How Rick Perry Got Rich

August 30th, 2011 at 9:34 am David Frum | 65 Comments |

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Jim Geraghty asks a piercing question today: If Rick Perry is as dumb as his detractors say, how’d he get rich?

Wait a minute, you may say: I thought Perry spent his career in politics? Discharged from the Air Force in 1977 aged 27, he was elected to the Texas House of Representatives seven years later, in 1984. At that time, the Perry family reported income of $45,000, largely from Mrs. Perry’s work as a nurse.

Rick Perry served in the legislature until elected Agriculture Commissioner in 1990. He climbed the ladder to Lt. Governor in 1998, then ascended in the governorship after George W. Bush was elected president in 2000.

Now it’s 2011, and Perry reports a net worth of $2.8 million. How’d he do it?

The Fort Worth Star-Telegram tells the story.

Perry made his money in real estate through deals like this:

Back in 1993, there was a piece of ground that computer billionaire Michael Dell needed to connect his new house near Austin to city water mains. Dell neglected to appreciate the land’s importance. But Perry did discern it. He bought the land for less than $120,000 – then sold it to Dell two years later for a $343,000 profit. Uncanny. True, some detractors have wondered whether the sale was entirely on the level:

Texas Democrats have repeatedly questioned the sale over the years, in part because Mike Toomey – an influential lobbyist who would later become Perry’s chief of staff – closed the deal for Perry while Perry was out of town. Perry has always maintained he didn’t know that the land would be so valuable to Dell when he purchased the property.

Perry repeated similarly shrewd investments again and again in the years ahead.

Look at this transaction from the 2000s. A Texas real estate developer sells land to a Texas state senator – the senator who happened to represent the development’s district. The state senator sold the land to Gov. Perry. Gov. Perry then sold then land – back to the real estate developer’s business partner. Perry scored a profit of $823,000. Tidy. And how remarkable that Perry and his state senator friend could see a value proposition that the two professional real estate developers overlooked.

So it goes through investments in stock, load, and energy properties. Perry just kept seeing things that other people apparently didn’t.

Even more impressive: how Perry managed to find the time. There he was, governor of the second biggest state in the country, creating jobs from morning to night. Yet somehow he also was able to scour the vast landscape of Texas for under-appreciated little parcels of land with the potential to triple or quadruple in value in just a few months.

Geraghty is right. Not “dumb.” Another word, perhaps.

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65 Comments so far ↓

  • CautiousProgressive

    The points made here are good ones, but the tenor is more vicious and less professional than we have come to expect from Mr. Frum.

    • Slide

      Really? I didn’t get that at all.

      • Smargalicious

        Yes. Frum hates any threat to his centrist choice for POTUS. But hey, it’s his site.

        • greg_barton

          Smarg, do you dispute the facts of Frum’s article?

        • Smargalicious

          No, but I and others understand Frum’s agenda: he wants to discredit Perry. This puts Frum in the same camp as ABC, CBS, NBC, and CNN.

          It’s his site. He can do what he damn well pleases.

  • balconesfault

    Perry and real estate developers have been veeeeery close.

    For example, one of his consistently biggest donors has been Houston real estate developer Bob Perry (no relationship).

    And over the last few years, while his Governor’s mansion has been being remodeled (progress was slowed by arson), Perry has been hitting the state up for $9,900 a month for a rental from a political contributor in West Austin.

    But coming from someone who worked to get GW Bush elected, this seems kind of paltry. Remember how Bush became a millionaire … not from his oil companies, but because Bush family friends who owned the Texas Rangers ballclub loaned Bush most of the $600K investment he put into franchise … and then later when the club and stadium sold (along with the adjoining office park that had been built on land taken from private property owners via eminent domain by the City of Arlington to turn over to the Rangers franchise) the Ranger partners gave him $25 million. And no, the rest of the Rangers partners … who had been invested in the franchise for far longer than Bush … didn’t see anything approaching a 50x return on investment. They basically, out of the goodness of their hearts, saw fit to each give GW a chunk of the sale proceeds that they were due.

    And with that money, Bush had the money to purchase Prairie Chapel.

    Now that’s some serious real estate grifting! Makes Perry seem kind of a piker.

