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  • Russian Rocket Engines Policy Provision

    by Senator John McCain

    Posted on 2015-12-16

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    McCAIN. Mr. President, I rise to call attention, sadly, 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 2 years ago, Russian President Vladimir Putin, furious that the Ukrainian people had ousted a pro-Moscow stooge, invaded Ukraine and annexed Crimea. It is the first time since the days of Hitler and Stalin that brute force has 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 that Vladimir Putin had 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 is why the Congress imposed tough sanctions against Russia, especially against Putin's cronies and their enormously corrupt business empire. As part of that effort, Congress passed the National Defense Authorization Act of Fiscal Year 2015, 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 the Defense authorization bill exempted five of the engines that United Launch Alliance 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 act in the Senate 89 to 11, Russia has continued--as we all know--to destabilize Ukraine and menace our NATO allies in Europe with aggressive military behavior. Putin has sent advanced weapons to Iran, violated the 1987 Intermediate-Range Nuclear Force Treaty. In a profound echo of the Cold War, Russia has intervened militarily in Syria on behalf of the murderous regime of Bashar Assad. Clearly, Russian behavior has only gotten worse.

    That is why a few weeks ago Congress acted again and passed the National Defense Authorization Act of Fiscal Year 2016. The NDAA authorized $300 million 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-- could be needed to maintain competition in the National Security Space Launch Program and facilitate a smooth transition to rockets with engines made in the United States. Therefore, the legislation allowed ULA to use a total of nine Russian engines. The fiscal year 2016 Defense authorization bill, including its provision limiting the use of Russian rocket engines, was debated for months. For months the issue was debated. The Committee on Armed Services had a vigorous debate on this important issue. An amendment was offered to maintain the restriction on the Air Force's use of Russian rocket engines. In a positive vote of the committee, the amendment was adopted.

    We then considered hundreds of amendments to this bill on the Senate floor over a period of 2 weeks. For 2 weeks we literally considered hundreds of amendments, and we did so transparently, with an open process which was a credit, frankly, to both sides. There was not one amendment that was called up to change the provision of that authorization bill concerning the 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 and it passed 91 to 3. I want to reemphasize, one of the things I was proud of for years is that we do debate the Senate Armed Services national defense authorization bill. We have done so every year for some 43 years, and passed it, and had the President sign it. We open it to all amendments, but there was no amendment on rocket engines proposed on the floor of the Senate. Why wasn't it? If there were Members of the Senate who did not like the provisions in the bill, we had an open process to amend it, but they didn't. They didn't because they knew they could not pass an amendment that would remove that provision in the Defense Authorization Act. So now in the dead of night we just found out, hours before we are supposed to vote, that they put in a restriction which dramatically changes that provision that was done in an open and transparent process. To their everlasting shame, in the dark of night, not [[Page S8695]] a vote--not a vote--no one consulted on the Armed Services Committee.

    The fiscal year 2016 bill, including its provision limiting the use of Russian rocket engines, was debated for months. The committee had a vigorous debate, as I mentioned. Here is my point. The Senate had this debate. We had ample time and opportunity to have this debate. Through months of this fulsome debate, no Senator came to the Senate floor to make the case that we needed 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, including the House of Representatives, voted overwhelmingly and repeatedly to maintain this restriction. This is a policy issue, not a money issue--nowhere in the realm of the Appropriations Committee. It was resolved, as it should have been, on the defense policy bill.

    Here we stand with a 2,000-page Omnibus appropriations bill crafted in secret. Members outside of the Appropriations Committee were not brought into the formulation of this legislation. There was no debate. Most of us are seeing this bill for the first time this morning, and buried within it is a policy provision that would effectively allow unlimited purchases and use of--guess what--Russian rocket engines.

    What is going on here? ULA wants more Russian engines, plain and simple. That is why ULA recently asked the Defense Department to waive the NDAA's previous 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 couldn'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--the rocket engines--that it had in its inventory to these nonnational 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 have done--again, secretly, nontransparently, as part of this massive 2,000-page Omnibus appropriations bill.

    As I said, neither Senator Shelby nor Senator Durbin, nor any other Senator, raised objections to the provisions of the bill or offered any alternative during the authorization process on the Senate floor. That is a repudiation of the rights of every single Senator in this body who is not a Member of the Appropriations Committee.

    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. 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. It is the height of hypocrisy, especially from 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 countries and governments that they need to hold the line on maintaining sanctions on Russia, which is far harder for them to do than for us, when we are getting our own policy in this way? We are gutting our own policy. 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 of 2014, my colleagues in the 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 Senator Shelby and Senator Durbin would explain to the American taxpayer exactly whom we are doing business with. They will not. But my colleagues need to know.

    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 the 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 markups under a multiyear deal to supply these engines. The Defense Contract Management Agency found that in one contract alone, RD Amross did ``no or negligible'' work but still collected $80 million in ``unallowable excessive pass-through charges.'' Now, remember my friends, that is a five-person outfit--five persons. The Defense Contract Management Agency found that in one contract they collected $80 million in unallowable, excessive passthrough charges. My friends, thanks to this amendment, that is who is going to continue to receive this money.

    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.

    My colleagues, we have to do better. We have to do better than this. Some may say that 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 from the Appropriations Committee just a few days ago, which they will claim as confirmation that the Department believes the United States will not have a domestically manufactured replacement engine for defense space launches before 2022.

