Texas Governor Rick Perry, who has never been paid a government salary of more than $150,000, became a millionaire while in public office through well-timed sales in the Texas real estate market.
The Republican presidential hopeful bought property from friends and political allies and sold to Texas businessmen, such as computer magnate Michael Dell, and in the process made more than $1 million. Perry’s income also was supplemented by stock sales, according to his tax returns and county land and tax records.
The transactions have drawn criticism from Democrats and ethics experts because, at times, they involved people who would benefit from their ties to the governor and because Perry always came out on top in the real estate deals.
“Public officials have a responsibility around conflicts of interest to avoid even the appearance of impropriety,” said Thomas Donaldson, a University of Pennsylvania Wharton School business ethics professor who hasn’t reviewed the transactions in detail.
“Every piece of land that the governor has bought has been scrutinized and has been reported properly,” Mark Miner, a Perry spokesman, said.
Not all of Perry’s dealings in the stock market were winners. In 2009, at the height of the financial crisis, he reported capital losses of $564,000, suggesting he or his trustee sold stocks when the market collapsed.
Still, the governor’s land transactions produced about $1.2 million in profits and he managed to build enough wealth to be ranked today among the millionaire candidates in the 2012 Republican presidential field.
Perry’s most lucrative land deal involved property he bought three months before he took over the Texas governorship in 2000 from George W. Bush, who stepped down after defeating Democratic nominee and former Vice President Al Gore in the presidential election.
In September 2000, Perry bought a home lot in a resort community known as Horseshoe Bay. The lot had 173 feet of waterfront property in the “Peninsula,” which is situated on the shore of Lake Lyndon B. Johnson northwest of Austin.
The then-lieutenant governor bought the tract from then-state Representative Troy Fraser, now a Republican state senator, for $314,000, according to Perry’s tax returns and county records.
Seven Years Later
Perry never built on the land and sold it seven years later, while he was governor, for $1.14 million, claiming a gain of $824,000, records show.
“Rick Perry really gives a new meaning to the phrase ’living off the land,’” said Jeff Rotkoff, a consultant with the Back to Basics PAC, a political group that tracks Perry’s business deals.
The governor’s ride on the real estate and housing market boom of the 1990s and early 2000s coincides with his political career.
After his first statewide election in 1990 to the office of agriculture commissioner, Perry sold his home for $116,000, claiming a $18,000 gain. The following year he bought a new home for $169,000.
Two years later, he purchased undeveloped land near Austin for $55,288, according to his tax returns. In 1994, Perry sold the land, which was described in tax records simply as “lots-Austin,” for $125,000.
A year later, the governor saw an even bigger real estate payoff when a lot he purchased in August 1993 was sold for a gain of $343,000, according to his tax returns. Mike Toomey, a former Republican state representative, was given power of attorney to complete Perry’s purchase of the land. Toomey served as Perry’s chief of staff from 2002 to 2004 and is now a Texas lobbyist.
The property was sold to Dell, the chief executive officer of Dell Computers, who needed the land to access public sewer lines for his adjacent property.
Perry’s spokesman declined to comment specifically on the Dell transaction. Dell Inc. spokesman David Frink referred Bloomberg to Michael Dell’s personal financial advisers at MSD Capital. The company didn’t respond to requests for comment on the transaction.
According to Perry’s tax records, the governor also generated extra income through the stock market. His 2005 and 2006 tax returns showed dozens of share trades generating short-and long-term capital gains.
In 1996 he earned $39,000 when he sold a stake in Kinetic Concepts Inc., a health care company founded by James Leininger, a longtime political supporter. Leininger and his wife have given $239,233 to Perry’s campaigns in the last 10 years, according to state campaign disclosure reports.
By 2007, Perry had put all his assets into a blind trust, tax records show. The full value of Perry’s wealth is unknown. He has 60 days to file his presidential financial disclosure report after jumping into the race on Aug. 13.
Perry’s wealth isn’t expected to match that of rival Mitt Romney, who reported assets worth between $190 million and $240 million, according to his financial disclosures.
Michele Bachmann, the Minnesota congresswomen who last week won the Republican Iowa Straw Poll, reported in her disclosures that she had an interest in a family farm worth as much as $1 million, and that her husband’s psychotherapy practice was worth as much as $1.25 million.