Insider’s Projects Drained Missile-Defense Millions

The New York Times

October 11, 2008 – They huddled in a quiet corner at the US Airways lounge at Ronald Reagan National Airport, sipping bottomless cups of coffee as they plotted to turn America’s missile defense program into a personal cash machine.

Michael Cantrell, an engineer at the Army Space and Missile Defense Command headquarters in Huntsville, Ala., along with his deputy, Doug Ennis, had lined up millions of dollars from Congress for defense companies. Now, Mr. Cantrell decided, it was time to take a cut.

“The contractors are making a killing,” Mr. Cantrell recalled thinking at the meeting, in 2000. “The lobbyists are getting their fees, and the contractors and lobbyists are writing out campaign checks to the politicians. Everybody is making money here – except us.”

Within months, Mr. Cantrell began getting personal checks from contractors and later returned to the airport with Mr. Ennis to pick up a briefcase stuffed with $75,000. The two men eventually collected more than $1.6 million in kickbacks, through 2007, prompting them to plead guilty this year to corruption charges.

Mr. Cantrell readily acknowledges concocting the crime. But what has drawn little scrutiny are his activities leading up to it. Thanks to important allies in Congress, he extracted nearly $350 million for projects the Pentagon did not want, wasting taxpayer money on what would become dead-end ventures.

Recent scandals involving former Representative Randy Cunningham, Republican of California, and the lobbyist Jack Abramoff, both now in prison, provided a glimpse into how special interests manipulate the federal government.

Mr. Cantrell’s story, by contrast, pieced together from federal documents and dozens of interviews, is a remarkable account of how a little-known, midlevel Defense Department insider who spent his entire career in Alabama skillfully gamed the system.

Mr. Cantrell worked in a division that was a small part of the national missile defense program. Determined to save his job, he often bypassed his bosses and broke department rules to make his case on Capitol Hill. He enlisted contractors to pitch projects that would keep the dollars flowing and paid lobbyists to ease them through. He cultivated lawmakers, who were eager to send money back home or to favored contractors and did not ask many questions. And when he ran into trouble, he could count on his powerful friends for protection from Pentagon officials who provided little oversight and were afraid of alienating lawmakers.

Senator Ted Stevens, the Alaska Republican, for example, chewed out Pentagon officials who opposed a missile range Mr. Cantrell and his contractor allies were seeking to build in Alaska, prompting them to back off, while a staffer for former Senator Trent Lott, Republican of Mississippi, intervened when the Pentagon threatened to discipline Mr. Cantrell for lobbying, a banned activity for civil servants.

“I could go over to the Hill and put pressure on people above me and get something done,” Mr. Cantrell explained about his success in Washington. “With the Army, as long as the senator is not calling over and complaining, everything is O.K. And the senator will not call over and complain unless the contractor you’re working with does not get his money. So you just have to keep the players happy and it works.”

The national missile defense program has cost the United States more than $110 billion since President Ronald Reagan unveiled his Star Wars plan 25 years ago. Today, the missile defense effort is the Pentagon’s single biggest procurement program.

The Army declined to discuss the Cantrell case, other than to say it had taken steps to try to prevent similar crimes from happening again.

But some current and former Defense Department officials say the exploiting of the system that preceded Mr. Cantrell’s kickback scheme has had a damaging impact, slowing progress toward building a viable missile defense system by diverting money to unnecessary or wasteful endeavors. That pattern of larding up the defense budget with pet projects pushed by lawmakers and lobbyists is a familiar one.

“What they did may have been a scandal,” said Walter E. Braswell, Mr. Ennis’s lawyer, referring to the actions of his client and Mr. Cantrell. “But even more grotesque is the way defense procurement has disintegrated into an incestuous relationship between the military, politicians and contractors.”

Dr. J. Richard Fisher, one of Mr. Cantrell’s former bosses, said: “The system needs to change. But it is not likely to do that. There is just too much inertia – and too much self-interest.”

Getting Around the System

Towering over the highway near the entrance to Huntsville is a replica of the Saturn V rocket, the powerful missile that lifted the first man to the moon.