    Of course, that is nonsense. When the Department of Defense starts making predictions beyond its 5-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 8 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 on subsidizing Putin's defense industry. Proponents of more Russian rocket engines will also cite claims by the Air Force that ULA needs at least 18 RD-180 engines to create a bridge between now and 2022 when a domestically manufactured engine becomes 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 [[Page S8696]] vehicles. There will be no capability gap. The Atlas V is not going anywhere anytime soon. ULA has enough Atlas Vs to get them through at least 2019, if not later. As I alluded a moment ago, the Pentagon agrees that no action is required today to address a risk for assured access to space.

    In declining ULA's recent request for a waiver from the Defense authorization bill's restriction, the Deputy Secretary of Defense concluded that they ``do not believe any immediate action is required to address the further 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 I ask Senator Shelby and Senator Durbin: 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 sends hundreds of millions of dollars to Vladimir Putin, his cronies, and Russia's military industrial base as Russia continues to occupy Crimea and to destabilize Ukraine and their neighbors in the region. 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 from the New York Times, an editorial dated June 5, 2015, titled ``Don't Back Down on Russian Sanctions.'' I also refer to an article from Reuters, dated November 18, 2014, titled ``In murky Pentagon deal with Russia, big profit for a tiny Florida firm.'' 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. 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 engine.

    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 interests. 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 cannot allow--I cannot allow 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 Russia's oligarchs to buy overpriced rocket engines that fund Russia's belligerence in Crimea and Ukraine, its support for Assad in Syria, and its neoimperial ambitions.

    I would like to address this issue in a larger context. The way the Congress is supposed to work is that authorizing committees authorize, whether it be in domestic or international or, in this case, defense programs. The responsibility of the authorizing committee is to make sure, in the case of defense--the training, equipping, the authorizing, the funding, the policies--that all falls under the Armed Services Committee.

    The Appropriations Committee is required in their responsibilities to decide the funding for these programs. It is within their authority to zero out a program if they do not think the funding is called for or necessary. They can add funding if they want to for various programs. But this--this is a complete violation, a complete and total violation.

    This issue was raised in the subcommittee and addressed in the subcommittee of the Armed Services Committee. It was in the full committee. It was addressed on the floor where there were hundreds of amendments that were proposed. Yet what was decided by the Armed Services Committee remained intact until, in the dark of the night, until 10 or 11 or 12 or whatever time it was this morning, up pops a direct contradiction, a direct dismembering, a direct cancellation of a provision in the law where we are talking about hundreds of millions of dollars that have no bearing whatsoever on the authority and responsibility of the Appropriations Committee.

    So there are two problems here: One, it was done in the dark of night--in the middle of the night. No one knew. Second of all, it is in direct violation of the relationship between the authorizing committees and the Appropriations Committee. So I say to my colleagues who are not on the Appropriations Committee: If you let this go, then maybe you are next. Maybe it is an amendment or a program that you have supported through debate and discussion and authorizing the committee and votes on amendments on the floor of the Senate. Then in the middle of the night, in December, when we are going out of session in 48 hours or so--or 72 hours--then up pops a provision that negates the entire work of the authorizing committee over days and weeks and months.

    I say to my colleagues: You could be next. You could be next. That is why this in itself--subsidizing Vladimir Putin--is outrageous enough. But if we are going to allow this kind of middle-of-the-night airdropping, fundamental changes in programs and proposals and policies that have been debated in the open, that have been voted on in the open, completely negated, then we are destroying the very fundamental structure of how the Senate and the Congress are supposed to work.

    I ask unanimous consent that a letter I sent to the chairman of the Appropriations Committee, dated November 19, 2015, be printed in the Record.

    There being no objection, the material was ordered to be printed in the Record, as follows: U.S. Senate, Committee on Armed Services, Washington, DC, November 19, 2015.

    Hon. Thad Cochran, Chairman, Committee on Appropriations, Washington, DC.

    Dear Chairman Cochran: As you finalize the appropriations bills for fiscal year 2016, I am concerned to hear that your Committee may be considering authorization language that would undermine sanctions on Russian rocket engines in connection with the Evolved Expendable Launch Vehicle (EELV) program, as approved in the recently enacted Fiscal Year 2016 National Defense Authorization Act (NDAA) on November 10, 2015, by a vote of 91-3. That provision, which was reviewed at length by the Armed Services Committee and subject to a fulsome amendment process on the Senate Floor, achieves a delicate balance that facilitates competition by allowing for nine Russian rocket engines to be used as the incumbent space launch provider transitions its launch vehicles to non- Russian propulsion systems.

    I know you share my concerns about our continued use of Russian rocket engines in connection with military space launch and I ask you to respect the well-informed work my Committee took in crafting our legislation. Recent attempts by the incumbent contractor to manufacture a crisis by prematurely diminishing its stockpile of engines purchased prior to the Russian invasion of Crimea should be viewed with skepticism and scrutinized heavily. Such efforts should not be misconstrued as a compelling reason to undermine any sanctions on Russia while they occupy Crimea, destabilize Ukraine, bolster Assad in Syria, send weapons to Iran, and violate the 1987 Intermediate Range Nuclear Forces Treaty.

    We welcome your Committee's views and look forward to working with your Committee on ensuring that Department of Defense resources are not unwisely allocated to [[Page S8697]] benefit the Russian military industrial base or its beneficiaries. I believe avoiding the year-over-year re- litigation of this matter between our authorizing and appropriations committees is in our best interest, inasmuch as such back-and-forth only delay our shared desire to eliminate Russian technology from our space launch supply chain and injects instability into the EELV program--not conducive to its success in ensuring the reliable launch of our most sensitive national security satellites or the stability of the fragile industrial base that supports them.

    Thank you for consideration of this important issue.

    Sincerely, John McCain, Chairman.

    Mr. McCAIN. I yield the floor.

    The PRESIDING OFFICER (Mrs. Ernst). The Senator from Minnesota.

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