Thursday, February 10, 2011

Spaceport Action Accelerates: Schmitt's Conflict Raised; Susana Names New Board & Branson Raises Stakes With Hotel Plans, Plus: Udall And The Earmarks 

Sir Richard Branson
The action has accelerated over Spaceport America, the economic development project that could be New Mexico's Sandia Labs of the 21st century--employing thousands--or a $210 million gamble gone bad.

First, there's the issue of Jack Schmitt's conflict of interest. Then there's Susana appointment of an all new Spaceport Authority Board. And then there's Virgin Galactic's Sir Richard Branson upping the ante by announcing plans to build a hotel near the Spaceport. We start with the Schmitt angle...

Should Jack Schmitt, nominated for a spot on Governor Martinez's cabinet, resign from the board of directors of Orbital Sciences Corporation because it represents a huge conflict of interest with the taxpayer-financed Spaceport America in southern New Mexico? Or should he be allowed to keep the board position because his department has no direct role in the Spaceport?

Schmitt, a former astronaut and US Senator, has been nominated to become the next secretary of energy and minerals department by Governor Martinez and awaits state Senate confirmation. Meanwhile, he is on the job and drawing a state paycheck. But his association with Orbital--a potential competitor with the Spaceport which has close ties to the Mid-Atlantic Regional Spaceport (MARS), has backers of the project asking when and if he will resign the board membership. He has held it since 1983 and in 2009 it paid him $88,000 in cash and stock.

It was hoped that Schmitt, a native of Silver City and one of the few men to walk on the moon, would be a major supporter of Spaceport America, but it hasn't turned out that way. He had to recuse himself from advising the Governor on the project because of his conflict of interest. Also, insiders in the know have told us that Schmitt is not a backer of the project as presently envisioned.

Having Schmitt on the Orbital board while the Spaceport struggles for full support with the current administration is just too much for Spaceport boosters to swallow. He is a national symbol of space exploration and his inability to support the project from his perch as a cabinet secretary is untenable for spaceport backers.

However, others argue that as secretary of energy and minerals Schmitt will have no direct role in the development of the Spaceport and that his board membership represents no direct conflict of interest.

Will state employee Schmitt resign his private board membership? Will Martinez, who has stressed ethics like no other recent governor, ask him to? Will the state Senate demand that he do so before confirming him? Or will the ex-Senator continue to cash Orbital Sciences checks as well as state paychecks and be allowed to look the other way when it comes to Spaceport America?


Meanwhile, Martinez's appointment of seven new directors to the Spaceport Authority Board drew favorable reviews from Spaceport enthusiasts who cited the continuity and experience the new directors would provide. Most of them have been involved in the project from them beginning.

There was concern that Martinez, who sacked the entire board soon after taking office along with executive director Rick Homans, would take too long in getting the board back together. But that concern was answered with this round of appointments. Still, the additional news that requests for proposals to hire contractors for maintenance and general services at the Spaceport has been extended for ninety days was called a "momentum buster" by one Alligator tracking the action.

Then there was that line in the Guv's news release:

"It’s time to see the project through to completion by bringing in private funding."

What private funding? The Spaceport's initial phase is already paid for by state appropriations and a voter-approved tax in two southern NM counties. Virgin Galactic is the anchor tenant and plans to send tourists into suborbital space at $200,0000 a pop and has signed a lease agreement with the state.

Is the administration sending a message that they want to "privatize" the Spaceport--sell it to a private company to operate? If so, Santa Fe is putting the cart way ahead of the horse.


The first order of business is to have Virgin Galactic light that rocket and put a civilian in suborbital space. The new Spaceport board can hire a new executive director and proceed posthaste with giving state taxpayers what they paid for--a functioning Spaceport.

Sure, some may want to offload to a private firm the risk we've already agreed to assume, but that would severely limit the projects potential and its accountability to southern New Mexicans most vested in its future. New Mexico voted to think big and take the gamble. To quote Jim Morrison of the Doors: "The time to hesitate is through."

