Full Text | McCain Blasts Appropriators for Lifting RD-180 Ban

by

U.S. Sen. John McCain (R-Ariz.) took to the Senate floor Dec. 16 to blast the Senate Appropriations Committee for eliminating restrictions Congress imposed last year on the Pentagon’s use of Russian-built RD-180 rocket engines.

United Launch Alliance, whose workhorse Atlas 5 rocket is powered by the RD-180, cited the ban among its reasons for not bidding last month on a contract to launch a GPS-3 satellite for the U.S. Air Force.

McCain, who is chairman of the Senate Armed Services Committee, said the RD-180 provisions appropriators included in a must-pass omnibus spending bill released overnight violates Senate protocol and represents “a direct dismembering” of the 2016 National Defense Authorization Act, which provided more-limited relief from the RD-180 ban.

Below are his prepared remarks:

I rise to call attention to the triumph of pork barrel parochialism in this year’s Omnibus Appropriations Bill—in particular, a policy provision that was airdropped into this bill, in direct contravention to the National Defense Authorization Act, which will have U.S. taxpayers subsidize Russian aggression and “comrade capitalism.”

Nearly two years ago, Russian President Vladimir Putin, furious that the Ukrainian people had ousted a pro-Moscow stooge, invaded Ukraine and annexed Crimea. It was the first time since the days of Hitler and Stalin that brute force had been projected across an internationally-recognized border to dismember a sovereign state on the European continent. More than 8,000 people have died in this conflict, including 298 innocent people aboard Malaysian Airlines Flight 17, who were murdered by Vladimir Putin’s loyal supporters with weapons he supplied them.

Putin’s imperialist campaign in Eastern Europe forced a recognition, for anyone who was not yet convinced, that we are confronting a challenge that many had assumed was resigned to the history books: a strong, militarily-capable Russian government that is hostile to our interests and our values, and seeks to challenge the international order that American leaders of both parties have sought to maintain since the end of World War II.

That’s why the Congress imposed tough sanctions against Russia, especially against Putin’s cronies and their enormous, and enormously corrupt, business empire. As part of that effort, Congress passed the Fiscal Year 2015 National Defense Authorization Act (NDAA), which restricted the Air Force from using Russian-made RD-180 rocket engines for national security space launches — engines that are manufactured by a Russian company controlled by some of Putin’s top cronies. We did so not only because our nation should not rely on Russia to access space, but because it is simply immoral to help subsidize Russia’s intervention in Ukraine and line the pockets of Putin’s gang of thugs who profit from the sale of Russian rocket engines.

Last year’s NDAA exempted the five of engines United Launch Alliance (ULA) purchased before the invasion of Ukraine. This allowed ULA, the space launch company that for years has enjoyed a monopoly on launching military satellites, to use those Russian rocket engines if the Secretary of Defense determined it was necessitated by national security.

Since the passage of the FY15 NDAA in the Senate, 89 to 11, Russia has continued to destabilize Ukraine and menace our NATO allies in Europe with aggressive military behavior. Putin has sent advanced weapons to Iran and violated the 1987 Intermediate Range Nuclear Force Treaty. Now, in a profound echo of the Cold War, Russia has intervened militarily in Syria on behalf of the murderous regime of Bashar al-Assad. Clearly, Russian behavior has only gotten worse.

That is why, just a few weeks ago, Congress acted again, and passed the Fiscal Year 2016 National Defense Authorization Act. The NDAA authorized $300 million dollars in security assistance and intelligence support for Ukraine to resist Russian aggression. At the same time, the bill recognized that a small number of Russian engines could be needed to maintain competition in the national security space launch program and facilitate a smooth transition to rockets with U.S. made engines. Therefore the legislation allowed ULA to use a total of nine Russian engines.

The FY16 NDAA, including its provision limiting the use of Russian rocket engines, was debated for months. The Committee on Armed Services had a vigorous debate over this important issue. An amendment was offered to maintain the restriction on the Air Force’s use of Russian rocket engines, and in a positive vote of the Committee, the amendment was adopted. We then considered hundreds of amendments to this defense authorization bill on the Senate floor over a period of two weeks, and did so transparently and with an open amendment process that was a credit to the Majority Leader. There was not one amendment called up to change the provision of the NDAA concerning RD-180 rocket engines. The legislation passed with 71 votes. Then, because of a misguided presidential veto, this defense legislation was actually considered a second time on the floor of the Senate, and this time it passed 91 to 3.