    • Stewardship

      Isn’t there a difference in that Perry was an elected official at the time of his investments? W was a private business person. My guess would be that his Rangers partners paid him handsomely for the use of his name–a common practice in private enterprise.

      • balconesfault

        So … was it the Bush name then that helped persuade the City of Arlington to use eminent domain to force reluctant landowners to sell their property to the city … and then to turn said land over to the Rangers?

        You have to remember that the Ranger partners … as well as Tom Hicks, who purchased the ballclub at an inflated price (leading in no small way to its later bankruptcy proceedings) … all were generous contributors to Bush’s political campaigns afterwards.

        It seems what we’re quibbling over here is that Rick Perry didn’t have the right political connections to make this kind of investment in him worthwhile until after he was governor … while Bush had the connections to justify this kind of investment before he formally ran for office.

  • jrhines

    David, what did you think about Obama’s real estate deal with Tony Rezko in 2005?

    “The same day the Obamas closed on the house, the Rezkos closed on the purchase of the adjoining vacant lot, which once was the estate’s lush side yard.” [ Chicago Tribune (Ray Gibson and David Jackson)] A ten foot strip of the Rezkos’ land amazingly ended up in the Obamas’ possession in 2006. Surprise, surprise. But Obama’s an honest man and Perry’s a crook?

    Seems like real estate transactions by David’s political allies get a pass while real estate transactions by David’s political enemies get examined with a proctologic thoroughness.

    BTW: Isn’t it funny that David thinks a politician from Chicago is clean as new snow while a politician from Texas is dirty as coal dust? Does the accent make Obama honest and Perry a crook?

    • TerryF98

      That straw clutching must make your hand hurt after a while.

    • balconesfault

      Umm … you do understand the difference between Obama buying a piece of land next to his home to add to his property, and Perry buying a piece of land to flip for investment purposes to help make someone a millionaire?

    • armstp

      jrhines,

      Do you even bother to figure out the facts before you comment?

      Obama paid $104,500 for a 10 foot wide piece of land. Obama did not financially benefit.

      Rezko did not benefit, other than selling about 1/6 of the land he owned next to the Obama household. It was a normal real estate transaction done at market rates.

      These are apples and oranges comparisons.

      • Graychin

        It isn’t even an “apples and oranges” comparison. Apples and oranges are both fruits of similar size.

  • TerryF98

    “Geraghty is right. Not “dumb.” Another word, perhaps.”

    Corrupt comes to mind.

  • elizajane

    I had been wondering when people were going to start asking where the Perry millions came from. I didn’t know what the story was, but I figured that it wouldn’t be pretty.

  • jg bennet

    watch this and at 7:30 minutes in you get an interesting quote on getting rich in politics. the whole video is worth watching… at 13 minutes in he gets to reagan and it is timely….. at 21 minutes you hear how far to the left reagan was in his hollywood days.

    http://www.charlierose.com/view/interview/4912

  • findingnemo

    I guess that would be the “paid for” in “bought and paid for”.

  • Watusie

    Lets put this together with the Republican’s favorite mantra that it is just SO WRONG to tax job creators….anyone see a job creator here? Anyone?

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  • LFC

    Rick Perry and George W. Bush, the best Texas governors money could buy.

  • armstp

    100% corruption.

    Obama paid $104,500 for a 10 foot wide piece of land to add to his Chicago property. He bought it from lobbyist Rezko’s wife. There was absolutely no financial gain for Obama.

    Do you think that Perry will go through the same organ-grinder of opposition outrage that Obama went through, given Perry’s numerous personally profitable real estate transactions with suspicious characters?

    How about what Clinton went through with “Whitewater”? which is nothing compared to Perry’s transactions.

    Perry should not be heading to the Presidential campaign, but should be going the way of Blagojevich.

  • jakester

    Obviously the guys is not a moron. But a typical shallow, backwards self serving political type but who can play the game pretty well.

  • Frumplestiltskin

    I also love the fact that he is having the state pay for his housing at a private estate while the Governors mansion is being “renovated” as it has been for lord knows how long.

    I have to be honest though, none of this is remotely surprising, I kind of expect all politicians to do such things. They associate with millionaires and multi-millionaires all the time and think themselves their equal (and better) and expect to be renumerated like millionaires. I don’t think for a second that Perry thinks he has done anything remotely unethical.

