A space battle is being fought on Capitol Hill, and a fleet of rocket companies are using millions of lobbying dollars to wage it.
The core struggle is between SpaceX, founded in 2002 by tech entrepreneur Elon Musk, and United Launch Alliance (ULA), which is jointly owned by aerospace giants Boeing and Lockheed Martin.
At stake is roughly $70 billion worth of Pentagon satellite launch contracts through 2030, plus what some members of Congress argue is the safety of future astronauts.
While the skirmish dates back more than a decade, lawmakers began sparring over issues central to each company’s interests in the past week — just days after SpaceX founder Elon Musk debuted his bold vision for colonizing Mars.
On September 27, Rep. Mike Coffman (R-CO), who represents the district where ULA is headquartered, penned a four-page congressional letter with nine other House Republicans and sent it to the Federal Aviation Administration (FAA), NASA, and the US Air Force (USAF).
The oversight letter — which has no legal authority, but government organisations almost always respond to — calls on the federal agencies to take control of SpaceX’s internally led investigations and specifically references the company’s most recent rocket failures on September 1, 2016, and June 28, 2015.
“These failures could have spelled disaster, even loss of life, had critical national security payloads or NASA crew been aboard those rockets,” the letter states. “Both SpaceX failures occurred after the Air Force certified the Falcon 9 launch vehicle for US national security launches, less than fifteen months ago.”
But on Tuesday, October 4, a larger, bipartisan group of 24 members of Congress delivered a rebuttal. Their letter urges the FAA, NASA, and USAF to stay the course.
“Accidents are unfortunate events, and accident investigations should not be politicized. We encourage you to reject calls for your organisations to abandon established, well considered, and long standing procedures,” states the letter, led by Rep. Bill Flores (R-TX), whose district includes a large SpaceX facility.
Beyond any convictions about how the commercial space industry should work, and what constitutes appropriate use of taxpayer dollars, lobbyist spending seems to be driving the latest feud.
In 2015 alone, SpaceX dropped almost $1.8 million on its lobbying efforts — up from about $569,000 just 5 years earlier, according to data gathered by the nonpartisan Center for Responsive Politics (which tracks federal campaign contributions and lobbying efforts on its website opensecrets.org)
But the company could be vastly outspent by its competitors.
ULA dropped nearly $1.5 million in 2015, up from $120,000 in 2010. Meanwhile, Boeing poured nearly $21.9 million in 2015 into defence and aerospace lobbying (up from $17.9 million in 2010) and Lockheed Martin spent almost $13.8 million in 2015 (up from $12.7 million in 2010). It’s unclear if and how much the joint owners of ULA spend to back its interests, since both companies develop a vast amount of US military technologies, but it stands to reason some of it could be used to support ULA. (Neither company addressed our inquiry into the matter.)
In either case, a sizable cut of that money has ended up in the campaign coffers of many lawmakers who seem to be fighting on the companies’ behalves.
A drawn-out space battle
The rivalry between the rocket-launching companies goes back at least a decade.
Boeing and Lockheed Martin used to compete against each other for military launch contracts, but in 2005 they announced their plan to lay down arms and form a joint rocket-launching business: ULA.
At the time, SpaceX was just 3-year-old rocket company with few launches under its belt — and a lot to prove. It nonetheless sued Boeing and Lockheed Martin in October 2005 in an attempt to block ULA’s formation under antitrust law.
A judge dismissed SpaceX’s lawsuit in February 2006 on the grounds that the company had no suitable alternative.
The FTC later (and reluctantly) approved the joint venture in October 2006, expressing that, while it was concerned about “anticompetitive harm“, the Pentagon needed “assured access to space” and ULA was the only real option.
SpaceX didn’t forget about ULA’s military spaceflight monopoly, yet chose to focus its energies elsewhere.
Over the next 8 years, Musk’s aerospace company matured its Falcon 9 rocket design, figured out how to build rocket boosters that can land themselves at sea, bagged contracts with telecommunications satellite providers, and worked toward winning NASA contracts to resupply the space station (and eventually launch people into space).
