The Strange Billionaire Brothers Behind America's Predator Drones -- And Their Very Strange PastLinden Stanley and James Neal Blue's General Atomics has a massive stake in the drone industry. But that's just the start.
April 24, 2013 |
This article first appeared at the Not Safe for Work Corporation.
Gray Butte, CA: It's around 1 p.m. when my buddy Dave and I finally spot the General Atomics drone base, way out in the wastelands of the Mojave Desert.
We're on the border of San Bernardino and Los Angeles Counties. There's not much around for miles--nothing but sandy soil, rocks, Joshua trees, an abandoned trailer here and there, heaps of trash and tires. There's also a salvage yard full of airplane parts a few miles down the road, as well as a dairy plant and a foul-smelling high density feed lot crammed with miserable dairy cows reeking of shit and piss, baking in the desert sun. Next door to that is a trailer with a sign offering baby goats for sale.
We stop short of the gate, pulling over on the shoulder. Dave is a Victorville native whose dad was in the Air Force. He' s been around drones since they started popping up here in the 1990s. Right after high school, he even scored a brief gig with the infamous Pinkertons, guarding an early prototype of the Predator. But today in our drop-top Mustang rental car--a perfect car for drone hunting--Dave and I look just like a couple'a tourists. I pretend to fumble with the roof controls while we check out the scene.
From afar, the base itself doesn't look like much--just a jumble of low-slung prefab structures and warehouses and random industrial machinery flanked by vivid green alfalfa crop fields, and a solar field just beyond. That base could be anything. But it isn't just anything. We are looking at what used to be an abandoned WWII-era airfield, but today ranks as possibly the largest private drone base in the United States.
General Atomics took the base over in 2001 and converted it into a testing and quality control facility for its drone fleet. This is where the company tests experimental drone technology--like the newfangled stealth bomber jet drone. But mostly the base is where General Atomics techs assemble and test their Predator and Reaper drones before breaking them down again and shipping them to eager customers in the Air Force, Border Patrol, National Guard and the CIA.
The Guardian estimated that U.S. armed forces had about 250 General Atomics drones in 2012. And a good number of them first came through Grey Butte.
As we peer through the outer perimeter fence of the base, I can make out a couple of Reapers parked outside, their motors revving up louder and faster, as they were about to take off. The fence has a couple of smallish signs warning people to stay the fuck away, or else. Beyond the whirring Reapers we see warehouses, hangers, an air control tower and stacks of long rectangular plastic crates that are used to transport the disassembled Predators.
At one point, we spot a Predator hovering very high overhead. It circles a few times and then disappears from view.
I'm suddenly paranoid.
When people talk or think about drones these days, it's usually in very crude, naive, B-sci-fi ways: vague images of big brother robots menacingly hovering over us, observing, recording and tracking our every move…
But I'm not so much spooked by the Predator drones hovering above me, as I am by the spooky brothers who make them: Linden Stanley and James Neal Blue, the mysterious Blue brothers who own and run General Atomics.
You probably don't know about the Blue brothers, and neither did I until a few months ago. There's very little current information available about their lives, and the parts that are known are murky and incomplete.
What we do know with a fair amount of certainty is that Linden Stanley Blue and James Neal Blue were born to a wealthy family in Colorado during the Great Depression, went to Yale, served as Air Force pilots, and have been involved in some very heavy business activities since then: They've enriched uranium, dumped radioactive waste on a Native American reservation, infiltrated and spied on environmental activists, operated plantations with one of the South America's most brutal dictator clans and tried to turn Telluride, the quaint Colorado ski town, into a giant McTractHome development.
Today the Blue brothers reside in separate mansions in the wealthy, pasty-white beach enclave of La Jolla -- the Beverly Hills of San Diego -- not far from the headquarters of General Atomics. The brothers are both approaching 80, and are extremely wary of the press.
The Blue's weren't always as shy of the spotlight as they are today.
Back in 1957, Neal Blue and his brother Linden made the cover of LIFE magazine as "The Flying Blue Brothers.” It showed them crammed into the cockpit of a small blue single-prop plane, with big creepy smiles, ready to fly around the perimeter of South America.