    • armstp

      Frump,

      Some politicians are worse than others and it appears that Perry is amongst the worst of them.

  • Rob_654

    I can only imagine how much Warren Buffet would pay to have lunch with Perry so that he can learn how to score such great investment insights over a range of investment possibilities.

  • ottovbvs

    This guy has worked for the govt for his entire life and by some miracle he’s worth $2.8 million. Now he could could have come by this from his book deal but I doubt it somehow. It’s the consequence of being on the inside track on a lot of deals. Please.

  • ProfNickD

    What a boring article.

    • armstp

      Of course you would find this boring. However, I am sure you were very much interested in and whinning about the Obama land deal with Rezko or Clinton’s Whitewater affair….

  • Graychin

    Mr. Frum, you might as well hold your nose – because your party is going to nominate this skunk to be its presidential candidate next year.

    Perry has a lot of stink on him, and a whole lot more will come out between now and elections day. But it won’t dissuade the primary election voters of your party. Not even a little bit.

    By the way – what ever happened to Reagan’s Eleventh Commandment: “thou shalt not speak ill of another Republican?

    • balconesfault

      Perry has a lot of stink on him, and a whole lot more will come out between now and elections day. But it won’t dissuade the primary election voters of your party. Not even a little bit.

      The real question is … is there any amount of stink that would dissuade Frum from supporting the GOP nominee in the next general election?

    • Smargalicious

      Wrong. Not as much stink as your Messiah, for sure.

      • Gus

        Never did find “I know you are, but what am I?” a very compelling argument in favor of a political candidate.

  • hisgirlfriday

    So many words to explain “How Perry Got Rich” when a YouTube video would so much more easily (and entertainingly) suffice:

    http://www.youtube.com/watch?v=fTqSp6r1QP8

  • jg bennet

    Well there is always a third option….. It is an organization ran by a Fallujah silver star winning marine and son of billionaire Peter Ackerman. Peter Ackerman and a few friends seeded the group with about 30 million dollars……………

    No third-party candidate has won a U.S. presidential election since 1860.

    The Republican Party was founded in 1854 by a group of renegade Democrats, Whigs, and political independents What began as a single-issue, independent party became a major political force in the United States. Six years after the new party was formed, Republican nominee ABRAHAM LINCOLN won the U.S. presidential election. The Republican Party and its counterpart, the DEMOCRATIC PARTY, became the mainstays of the nation’s de facto two-party system.

    Lincoln’s victory in 1860 signaled the demise of the WHIG PARTY and the ascendance of Republican politics. From 1860 to 1931, the Republicans dominated U.S. presidential elections. Only two Democrats were elected to the White House during the 70-year period of Republican preeminence…………………..

    THE WEBS STEALTH PRESIDENTIAL RACE

    Imagine what our election system might look like if it were designed today: No Byzantine electoral college, no long lines on a random Tuesday, no closed primaries that force candidates into the arms of their party’s special interests. Modern Madisons and Hamiltons would try to devise a process that’s open, online, citizen-driven, and capable of producing leaders that can unify the nation once in office.

    That’s the idealist vision driving a new group, Americans Elect, which has quietly collected enough signatures to secure a 2012 ballot line in eight states, including Arizona, Michigan, and Missouri. They will soon submit an unprecedented 1.6 million signatures in California.

    he ballot position they’re securing isn’t for a specific platform, person, or ideology, but rather an entirely new way to elect a president. As Elliot Ackerman, the group’s chief operating officer, explains it, “This isn’t a third party—it’s a second process.”

    Here’s how the group envisions it will work: An online convention will take place over a course of two weeks in June 2012. Any registered voter can participate as a delegate, after signing up securely at the newly launched AmericansElect.org. Through a series of interactive online questionnaires, they will be able to seek out potential candidates whose policy positions most closely resemble their own. A party platform will be determined and candidates drafted. A final field of six prospective nominees will then each select a running mate from a different party, with those options eventually winnowed down to a bipartisan ticket that will inherit the Americans Elect ballot line in, the organizers hope, all 50 states.