Created in Huntsville, it is a fitting icon for this once-sleepy cotton mill town, now so dominated by the aerospace industry that it is nicknamed Rocket City. An estimated 18,000 uniformed and civilian federal employees work in the aerospace industry in the Huntsville area today, augmented by about 40,000 others, who work for federal contractors.

Michael Cantrell grew up on a dairy farm nearby, listening to the rumble of rocket test flights. As a young engineer, he became a civilian employee of the Army and quickly impressed his bosses. “Mike moved at the speed of sound,” said Lt. Gen. Jay Garner, who briefly headed the missile command.

By 1990, Mr. Cantrell, then 35, took over an experimental program to develop faster, cheaper and lighter missiles that could intercept and knock out enemy missiles flying within the atmosphere. Under the Reagan administration, money was plentiful for such research, but with the fall of the Soviet Union and the arrival of the Clinton administration, Pentagon bosses were forced to make budget cuts.

Like other Army employees, Mr. Cantrell was prohibited from lobbying or even visiting Capitol Hill unless he had permission from his agency’s Congressional liaison, a prohibition intended to block employees from promoting initiatives that Pentagon leaders did not see as a priority.

But General Garner said it was obvious to his managers what they had to do if they did not want their programs – and jobs – eliminated.

“If the money does not end up in the palm and you need it,” he said in an interview, “the only other place you can go to get it is the Congress.”

Soon enough, Army missile program managers started opening what amounted to their own lobbying shops in Washington, according to Mr. Cantrell and his former supervisors.

Mr. Cantrell became a regular on Capitol Hill, both in the halls of Congress and in the bars and restaurants where Hill staffers gather after hours. He set up a makeshift office in the US Airways lounge at Reagan National Airport, where he followed up on pitches for money to lawmakers and hid out from his Defense Department bosses. He identified lobbyists who could prove useful and contractors – many of them campaign donors – with projects that needed nurturing.

With the backing of the New York Congressional delegation, for example, he blocked cuts in financing for a sophisticated wind tunnel in Buffalo, where he promised to test his missile components. With help from then Representative Curt Weldon, Republican of Pennsylvania, who wanted Army assistance for a “technology corridor” in his district, Mr. Cantrell managed to get millions more for his program. Eventually, a dozen or so lawmakers helped him.

“It was like I was going hunting in Washington,” Mr. Cantrell said. “And I would always come up with money.” One colleague was so impressed with Mr. Cantrell’s record that she gave him a bobblehead doll carrying a briefcase marked with dollar signs.

The Pentagon had objected to Mr. Cantrell’s financing requests, but he was not discouraged. “He kept trying to kill our programs,” Mr. Cantrell said of one supervisor. But “we would go around” and get a lawmaker “to whack him.”

Inspired by his successes, Mr. Cantrell soon embarked on a more ambitious project that would all but guarantee sustained financing.

His proposal, which was based on the premise that Congress would significantly increase annual financing for his experimental missile defense work, involved not just five test launchings, but the construction of a new launching site on a remote Alaskan island and the lease of a mothballed Navy helicopter carrier, which would be used to send the simulated attack missile.

The Launching Project

It was easy to find willing partners.

The program’s main contractors, including the defense giant Lockheed Martin, prepared presentations for Congress making the case for an extra $25 million to $50 million a year for the project.

Officials in Alaska, who had been seeking money for a spaceport on Kodiak Island to launch commercial satellites, eagerly chimed in. And nearly a dozen lawmakers also did their part, Mr. Cantrell said, including Senator Stevens of Alaska; Senator Richard C. Shelby, Republican of Alabama; Senator Olympia J. Snowe, Republican of Maine; and Representative C. W. Bill Young, Republican of Florida, all members of the Appropriations or Armed Services committees with missile defense contractors in their districts.

But the military already had rocket launching sites around the globe, and Gen. Lester L. Lyles of the Air Force, who then ran the missile defense program, had no intention of spending money on another one.

General Lyles and his deputy, Rear Adm. Richard D. West of the Navy, were particularly incensed when they learned of the plans to lease the helicopter carrier, the Tripoli, and spend several million dollars renovating it.

