cryptogon.com news – analysis – conspiracies

February 12th, 2009

So, an Iridium satellite just happened to collide with a defunct Russian military satellite…

You’re about to learn how the sausage gets made, and, before we begin, you should know that it’s not pretty.

I don’t know the whole story about Iridium, but it has got to be one of the spookiest tales of them all.

In November 1998, Motorola activated the Iridium communications network, a constellation of low-earth orbit satellites that provides wireless telecom and data services to any location on the planet. The cost to build the system? About $5 billion. By August 1999, unable to sign up enough customers—because of extremely high handset costs and per minute usage fees—Iridium was facing bankruptcy.

(If you know of a more complete account of what happened next, please let me know about it.)

Iridium executive Dan Colussy put together a group of “private investors” to buy the Iridium system. According to Iridium:

In December 2000, a group of private investors led by Dan Colussy organized Iridium Satellite LLC. Iridium Satellite LLC acquired the operating assets of the bankrupt Iridium LLC including the satellite constellation, the terrestrial network, Iridium real property and intellectual capital.

How much did this group of private investors pay for the system that cost about $5 billion to build?

$25 million. That’s a discount of about 99.5% off the build cost.

Who were those private investors who just happened to be at the right place at the right time? I’ll be buggered if I know, but someone, somewhere probably knows.

But guess what happened next.

This is U.S. Department of Defense Press Release Number, 729-00, 26 December 2000:

DEPARTMENT OF DEFENSE ANNOUNCES CONTRACT FOR IRIDIUM COMMUNICATIONS SERVICES The Department of Defense, through its Defense Information Systems Agency, last night awarded Iridium Satellite LLC of Arnold, Md., a $72 million contract for 24 months of satellite communications services. This contract would provide unlimited airtime for 20,000 government users over the Iridium satellite network. The contract includes options which, if exercised, would bring the cumulative value of this contract to $252 million and extend the period of performance to December 2007. The Department has taken this action because the Iridium system offers state-of-the-art technology. It features on-satellite signal processing and inter-satellite crosslinks allowing satellite-mode service to any open area on earth. It provides mobile, cryptographically secure telephone services to small handsets anywhere on the globe, pole-to-pole, 24 hours a day. The system and its DoD enhancements will provide handheld service currently not available. Since the Navy has a requirement more than twice as large as the current capability, the Department of Defense needs the capacity Iridium uniquely offers small unit operations in areas without satellite constellation coverage or during periods when various assets are being used in other contingencies. Special Forces operations, combat search and rescue activities and polar communications will also be enhanced. Iridium will provide a unique resource to enhance DoD mobile satellite communications requirements. “Iridium will not only add to our existing capability, it will provide a commercial alternative to our purely military systems. This may enable real civil/military dual use, keep us closer to the leading edge technologically, and provide a real alternative for the future,” said Dave Oliver, principal deputy undersecretary of Defense (Acquisition, Technology and Logistics). Iridium Satellite LLC is now purchasing the operating assets of Iridium LLC and its existing subsidiaries, pursuant to a Nov. 22, 2000 order of the U.S. Bankruptcy Court for the Southern District of New York. Under the agreement, Iridium Satellite LLC will purchase all of the existing assets of Iridium LLC, including its constellation of low-orbiting satellites and its satellite control network, and will have Boeing operate the system. The new “bulk rate” service agreement offered and accepted by the Department stands to provide the same critical augmentation capability at substantially cheaper rates. Early next year, Iridium will offer a classified capability. Classified service will not only be provided for users already registered to the DoD gateway, but will also be extended to new users from DoD, other federal agencies, and selected allied governments.

Woh! Wait a minute. The General Accounting Office tried to investigate, but while those spooky birds continued to fly, a big black National Security blanket fell from above and shut down the GAO with regard to the DoD and Iridium:

The U.S. General Accounting Office (GAO) is investigating the Department of Defense’s recently signed contract for satellite telephone services from Iridium Satellite LLC. Globalstar LP filed a protest with GAO shortly after the Pentagon announced the agreement with Iridium, because no competition was held for the telecommunications contract. GAO placed a hold on the Iridium contract pending its investigation, but the Pentagon was able to have the hold lifted by citing national security reasons. The GAO investigation has a 100-day limit.

