Billionaires battle in private space race

Jeff Bezos and Elon Musk are among those vying to make their mark up there

Topics: Jeff Bezos, Elon Musk, Space, Space exploration, NASA, U.S. Government, , ,

Billionaires battle in private space raceJeff Bezos (Credit: Reuters/Shannon Stapleton)

Sept. 27 (Bloomberg) — 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 U.S. 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 Corp., known as SpaceX, and Bezos’s Blue Origin LLC, which are trying to fill the void for the U.S.

SpaceX, already delivering cargo to the station under a $1.6 billion National Aeronautics and Space Administration 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, 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.”


Billionaires


Bezos, chief executive of Amazon.com Inc., is the bigger of the billionaires. He is No. 17 on the Bloomberg Billionaires Index, a ranking of the world’s wealthiest people, with an estimated net worth of $29.4 billion. Musk, the CEO of Tesla Motors Inc. and co-founder of PayPal Inc., is No. 135, with an estimated net worth of $8.8 billion.

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 $8.7 billion 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 St. Petersburg, Florida, said in a phone interview. “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 Hawthorne, 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 LLP includes Lott, a Mississippi Republican.


Blue Origin


Blue Origin, based in Kent, Washington, and also closely held, hired the lobbying firm K&L Gates LLP 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 didn’t 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 Jan. 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.


Campaign Donations


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 in a Sept. 20 interview 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 Seabrook, Texas- based Griffin Communications Group that coordinates 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 criticized the idea of limiting use of the site to one company.


Restricted Use


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, director of marketing and communications, said in a Sept. 20 e-mail. The company would be “more than happy to support other commercial space pioneers” and allow NASA to use the site if needed, she said.


Florida Economy


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

In contrast, a Sept. 16 letter from Florida’s 27-member, bipartisan U.S. 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 $4.1 billion into the state’s economy during the 12 months ending Sept. 30, 2010, creating 33,049 jobs, according to an agency report.


Space Race


NASA may not be able to award the lease until the U.S. Government Accountability Office weighs in. Blue Origin this month protested NASA’s solicitation with the federal arbitrator of contract disputes. The GAO has until Dec. 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,” said Marco Caceres, a senior space analyst for Fairfax, Virginia-based Teal Group. “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 $1.61 billion to transport cargo and to ensure commercial spacecraft will be safe to carry people, according to the agency.

Separately, SpaceX has gotten 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 in an e-mail.

Blue Origin hasn’t received NASA contracts, he said. It has received $25.7 million in other funding from the agency to design its own spacecraft to carry astronauts.






–Editors: Stephanie Stoughton, Bernard Kohn


To contact the reporters on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net; Kathleen Miller in Washington at kmiller01@bloomberg.net


To contact the editor responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net



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