    It’s old-school democracy married to modern technology, marketed to a fertile audience. In May, Gallup found that a majority of Americans support the creation of a third party, including 68 percent of independent voters—and that was before Washington’s debt-ceiling dysfunction. This disconnect is compounded by the fact that Republicans and Democrats still play by Industrial Age rules, even though consumers have shown in every other field that they are no longer satisfied with a choice between Brand A and Brand B.

    http://www.thedailybeast.com/articles/2011/07/22/americans-elect-will-an-internet-presidential-race-become-2012-s-spoiler.html

    • Graychin

      Dream on. The American presidency was carefully insulated from the will of the rabble by our founding fathers. Hence the electoral college.

      The emergence of popularly-chosen presidential candidates is a relatively recent phenomenon. For 100 years after the Lincoln insurgency, party nominees continued to be selected in smoke-filled rooms. Closed primaries, winner-take-all primaries, and “super-delegates” still help to temper the influence of “we the people” in the selection process. And don’t forget who won the popular vote in 2000.

      You have a nice idea there, but it’s probably a bridge too far for a few more decades. Maybe someday.

      • jg bennet

        will you participate in the cyber primary if it happens?

        the guy creating the software for the primary aint no pie in the sky dreamer he is a doer.

        Joshua S. Levine served as Chief Technology and Operations Officer of E*TRADE Financial Corp. from 1999 to October 2005, where he was responsible for the company’s global technology, operations and customer service. Mr. Levine also served as its Chief Administrative Officer. In 2001, he moved E*TRADE completely to open-source technologies. Prior to joining E*TRADE Group Inc. in 1999, Mr. Levine served as Managing Director and Global Head of Equities technology for Deutsche Bank from April 1997 to October 1999, where he was responsible for the technology development and systems for equity sales and trading, equity finance and equity derivatives worldwide. From 1985 to 1997, Mr. Levine was with Morgan Stanley Dean Witter, ultimately as a Managing Director and Chief Technology Officer.

        • Graychin

          Of course I would participate.

          As an interim step, how about postcard voting like they have in Oregon? Unfortunately, Republicans are working hard to make voting more difficult, not easier.

      • Smargalicious

        Which makes all good folks pine for the days when only land owners (aka taxpayers) could vote.

        Now, the church buses pull up to the Section 8 housing projects on voting day to get the fatherless welfare constituency in line.

        God help us.

        • armstp

          Everyone who spends a dime or works or invests in the U.S. (even working outside the U.S.) pays U.S. taxes…. so by your metric every U.S. citizen is entitled to vote.

          What about those non-U.S. citizens who pay U.S. taxes? should they be able to vote?

          Lets do it based on the amount of proportional taxes you pay. Since the wealthy pay the least taxes in proportion to their income they should get the least amount of votes.

          And if corporations are people too and we give them votes based on the proportion of taxes they pay, many large corporatons would get no votes, as they pay no taxes or very little. Big oil would get no votes for example.

        • teabagger

          Smegmalicker = Clown

    • beowulf

      I’m dubious about this. Any kind of “internet primary” that isn’t instantly taking over by the Ron Paul fanatics (and they are legion) is almost certainly a pre-rigged game.

      You don’t have to be Joe Kennedy to realize that the best use of Peter Ackerman’s time and fortune is to get his war hero son elected to high office (he just reached the age requirement for US Senator), not sure this moves the ball forward on that. My best guess its a stalking horse for a possible Bloomberg campaign.

  • think4yourself

    Seems to me there is enough to knock Perry about regarding his policy positions. Not saying his real estate deals pass the sniff test. On the other hand, if someone gave me a tip on how to triple my money on piece of real estate in 2 years, I’d probably take a look.

    BTW, I think that is a different subject than Michele Bachmann’s family farm taking farm subsidies while she speaks against them, or taking medicare dollars in a clinic she owns with her husband to turn gays straight, etc.

    I wouldn’t vote for Perry cause he’s the only person I ever heard of who decides to go out on an exercise run packing a gun (I’m picturing tank top, little short running shorts, running shoes, Colt revolver and a ten gallon hat. :) ).

    • Gus

      Haha, do they make running cowboy boots? And what kind of hellhole has Austin become during the governor’s tenure if he feels the need to pack heat while jogging?

      • balconesfault

        fwiw, I’ve never felt the need during my daily runs in the area around the Austin capital building (I work 2 blocks away) to carry any more protection than my sunglasses. Hell, there’s not a neighborhood in Austin where one would feel that threatened while out for a run, even wearing a Rolex.