Had enough? We’re just getting started.

This is from USA Today:

When the bankruptcy judge offered one last chance for a buyer to step in, nobody could put together a deal that made all parties happy — except for Dan Colussy, who for the previous 10 years had run United Nuclear, a company that refurbished aircraft and made nuclear reactors for submarines. “Basically, he was retired but viewed it as a shameful waste to see an extremely valuable asset done away with,” says Picasso, who Colussy hired to run Iridium. So Colussy and a group of investors offered $25 million for a system that cost Motorola and its partners $5 billion to build. That’s one-half cent on the dollar. It’s like picking up a $150,000 Porsche 911 for $750. Or getting a $425-a-night room at the Ritz-Carlton in Laguna Nigel, Calif., for $2. The last time anybody consummated a deal like that, the French wound up with just $15 million for the Louisiana Purchase, which is probably the underlying reason they’re ticked off at us. In an odd twist, the new Iridium is 24% owned by an investment firm controlled by Prince Khalid bin Abdullah bin Abdulrahman of Saudi Arabia. The prince used to own a minority chunk of the old Iridium in partnership with the Saudi Binladen Group, the company run by Osama bin Laden’s family. So in a way, some of the money that gave a start to the world’s most notorious terrorist partly funded a communications system helping the U.S. military blast Saddam’s army. Now that’s globalization.

Can you hear me now?

No? Ok, let’s try again.

Alvin B. (“Buzzy”) Krongard, Former Investment Banking and CIA Veteran, Joins Iridium Satellite Board Of Directors:

BETHESDA, Md., Aug. 9 /PRNewswire/ — Iridium Satellite is pleased to announce that Alvin B. (“Buzzy”) Krongard has joined its Board of Directors. Buzzy Krongard is the former Chief Executive Officer and Chairman of the Board of Alex.Brown Incorporated, the nation’s oldest investment banking firm. In addition, Krongard served as Vice Chairman of the Board of Bankers Trust, in addition to holding other financial industry posts. He also served as Counselor to the Director of the U.S. Central Intelligence Agency (CIA), then as Executive Director of the CIA from 2001 to 2004. Iridium, as the only provider of truly global satellite voice and data communications, helps government organizations and businesses around the world communicate where there are no other forms of communication available. Iridium is the only mobile satellite communications service that provides complete pole-to-pole coverage of the earth, making it ideal for remote and backup communications. As such, Iridium has experienced substantial business growth in providing services for mission critical communications, as well as for response to natural and manmade disasters. Iridium is tapping top-level counsel as it expands its Board. The company announced its appointment of Tom Ridge, Former Director of the U.S. Department of Homeland Security, to its Board in June. “Iridium is at a pivotal point in growing its business and expanding its services,” said Dan A. Colussy, CEO and Chairman, Iridium Satellite. “With Buzzy’s deep knowledge base in investment banking and his unmatched experience with the intelligence community, we look forward to his direction as we expand our financial resources and further serve our important customer base.” … “I look forward to sharing my investment banking background, as well as my insight into the communications needs of the intelligence community, as an Iridium Board member,” said Mr. Krongard. “I am impressed with the unique aspects of the Iridium network and the power it brings to bear on the Global War On Terrorism (GWOT), homeland defense and other related operations. Iridium has an important customer base to serve and I am pleased to assist.”

Other related operations?

Like, growing tomatoes?

Oh sure. British intelligence had worked out a covert operation that was tasked with teaching the Taliban “farming and irrigation” techniques. Part of this back-to-the-land plan, for the producers of 95% of the global opium supplies, included training the Taliban, “To use secure satellite phones, so they could communicate directly with UK officials.”

