started working as a team in the late 1950s, they shared
20 insurance-company accounts. Perot agreed to work on two
large, difficult accounts -- including Southwestern -- while
Campbell would take the rest. Perot told his boss that he should
not split the Southwestern commission with Campbell because he
had done all the work. In response, Campbell argued that Perot
didn't visit the 18 accounts Campbell was managing but the pair
was splitting those smaller commissions.

    "Ross was able to convince a new branch manager ((who has
since died)) that I shouldn't get the money," recalls Campbell.
"He convinced management that he could walk on water. He is a
master salesman. He really thought a lot less of me because I
let him do it. I was just so aghast that he would have the
audacity to even suggest it -- and doubly aghast that the new
manager went along with it. After that, I wouldn't touch
anything he got close to." Hard feelings aside, Campbell plans
to vote for Perot in November. "I still don't like him," he
says, "but I've never seen anybody who could accomplish as much
as this son-of-a-gun could."



    Join Me -- or Else. Merle Volding, a former IBM manager,
knows what it's like to cross Perot. He recalls that Perot quit
IBM in June 1962 on a Friday afternoon, then turned up the next
morning at Volding's Dallas home and spent several hours trying
to persuade him to join EDS in exchange for a one-third share.
"I ended up telling him that he had a good idea, but that,
`Let's face it, you and I are so different, it wouldn't last six
months,' " recalls Volding, now 68. "He got upset that I turned
him down." Volding, meanwhile, had been promoted to marketing
manager in Dallas, and was responsible for helping IBM salesmen
protect their accounts from rivals like Perot.

    Later that same year, Perot wrote to IBM chairman Thomas
Watson Jr. accusing Volding "of all kinds of unethical things"
in preventing his upstart company from competing against IBM,
says Volding. Big