    • armstp

      Depends on who is giving you the tip and what they want back for it. And if it is a tip regarding the stock market it would be illegal, as it is called insider trading.

      • think4yourself

        No problem, I hear he is choosing Gorden Gekko as his running mate, Perry keeps the TP in line while Gekko works on the Wall Street crowd.

  • MurrayAbraham

    David, are you telling us that the virtuous Texan cowboy indulged in influence trafficking?

    I am shocked. Plain shocked.

  • jjv

    So like Davy Crocket he engaged in land speculation in Texas? Wow. Sounds horrible. I bet George Washington who bought land and then pushed for the C&O canal would be horrified!

    And are the Democrats whose modern avatar is LBJ going to attack this? On what grounds?

    Rick Perry-he made his money the way Washington and Davy Crocket did, not like Romney by firing people and sending jobs overseas!

    • Gus

      So you’re perfectly fine with office holders trading on their influence to get rich?

    • armstp

      Perry did not make any money, he just received bribes for favors or pay-to-play in the form of no lose real estate investments.

    • sweatyb

      Ah, the “George Washington was corrupt too!” defense.

      Very refreshing!

  • jg bennet

    Texas GOP wants to Otulaw Blow Jobs & Butt Sex for all Texans gay or straight……….Who here would be an outlaw repeat offender in Texas?

    Is it a bad idea?

    Texas Governor Rick Perry received standing ovations with his speech: “Texas is a place to proud of and where 1,500 people a day want to be a part of our success and future. We live in the great State of Texas and in a wonderfully blessed Nation.”

    The Texas GOP released its 2010 platform, which was finalized during its state convention two weeks ago in Dallas. Among other things, the platform calls for again making sodomy a crime and for making it a felony to issue a same-sex marriage license. The anti-gay language in the platform has prompted headlines on some blogs comparing Texas to the African nation of Uganda, which sought to impose the death penalty for homosexuality.

  • laingirl

    Perry is continuing to cost the taxpayers of Texas many thousands every month for his “security detail.” He travels with a detail in excess of six (6) people to protect him while he vacations, promotes his book and himself for president. The citizens of Texas will not have knowledge of the exact size or total costs of his security detail until after the next presidential election. Here’s a story on the matter: http://www.startribune.com/politics/128569573.html

    Texans are not real happy over this.

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  • Bunker555

    The subtitle of Perry’s book is “Our Fight to Save America from Washington.” Reading it summons the image of another, urgent fight: saving America from Rick Perry.
    http://www.washingtonpost.com/opinions/rick-perry-by-the-book/2011/08/30/gIQAJJsbqJ_story.html

  • steven08817

    Just what the country needs, another career politician who uses his influence to get rich and live off the fat of the land.

  • LISGUY

    For what it’s worth, (to the trolls here nothing at all), Geraghty response is essentially that the issue has been raised numerous times in both primaries and general elections and drawn a collective yawn from voters. Governor Perry’s land deals have also drawn collective yawns from the Democrat Attorney General and from the U.S. attorneys that might have some say in such matters.

    Pols from both parties, as they climb up the greasy pole of politics, usually come out of public service with net worths far greater than when they went in. While he was still writing over at National Review, I remember Mr. Frum passionately making the case that it was a waste of time to dwell on Obama’s relationship to Bill Ayers. The same thing could have been said about Clinton and Whitewater. Ultimately voters will judge Gov. Perry on his overall character and most importantly, what his agenda is going forward. If one wants to follow that rabbit trail, fine. I just wouldn’t expect much out of it at this point.

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  • Bulldoglover100

    Smargalicious….. Mr. Frum has the right to set the record straight on a candidate that he feels is less than honest. You state that it is his site and he can do as he darn well pleases and your correct… yet your tone shows you don’t like that fact…. I have found that many delusional people don’t like those pesky little things called facts…..
    Rick Perry is a danger to this country and his past dealings prove this fact and if Mr. Frum chooses to expose Mr. Perry for the scum he is, then so be it. I, for one, applaud him! I am sick of politicians who lie. Period. or Flip flop. Period. I want the truth and that can ONLY be found in facts.

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