Never mind all of that, because all’s well that ends well for “the biggest project failure in history”: Nine-Year Iridium Bankruptcy Saga Over for Motorola:

A judge has finally ruled that Motorola has nothing to pay over the bankruptcy of its Iridium satellite venture in 1999, described as the biggest project failure in history. The satellites are still in use, with current owner, Iridium Satellite, claiming to have around 250,000 subscribers. A creditors’ committee had been seeking more than $4bn in damages against Motorola, which backed the original Iridium plan to cover the globe with 66 satellites providing phone coverage. Founded in 1992, Iridium launched its service in 1998, but went into Chapter 11 bankruptcy in 1999, unable to sell enough subscriptions to the expensive service, in the face of competition from GSM mobile-phone services.

Yep, so that’s all I know about Iridium. And now back to our regularly scheduled broadcast.

I’m going to bold just one paragraph below about the, “accident.” I’ll let you do the math on the rest.

Via: Wall Street Journal:

A commercial satellite owned by a U.S. company was destroyed in a collision with a defunct Russian military satellite in what NASA said was the first such accident in orbit, raising new concerns about the dangers of space debris.

The crash, which happened Tuesday in low-earth orbit, involved one of the satellites owned by closely held Iridium Satellite LLC and a crippled Russian military satellite that apparently stopped functioning years ago, according to U.S. government and satellite-industry officials.

The collision created two large clouds of debris floating roughly 480 miles above Siberia, and prompted space scientists and engineers to assess the likelihood of further collisions.

The accident could have implications for U.S. space budgets and policy, partly because it comes amid a Pentagon campaign to increase spending on systems to protect U.S. high-tech space hardware by keeping better track of the thousands of pieces of debris and other satellites circling the earth.

As more and more satellites are blasted into orbit, the challenges of keeping them from hitting debris or each other are growing. Military planners also worry about enemies jamming, disabling or potentially even ramming U.S. satellites.

Industry officials say Iridium has identified the Russian craft as a Cosmos series satellite launched in 1993, weighing more than a ton and including an onboard nuclear reactor. A collision could release nuclear residue, though experts have argued for years that the chance of radioactive debris surviving a fall through the atmosphere and reaching inhabited areas is very small.

More than 220 active commercial satellites now orbit the globe, in addition to hundreds of military, spy and scientific satellites. Commercial satellites provide businesses with everything from data and video transmissions to support for automated bank teller systems and consumer navigation devices.

The Russian craft was being monitored by Pentagon organizations that keep track of space debris in order to prevent in-orbit collisions from damaging or destroying both commercial and government satellites. The National Aeronautics and Space Administration and the Pentagon track more than 10,000 pieces of high-speed debris, some no larger than a football.

Cosmos satellites have been designed for various uses, from spy missions to missile-warning systems to secure military communications. They have caused a number of scary incidents over the years, including a 1991 collision between one defunct model and debris from another; a near-collision with the space shuttle the same year; and another that crashed into Canadian wilderness in 1978.

Pentagon officials will face a barrage of questions about how they missed such an impending collision with an intact satellite, according to Tim Farrar, a satellite consultant familiar with Iridium. Commercial satellites are “routinely repositioned to avoid potential collision with smaller pieces of debris,” said Mr. Farrar.

Pentagon brass, satellite industry executives and NASA leaders for years have publicly expressed concern about the dangers of orbital debris. But the odds of a direct hit between satellites were considered so small as to be basically unthinkable. The ground-based and space-based reconnaissance tools available to the Pentagon generally were considered adequate to keep close track of larger objects.

Recently, large U.S. and European operators began reviewing contingency plans to move some telecommunications satellites away from a pair of malfunctioning satellites.

Space collision worries gained momentum in January 2007, when the Chinese government used a relatively simple antisatellite weapon to knock down one of its aged weather satellites.

NASA said there have been four earlier instances of accidental collisions in orbit, generally involving rocket parts and other debris. None involved a full-size satellite.

When satellites reach the end of their useful lives they often are parked in remote orbits where they are unlikely to endanger working satellites. But if a satellite’s onboard computers or other systems fail, or it runs out of battery power, it can be difficult for ground operators to maintain control. Without such orders from the ground, satellites can act unpredictably over months.

Iridium, of Bethesda, Md., uses more than 60 satellites to provide voice and data services for about 300,000 subscribers globally. It said the collision has “minimal impact” on service due to its backup capacity.