Why Did We Give Putin Control Over Our Satellite Launches?

J. Michael Waller J. Michael Waller is Senior Analyst for Strategy at the Center for Security Policy.
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Last year, Russian President Vladimir Putin’s security council publicly raised the idea of cutting off America’s military and spy satellite program at the knees.

All Putin needed to do was to shut down the supply of RD-180 engines that the U.S. Air Force was buying to power the lift-offs of the American Atlas V rockets into space.

The KGB strongman had the power to cut the supply in an instant. Not because he had pulled off an incredible intelligence coup against the United States – although FBI sources say that Putin’s hostile espionage operations against the U.S. have exceeded Cold War levels – but because the U.S. government placed the opportunity right in Putin’s hands.

Washington had made the Putin regime the sole-source supplier of reliable engines to launch U.S. Air Force military and intelligence satellites into orbit. The RD-180 engine is made in Russia by NPO Energomash, a state-controlled military space company founded under Stalin.

What began as an urgent program to provide the U.S. with an alternate means of deploying a constellation of new satellites into space to fight the global war on terror became, over time, an exclusive monopoly that gave Putin effective control of U.S. national security mission launches.

By 2006, the U.S. Air Force decided it had no need for competition among private companies for reliable satellite launches, and encouraged a monopoly, the United Launch Alliance (ULA), as a joint venture between Lockheed Martin and Boeing. ULA then made the Russian company NPO Energomash the sole supplier of the first-stage engines for the Atlas V.

Other American companies were effectively prevented from competing by the Air Force’s own certification rules, putting the Russian government-run engine manufacturer in a position of power.

Other competitors – SpaceX, Orbital Sciences, etc. – were working their way toward certification to compete with ULA and this would have been the perfect moment for the Air Force to put in place a system for fast-tracking certification while balancing the need to ensure safety and reliability.

But the Washington establishment preferred the comfort of establishment companies, even though the establishment solutions were much more expensive than solutions being offered to others. Competitor SpaceX says that it can do the same job for the Air Force at $100 million per launch – as opposed to the $400 million the Air Force is paying the ULA-Energomash monopoly.

“This contract is costing U.S. taxpayers billions of dollars for no reason,” SpaceX founder Elon Musk said, while taking legal action in April of this year to try to break the monopoly.

The marriage of convenience – American crony capitalism with Russian gangster capitalism – was bound to have an unhappy ending for the United States. But, as with most marriages that didn’t look quite right at the time, few in Washington wanted to consider the trouble they were getting into.

It wouldn’t be long before Washington triumphantly proclaimed the global war on terrorism over. That war had been the reason the U.S. needed to launch so many military and intelligence satellites.

Meanwhile Russia, unveiling its next-generation strategic nuclear ballistic missiles and Borei-class ballistic missile submarines, was feeling more confident. With the “reset” button freshly pressed, the Putin regime could plot to subvert, dismember, and annex portions of countries like Ukraine at little cost from the West.

Putin and what is known as “The Family” (silovki) of loyalist gangster-bureaucrats had reduced their financial dependence on the U.S, and with militant nationalists like Deputy Prime Minister Dmitry Rogozin in charge of the state-controlled military industry, Moscow could become more assertive.

Washington’s weak sanctions in response to the Russian seizure of Crimea gave Putin and Rogozin the go-ahead to impose sanctions of their own on the United States.

The time was right for the Kremlin to hit Washington hard, but subtly enough not to provoke an over-reaction. Just as Putin could shut off the flow of Gazprom natural gas to Europe, he would shut off the flow of RD-180 engines to the U.S. Air Force.

Before the Kremlin cutoff, SpaceX warned of the dangers of the monopolistic ULA-NPO Energomash contract for the Air Force. Academic and policy critics had been voicing such concerns for years, to no avail.

“It is hard to imagine any way in which entrenching reliance on Russian rocket engines while funding the Russian military industrial complex with U.S. tax dollars serves national security interests,” SpaceX said in a complaint to a federal court last month, “especially at a time when the Administration has sanctioned individuals associated with the same military industrial complex over the Ukraine annexation.”

Strangely, the ULA-NPO Energomash monopoly is not blaming gangster capitalists in the Kremlin for the engine cutoff.

How did the U.S. allow itself to place some of its most vital national security systems in Putin’s hands? That question has yet to be answered.

In this time of national budgetary crisis and renewed threatening behavior from Moscow, Congress should re-examine the taxpayer-funded, monopolistic practices that gave Putin veto power over American military and spy satellite launches.

Congress should also look at who made the decision to prevent competition among American companies for the Air Force launch contracts. And the public should examine the politicians from both parties on the take from the marriage of American crony capitalism with Russian gangster capitalism.

J. Michael Waller is a Washington-based policy analyst who has been a critic of U.S. funding of Russia’s military space industry since 1994.