But in September 2013, when SpaceX says it was “just days away” from its third and final certification flight — which the USAF requires to compete with ULA for Pentagon contracts — the Air Force quietly inked a contract with ULA to fly its next 36 launches.
SpaceX sued the government over the deal in April 2014, detailing its rationale in a press release:
“Since the merger, not only have there been no savings but costs have skyrocketed. Vehicle costs are up from approximately $100M per vehicle to $400M per vehicle — making ULA’s launch vehicles the most expensive not just in the US, but the world. In addition, the United States pays ULA nearly $1 billion dollars per year just to maintain the ability to launch — regardless of whether or not they launch a single rocket.
“To be clear, SpaceX is not seeking to be awarded any launch contracts. We are simply seeking the opportunity to compete — and not just for SpaceX, but for any qualified company. If we compete and we lose, that’s OK too.”
In January 2015, the US Justice Department settled with SpaceX, which dropped its lawsuit.
Four months later, in May 2015, SpaceX earned its USAF certification, followed by receiving its first $83 million military satellite launch contract — a bid hundreds of millions of dollars less than ULA’s typical pricing.
Another flash point for SpaceX vs. Boeing-Lockheed-ULA involved a government rule limiting the use of Russian-made RD-180 engines, which are powerful devices that ULA uses to propel heavy military satellites into orbit.
While Russia aggressively annexed Crimea in Ukraine, SpaceX lobbied intensely to have the engines banned after 2019 in a re-authorization of the National Defence Authorization Act (NDAA). Since SpaceX makes its own rocket engines, passage of the rule might have guaranteed its own military launch monopoly.
But Senator John McCain (R-Ariz.) — to whom SpaceX contributed at least $16,500 in the latest election cycle, and who is the chairman of the Senate Armed Services Committee — ultimately backed down from his position that allowing the use of RD-180s would be funding “Putin’s top cronies“.
In a legislative compromise earlier this year, the NDAA re-authorization gave ULA permission to use 18 of the RD-180 engines on its rockets through 2022. (The much-deeper pockets of Boeing and Lockheed Martin almost certainly helped win the day.)
Amid these legal actions, SpaceX suffered two launch failures (in 2012 and 2015) and a string of anomalies at launch — giving Coffman and other politicians multiple openings to wade into the fray.
Raising issues about SpaceX, its launch failures and anomalies, and its relationship with the US government is not a first for Coffman.
As a member of the House Armed Services strategic forces subcommittee, which oversees military spacecraft, he did so in 2014, and in 2015 on multiple occasions. (His calls for change were mostly rebuffed by government agencies.)
The congressman now faces a tough 2016 reelection campaign in his district — the home base of ULA.
In the 2016 election cycle, SpaceX contributed money to at least half of the 24 signers of the congressional letter that responded to (and contested) Coffman’s. Flores himself has taken at least $2,000, and cosigner Loretta Sanchez (D-CA) accepted at least $7,000 from SpaceX.
Flores also presides over district 17 in Texas, which is home to SpaceX’s 4,000-acre rocket development facility in the town of McGregor.
Samantha Masunaga, a reporter for the Los Angeles Times, captured the friction well in a story published in May 2016
“Traditional launch providers see their market being threatened by nontraditional entrants,” Loren Thompson, aerospace analyst at the Lexington Institute think tank (which is funded by Boeing and Lockheed Martin), told Masunaga. “Basically, this is competition between launch providers over market share and money that in the political process gets related to local interests.”
Business Insider contacted Rep. Coffman’s press secretary as well as ULA about campaign funding and other issues related to this story, but we did not immediately receive a response. A representative from Boeing could not immediately provide a comment, and a Lockheed Martin representative declined to comment.
Representatives from Rep. Flores’ office did not immediately reply, and a SpaceX spokesperson told Business Insider that he was looking into getting us a response.
