KLC Wasn't Wanted and They Couldn't Pay Their Own Way (and they still can't)

Stevens pushed Kodiak rocket funding on reluctant military
Article published on Wednesday, December 3rd, 2008
By JAN HUISMAN
Mirror Writer

When, in 1997, the Alaska Aerospace Development Corporation suddenly received $18 million dollars in federal funding for its planned rocket launch site on Kodiak Island, it was no secret U.S. Sen. Ted Stevens of Alaska had pulled some strings.

New evidence indicates Stevens not only pulled, but pushed, strong-arming Missile Defense commanders on behalf of AADC.

The money appeared in a Pentagon spending bill during a House-Senate conference in the fall of 1996. $23 million was added to the budget of a small Air Force missile defense program. $5 million would be spent on two launches for the program — the remaining $18 million was earmarked for construction of the Kodiak Launch Complex.

Newspapers at the time reported the Air Force did not solicit the funding.

“The Air Force believes this is an important test but due to higher priority requirements and limited budgets, did not request funds for this test,” the Air Force said in a statement to the Anchorage Daily News.

Michael Cantrell, an engineer working for the Air Force Atmospheric Interceptor Technology program, said Stevens added the money to his program’s account after he worked out a deal in which the money would go to Kodiak.

“I understand that Sen. Stevens wanted to fund the range, but could not just put the funds in the budget for a range without a user. So I became that user and the funds were added to my budget for the Kodiak Complex,” Cantrell wrote in a fax to the Kodiak Daily Mirror.

When Cantrell’s superiors at the missile defense program found out, they were furious.

“I was opposed to using missile defense money for the Kodiak facility only because we already had our launch facilities that we were using for missile testing,” said retired Rear Adm. Richard D. West, then deputy director of the Ballistic Missile Defense Organization.

“We were using White Sands and Kwajalein (launch facilities), which were already developed and paid-for launch facilities that were sufficient for our testing.”

West said Stevens overruled MDA’s priorities, insisting the Kodiak project proceed.

No one more important

AADC has never denied Stevens’ importance to their agency.

“No one has been more important to AADC than Senator Ted Stevens,” wrote former AADC CEO Pat Ladner in the 2002 annual report. “He held us to a strict standard and provided help to AADC only after we convinced him that our goals would benefit the nation as well as Alaska.”

Yet others said it was Stevens who did the convincing.

“Congress has the right to put money into programs that they think are important to the nation,” West said. “We made a point that in this particular case, we didn’t think we needed that facility and could use the money for something else.”

In response, West said Stevens sent a “strong message.”

“We were to see that that money would be used in building the facility for Kodiak.”

The Alaska Aerospace Development Corporation was formed as an independent state agency in 1991 with the intention of bringing space-related economic development to Alaska. Ladner was hired as CEO in 1992, leaving a management position at the Strategic Defense Initiative, a forerunner to the Missile Defense Agency.

Initially focused around expanding the Poker Flats facility in Fairbanks, the agency settled in 1994 on Kodiak as a suitable site for a launch facility. Advantages included range safety – with nothing but water for thousands of miles south of Kodiak Island — and the ability to launch satellites into a polar orbit.

In a series of public meetings in Kodiak in the mid ’90s, Ladner pitched the project as a cutting-edge venture that would bring the burgeoning commercial space industry to Alaska. Ladner said several private communications and aerospace firms had expressed interest in launching out of Kodiak.

Funding for construction was to come from bonds issued by the Alaska Industrial Development and Export Authority, to be repaid by profits from commercial activity.

But the customers never turned up and the project failed to meet AIDEA’s funding criteria. The project appeared dead in the water.

Neal Brown, former director of the Poker Flats research range, said he had been hopeful but skeptical about the commercial potential of the aerospace industry.

“I’m sure (Ladner) worked really hard to get commercial stuff, but he just never materialized it,” Brown said. “So he went for what he could, and that became the military.”

Cantrell was the subject of a lengthy New York Times article in October detailing how he leveraged his position as head of the experimental AIT program to collect more than $1.6 million in kickbacks. Cantrell and his deputy, Doug Ennis, are waiting sentencing after pleading guilty to corruption charges.

