Although this article is rather long, it documents how Ted Stevens, other politicians, and defense contractors succeeded in obtaining funding for an unnecessary facility: the Kodiak Launch Complex.
How one man gamed the defense spending system
They huddled in a quiet corner at the US Airways lounge at Ronald Reagan National Airport, sipping bottomless cups of coffee as they plotted to turn America's missile defense program into a personal cash machine.
Michael Cantrell, an engineer at the Army Space and Missile Defense Command headquarters in Huntsville, Ala., along with his deputy, Doug Ennis, had lined up millions of dollars from Congress for defense companies. Now, Cantrell decided, it was time to take a cut.
"The contractors are making a killing," Cantrell said he recalled thinking at the meeting, in 2000. "The lobbyists are getting their fees, and the contractors and lobbyists are writing out campaign checks to the politicians. Everybody is making money here -- except us."
Within months, Cantrell began getting personal checks from contractors and later returned to the airport with Ennis to pick up a briefcase stuffed with $75,000. The two men eventually collected more than $1.6 million in kickbacks, through 2007, prompting them to plead guilty this year to corruption charges.
Cantrell readily acknowledges concocting the crime. But what has drawn little scrutiny are his activities leading up to it. Thanks to important allies in Congress, he extracted nearly $350 million for projects the Pentagon did not want, wasting taxpayer money on what would become dead-end ventures.
Recent scandals involving former Rep. Randy Cunningham, R-Calif., and the lobbyist Jack Abramoff, both now in prison, provided a glimpse into how special interests manipulate the federal government.
Cantrell's story, by contrast, pieced together from federal documents and dozens of interviews, is a remarkable account of how a little-known, midlevel Defense Department insider who spent his entire career in Alabama skillfully gamed the system.
Determined to save his job, Cantrell often bypassed his bosses and broke department rules to make his case on Capitol Hill. He enlisted contractors to pitch projects that would keep the dollars flowing and paid lobbyists to ease them through. He cultivated lawmakers, who were eager to send money back home or to favored contractors and did not ask many questions. And when he ran into trouble, he could count on his powerful friends for protection from Pentagon officials.
Sen. Ted Stevens, the Alaska Republican, for example, chewed out Pentagon officials who opposed a missile range Cantrell and his contractor allies were seeking to build in Alaska, prompting them to back off, while a staffer for former Sen. Trent Lott, R-Miss., intervened when the Pentagon threatened to discipline Cantrell for lobbying, a banned activity for civil servants.
"I could go over to the Hill and put pressure on people above me and get something done," Cantrell explained about his success in Washington. "With the Army, as long as the senator is not calling over and complaining, everything is OK. And the senator will not call over and complain unless the contractor you're working with does not get his money. So you just have to keep the players happy and it works."
Cantrell's division was a small part of the national missile defense program, an effort that has cost the United States more than $110 billion since President Ronald Reagan unveiled his Strategic Defense Initiative 25 years ago. Today, the missile defense effort is the Pentagon's single biggest procurement program.
The Army declined to discuss the Cantrell case, other than to say it had taken steps to try to prevent similar crimes from happening again.
But some current and former Defense Department officials say the exploiting of the system that preceded Cantrell's kickback scheme has had a damaging impact, slowing progress toward building a viable missile defense system by diverting money to unnecessary or wasteful endeavors. That pattern of larding up the defense budget with pet projects pushed by lawmakers and lobbyists is a familiar one.
"What they did may have been a scandal," said Walter E. Braswell, Ennis' lawyer, referring to the actions of his client and Cantrell. "But even more grotesque is the way defense procurement has disintegrated into an incestuous relationship between the military, politicians and contractors."
Dr. J. Richard Fisher, one of Cantrell's former bosses, said: "The system needs to change. But it is not likely to do that. There is just too much inertia -- and too much self-interest."
Towering over the highway near the entrance to Huntsville is a replica of the Saturn V rocket, the powerful missile that lifted the first man to the moon.
Created in Huntsville, it is a fitting icon for this once-sleepy cotton mill town, now so dominated by the aerospace industry that it is nicknamed Rocket City.
