Transferring the Export-Launch License to DOT
Without any authority except that of a facilitator, the role granted by an Executive Order, we really were without much ability to assist or influence the industry. Other agencies would put up with our “facilitation” efforts only so long before our calls would be unwelcome and ineffectual.
Steve Koumanelis’ words stayed in my head throughout the remainder of Starstruck’s launch trials. If he was uncomfortable with the risks of approving launches about which he knew nothing, I wondered who else in the State Department felt this way. Certainly, Legal Counsel’s Office and his superiors must also harbor some doubts. Was the Department of State uncomfortable enough about approving risky launch licenses to consider alternatives? And how far would they go to get rid of that discomfort?
Steve Koumanelis and I continued to be in contact after the approval of the Export License for Starstruck. He was still uncomfortable with the use of the Export License as an approval mechanism, particularly since the State Department could do nothing to ensure the safety of the launch.
It was during one of our discussions that he said, “I wish there were some way to get rid of this responsibility! You are the guys who should be doing this.” I had been thinking about this already. There really was a way for the State Department to get rid of that role and still ensure that the launches were controlled, but it was going to require the willingness of the State Department to take a creative step. I explained to Steve that the Department of State could transfer or delegate the responsibility for administering the Export License–as it pertained to rocket launch approvals–to the Department of Transportation. If his organization was willing to separate and transfer that narrow part of their authority to us, then his office’s role would return to normal, and we would take care of the rocket risks.
Soon, Steve and I were discussing that possibility. I laid out for him how I thought we would have to work the process, and I told Steve that I would have to talk to my boss.
In the meantime, our Departmental attorneys were asking me whether I had found a way that the launch could be regulated “down to the ground” using the Export License. This question was important because, in order to ensure safety, we could not just be addressing the launch the moment it became an “export” by entering outer space. I was confident we could, but it would be a stretch.
There would be a major difference between having our own legislation, such as the Commercial Space Launch Act and using the Export License. The Act would give us the authority to license in order to protect public safety, whereas the license would focus on the act of launching, itself, and the consequences (e.g. safety, national security, etc.). With the Act, in the name of public safety, we could look at every aspect of the launch, starting with the issues of public safety at the launch pad. The Export License, as it pertained to launch licenses, was an ambiguous device that the government used to say, “You, a private company, don’t launch until we say ok” with no specific aim other than to stop or delay. Trying to use this to review a company’s launch safety plans was going to be delicate and difficult because of the ambiguity, the open-endedness, and tenuous financial status of the new industry. But it was possible, and I thought I had a logic that would make it work.
I returned to DOT and told Jenna, “I think we can get the State Department to transfer their launch licensing authority to us”. Jenna was doubtful. Agencies did not transfer authority like State’s export licensing responsibility. It was practically unheard of. Further, although Steve Koumanelis was a major player in the export licensing business, he still was relatively low in the State Department hierarchy. Undoubtedly someone up the chain would say “No”. She was correct; it was unheard of and, very likely, someone up the chain was going to put a stop to the idea.
But I had figured a way which, although it could take awhile, had a very good chance of working. I explained how I thought we might be successful.
I went back to Steve and told him that we would be willing to accept a delegation of authority for using the Export License to approve private launches. Although it wasn’t in our charter, DOT had more experience with transportation safety. We could bring the resources to bear to make this function effectively. Thus, the integrity of the Export License would be preserved.
The strategy was based on some key truisms: 1) the State Department didn’t feel comfortable approving rocket launches; 2) officials don’t want to take the risk of a wrong decision and being overridden; and 3) when in doubt, it is easier to pass the buck upstairs.
Steve was going to lay out the case to his boss for delegating that portion of the License to DOT. Steve already had a description of the risks of launch vehicles and the things that could occur under the State Department’s administration of the Export “Launch” License. He was going to tell his superior that DOT was willing to accept the responsibility and thought it made sense. But I also asked him to tell his boss that if he was inclined to say no, that Jenna Dorn and I wanted to meet with him personally before he made his final decision. Otherwise, if he actually formally decided “no”, then Secretary Dole would call the Secretary of State to talk about the issue. Shortly after that, we got a call that Steve Koumanelis’ boss wanted to meet with us.
That is how we worked it. I had believed that it would be easier for each layer of officials to be willing to talk to us, than to say “no” and risk having the Secretary of Transportation call the Secretary of State. We met with each layer of the hierarchy, laid out the risks and reasons it made sense to delegate that specific licensing authority to DOT. We also requested that if they thought they were inclined to say “no” to kick it up to the next level because, if necessary, Secretary Dole would call the Secretary of State. We had several of those meetings, and a number of them included attorneys from the counsel’s office.
The strategy worked because the State Department felt uncomfortable with an unwanted hot potato, and no one wanted to be the one whose decision kept the hot potato in their hands. By being “kicked upstairs” one level at a time, we were educating successively higher level State officials about launch risks to make them confident they were doing the right thing. Eventually, we reached the level where the issue was less about power than the proper use of the State Department’s authority.
