Congressional negotiators are considering whether NASA contracts awarded to Elon Musk’s SpaceX represent a potential national security risk due to Chinese financial support for the billionaire owner’s electric car company, Tesla.
“What is there to stop them from going to Musk directly and saying, ‘We’ll call your line of credit early, unless you give us X, Y, or Z?’” said a congressional Republican aide involved in negotiations over the comprehensive legislation governing the space agency. “And, there’s no real clarity that there’s any kind of mechanism that would stop that other than good behavior by an individual.”
The question underscores the suspicion coursing through Washington and Beijing, with national security officials prosecuting an intensifying geopolitical rivalry by economic means. China’s penchant for intellectual property theft has created uncertainty even around federal government contracts awarded to American captains of industry such as Musk, a pioneer of private sector spaceflight and electric cars.
“I’m concerned that companies in China could come into the U.S., make a sweetheart deal, take sensitive information, take proprietary technologies, and use it to enrich their own space program, their own national security efforts in China,” Colorado Sen. Cory Gardner, a Republican member of the Commerce Committee, told the Washington Examiner.
So, Gardner, who also chairs the Foreign Relations subcommittee for East Asia, offered two amendments addressing that risk. The first would have the Government Accountability Office review NASA contractors for potential ties to China, while the second advises NASA leaders to “take into account” those ties when awarding contracts. “The level of concern I’m hearing from companies who are in the U.S. and are concerned about this is alarming,” Gardner said.
The amendments decry the specter of an American company that works with NASA being “leveraged” by the Chinese Communist Party due to “significant financial assistance” from Beijing. Gardner’s proposals put a spotlight not only on aerospace companies that have a direct connection to China-linked cash, but even on “United States companies that share ownership with NASA contractors” — language that broadens the scope of the review to ensure that China can’t establish American “shell companies” to escape scrutiny.
Such legislation could put SpaceX at a disadvantage given that Musk’s Tesla secured a line of credit worth approximately $1.4 billion from Chinese state-owned banks in December. Small wonder then that United Launch Alliance, one of SpaceX’s main rivals for contracts to launch federal government satellites and spacecraft, urged Gardner to introduce the bill, according to congressional sources familiar with the process.
“The thrust of that is obviously self-interested because they’re competitors, but it doesn’t mean that it’s not a valid concern,” said the first congressional Republican aide. “It’s sort of a classic dynamic, right? An established provider, an established interest, that is challenged by an upstart interest. … If there was no SpaceX, ULA would love it because ULA would get more contracts. That doesn’t mean that the question isn’t worth asking and answering, though.”
Multiple congressional aides emphasized that the legislation isn’t tailored narrowly to apply to Musk’s companies. There are “at least seven aerospace companies that have some element of Chinese investment that would raise red flags, like Tencent,” the Senate Republican aide said, referring to the social media company that President Trump’s administration has targeted in recent months.
Gardner’s team acknowledged receiving ULA’s input. “That’s just responsible vetting,” a Gardner aide said. “But to say this is a rubber stamp of something ULA gave us and it’s a ULA-Space X [fight reveals] a lack of recognition of what the real issue is.”
Gardner said he was surprised that the legislation, which passed out of committee unanimously, turned controversial in recent weeks. “I look at these provisions as pretty commonsense protections of our space programs and space technologies,” Gardner said in a recent interview.
Still, two congressional sources familiar with the legislative process said that multiple lawmakers worried that Gardner’s original proposal for NASA to “take into account” ties to China was too vague for the agency to implement.
Negotiators have proposed a compromise that would establish a self-certification process for companies to affirm that no Chinese entity is even a minority owner. The talks have stalemated over how to enforce that process. Gardner’s team wants the bill to ban malefactors from NASA contracts for at least one year, in addition to giving NASA the authority to extend that ban for as many as 10 years. Washington Sen. Maria Cantwell, the Commerce Committee’s top Democrat, would rather rely on existing law punishing deception in such cases — in part because the existing laws afford NASA the discretion to give the companies a reprieve if necessary.
As lawmakers mull the best way to protect NASA’s secrets, national security debates have provided the great powers of the space industry with ammunition for their own heavyweight clashes. Musk, for instance, invoked Russia’s annexation of Crimea from Ukraine to discourage Senate appropriators from relying on ULA, given that his rival’s rockets used a Russian-made engine.
“You live by wrapping yourself in the flag, you die by wrapping yourself in the flag sometimes,” a space industry executive said. “Elon is just having his own tactic used against him. And I promise you that if Elon could find his own Chinese angle to use against ULA, he’d do it.”