An estimated 18,000 uniformed and civilian federal employees work in the aerospace industry in the Huntsville area today, augmented by about 40,000 others, who work for federal contractors.
Michael Cantrell grew up on a dairy farm nearby, listening to the rumble of rocket test flights. As a young engineer, he became a civilian employee of the Army and quickly impressed his bosses.
"Mike moved at the speed of sound," said Lt. Gen. Jay Garner, who briefly headed the missile command.
By 1990, Cantrell, then 35, took over an experimental program to develop faster, cheaper and lighter missiles that could intercept and knock out enemy missiles flying within the atmosphere. Under the Reagan administration, money was plentiful for such research, but with the fall of the Soviet Union and the arrival of the Clinton administration, Pentagon bosses were forced to make budget cuts.
Cantrell became a regular on Capitol Hill, both in the halls of Congress and in the bars and restaurants where Hill staffers gather after hours. He set up a makeshift office in the US Airways lounge at Reagan National Airport, where he followed up on pitches for money to lawmakers and hid out from his Defense Department bosses. He identified lobbyists who could prove useful and contractors -- many of them campaign donors -- with projects that needed nurturing.
"It was like I was going hunting in Washington," Cantrell said. "And I would always come up with money."
One colleague was so impressed with Cantrell's record that she gave him a bobblehead doll carrying a briefcase marked with dollar signs.
Inspired by his successes, Cantrell soon embarked on a more ambitious project that would all but guarantee sustained financing.
Cantrell's proposal, which was based on the premise that Congress would significantly increase annual financing for his experimental missile defense work, involved not just five test launchings, but the construction of a new launching site on a remote Alaskan island and the lease of a mothballed Navy helicopter carrier, which would be used to send the simulated attack missile.
The launching project
It was easy to find willing partners.
The program's main contractors, including the defense giant Lockheed Martin, prepared presentations for Congress making the case for an extra $25 million to $50 million a year for the project.
Officials in Alaska, who had been seeking money for a spaceport on Kodiak Island to launch commercial satellites, eagerly chimed in. And nearly a dozen lawmakers also did their part, Cantrell said, including Sen. Stevens of Alaska; Sen. Richard C. Shelby, R-Ala.; Sen. Olympia J. Snowe, R-Maine; and Rep. C.W. Bill Young, R-Fla., all members of the Appropriations or Armed Services committees with missile defense contractors in their districts.
But the military already had rocket launching sites around the globe, and Gen. Lester L. Lyles of the Air Force, who then ran the missile defense program, had no intention of spending money on another one.
Lyles and his deputy, Rear Adm. Richard D. West of the Navy, were particularly incensed when they learned of the plans to lease a helicopter carrier, the Tripoli, and spend several million dollars renovating it.
Summoned to Washington in 1997 to explain the project, Cantrell offered little information. That only further infuriated his bosses.
"Who in the hell is in charge of this program?" West finally demanded in an exchange both men recall.
Cantrell was ordered to remove his experimental equipment from the planned launching. But the money kept coming. Stevens' office had called to insist that the Kodiak project proceed, West and Lt. Gen. Edward G. Anderson, then the head of Army Space and Missile Defense Command, said in interviews.
"I got hammered pretty hard," West recalled. The military men backed off, and the construction at Kodiak continued.
Cantrell said he knew that building a new launching facility was wasteful. "It doesn't make sense," he said. "The economics of it, they just don't work."
Cantrell and his deputy, Ennis, visited Kodiak Island on the afternoon of the inaugural test launching in November 1998. The Air Force had substituted other equipment for Cantrell's payload.
The two men, armed with a cooler filled with Miller Lite beer, watched the launching from a trailer, emerging just in time to see the missile burn an orange streak into the sky. They had hidden out to avoid any local newspaper reporters who might discover that Cantrell's missile parts -- the justification for millions of dollars in spending -- were not even being tested.
"There is no way we can explain this," Cantrell remembered telling Ennis.
Back in Washington
The hand that grabbed Cantrell by the shoulder startled him.
