Lead Agency: Who Will Guide the New Space Industry: Commerce or Transportation?
Choosing between the Department of Commerce and the Department of Transportation (DOT) for the ‘lead agency’ didn’t start out as a competition. House Congressional staff always wanted the Department of Commerce, as did the industry. The National Security Council (NSC) Senior Interagency Working Group (SIG Space)) thought they wanted the Federal Aviation Administration (within DOT) until they became convinced they didn’t because DOT had shot itself in the foot. It was then that DOT realized it actually was in a fight and the duel began.
When President Reagan announced future privatization of expendable launch vehicles, several things happened within the Department of Transportation (DOT). First, Kip Hawley, a politically appointed senior executive in the Office of the Secretary (OST), Office of Congressional Affairs, started passing the word that the Secretary of Transportation, Elizabeth Dole, should seek the role of “lead agency” for DOT. Then, Assistant Secretary for Administration, Bob
Fairman, and Assistant Secretary for Policy and International Affairs, Charlie Swinburne, signed a joint memorandum to the Secretary recommending she seek the role, and that she place the responsibility within the Federal Aviation Administration.
DOT formed a cross-disciplinary working group composed of senior executives including General Counsel (Jeff Shane), Administration (Shannon Roberts), Policy (Don Trilling), Federal Aviation Administration (Tony Broderick) and others to attend the NSC SIG (Space) working group meetings. As chief of the Aviation and Research Division, I was on the internal routing list for all the correspondence pertaining to this initiative but was not on the working group. So I didn’t attend the working group meetings, have a voice in the process, or attend the White House meetings. Essentially, I had no role, other than being copied on key correspondence.
I headed the Aviation and Research Division in the Office of Management Planning in the Office of the Assistant Secretary for Administration. I reported to Shannon Roberts who in turn reported to Bob Fairman, the Assistant Secretary who had made the recommendation to Elizabeth Dole that the “lead agency” function should be placed in the FAA. I saw Charlie Swinburne and Bob Fairman’s decision memorandum to her recommending she approve the placement in FAA and thought immediately that they had made a serious mistake with this proposal. Further, once she acted on their recommendations, I was convinced that we were on a doomed path.
I was a pilot, an aviation aficionado, a senior management analyst in the Department and Office of the Secretary, and I had had a lot of experience with regulatory programs. I was also extremely aware of how upstart, new technologies could easily run afoul of rules intended for old technologies. FAA had a well-deserved reputation as a heavy-handed regulator (and still is). Innovations in aviation are hindered by an extensive and complex regulatory process. In part, this is due to the publics’ understandable aversion to taking risks in flight. But also, it is due to an entrenched bureaucracy that is slow to address innovation, and even when it steps up to the task, it’s approach tends to be crude and clumsy. Thus the FAA regulatory process for aviation is extremely conservative, slow, and expensive. A young space industry which was going to have to go through its era of mistakes and accidents, and FAA, which was accident-intolerant, did not make a healthy match. Space transportation had to go through the same evolutionary process that early aviation did if we were to see a robust industry emerge.
I believed that Elizabeth Dole and DOT would not be able to secure the “lead agency” role as long as we said that we would relegate that lead role to the FAA. I was confident that it wouldn’t take long for the space industry to come to the same conclusion. As time progressed, the launch industry and the members of the NSC SIG (Space) working group would begin to understand the implications of putting a new launch industry under the oversight of FAA. In essence, putting the commercial space industry under FAA oversight would quickly stifle and kill the industry.
I began to lobby members of the OST working group, trying to convince them that we were making a serious mistake—that if we continued to say we would place the “lead agency” role in FAA, DOT would eventually not be selected as the “lead agency”.
I started with different DOT members of the decision group. No one understood or appreciated the concern I was raising—especially because the FAA was an important and respected component of the Department. In fact, at the time, FAA constituted almost one-half of the workforce of 110,000 that made up the DOT. Every opportunity I got, I would talk to Jeff Shane, DOT Assistant General Counsel, who, then, was the senior DOT representative on the NSC SIG (Space) working group. One time I heard he was going to meet with the FAA chief counsel, Mr. Murdoch, and arranged to sit down with both of them to talk about how we had to change our position with respect to the “lead agency” within DOT. Although everyone listened and asked questions, no one believed that DOT was going to lose the “lead agency” role. All told, I literally spent hours talking to the working group members raising the issue every opportunity I had.
One time, I even raised the issue with FAA’s representative on the national security working group, Tony Broderick, who was also the FAA Associate Administrator responsible for the aircraft certification process (whom I knew pretty well from previous projects). His response was to the effect that, “You know those rockets are only about 95% reliable; we will fix that.” That FAA viewpoint was the very thing that was going to cause DOT to lose the “lead agency” responsibility.
