Russian on Sanction List Oversees Firm With US Contract

Friday, 25 Apr 2014 08:15 PM

By Sandy Fitzgerald

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A senior Kremlin official sanctioned by President Barack Obama in March plays a key role in the Pentagon's space program and will likely continue to benefit from a contract awarded earlier this year to a company he oversees.

Russian Federation Deputy Prime Minister Dmitry Rogozin, along with several other officials, were sanctioned March 17 in response to Moscow's aggression toward Ukraine, Fox News reported Friday.

But Rogozin, through a special order issued by Russian President Vladimir Putin two years ago, oversees the Russian space sector and supplies hardware used in the Pentagon's satellite program.

In January, the U.S. Air Force awarded a contract to the private firm United Launch Alliance, a venture of Lockheed Martin and Boeing, to buy 36 of the booster cores the Pentagon uses for the Delta IV and Atlas V launching systems. The contract, along with others the Air Force has signed with ULA, total $2.5 billion.

The engines in the Atlas V system, however, are made by NPO Energomash, which is owned by the Kremlin and overseen by Rogozin. The engines cost an estimated $15 million to $20 million each.

SpaceX, a firm that launches satellites for NASA without the Russian engines, is challenging the ULA contract, saying it was awarded as a sole-source deal and because Rogozin has been sanctioned.

"It's hard to imagine some way that Dmitry Rogozin is not benefiting personally from the dollars that are being sent there," said Elon Musk, chief executive officer of SpaceX. "This seems like the wrong time to be sending hundreds of millions of dollars to the Kremlin."

Rogozin was named in Obama's first round of sanctions. Last year, the Putin ally and former Russian ambassador to NATO announced plans to consolidate Russia's space industry into a state-controlled corporation, the Russian publication RIA Novosti reports. 

Former NATO official Mark Jacobson, a senor fellow for the German Marshall Fund, said he is concerned about the Pentagon's reliance on one source for its satellite program.

"The United States is going to have to find a way to diversify its ability to put heavy payloads into space," Jacobson told Fox. "The single point of failure in this case is that we assume that the Russians will always provide these engines. What happens if they stop?"

Meanwhile, the sanctions could be undermined by the Pentagon's use of Russian sources, said Jacobson, formerly a senior adviser in Afghanistan to Gens. Stanley McChrystal and David Petraeus.

But ULA spokeswoman Jessica Rye said the company is not overly reliant on Moscow for its space launches.

"ULA maintains a two- to three-year supply of RD-180 engines in the United States to minimize potential supply disruptions," she said. "Russia has taken no actions to restrict sales or exports of the RD-180 ... [and] the RD-180 supply chain has never experienced a supply disruption in the 15 years of imports."

In addition, she said that if the sanctions interfere with the launch system, national security payloads could be transferred to another section of the company.

State Department spokeswoman Jen Psaki said the sanctions against Rogozin were against him as an individual and Putin ally, not because of his affiliations, and noted the United States has flexibility to amend the sanctions.

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