Here is my point: The Senate had this debate. We had ample time and opportunity to have this debate. And through months of this fulsome debate, no Senator came to the Senate floor to make the case that we need to buy more Russian rocket engines. No Senator introduced an amendment on the floor to lift the restriction on buying more Russian rocket engines. To the contrary, the Senate and the full Congress voted, overwhelmingly and repeatedly, to maintain this restriction. This is a policy issue, and it was resolved, as it should be, on the defense policy bill.

And yet, here we stand with a 2000-page omnibus appropriations bill, crafted in secret with no debate, which most of us are seeing for the first time this morning. And buried within it is a policy provision that would effectively allow unlimited purchases and use of Russian rocket engines.

What is going on here?

ULA wants more Russian engines. Plain and simple. That’s why ULA recently asked the Defense Department to waive the NDAA’s restriction on the basis of national security and let it use a Russian engine for the first competitive national security space launch. The Defense Department declined.

So, what did ULA do when it didn’t get its way? It manufactured a crisis. Though the Department of Defense is restricted in using these Russian rocket engines, there is no similar restriction on NASA or commercial space launches. So ULA rushed to assign the RD-180s that it had in its inventory to these non-national security launches, despite the fact that there is no restriction on the use of Russian engines for those launches. This artificial crisis has now been seized on by ULA’s Capitol Hill leading sponsors, namely the senior Senator from Alabama, Senator Shelby, and the senior Senator from Illinois, Senator Durbin, to overturn the NDAA’s restriction.

And that is exactly what they’ve done—again, secretly, non-transparently, as part of this massive Omnibus Appropriations bill. As I said, neither Senator Shelby nor Senator Durbin, nor any other Senator, raised objections to the provisions of the NDAA or offered any alternatives during the authorization process on the Senate floor.

In fact, as I have said, when this issue was debated and voted on in the Committee on Armed Services, the authorizing committee of jurisdiction voted in favor of maintaining the restriction. Instead, my colleagues on the Appropriations Committee crafted a provision in secret with no debate to overturn the will of the Senate as expressed in two National Defense Authorization Acts. And the result will enable a monopolistic corporation to send potentially hundreds of millions of dollars to Vladimir Putin and his corrupt cronies and deepen America’s reliance on these thugs for our military’s access to space.

This is outrageous. And it is shameful. And it is the height of hypocrisy, especially for my colleagues who claim to care about the plight of Ukraine and the need to punish Russia for its aggression. How can our government tell European governments that they need to hold the line on maintaining sanctions on Russia, which is far harder for them to do than us, when we are gutting our own policy in this way? How can we tell our French allies, in particular, that they should not sell Vladimir Putin amphibious assault ships, as we have, and then turn around and try to buy rocket engines from Putin’s cronies? Again, this is the height of hypocrisy.

Since March 2014, my colleagues and I in the in Senate have tried to do everything we can to give our friends in Ukraine the tools they need to defend themselves and their country from Russian aggression. Rather than furthering that noble cause, Senator Shelby and Senator Durbin have chosen to reward Vladimir Putin and his cronies with a windfall of hundreds of millions of dollars. A rocket factory in Alabama may benefit from this provision. Boeing, headquartered in Illinois, may benefit from this decision. But have no doubt, the real winners today are Vladimir Putin and his gang of thugs running the Russian military-industrial complex.

I wish that Senators Shelby and Durbin would explain to the American taxpayer exactly who we are doing business with. They won’t. But my colleagues need to know. So let me explain.

At least one news organization has investigated how much the Air Force pays for these RD-180 rocket engines, how much the Russians receive, and whether members of the elite in Putin’s Russia have secretly profited by inflating the price. In an investigative series entitled, “Comrade Capitalism”, Reuters exposed the role that senior Russian politicians and Putin’s close friends, including persons sanctioned over Ukraine, have played in a company called NPO Energomash, which manufactures the RD-180. According to Reuters, a Russian audit of that company found that it had been operating at a loss because funds were “being captured by unnamed offshore intermediary companies.”

In addition, the Reuters investigation also reported that NPO Energomash sells its rocket engines to ULA through another company called RD Amross, a tiny five-person outfit that stood to collect about $93 million in cost mark-ups under a multiyear deal to supply these engines. The Defense Contract Management Agency (DCMA) found that in one contract alone, RD Amross did “no or negligible” work but still collected $80 million in “unallowable excessive pass-through charges.”

According to University of Baltimore School of Law Professor Charles Tiefer, who reviewed Reuters’ documents, “The bottom line is that the joint venture between the Russians and Americans is taking us to the cleaners.” He said that he had reviewed Pentagon audits critical of Iraq War contracts, but those “didn’t come anywhere near to how strongly negative” the RD Amross audit was.

