The articles appeared in late August, mostly in conservative publications such as Town Hall, Breitbart and the Daily Caller, and have since continued to trickle through October. All of the dozen or so web comments, in various styles as op-eds or contributions, have made the same essential point: that Elon Musk is profiting from crony capitalism and should be stopped.
This isn’t a particularly new line of attack against Musk, especially among some conservatives who decry the public money his companies have received to build solar power facilities, electric cars and low-cost rockets. Still, most of these articles were quite specific in their attacks, with a single section in the 2018 National Defense Authorization Act designated as particularly troublesome to the Republic.
The articles, several written by former U.S. Representative Ron Paul or his associates, have the same general theme: Musk has lavished money on politicians, especially Senator John McCain (R) of Arizona. In return, McCain added Section 1615 to this year’s defense authorization law, which contains language to prohibit the military from investing in new launch systems. With this language, the articles claim, Musk is aiming for a monopoly on the US national security launch market. In addition to allowing Musk to cheat taxpayers, some of the more exaggerated authors argue that it could kill Americans.
As the Senate deliberates fiscal year 2018 [National Defense Authorization Act]it should listen to the real space experts, not pseudo-experts with vested financial interests like John McCain, Musk’s donor,” wrote Jerry Rogers in The Federalist in a typical op-ed. using the government to corner the market in the electric car industry is not optimal, but at least it doesn’t threaten American lives.”
The central canard of these attacks is that John McCain did not, in fact, add “Section 1615” to the Defense Authorization Act, which is now being finalized by a conference between the House and Senate. This clause does not exist at all in the language of the Senate. It was previously passed into House legislation by U.S. Representative Mike Rogers, a Republican from Alabama.
Rogers’ language concerns the purchase of new American-made missiles. The US military must have assured access to space, and this means two separate launch systems to get its spy and communications satellites into orbit. It currently has three: the Delta and Atlas rocket families built by United Launch Alliance (ULA) and the Falcon 9 rocket by SpaceX. However, ULA wants to stop building the Delta missiles because they are expensive, and the Atlas fleet uses Russian-made RD-180 rocket engines, which Congress wants to phase out.
This leaves open the possibility that, without Congressional action, the US military could only reach SpaceX’s space rocket within a few years. That’s why the US military is spending a few billion dollars this decade developing one or more new launch systems to replace the Delta and Atlas fleets with vehicles powered by US-made engines.
As a long-time national defense contractor for the government, ULA is at the forefront of these funds. The Colorado-based company, which was founded in 2005 by Boeing and Lockheed Martin, prefers to build a new missile, called Vulcan. ULA has said it wants to use Blue Origin’s American-made BE-4 rocket motor for Vulcan, as this motor continues to be developed. However, Vulcan could also use an engine under development by Aerojet Rocketdyne, the AR1. Finally, it is possible that the AR1 engine is a “drop-in” replacement for the RD-180 engine in the existing Atlas V rocket, although there is some debate about how easy it would be to retrofit the AR1 on this way to use.
Section 1615 restricts how the Secretary of Defense can spend money on these new launch systems, allowing funds to be spent only on engine development, the interface between a new engine (i.e. AR1) and an existing launch vehicle (i.e. Atlas V), or to pay expenses unique to military launches, such as certification costs and payload vertical integration. For ULA, it is critical that no expenditure can be made on other parts of the rocket. This limitation is what the conservative editorial writers oppose.
Who benefits, who does not
Two sources familiar with the legislation told Ars that Rogers added section 1615 specifically for the benefit of Aerojet and its AR1 rocket engine.
“The purpose of the provision is simple,” said a source in Washington DC. “Rather than the Department of Defense continuing their open, market-friendly risk mitigation investment across providers to enable Russian engineless launch capabilities, Rogers wants DOD to fund Aerojet to build AR1 to be inserted into Atlas V.” In other words, the language benefits Aerojet by favoring its “drop-in” engine solution over building a Vulcan missile from scratch.
So one of the battles here is between Aerojet on one side and ULA and Blue Origin on the other. Ars has previously reported that Rogers appears to prefer Aerojet, as he has questioned Blue Origin’s ability to develop the BE-4 rocket engine. With section 1615, Rogers prevents the military from giving ULA money to develop the Vulcan launch system, including the core stage, boosters, second stage, and other missile components.
This puts ULA in a difficult position. The parent companies, Boeing and Lockheed Martin, have indicated that they are unlikely to invest significantly in the Vulcan missile without substantial money from the US military. For example, on an earnings call in January 2016, Lockheed CFO Bruce Tanner said of the Vulcan missile, “At this point, we don’t expect that to require parental contributions, but that’s something we’ve been given to get a . to make some kind of arrangement between our partner and the US government to ensure that.”
SpaceX is to blame?
If Aerojet benefits from Section 1615 and ULA is the loser, why does SpaceX get the blame in these editorials? Although the California company does not appear to be responsible for Section 1615, it does make a useful target. After all, SpaceX wouldn’t be against this language because it allows the military to continue to provide money for SpaceX’s own methane-based Raptor engine. There’s also little love lost between SpaceX and its competitor ULA, so SpaceX would be fine with legislation harming ULA.
For opponents of Section 1615, SpaceX, its lightning rod director Musk and the well-known political ally McCain are therefore handy accomplices instead of Rogers, the chairman of the House Armed Services Subcommittee on Strategic Forces. Still, it seems like a brutal line of attack to accuse SpaceX of crony capitalism. While the company received some NASA funding to help bring the Falcon 9 rocket to fruition, most of the research and engine development was privately funded. And it was only because of the Falcon 9 that SpaceX broke ULA’s monopoly on the national security launch market and significantly lowered the price taxpayers pay for government launches.
Ars spoke to half a dozen industry officials about these background opinions to try to find out who or what was behind it. SpaceX declined comment. A ULA spokeswoman did not respond to a request for comment about these articles. One source speculated that there are likely multiple stakeholders behind this artificial turf-like activity.
“This is business as usual,” said a space industry source of the litany of anti-SpaceX comments. “I don’t think it’s that effective. It’s like going to a space conference and it’s a bunch of space people hearing what they expect to hear without any new listeners.”