Openly questioning the decision that one’s own boss recommended to the Secretary, and then questioning the Secretary’s decision in public isn’t generally considered to be a good career move. However, I had a reputation as a critical, forward-thinking, outspoken senior manager, and my warnings—though ignored—were tolerated.
I knew Charlie Swinburne and Bob Fairman rather well, and I had intended to speak to them about the FAA issue. However, I failed to go to them directly to get them to reverse their recommendation to Elizabeth Dole. Although both Bob Fairman and I were runners, and would occasionally run together on the Mall during lunch, other topics dominated our conversations. I just assumed that when the DOT representatives saw the resistance developing on the NSC group, they would get the Secretary to change her mind.
Because I knew every one of the DOT representatives on the NSC SIG (Space) working group, I received constant feedback on what was being said in the meetings. The information I was hearing was not good; questions were being raised about FAA being DOT’s selection as the facilitator for the industry.
The Department of Commerce Secretary, Malcolm Baldridge, had expressed interest in his Department being the “lead agency”. Commerce’s argument to the NSC SIG decision group was that the commercial space industry needed a promoter, not a regulator—especially a heavy-handed one. The industry had come to this same conclusion. With industry lobbying hard, Congress was also supporting Commerce. Considering the evidence that FAA was not right for the industry and the groundswell of support for Commerce, the NSC SIG (Space) working group was also switching over to Commerce. However, no one on the DOT working group thought DOT was at risk of losing the “lead agency” role.
At the time, DOT was involved in the deregulation of the commercial air carrier industry. The Civil Aeronautics Board (CAB) was sunsetting, and I was the liaison between the CAB and DOT with respect to the impact of the sunset on the CAB organization, its people, and resources. We had periodic coordinating meetings of all the DOT principals involved in implementing the sunset, one of whom was Jeff Shane.
One of these meetings was just beginning late in the morning. The meeting members were just coming into the room. Jeff Shane had just sat down at the long conference room table, and I sat down across from him. I said, “Jeff, I know I sound like a broken record, but I think we are going to lose the “lead agency” role.” To my surprise, Jeff replied, “Can you come to the White House with us this afternoon?” He then explained, “We just lost it. They are giving it to the Department of Commerce. None of us have understood why the FAA has been such a big issue, but you do. Can you come to the meeting and talk to them so they know that we have gotten the message?”
I told Jeff that I had been meaning to talk to Charlie Swinburne or Bob Fairman to get them to change their minds about where to put the “lead agency” function. Since they were the ones who had made the recommendation to Secretary Dole about FAA, I needed one of them to agree that it would be a good idea to reverse that decision. After all, although I knew DOT had to put the “lead agency” role in the Office of the Secretary, I sure didn’t have the authority to make that call. Furthermore, it was my belief we couldn’t go into the meeting and simply tell the NSC group we understood their concerns—by my reckoning, the decision group was passed that point and they intended to give the role to the Department of Commerce.
I needed to talk to my boss, Bob Fairman, to get him to permit me to tell the group we had changed our plan, and that DOT would not put the responsibility in FAA. Jeff said the sooner I talked to Bob the better. I agreed and said that as soon as the meeting was over, I’d go to talk to Bob.
Bob’s secretary, Francis Brown, told me that Bob was out running, so I camped out in front of his door with her assurances that as soon as he came back, I could see him. When Bob returned, I followed him into his office.
I quickly laid out the issues—we had to tell the NSC SIG (Space) working group that we were not going to give FAA the “lead” responsibility. We needed to be able to tell them DOT had changed its mind.
Bob was appalled, and in a very loud voice told me, “I’m not going to reverse the Secretary of Transportation’s decision! You CANNOT tell them that we changed our minds”.
Bob’s reaction was to be expected. This was the first time he had heard that we were going to have to say the Secretary’s decision was going to have to change. There wasn’t going to be much time for this discussion because the car to take us to the NSC SIG (Space) working group meeting was arriving, so I had to play it in a way that would get the fastest outcome with Bob.
“That’s ok, Bob,” I answered as I turned around to leave. “If I can’t tell them we changed our minds, then there is no problem. She has lost it.”
“You cannot tell them we changed the Secretary’s decision”.
I turned around at the door and replied, “That’s ok, Bob. We can keep the decision as it is. But no “lead agency” for us!”
Bob realized that there was no option, but he didn’t think he could go as far as to change her decision. He only made the recommendation; Secretary Dole had made the decision.
At the time, the FAA Administrator was J. Lynn Helms, a former Navy test pilot, a US Marine officer, the former president of Piper Aircraft, and the Administrator who told President Reagan that the skies could be kept safe if the air traffic controllers were fired. He then proceeded to manage FAA throughout the strike and the post-strike recovery. Helms was a no-nonsense Administrator who had shepherded through Congress a $10 billion airspace plan, and who was involved in international negotiations after the shooting down of Korean Airlines 007 by the Soviet Union. He was by far the most powerful of the agency administrators in DOT at any time during its history up to that point, and one of the most competent.