We must do better than this, and we can.

Now some may say we need to buy rocket engines from Putin’s cronies in Russia. In particular, they will cite a letter from the Department of Defense in response to a list of leading questions form the Appropriations Committee just a few days ago, which they will claim as confirmation that the Department believes that the United States will not have a domestically-manufactured replacement engine for defense space launches before 2022.

Nonsense. When the Department of Defense starts making predictions beyond its five-year budget plan, what I hear is, “this isn’t a priority”. Or, “we don’t really know.” Either way, this is unacceptable. Both the authorizers and the appropriators have ramped-up funding for the development of a new domestically-manufactured engine. The Pentagon needs to do what it has failed to do for eight years: Make this a priority. Indeed, American companies have already said that they could have a replacement engine ready before 2022. Our money and attention should be focused on meeting this goal, not subsidizing Putin’s defense industry.

Proponents of more Russian rocket engines will also say cite claims by the Air Force that ULA needs a least 18 RD-180 engines to create a “bridge” between now and 2022 when a domestically-manufactured engine comes available.

This, too, is false.

Today, we have two space launch providers—ULA and SpaceX—that, no matter what happens with the Russian RD-180, will be able to provide fully redundant capabilities with ULA’s Delta IV and SpaceX’s Falcon 9, and eventually, the Falcon Heavy space launch vehicles. There will be no capability gap. The Atlas V is not going anywhere anytime soon. ULA has enough Atlas V’s to get them through at least 2019, if not later.

And, as I alluded to a moment ago, the Pentagon agrees that no action is required today to address a risk to assured access to space. In declining ULA’s recent request for a waiver from the NDAA’s restrictions, the Deputy Secretary of Defense concluded that they “do not believe any immediate action is required to address the future risk of having only one source of space launch services.” Indeed, in its recent letter, the Department of Defense even confirmed that ULA has enough engines to compete for each of the nine upcoming competitions and that the number they will pursue is “dependent upon ULA’s business management strategy.”

So to Senator Shelby and Senator Durbin, I would ask, what are your priorities?

As we speak, Ukrainians are resisting Russian aggression and fighting to keep their country whole and free. Yet this omnibus appropriations bill will send hundreds of millions of dollars to Vladimir Putin, his cronies, and Russia’s military-industrial base as Russia continues to occupy Crimea and destabilize Ukraine. What kind of message does that send to Ukrainians who have been fighting and dying to protect their country?

How can we do this when Putin is menacing our NATO allies in Europe? How can we do this when Russia continues to send weapons to Iran? How can we do this when Putin continues to violate the 1987 Intermediate Range Nuclear Forces Treaty? How can we do this when Putin is bombing U.S.-backed forces in Syria fighting the murderous Assad regime?

I understand that some constituents of Senator Shelby and Senator Durbin believe they would benefit from this provision. But as the New York Times editorial board stated earlier this year, “When sanctions are necessary, the countries that impose them must be willing to pay a cost, too. After leaning on France to cancel the sale of two ships to Russia because of the invasion of Ukraine, the United States can hardly insist on continuing to buy national security hardware from one of Mr. Putin’s cronies.” I repeat, that is the opinion of the New York Times.

On the record, I make this promise. If this language undermining the National Defense Authorization Act is not removed from the Omnibus, I assure my colleagues that this issue will not go unaddressed in the Fiscal Year 2017 National Defense Authorization Act. Up to this point, we have sought to manage this issue on an annual basis, and we have always maintained that, if a genuine crisis emerged, we would not compromise our national security interests in space. We have sought to be flexible and open to new information, but if this is how our efforts are repaid, then perhaps we need to look at a complete and indefinite restriction on Putin’s rocket engines.

I take no pleasure in saying that. I believe that avoiding the year-over-year conflict over this matter between our authorizing and appropriations committees is in our nation’s best interest. Such back-and-forth only delays our shared desire to end our reliance on Russian technology from our space launch supply chain, while injecting instability into our national security space launch program. That instability threatens the reliable launch of our most sensitive national security satellites and the stability of the fragile industrial base that supports them.

But, I simply cannot allow Senator Shelby, Senator Durbin, the Appropriations Committee, or any other member of this body to craft a take-it-or-leave-it omnibus spending bill that allows a monopolistic corporation to do business with Russian oligarchs to buy overpriced rocket engines that fund Russia’s belligerence in Crimea and Ukraine, its support for Assad in Syria, and its neo-imperial ambitions.

I will not stand for that, and none of you should either.