Summoned to Washington in 1997 to explain the project, Mr. Cantrell offered little information. That only further infuriated his bosses.

“Who in the hell is in charge of this program?” Admiral West finally demanded in an exchange both men recall.

Mr. Cantrell was ordered to remove his experimental equipment from the planned launching. But the money kept coming. Mr. Stevens’s office had called to insist that the Kodiak project proceed, Admiral West and Lt. Gen. Edward G. Anderson, then the head of Army Space and Missile Defense Command, said in interviews.

“I got hammered pretty hard,” Admiral West recalled. The military men backed off, and the construction at Kodiak continued.

Mr. Cantrell said he knew that building a new launching facility was wasteful. “It doesn’t make sense,” he said. “The economics of it, they just don’t work.”

But he did not care.

“I went up there to get the money,” Mr. Cantrell said of his dealings on Capitol Hill. “And we got what we needed.”

Mr. Cantrell and his deputy, Mr. Ennis, visited Kodiak Island on the afternoon of the inaugural test launching in November 1998. The Air Force had substituted other equipment for Mr. Cantrell’s payload.

The two men, armed with a cooler filled with Miller Lite beer, watched the launching from a trailer, emerging just in time to see the missile burn an orange streak into the sky. They had hidden out to avoid any local newspaper reporters who might discover that Mr. Cantrell’s missile parts – the justification for millions of dollars in spending – were not even being tested. “There is no way we can explain this,” Mr. Cantrell remembered telling Mr. Ennis.


The hand that grabbed Mr. Cantrell by the shoulder startled him.

It was General Lyles, who happened to be on Capitol Hill when he spotted Mr. Cantrell outside Mr. Lott’s office. It was February 1998, even before the dispute over the Alaska project had played out. But the general said he immediately suspected Mr. Cantrell was up to no good.

“Are you over here lobbying?” General Lyles asked in an exchange the two men recalled.

Mr. Cantrell had been working with Mr. Lott, then Senate majority leader, for several years. The lawmaker included several million dollars in the defense budget for an acoustics research center in his home state, and Mr. Cantrell made sure it went to the intended recipients: the University of Mississippi in Oxford and a Huntsville defense contractor that had a branch office in Oxford. In turn, Mr. Lott’s office helped get extra financing – $25 million or so every year – for Mr. Cantrell’s program.

It was an arrangement that Mr. Cantrell did not want to discuss with General Lyles. While he did not consider himself to have been lobbying that day, he readily acknowledges that he often did.

“I just mumbled a lot,” he recalled of his response to the general.

By then, Mr. Cantrell felt confident that he could find his way out of any trouble with the help of his many friends in Washington. Several were lobbyists or consultants working on his behalf; he had /placed them with friendly contractors, allowing them to bill the government for the costs, even though federal law prohibits paying any expenses associated with lobbying.

For example, Mr. Cantrell arranged for James Longley, a former Republican congressman from Maine who started his own consulting firm, to be hired as an employee by Computer Systems Technology, a missile defense contractor.

“The man could put ‘honorable’ in front of his name and go places with that,” Mr. Cantrell explained, saying that Mr. Longley introduced him to lawmakers and appealed to senior Pentagon officials to protect Mr. Cantrell’s program.

Mr. Longley, in an interview, insisted that he never sought money from Congress, but simply provided strategic advice to Mr. Cantrell.

But several people, including Dr. Fisher, one of Mr. Cantrell’s bosses, thought the arrangement improper.

“Here is an ex-congressman out there promoting Mike’s programs,” Dr. Fisher said. “He can call himself what he wants, but he is basically a lobbyist.”

The incident with General Lyles prompted a formal investigation into Mr. Cantrell’s activities that same year.

But Mr. Cantrell got Mr. Longley to call Army officials. Then Mr. Lott’s office requested that the case be closed, Mr. Cantrell said. Eric Womble, a former aide to Mr. Lott, said he could not remember taking such a step, but added that it would not have been surprising.

“Senator Lott’s staff protects people who are trying to help us and help the nation,” Mr. Womble said.

