Musk Points to Revolving Door as Rival Enlists Military Official

May 24, 2014 12:00 am ET

May 24 (Bloomberg) -- Elon Musk, chief executive officer of Space Exploration Technologies Corp., went on Twitter to suggest his competitors hired an Air Force official in return for a big contract.

The 42-year-old billionaire didn’t offer backup for his accusations against Roger S. Correll, the former Air Force program officer hired by Aerojet Rocketdyne, a unit of GenCorp Inc. Rocketdyne, which supplies rocket engines to United Launch Alliance LLC, dismissed Musk’s allegations.

“V likely AF official Correll was told by ULA/Rocketdyne that a rich VP job was his if he gave them a sole source contract,” Musk wrote on Twitter May 22. “Reason I believe this is likely is that Correll first tried to work at SpaceX, but we turned him down. Our competitor, it seems, did not.”

Musk’s company, known as SpaceX and based in Hawthorne, California, sued the Air Force last month, accusing the service of creating an illegal monopoly. Musk wants a piece of the $67.6 billion Pentagon satellite-launch market. United Launch Alliance, a joint venture of Bethesda, Maryland-based Lockheed Martin Corp. and Chicago-based Boeing Co., has a lock on that work.

Glenn Mahone, a spokesman for Aerojet Rocketdyne, said Musk’s allegations are “completely without merit.”

“We’re confident of the process that we followed in hiring Mr. Correll,” he said in a phone interview.

Correll received “the necessary clearances and approvals” from the Defense Department, Mahone said. “His duties and actions on behalf of Aerojet Rocketdyne are consistent with those clearances and approvals.”

The Air Force “cannot comment on ongoing litigation, since the Space X lawsuit was amended to include Mr. Correll’s employment,” Major Eric Badger, a spokesman for the service, said in an e-mail.

Twitter Postings

United Launch Alliance didn’t address the Twitter postings. The company is “the only government certified launch provider” that meets the Air Force requirements “critical to supporting our troops and keeping our country safe,” Jessica Rye, a spokeswoman, said in a statement.

SpaceX didn’t back off Musk’s comments. “The tweets speak for themselves,” said John Taylor, a spokesman. He declined further comment.

Musk, who’s also CEO of Tesla Motors Inc., has a long history of jabbing at those in his way. In recent months, he has thrown barbs at another space competitor, Orbital Sciences Corp., and New Jersey Governor Chris Christie.

Musk’s comments are “an accusation of criminal conduct against a company and the Air Force official,” said Steven Lieberman, a partner who handles First Amendment issues at the law firm of Rothwell, Figg, Ernst & Manbeck PC in Washington.

‘Put Up’

“He may be forced to put up or shut up -- or put up or retract,” if Musk is sued over his Twitter postings, Lieberman said.

Correll’s job change comes at a time when the relationship between the military and United Launch Alliance is under scrutiny.

Correll was the Air Force program executive officer for space launch from 2011 to January 2014, according to his LinkedIn profile. In May, he joined Rancho Cordova, California- based GenCorp’s Rocketdyne as vice president for government acquisition and policy.

Such trips through the “revolving door” between government and the industries it regulates aren’t unusual, said Kenneth Gross, a partner in the Washington office of Skadden, Arps, Slate, Meagher & Flom LLP.

Revolving Door

Correll in his new job would face restrictions on his dealings with the Air Force because of federal laws addressing the revolving door, Gross said.

In a May 19 court filing, SpaceX cited a report about Correll’s new “senior position” published by the National Legal and Policy Center, a Falls Church, Virginia-based organization that supports reducing the size of government.

The center’s article doesn’t go as far as Musk went on Twitter. In his series of postings, Musk also wrote that the case deserves “close examination” by the Defense Department inspector general.

Arizona Senator John McCain, the top Republican on the Homeland Security and Governmental Affairs investigations subcommittee, already has asked the Pentagon inspector general to look into the military-satellite launch program.

Like Musk, McCain has questioned the Air Force’s decision last year to buy 36 rocket cores from United Launch Alliance without competition.