The Blue brothers of Yale make a hazardous hemispheric odyssey
The tiny plane above, dodging through cloud openings among the treacherous peaks of the Colombian Andes, is the vehicle of a unique, exciting modern odyssey. Last summer, piloted alternately by Yale men Neal and Linden Blue (left), the Blue Bird flew 25,000 miles in 110 days--from Denver. Colo, to Mexico, down along the rugged west coast of South America, across the Andes to Argentina, back north again over the Caribbean to Miami, and at last to New Haven. The log of their trip was packed with colorful and hazardous incident. With oxygen but without a supercharger in their single-engined plane, they Hew at dangerous altitudes of 16,000 feet They made 44 stops along the way, dropping in on affable plantation owners and friendly head-hunters; they landed lightheartedly where no plane had ever been before and then were forced down dangerously where no plane should have been.
One of these "affable plantation owners” was none other than Anastasio Somoza, the brutal dictator whose family had run Nicaragua like their own private slave plantation for three generations, until being ousted in from power in 1979 after a bloody popular uprising led by the Sandinistas.
One of the LIFE spreads is a picture of the brothers hanging up hammocks to dry on their plane, with a caption explaining that "the boys and their bedding had got soaked when they slept out in a tropical shower” in Nicaragua, "where they interviewed the late President Somoza.”
The Blue brothers did more than just interview President Somoza, they went into business with his family, partnering up on several agricultural ventures, including cocoa and banana plantations, as well as a 100,000-acre ranch of some kind. The details are murky, but it seems the partnership continued until the very end of Somoza rule.
These are the same Somozas whose security forces were caught on camera executing an American reporter for ABC News in 1979, shooting him point-blank in the head as he lay on the ground face-down. That reporter had come to Nicaragua to cover the revolution. When American TV showed the reporter getting his brains blown out, that was the last straw forcing Carter to withdraw U.S. backing for the Somoza family.
Their hold on power collapsed, the Sandinistas took over Nicaragua, and the Blue brothers' business partners went into exile in the U.S. The execution of a nosy journalist wouldn't have interested the Blue brothers much, but losing their agricultural holding to a bunch of commie peasants wounded their pride. It's a wound that festers to this very day.
In 1961, four years after making the cover of LIFE magazine, the Blue brothers again made national headlines--this time, in connection with Communist Cuba.
It was another bizarre story, but the gist of it is this: Linden Blue was on his way to Nicaragua when, for some inexplicable reason, he decided to fly his private prop plane straight over Fidel Castro's Havana. This happened at a time of escalating tensions. The U.S. had just closed down its embassy in Havana and severed diplomatic relations. Meanwhile, Castro had advanced knowledge that the CIA's was planning its Bay of Pigs invasion, which was just a month away. Not surprisingly, as Linden flew over Havana, he was intercepted by a Cuban fighter jet, forced to land, and thrown in jail along with his sole passenger, a buddy/business partner who worked as an executive for a baby food company.
Here's a clip from a 1961 story in the Miami News published after their release 11 days later:
They had set out from Key West on March 24 In Blue's twin-engine private plane on a flight to Managua, Nicaragua, where Blue is partner in a banana plantation. [Donald] Swenson, executive for a baby food manufacturing firm, said he went along to see the plantation and possibly to enter into a business relationship with Blue. They were about 70 miles from Havana when Blue, piloting the plane, contacted the Havana airport by radio to ask permission to fly over the area on his way to Nicaragua. "About 20 miles from Havana, they ordered me to remain near the city at 8,000 feet,” Blue said. ”Shortly after that an American-made jet fighter appeared. He came very close once, apparently to check on our plane's identification marks." Next, Blue was ordered to land. I was in no position to argue about it," he said. Blue and Swenson were hustled away to a large house in the city. They soon learned that they were at the head-quarters of the Cuban secret police.
Linden Blue and his buddy Gerber were released on April 5. Less than two weeks later, the CIA launched the Bay of Pigs invasion--an operation in which Nicaragua's Somoza clan happened to play a crucial role, allowing the CIA to use Nicaragua as a base of operations. The Cuban exile "army” trained in Nicaragua, and part of their invasion was launched from there.
H'mmm, makes me wonder about that plantation business the Blue brothers were running in Nicaragua. Was it simply a cover for clandestine spook work? Or was it a legitimate business? Maybe it was both?