Cantrell lobbied Capitol Hill to line up federal funding for his program. Often, as in the case of AADC, he enlisted congressmen and senators with promises the money would be spent on contractors or agencies in the politicians’ constituencies.

Cantrell said he worked with Ladner to procure funding for the Kodiak Launch Complex.

“Pat knew what I was doing,” Cantrell wrote in the fax to the Mirror. “Bill Bittner was AADC’s attorney, and Pat used Bill to work Stevens’ office.”

Bill Bittner, attorney and lobbyist, is Sen. Stevens’ brother-in-law.

Ladner acknowledged knowing Cantrell, but distanced himself from Cantrell’s lobbying.

“Mr. Cantrell and I never went to see Sen. Stevens at all. Now, if he went to see Sen. Stevens, that’s fine,” Ladner said.

He said the funds that came through Cantrell’s program were not make or break for AADC.

“We got money from a lot of sources. What can I tell ya?” he said.

Regarding the Pentagon’s reluctance to pay for the Kodiak project, Ladner said they didn’t appreciate what they were getting.

“The people that were in missile defense at that time probably would have rather had that money for something else, but as it proves out now, it was a worthy investment,” he said, citing Kodiak’s ongoing involvement in missile defense testing.

Tipping point

Cantrell’s first test in November 1998 launched from a mobile pad on the Kodiak site where contractors had only just begun pouring concrete; The program used to justify $18 million in funding for KLC could itself have launched without it.

Compounding the waste, the first missile carried none of Cantrell’s test equipment in the payload. Cantrell’s superiors ordered it removed when they found out about the earmark to build KLC.

“After the Stevens meeting I was told to participate, but we could not get my payload on the launch without a significant delay and cost increase,” Cantrell wrote. “So, we put my program name on the launch and left the hardware off.”

Ladner said AADC does not know what is on the classified military payloads, aside from confirming they do not contain anything hazardous.

Since 1998, the Kodiak Launch Complex has completed 13 launches. Aside from one launch contracted by Lockheed and NASA, all have been military.

All of the seven launches since 2004 were target missiles fired by the Missile Defense Agency to simulate an attack on the U.S. coming from Asia.

Aside from the $76 million earned in revenue from these launches, the AADC has received $138 million in federal capital investments since 1993.

In August, AADC signed a new three-year contract with MDA that could be worth $50 million. A target missile launch is planned for Friday, and two Air Force launches are on the schedule over the next two years.

Current AADC CEO Dale Nash said the anticipated commercial launches never materialized because satellite phone systems lost out to terrestrial cell phones.

“There were an awful lot of people counting on that being out there – constellations of hundreds of satellites,” he said. “The commercial (demand) for polar orbits has basically gone away.”

Nash said AADC faces strong competition from government-subsidized launch sites in India, Russia, China and Europe.

Unless depreciation of the launch site’s infrastructure is factored in, Nash said, AADC is operating at a profit.

Yet AADC has never issued a dividend to the State of Alaska, which initially invested $15 million in the project. Nash said the Alaska legislature agreed it was better to reinvest profits into growing the launch capabilities.

The agency is seeking capital funding from the state to expand the Kodiak Launch Facility, Nash said. The expansion would give Kodiak the ability to launch quickly upon request.

“Right now, it’s typically about 60 days from the time someone shows up until they can go launch,” Nash said.

“Russia and China both have the capability to launch within about an hour to two hours from the time they decide they want to launch until they’re on orbit,” he said. “We’re trying to design and build an additional launch pad with rocket motor storage to get that kind of capability.”

AADC president Tom Case said rapid launch capability would help protect a nation increasingly dependent on satellite systems for its economic and national security.

“There are anti-satellite technologies that have proliferated around a number of space-faring countries now,” said Case, who joined AADC in 2007 after retiring from the Air Force.

Case said AADC anticipates a demand for “the ability to put small satellites into orbit quickly to fill a specific need for a period of time.

“This is a major economic development opportunity for this state (and) it’s a key part of our national security infrastructure.”

“We are on the tipping point of being able to break out into a significant aerospace industry in Alaska,” he said.

Mirror writer Jan Huisman may be reached via e-mail at jhuisman@kodiakdailymirror.com.

AADC has claimed that “We are on the tipping point of being able to break out into a significant aerospace industry in Alaska,” since 1995. Just saying it doesn't make it so.