The same might be said of his real estate deals.
Perry was not born into wealth and while he has drawn relatively modest pay as an elected official since 1985, he has made a small fortune on land transactions, some with the help of rich and politically connected friends. As the governor mulls a run for president, opponents and the news media are taking another look at his holdings and federal tax returns.
Michael Dell, the computer magnate, once bought a piece of property from Perry — for almost four times what he paid two years earlier. In 2001, the governor bought a piece of lakefront property from his longtime friend, state Sen. Troy Fraser, R-Horseshoe Bay. Perry sold it six years later for a profit of $823,766, his biggest real estate gain ever, according to available records.
Over the years, both Republican and Democratic critics have used the land deals — and at least one stock trade involving the company of a top donor — to suggest that Perry has traded on his connections to make money. But no one has found any wrongdoing, and Perry has said that all of his deals were above board. In 1996, Perry put much of his wealth into blind trusts, making it almost impossible to tell what he owns now.
Bob Martin, a Houston accountant who analyzed Perry’s federal tax returns going back to 1991 for The Texas Tribune, said Perry has fallen into a handful of deals producing some big pay days.
“Based on the information that we’ve been given, it looked like Gov. Perry’s net worth did increase significantly while he’s been in office,” Martin said. “The market was going up, timing was very much in people’s favor. So it might not be unusual, but because he is a political official, it is subject to more scrutiny.”
Perry aides have said the governor benefited only from good business sense and a once-red-hot real estate market, all the while meeting disclosure requirements. The tax records are not subject to mandatory disclosure, but Perry has voluntarily released them for most of the time he has been in elected office. Perry, or at least his trust, has also lost some money along the way, most notably during the 2008 economic downturn.
When he got elected to the Legislature in 1984, Perry, from rural Haskell County, north of Abilene, was still farming cotton and ranching cattle. In 1987, he and his wife, Anita, reported an adjusted gross income of $45,000. As a state legislator, considered a part-time job, Perry was entitled to a salary of $7,200 a year plus expenses. He made about $85,000 annually as agriculture commissioner and now draws $150,000 a year as governor.
In his almost three decades in public office, Perry’s biggest income gains have come from buying and selling land. Since the early 1990s, when Perry began serving as a statewide elected official, the transactions have helped him earn about $2 million in pre-tax profits, according to interviews, public records and news accounts.
In 1995, Perry sold a 9.3-acre tract in Austin to Dell, with Mike Toomey, an influential Texas lobbyist and longtime confidante, representing him at the sale. Dell bought the property for $465,000 and got access to important municipal sewage infrastructure. Perry had bought the property for a reported $122,000 in 1993, giving him a $343,000 profit.
A little more than a year later, acting on a tip from Gary Bradley, the flashy Austin developer, Perry bought 60 acres of land southwest of Austin. He sold the tract less than three years later for a profit of $239,000. Bradley’s real estate empire went into bankruptcy in 2002.
According to available records, Perry’s most lucrative land deal was a 2007 transaction in which he sold a prime piece of real estate on the shores of Lake LBJ near Austin for $1.14 million at the height of the market. Records show he had bought the 0.68-acre tract for $314,770 in 2001 from Fraser, the state senator, who had acquired it and a nearby tract in the lake resort town of Horseshoe Bay. Perry’s office has described the transaction as “completely at arm’s length."
The lot Perry bought sits in an area of Horseshoe Bay known as The Peninsula, the town’s “most prestigious and exclusive waterfront address,” according to a description on the Horseshoe Bay Resort Realty website. Resort literature described the property, with 10-foot stone walls around it, as one of 10 lots taken from the estate of Horseshoe Bay’s founder.
After selling the land in 2007, Perry reported adjusted gross income of $1,092,810, while paying $195,023 in taxes. It was the best year, in terms of income, that Perry has disclosed so far.
The governor’s office did not respond to requests for the Perrys’ 2010 return and did not volunteer the market value of their blind trusts. In 2009, the governor’s office pegged the value of the trust at $896,000. The Perrys reported income of $200,370 in 2009, which included the $65,000 from Anita Perry’s work as a consultant for the Texas Association Against Sexual Assault.
Apart from the money he made on land deals, Perry reported a profit of $38,000 in 1996 after selling shares of Kinetic Concepts Inc., a hospital equipment company founded by one of Perry’s most generous donors, James Leininger of San Antonio, the school voucher proponent. All of Perry’s publicly traded stocks, and some other assets, have been transferred into his blind trust, records show. The trust has provided at least $600,000 in income to Perry since 1997.
It has not all been rosy. The blind trust Perry created in 1996 reported a half-million dollars in losses in 2008, in what Martin, the accountant, said was most likely caused by a sell-off during the market downturns that year.
“He’s had good timing, and he’s had bad timing,” Martin said. “When the stock market went down, it looks like he pulled out of the stock market, or at least his blind trust did, and he has a significant capital loss now.”
Perry’s most recent personal financial statement, filed with the Texas Ethics Commission earlier this year and covering 2010, also reflects a loss, reported as less than $5,000, on the sale of a house the Perrys owned in College Station, where their daughter attended college.
One area that has grown on Perry’s financial disclosures in recent years: gifts received by the couple. The latest disclosure included seven pages of them, up from three in each of the two previous years. They included a hat, transportation, lodging and hunting trips from various contributors and friends. Mrs. Perry received a gift last year of “hair products” from Farouk Shami, maker of the popular CHI flat iron and at one point in 2010 a Democratic contender for her husband's job. Shami later dropped out and endorsed the governor.
Boots seemed to be the most popular gift. The records show that since 2007, Perry has received 10 pairs from a variety of donors, including several from the famed Houston bootmaker Rocky Carroll.