The Blue brothers are coy about their intelligence connections. In 2007, Neal told the New York Times that he and his brother were "enthusiastic supporters” of the CIA-run Contra army in the 1980s, a brutal death squad that terrorized Nicaraguan peasants and sabotaged infrastructure in order to destabilize the Sandinistas' rule. That raised an obvious question about intelligence connections; but Neal Blue "declined to discuss if they have worked for the Central Intelligence Agency.”
Wink, wink. Nod, nod.
Then, in 1982, Linden Blue, was appointed CEO of Beech Aircraft Corporation, which at the time had just been bought out by mega-military contractor Raytheon, the world's premier manufacturer of guided missiles.
Two years later, his brother Neal bought up most of the valley below Telluride and hatched plans to subdivide and turn the small ski town into a massive McMansion subdivision. The plan ultimately failed, but Neal fought with local residents for 25 years to push it through, even lobbying the Colorado's legislature to pass a retroactive law that would allow him carry out his plans--a law that was later struck down by Colorado's Supreme Court.
But the Blue brothers really came into their own after buying General Atomics from Chevron in 1986 for a reported $60 million.
At the time, General Atomics was a struggling company primarily involved in building civilian nuclear reactors, and losing out to bigger, badder nuclear behemoths like Westinghouse.
After packing their company's "advisory panel” with big names like Reagan's loopy Secretary of State, Gen. Alexander Haig, the Blue brothers began expanding into nuclear-related technologies: nuclear waste disposal, maglev trains and, most lucratively, mining and enriching uranium.
They acquired the largest known uranium deposit in the United States, located in New Mexico. They also bought a decrepit uranium processing facility in Oklahoma that had had a radioactive leak the size of Three Mile Island just a few years earlier. But General Atomics kept operating the leaky facility, cranking out specialized uranium metal used in fuel rods and armor-piercing munitions for five more years before finally shutting it down after the plant experienced yet another major release of radioactive material. An investigation found that ground water near the plant was 35,000 times above the legal limit, and that the company had known the plant was leaking radioactive waste but did nothing.
General Atomics also developed a massive uranium operation in Australia, where it owned one of the country's largest uranium mines. In 2001, it was discovered that the company had hired private spooks to infiltrate an Australian environment group that had been protesting one of its mines.
Here's the Australian branch of Friends of the Earth describing what happened:
The infiltrator, known as Mehmet, had previously infiltrated green groups as part of an undercover police operation before he moved into the private sector to set up his own security company, Universal Axiom. He also provided personal protection to visiting GA executives. When asked about the company's tactics, a Heathgate spokesperson said the company was privately owned and had a policy of not responding to media questions.
Neal Blue bragged to Fortune Magazine in 2008 that he had snapped up uranium deposits in Australia for nothing in the 80s, when uranium mining was still illegal in that country, "gambling” that a new government would eventually rewrite the laws and make the Blue brothers a lot of money--which of course they did.
”For our size, we possess more significant political capital than you might think,” Blue once told a defense trade mag.
Indeed.
That "political capital” is a big reason GA's Predator drones are now a household name.
A few years after buying General Atomics, Neal Blue set up a special "advanced technology projects” division in order to identify and develop undervalued military technology.
Such a venture required some serious connections and lobbying muscle, so Neal found the perfect man for the job: former Navy admiral Thomas J. Cassidy Jr.
Cassidy had a cameo role in Tom Cruise's "Top Gun,” a movie which was made with massive support from the U.S. Navy. Cassidy was a celebrity, but was also very experienced in navigating the halls of the DoD. A few years before he was hired by General Atomics, Cassidy had been disciplined in a major corruption scandal triggered by reports that the Navy had been buying ashtrays from Grumman Aerospace Corp for $659 a pop under his command.
So in 1992, Cassidy and the Blue brothers realized that locally-manufactured UAVs were gonna be the next big thing, and decided to get in early on the UAV racket. A decade later, their little company dominated the drone market, producing the cheapest and most dependable product.
To hear the Blue brothers tell it now, they all but invented the Predator drone. Neal told Fortune magazine in 2008 he got the idea to build drones decades ago, while fighting Sandinistas in Nicaragua.