Soon, the investigation of Mr. Cantrell came to a close. He got only an oral warning from his boss.

That episode would embolden Mr. Cantrell. On several occasions, he would again be caught violating Pentagon rules and each time escape with nothing more than a reprimand.

“If you have the Senate majority leader’s office calling over to get you out of trouble, you can’t help but get a little cocky,” Mr. Cantrell said.

The Fallout

From the US Airways club, Mr. Cantrell could see the symphony of the arriving and departing planes, the Potomac River and off in the distance, the Capitol dome.

One day in 2000, Mr. Cantrell met in the airport lounge with Mr. Ennis, his deputy, and a Maine contractor to figure out how to pocket some of the government’s money.

There were easy ways to cheat. The prototype missile nose cone and heat shields that the Army had paid the Maine company to design for the Alaska tests. Why not hire the business to pretend to design them again? Mr. Cantrell asked.

The ballute – an odd cross between a balloon and a parachute – had been rejected by experts as a tool to strike an enemy missile. But why not pay the Maine company to develop them anyway? Mr. Cantrell suggested.

He could pull off such shenanigans because, by then, he had an extraordinary degree of independence. Mr. Cantrell”s experimental missile program, which had cost nearly $250 million, was about to be canceled. No working missile system had been built – and almost none of the components had ended up being tested in real launchings as planned. The effort had produced some benefits for the players involved: Congress sent an annual allotment of extra money to the Alaska launching site now totaling more than $40 million, and one of the contractors that had worked with Mr. Cantrell initially to pitch the space port, Aero Thermo Technology, had secured a no-bid federal contract to provide launching services.

Now Mr. Cantrell was on to another assignment overseeing missile defense research in Huntsville, and through his friends on the Hill, he was once again getting money for projects that the Pentagon did not want.

Mr. Cantrell, who by now was helping to oversee 160 or so contractors and managing a $120 million a year contracting budget, said he knew that if he only requested a few million dollars at a time for his scheme, there would be little scrutiny of his requests or demands that he prove that the work was actually done.

For example, the missile nose cones and other parts now made round trips from Huntsville to Maine with little or no change. Mr. Cantrell or his deputy simply marked off the work as complete, and that was the end of it.

For nearly six years, from 2001 to 2007, the men collected kickbacks from contractors. During one visit to the US Airways Club, Mr. Ennis picked up a briefcase stuffed with $75,000 in cash, according to federal court records. Mr. Cantrell also got checks, ranging from $5,000 to $60,000, once or twice a month, court records show.

The Maine contractor, Maurice H. Subilia, is under investigation; his lawyer, Toby Dilworth, a former federal prosecutor, declined to comment. Dennis A. Darling, a Florida contractor who got government research grants and then divvied them up with Mr. Cantrell, was indicted last month on a charge of paying Mr. Cantrell $400,000 in bribes from 2005 to 2007.

With his new wealth, Mr. Cantrell, now 52, built himself a $1.25 million home in an exclusive Huntsville neighborhood called the Ledges.

Mr. Cantrell, who received the bulk of the kickbacks, acknowledges his crime but he ticks off the failings of the system that he exploited: lawmakers who are eager to please contractors and campaign donors; unwillingness by the Army to push back against members of Congress whose agendas were at odds with those of the military; and little scrutiny.

“We just paid for meaningless work,” he said. “And there was so little oversight that no one noticed.”

Admiral West, the former deputy director of the Pentagon missile defense program, faults Mr. Cantrell for wrongdoing, but says there were multiple missed opportunities to investigate his activities.

“The blame needs to go around widely here,” he said. “Congress should know better; the contractors, too.”

Mr. Cantrell, who is awaiting sentencing on conspiracy and bribery charges, now spends his days sitting in the kitchen of his father-in-law’s house; his dream home was seized by the federal government.

On top of the kitchen table, next to a King James Version of the Bible and bottle of Extra Strength Excedrin, is a stack of books on how to master poker. Mr. Cantrell has reduced them to mathematical formulas pinned onto a bulletin board in front of a computer terminal, where he plays Internet poker for hours at a time. Even now, he is trying to beat the system.

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