Background: The Administration’s insistence that there was no need for “legislation” was an ideological mantra, and the Washington bureaucracy kept the mantra from changing. The ideological part was that the “conservative” thought held that adding legislation would create a new government bureaucracy, and increase complexity for the commercial launch industry. However, ideology changes often in the political world for reasons of pragmatism.
However, the “bureaucratic” part of it was that this political notion of “no legislation” quickly got institutionalized in various Agencies’ bureaucracies (especially the Office of Management and Budget) at the time, and the decision became set in concrete. In this case, the decision about lead agency was made with a White House national security decision group (that included State, Defense, NASA, Air Force, and others) on the premise that the authority would be granted through a National Security Decision Document and Executive Order–not through legislation.
The Administration’s negativity with regard to legislation had become so entrenched, that it was virtually impossible to “sell” anyone (except the Hill and industry) on the need for legislation. Nothing probably would have changed that view for years, until some major issue (such as an accident or demise of the industry) arose that “drove” a philosophical change of mind. Not even Secretary Dole, who at the time commanded a cabinet Department of 110,000 people, could have flipped the established dogma.
Our meeting described on this page, though, was sufficiently cataclysmic to change the White House’s position. The Department of State–owner of the only device available to control private launches–in agreeing to transfer the “Export License” to DOT, also was willing to state the “Export License” was the wrong tool to try to control the commercial launch industry. In essence, the Department of State took its football and went home. This left no other option than for the Administration to support legislation.
Finally, we met with the Undersecretary of State. By the time Jenna and I met with him, the decision had been made within the State Department to transfer the responsibility for rocket launch Export Licenses to DOT. This was a major action for the Department of State because delegating ANY aspect of the Export License—regardless of how good the reason—was virtually unheard of. The Undersecretary wanted to hear from us how we could administer it and how we could ensure that the Export License would be used to ensure nothing catastrophic happened to a launch.
The discussion finally turned to the method of delegation. The Secretary of State would delegate that portion of the Export License to the Secretary of Transportation. It was during this part of the discussion that the Undersecretary said he was really uncomfortable using the Export License for this purpose and it would have been better had DOT had its own legislation. It could not get any better than this. The Undersecretary had opened the most important door of all.
Without hesitation, we asked, “When you send the letter transmitting the delegation, would you include a position statement regarding DOS’ belief that the Export License is not the proper licensing instrument and that the Department believes there should be specific legislation?” After a little more discussion, we offered to draft the transmittal letter and the delegation of authority material for the State Department. (It’s not uncommon for someone other than the “principal” to draft the signature documents for the principal to sign. In this case, we had an idea how to craft the way we wanted the export “launch” licensing language to look. The document shown on this page was the package we had prepared to send to the UnderSecretary.)
It was agreed we would send State the documents executing the agreement. But before we could send our package, we received from State the delegation of authority for the Export License as it pertained to licensing rocket launches. The transmittal letter contained the statement that DOS thought the Export License was inappropriate as a tool for licensing private rocket launches. It stated that DOS believed there ought to be specific legislation for licensing launches.
That was all we needed. We sent copies of the letter to the White House and Office of Management and Budget, and soon the Administration stated that it supported legislation. We were going to have our own enabling legislation and would no longer be dependent on an Executive Order!!
Why was it so important we have legislation if the goal was to streamline the regulatory process? Would legislation add yet another layer of regulation? The importance of legislation cannot be overemphasized. Without legislation, DOT was trying to facilitate in an environment that was going to become increasingly complicated with the Agencies that had various approval authorities. Government power abhors regulatory vacuums. Already, the Department of State had expanded into that vacuum using its Export License to prevent SSI from launching its rocket without government approval. Once DOT got licensing authority, the State Department ceased requiring an Export License.
As soon as the President signed the law granting DOT licensing authority, we notified various Agencies likely to be involved in approving some aspect of commercial space launches. In some cases, we notified the Agency we would exercise our jurisdiction thereby simplifying the process. For example, Bureau of Alcohol, Tobacco, and Firearms (BATF) has authority over explosives, but heretofore, commercial launches needed BATF approval to use the explosives in a launch vehicle because the explosives could cause a risk when the vehicle was flying. Once we had legislation, we became the Agency overseeing the safety of the vehicle. This expedited the BATF review because they no longer had to address the reason the explosives were being used. The same was true for the Federal Communications Commission which had been addressing the self-destruct systems for which the launch companies requested frequencies.
On the other hand, I notified the Occupational Safety and Health Organization that we had safety authority over the launch site as well as the launch. However, in this instance, we told them that we were not going to impose any of our own requirements and would instead rely on their standard policies.
The Commercial Space Launch Act enabled DOT to build a licensing process that was simple and tailored to the unique needs of the industry.