It was Lyles, who happened to be on Capitol Hill when he spotted Cantrell outside Lott's office. It was February 1998, even before the dispute over the Alaska project had played out. But the general said he immediately suspected Cantrell was up to no good.
"Are you over here lobbying?" Lyles asked in an exchange the two men recalled.
Cantrell had been working with Lott, then Senate majority leader, for several years. The lawmaker included several million dollars in the defense budget for an acoustics research center in his home state, and Cantrell made sure it went to the intended recipients: the University of Mississippi in Oxford and a Huntsville defense contractor that had a branch office in Oxford. In turn, Lott's office helped get extra financing -- $25 million or so every year -- for Cantrell's program.
It was an arrangement that Cantrell did not want to discuss with Lyles. While he did not consider himself to have been lobbying that day, he readily acknowledges that he often did.
"I just mumbled a lot," he recalled of his response to the general.
The incident with Lyles prompted a formal investigation into Cantrell's activities that same year. But Lott's office requested that the case be closed, Cantrell said. Eric Womble, a former aide to Lott, said he could not remember taking such a step, but added that it would not have been surprising.
"Sen. Lott's staff protects people who are trying to help us and help the nation," Womble said.
Soon, the investigation of Cantrell came to a close. He got only a verbal warning from his boss.
That episode would embolden Cantrell. On several occasions, he would again be caught violating Pentagon rules and each time escape with nothing more than a reprimand.
"If you have the Senate majority leader's office calling over to get you out of trouble, you can't help but get a little cocky," Cantrell said.
From the US Airways club, Cantrell could see the symphony of the arriving and departing planes, the Potomac River and off in the distance, the Capitol dome.
One day in 2000, Cantrell met in the airport lounge with Ennis, his deputy, and a Maine contractor to figure out how to pocket some of the government's money.
There were easy ways to cheat. The prototype missile nose cone and heat shields that the Army had paid the Maine company to design for the Alaska tests. Why not hire the business to pretend to design them again? Cantrell asked.
The ballute -- an odd cross between a balloon and a parachute -- had been rejected by experts as a tool to strike an enemy missile. But why not pay the Maine company to develop them anyway? Cantrell suggested.
He could pull off such shenanigans because, by then, he had an extraordinary degree of independence. Cantrell's experimental missile program, which had cost nearly $250 million, was about to be canceled. No working missile system had been built -- and almost none of the components had ended up being tested in real launchings as planned.
The effort had produced some benefits for the players involved: Congress sent an annual allotment of extra money to the Alaska launching site now totaling more than $40 million, and one of the contractors that had worked with Cantrell initially to pitch the space port, Aero Thermo Technology, had secured a no-bid federal contract to provide launching services.
Now Cantrell was on to another assignment overseeing missile defense research in Huntsville, and through his friends on the Hill, he was once again getting money for projects that the Pentagon did not want.
Cantrell, who by now was helping to oversee 160 or so contractors and managing a $120 million a year contracting budget, said he knew that if he only requested a few million dollars at a time for his scheme, there would be little scrutiny.
For example, the missile nose cones and other parts now made round trips from Huntsville to Maine with little or no change. Cantrell or his deputy simply marked off the work as complete, and that was the end of it.
For nearly six years, from 2001 to 2007, the men collected kickbacks from contractors. During one visit to the US Airways Club, Ennis picked up a briefcase stuffed with $75,000 in cash, according to federal court records. Cantrell also got checks, ranging from $5,000 to $60,000, once or twice a month, court records show. With his new wealth, Cantrell built himself a $1.25 million home in an exclusive Huntsville neighborhood called the Ledges.
Awaiting sentencing on conspiracy and bribery charges, Cantrell now spends his days sitting in the kitchen of his father-in-law's house; his dream home was seized by the federal government.
On top of the kitchen table, next to a King James Version of the Bible and bottle of Extra Strength Excedrin, is a stack of books on how to master poker. Cantrell has reduced them to mathematical formulas pinned onto a bulletin board in front of a computer terminal, where he plays Internet poker for hours at a time.
Even now, he is trying to beat the system.