Despite the apparent turf-based lobbying war, Coffman and his colleagues are not alone in their critique of how government agencies permit SpaceX to internally lead their own mishap investigations — and, by extension, other rocket companies like Orbital ATK and ULA. (Both have led their own investigations in recent years.)
In fact, a June 2016 audit by NASA’s Office of Inspector General (OIG) argues that internally led probes don’t meet the bar for being independent.
The first SpaceX incident in question was an in-flight explosion of a Falcon 9 rocket on June 28, 2015, which destroyed a telecommunications satellite.
SpaceX followed a pre-approved plan to do an internal accident investigation with some FAA oversight, ultimately determining that a faulty strut had caused the accident.
The June 2016 NASA OIG audit concluded that investigation wasn’t independent “because 11 of the 12 voting members were SpaceX employees.”
“While not required in the CRS-1 contract, this lack of independence does not meet Government best practice standards for NASA, NTSB, and USAF investigations and could impact the board’s ability to identify the root cause and make corrective actions,” the report read.
The most recent incident was a launchpad fireball of a Falcon 9 rocket on September 1, 2016, in Cape Canaveral, Florida. The percussive blaze destroyed a $200 million satellite that Facebook planned to lease, and SpaceX again followed a federal law to perform its own investigation (since no people were harmed). That investigation isn’t done, though a helium system seems to be at fault.
Musk said in a press call on September 27 that the company hasn’t lost any contracts because of the incident.
“If something happens to SpaceX, it gets 100 times more press … The public may think that our rockets fail, but actually lots of rockets fail,” he told reporters. “This is a small thing on a long road. There will probably be other failures in the future.”
For its ongoing investigation, SpaceX nearly doubled its team to a core group of “around 20 people,” of which “more than half are representatives from FAA, NASA, US Air Force and industry experts,” a company spokesperson previously told Business Insider in an email.
Leading the entire group is Hans Koenigsmann — SpaceX’s vice president of mission assurance.
“[W]e believe he is the best person to do so,” the spokesperson said. “We are collaborating very closely with the participating agencies, sharing raw data and providing access to meetings.”
But the 10 signers of the first congressional letter do not seem satisfied with the internally led process.
“We feel strongly that the current investigation should be led by NASA and the Air Force to ensure that proper investigative engineering rigour is applied and that the outcomes are sufficient to prevent NASA and military launch mishaps in the future,” the letter states.
John Taylor, a SpaceX spokesperson, declined to comment when provided a copy of the first letter.
How federal agencies responded
The first letter calls on the FAA, USAF, and NASA for their responses to the letter by October 31, 2016.
Business Insider forwarded both a draft and then a signed letter to those agencies as well as to the DoD (which is named in the letter) and asked for comment.
Hank Price, an FAA spokesperson, told Business Insider “it’d take some time to draft a response, and we wouldn’t respond to it until we’d spoken to the Congressman first.”
Another FAA spokesperson later told Business Insider in an email: “The FAA received the letter late Thursday afternoon and has not had a chance to review it. Safety of all operations, including commercial space, is our top priority, and the FAA is closely overseeing the accident investigation. We will respond to the members of Congress in a timely manner.”
NASA representatives for the agency’s Human Exploration and Operations Mission Directorate told Business Insider in an email “we haven’t officially received this, but even when we do, we wouldn’t be able to comment in advance of responding.”
Laura Seal, a DoD spokesperson, told Business Insider by email that the “letter is not addressed to the Department of Defence. If we do receive a letter from Congress on this topic for response, we would respond directly to the author.”
Representatives at the USAF did not immediately reply.
The congressional letters
Below is the full text of the first letter, from Coffman’s group on September 27:
And the second letter from Flores’ contingent, released October 4:
Correction: A previous version of this post misstated which entity settled SpaceX’s April 2014 lawsuit. The US Justice Department, which represents the USAF in legal proceedings, reached an agreement with SpaceX in January 2015 (not ULA).
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