Finally, Bob said, “Ok, Norman, you can tell them that we are reconsidering our decision. But you cannot tell them we changed our decision”. That was as much approval as I could get. At least it was something.
Jeff and I and a couple of others went to the NSC SIG (Space) decision group meeting. This was my first time to attend one of these meetings or to meet its members. This helped us out a lot later in the meeting. Present were the two co-chairs for that day from DOD (Col. Tom Maultsby) and NASA (Charlie Gunn). The room was full with representatives from Commerce, Air Force, State, CIA, and others. The group moved quickly to business; it was apparent the meeting wasn’t going to end well. The chair of the meeting announced that the group was going to recommend that the White House assign the “lead agency” role to Commerce. DOT was out of contention. It was going to come down to a vote finalizing that decision.
Realizing that there were no more options for us, Jeff Shane asked if DOT could say something before the group voted. He introduced me and explained my role in the Office of the Secretary.
I stood up and looked around at the group. There are times when it isn’t possible to follow instructions, even if it is a potentially poor career move; after all, we were talking about changing a Cabinet Secretary’s decision without her knowledge. In this case, it seemed like it was all over for DOT if I followed my boss’s instructions.
So I said, “The reason I am here is to tell you that we understand your concerns about FAA and we have changed our decision. We are not going to put it in FAA. We’re going to put it in the Office of the Secretary.” Then I proceeded to give reasons.
Following this pronouncement, the group started grilling me intensely. Although the group was skeptical, the fact of the matter was they had never seen me in their meetings, nor heard of me. Clearly, this could not be an on-the-spot change of mind if a new emissary had been sent to convey the message. This seemed to convince them this was not a ploy, and that DOT had indeed changed its mind. Not only did I have the answers for them, but was able to discuss issues they had not considered. By the end of the questioning, the group accepted that DOT was once again a good candidate for the “lead agency” role.
The NSC SIG group was not happy nor prepared for this. After many meetings and discussions during which DOT had been inflexible about FAA, DOT suddenly announced it was going to do something entirely different. This posed a serious problem. Although the group had the authorization to make a recommendation regarding the “lead agency” decision, the fact that Secretary Dole was changing her original decision was not something the decision group could ignore. After all, Elizabeth Dole was one of the Administration’s stars, and her husband, Senator Bob Dole, was one of the most influential and powerful Republicans at the time. (Just 12 years later, Bob Dole would be the Republican Presidential candidate.)
However, that didn’t mean that they were going to reverse course and immediately give us the “lead agency” role.
One meeting does not undo months of discussion. Throughout the process, each of the representatives had been consulting with their respective agency leaders, and a gradual consensus had emerged within each of those agencies that Commerce should be assigned the lead role. None of these representatives could unilaterally undo their agency’s decision to support Commerce. Further, the group had already indicated that the Department of Commerce was going to be the “lead agency”, plus Secretary Baldridge had been lobbying for the role; the decision group could not simply redesignate DOT as the “lead agency”. They were all suddenly confronted with an impossible situation.
After a lot of confusion around the table, one of the co-chairs (I believe it may have been Charlie Gunn) said that the representatives from both the DOT and Commerce would have to leave the room in order for the remainder of the group to discuss what to do next. We all spent a bit of time waiting in the hall.
Finally, after a long wait, we were asked to come back into the room. The meeting chair announced that the group had decided that both Departments would prepare their cases in writing as to why they should be the “lead agency”. Specifically, each was to answer a number of questions, and present evidence about how it could make a difference for the industry. Whichever Department made the best case would become the “lead agency”. At least DOT was back in contention.
On the ride back, it was a victory of sorts—we had avoided losing the “lead agency” role, but we still had a fight ahead. I had to go back to Bob Fairman and give him the news that I had disobeyed his direction. In the meantime, the news had to be broken to Elizabeth Dole as well. Jeff Shane had the idea to talk to Secretary Dole’s special assistant, Jenna Dorn, and get her help in explaining to the Secretary. Jenna was a close friend of Kip Hawley, Assistant Secretary for Congressional and Public Affairs, and was enthusiastic about the prospective space facilitator role.
But for that meeting that morning when Jeff Shane and I sat across from each other, I would not have gone to the SIG (Space) commercial space working group meeting, and the Department of Commerce would be overseeing the commercial industry today.
(Even though both agencies prepared their respective cases and submitted them to the NSC SIG (Space) working group, the group was unable to make the final decision. This had become a battle between two cabinet members who each had staked his/her claim to the “lead agency” role. The decision was far above the pay grade of the working group members, or even their own respective Agency heads. Ultimately, both Secretary Dole and Secretary Baldridge would have to make the case personally in a joint meeting with President Reagan. Little do most of the employees of FAA or of the Office of Commercial Space Transportation (OCST) realize that where OCST is today was never supposed to happen.