Companies vie for launch pad

By Bloomberg Time of article published Sep 29, 2013

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In a battle of billionaires, space ventures owned by internet pioneers Jeff Bezos and Elon Musk are relying on prominent former lawmakers as they jockey for control over a historic launch pad at Kennedy Space Center.

The Florida launch pad was mothballed after the US retired its shuttle fleet in 2011 and turned to countries such as Russia to ferry astronauts to the International Space Station. It’s now coveted by Musk’s Space Exploration Technologies, known as SpaceX, and Bezos’s Blue Origin, which are trying to fill the void for the US.

SpaceX, already delivering cargo to the station under a $1.6 billion (R15.9bn) National Aeronautic and Space Administration (Nasa) contract, has former Senate Majority Leader Trent Lott on its lobbying team, Senate filings show.

Blue Origin hired two ex-lawmakers, including the former House Science Committee chairman, in May to lobby. In Congress, dozens of lawmakers with opposing views on the issue sent letters to Nasa.

“It doesn’t matter if you’re making buggy whips or rockets, the way to get Congress’ attention is to hire a lobbyist,” said Bill Allison, the editorial director at the Sunlight Foundation, a Washington-based research group.

“Lobbyists can take comfort in the fact that there will be place for them even beyond the final frontier.”

Bezos, the chief executive of Amazon.com, is the bigger of the billionaires. He is rated number 17 on the Bloomberg billionaires index, a ranking of the world’s wealthiest people, with an estimated net worth of $29.4bn.

Musk, the chief executive of Tesla Motors and co-founder of PayPal, is rated 135, with an estimated net worth of $8.8bn.

The competition began after Nasa in May began seeking proposals to operate the launch pad, the departure site for the manned Apollo missions to the Moon. The agency plans to spend about $8.7bn on transporting crews and cargo to the station in the next five years, according to budget documents.

SpaceX and Blue Origin applied for the launch site lease.

“There are a limited number of East Coast established launch sites,” Chris Quilty, an analyst with Raymond James and Associates in Florida, said.

“Given the fact that both companies intend to ramp up their launch volume, they need to secure enough launch pads to handle that volume.”

Closely held SpaceX, based in California, has spent $540 000 in the first six months of 2013 to lobby, compared with $500 000 during the same period in 2012, Senate filings show. Its team at Washington-based Patton Boggs includes Lott, a Mississippi Republican.

 

Campaign donations

Blue Origin, based in Washington, and also closely held, hired the lobbying firm K&L Gates the same month Nasa sought proposals. Its contingent includes former House Science Committee chairman Bart Gordon, a Tennessee Democrat, and former Representative James Walsh, a New York Republican who was chairman of the House Appropriations subcommittee that approved spending for Nasa.

The company spent $20 000 to lobby Congress in June – its first such expenditures, according to Senate filings.

Patton Boggs and K&L Gates did not comment. Lobbying firms rarely speak to the media about their clients.

SpaceX’s Musk has outspent Bezos in campaign contributions. He has made $242 200 in donations since January 1, 2009, supporting Democrats twice as much as Republicans, according to the Center for Responsive Politics, a Washington-based research group. Bezos contributed $24 800 during the same period.

House space subcommittee member Mo Brooks, an Alabama Republican, said he was troubled by the campaign donations.

“That’s not to say they’re using political influence to achieve an unfair advantage over competitors at taxpayer expense, but it’s a situation that does require close monitoring and aggressive questioning,” Brooks said on September 20 outside the subcommittee hearing room.

Blue Origin, whose founder is the incoming owner of the Washington Post, has proposed sharing the site from the start.

Blue Origin declined to comment about its interest in the lease, said Brooke Crawford, an account director for Texas-based Griffin Communications Group that co-ordinates the space company’s media relations.

SpaceX initially sought an exclusive lease. It changed its position after some members of the House space subcommittee and other lawmakers criticised the idea of limiting use of the site to one company.

Seven members of Congress told Nasa administrator Charles Bolden in letters that they wanted many companies to use the launch pad. They include Republican Representative Frank Wolf of Virginia, chairman of the House Appropriations subcommittee that approves Nasa spending, and Senator Patty Murray, a Democrat from Washington, where Blue Origin is based.

Murray received $4 800 from Bezos for her 2010 re-election campaign, the only candidate since 2009 to whom he has contributed.

“It seems premature to restrict use of this unique asset to one entity, given that the commercial launch market is still in development,” Wolf and Representative Robert Aderholt, an Alabama Republican who serves on the same appropriations subcommittee, wrote on July 22.

SpaceX wasn’t aware other parties were interested in using the launch pad when it bid, Emily Shanklin, the director of marketing and communications, said in a September 20 e-mail.

The firm would be “more than happy to support other commercial space pioneers” and allow Nasa to use the site if needed, she said.

Space race

The letter from Wolf and Aderholt criticised Nasa, saying the agency “appears to be racing” to lease the launch pad “with little transparency and absent congressional consent”.

In contrast, a September 16 letter from Florida’s 27-member, bipartisan US House delegation praised the agency’s effort to “quickly and efficiently” lease the site.

“We have an opportunity to recapture the commercial space launch business, but unnecessary delays could hamper our ability to do that,” they wrote.

Nasa’s spending in Florida – most of it tied to Kennedy Space Center – pumped $4.1bn into the state’s economy during the 12 months to September 30, 2010, creating 33 049 jobs, according to an agency report.

Nasa may not be able to award the lease until the US Government Accountability Office (GOA) weighs in. Blue Origin this month protested Nasa’s solicitation with the federal arbitrator of contract disputes. The GAO has until December 12 to issue its decision.

Even if both companies agree to share the launch pad, the winner of the lease has control.

“If you own that lease, then you can decide when you allow somebody else to use it,” Marco Caceres, a senior space analyst for Virginia-based Teal Group, said. “You have control over when you launch instead of taking what is provided by another company when they choose to give it.”

In private companies’ race to space, SpaceX is ahead of Blue Origin. Last year, it became the first company to dock a commercial craft at the station, and it has begun ferrying cargo.

Since 2008, it has received Nasa contracts valued at about $1.61bn to transport cargo and to ensure commercial spacecraft will be safe to carry people, according to the agency.

Separately, SpaceX had got about $930 million in non-contract funding from Nasa for its work on vehicles capable of carrying cargo and astronauts, Trent Perrotto, a Nasa spokesman, said.

Blue Origin hadn’t received Nasa contracts, he said. It has received $25.7m in other funding from the agency to design its own spacecraft to carry astronauts. – Jonathan D Salant and Kathleen Miller from Bloomberg

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