Governor Martinez's rhetoric has gotten a wee bit more friendly to the Spaceport, but her overall communications about the project still carry a tone that the Spaceport is a burden, presents problems, is a financial challenge and on and on. We understand the emotions that may prevent the administration from fully embracing a project that was launched under her predecessor--Big Bill--who they so dislike. But it's time to get over it and cease worrying about Bill getting credit and those far-in-the-future financial issues. How about bringing to fruition the fully-financed task at hand--putting people in space and then watch what happens.


Sir Richard Branson, the colorful raconteur and billionaire who the state has pinned much of its hopes on to get the state Space program up and running, dropped a mini-bombshell this week when he announced that Virgin Hotels--his new hotel chain--will build a hotel near the Spaceport to complement Virgin Galactic's spaceport operation. No details on the project, except that Virgin Hotels are to be of the five star variety.

It's a mini-bombshell because it signals the first private sector jobs that could be spun off from the Spaceport. That's key to maintaining public support and for the state to profit from the project via gross receipts taxes.

The Branson announcement also raises the political stakes for Martinez in keeping the Spaceport on track. We're now talking about the first round of tangible employment spinning off from the Spaceport. And we're not just talking jobs for the eggheads, but for the working class. Pressure for those jobs will be intense.

This hotel announcement is interesting timing, isn't it? If Branson was on the defensive now that Big Bill and former Spaceport executive director Homans are gone, it didn't last very long. They don't teach that in the poly sci classes, kids, but that's how the game is played.

Virgin has already signed up hundreds of suborbital space tourists at $200,000 a piece. Now Branson plans to give them some nice earthly views while they wait to rocket up and to rest when they touchdown. But don't make a reservation just yet. Word is that Branson's hotel is two years down the road.


That PPP poll that had Senator Bingaman in such good shape for re-election (56% approval) also has President Obama scoring well with New Mexicans. It says Obama's approval rating here is a healthy 55%, with 40% disapproving. In theoretical match-ups the Prez also handily beats potential 2012 GOP challengers like Romney, Gingrich and Palin.

Obama scores 60% approval with critical independent voters who helped push him to a 15 point win here in 2008.

PPP is a Democratic firm, but it has been reliable and not shown itself to be biased. The survey has more Dems than the R's would like to see, but keep in mind that more Dems will be voting in a presidential election year than voted in 2010. Most important, the R's are not coming with any of their own numbers that contradict the PPP standing of Obama or Bingaman.

This early polling is vital because it determines the field. For example, if Bingaman were faltering it could persuade him to opt out of a re-election bid as happened Wednesday with Virgina Senator Webb who faced a tough re-elect. With huge money needed to run, you can't wait six months for better polling numbers, you need them early to raise the money and deflect stronger opposition.

Many folks are asking us about ABQ GOP Mayor RJ Berry and whether he might make a run against Bingaman. All we can tell you is that a close friend of the mayor told us recently the mayor has no plans to run for the US Senate. Berry is up for re-election for mayor in 2013.


Senator Tom Udall has some words to keep in mind when we hear the outcry against those congressional "earmarks."

The Washington spin cycle has turned 'earmarks' into a dirty word, but in reality, they have long provided funds to New Mexico businesses and organizations that create jobs and boost local economies. The decision to prohibit earmarks might make for a good sound bite, but in practice, it means less federal support for our state in the long run.

You summed it up nicely, Tom. But you're going to take a hit in some quarters for saying it. You see, there's a viewpoint, expressed by those who may not be familiar with the history of our state, that only money generated by the "private sector" is "good" money. They look with disdain at anything associated with government.

We know that sounds bizarre when the very foundation of the modern economy of New Mexico is the federal government. Fortunately, most of our congressional delegation, as delegations that have preceded them the past seventy years, are determined to bring to this little and needy state the federal funds that provide thousands of well-paying, meaningful and reliable jobs--and also provide a major boost to the private economy.

And that's the way it is.

This is the home of New Mexico politics.

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