Back then Blue was a Denver oilman and real estate investor who happened to spend a lot of time thinking about how to defeat communists. He was particularly interested in seeing the overthrow of the Soviet-backed Sandinistas, who had recently seized control of Nicaragua. He had known the Somozas, the ousted ruling family, from his cocoa and banana days, and, well, he hated Reds. Crippling the regime, Blue figured, was simple: just send GPS-equipped unmanned planes on kamikaze missions to blow up the country's gasoline storage tanks. "You could launch them from behind the line of sight,” he recalls matter-of-factly, "so you would have total deniability.” Blue pauses, leans back in his white-leather swivel chair, and quickly adds that he had nothing to do with any of the Reagan-era operations there - nor, of course, did he launch his own attack.
It's a nice story, except for all the bullshit.
The Predator drone was actually created by Israeli named Abroham Karem, who had helped design Israel's first drones for use in the Yom Kippur war. In the 1980s, Karem moved to Orange County and set up a small shop with DARPA funding to replicate and improve the technology here.
His company was called Leading Systems, and had already developed a working Predator drone prototype that was cheaper and more reliable than what good ol' boy defense companies like Lockheed Martin could crank out. Karem made an elegant and efficient product it, but it wasn't getting much love in the DoD.
It needed a power-salesman and a lot of money to grease the procurement process. And that's what the Blue brothers, and their man Cassidy, brought to the table.
"Behind its success in winning government contracts has been a formidable and at times controversial lobbying effort,” wrote the Financial Times.
H'mmm… "formidable and at times controversial” is one way of putting General Atomics' lobbying efforts. Another way would be to say the company flooded Congress with money.
A 2006 investigation by the Center for Public Integrity found that General Atomics was among the biggest sponsors of congressional trips, outspending other defense contractors by 50 times or more--and that's not counting the roughly $2.5 million a year it spends on lobbying.
San Diego-based General Atomics largely targeted congressional staff members, spending roughly $660,000 on 86 trips for legislators, aides and their spouses from 2000 to mid–2005, according to an analysis of travel disclosure records by the Center for Public Integrity, American Public Media and Northwestern University's Medill News Service.
While on trips to Turkey in 2004 and Australia in 2005 -- some valued at more than $25,000 -- staffers attended meetings with officials of foreign governments being solicited to buy the company's unmanned spy plane, the Predator.
Among those aides was J. Scott Bensing, chief of staff to Sen. John Ensign, R-Nev., a member of the Senate Armed Services Committee's Airland subcommittee. Two of his trips cost more than a combined $46,000.
Bensing said that he and his wife, Lia, went to Italy and Turkey in 2004 and Australia in March 2005 on the company's tab. His disclosure forms list more than $37,000 in transportation expenses and nearly $4,400 worth of meals for the two weeklong trips.
Bensing indicated on his forms that the Australia trip's purpose was to discuss "the international war on terror,” while the Turkey trip included discussions on "NATO interoperability and other international military issues.” However, other aides who went on the trips indicated that staffers also sat in on meetings with officials of foreign governments interested in buying the Predator and other robotic planes developed by General Atomics.
"I was not there to advocate [for General Atomics],” he said. "That was not our purpose. It certainly wasn't why I was there.” Bensing asserted that he did not go on the two trips to help sell aircraft. He said the meetings were focused on national security, and that if the Predator came up in conversation, it was because foreign officials raised the topic.
One of General Atomics' biggest fans was Rep. Randy "Duke” Cunningham, a Republican whose district included General Atomics headquarters in San Diego. Cunningahm's office took more than $50,000 worth of trips from 2002 to 2005.
In 2006, Cunningham got eight years for evading taxes and accepting a couple of million in bribes, including a house and a boat christened the "Duke-stir,” from a couple of defense contractors not connected with General Atomics. Cunningham was the poster boy for Bush-era defense corruption: He even worked out a bribe-scale which valued the bribe amount based on the size of contracts he secured for his clients.
While staffers denied their roles as drones salesmen, General Atomics' Admiral Cassidy was more honest, explaining that this was simply a sensible way of doing business: "[It's] useful and very helpful, in fact, when you go down and talk to the government officials to have congressional people go along and discuss the capabilities of [the plane] with them.”
Cassidy admitted that "Without congressional support in the beginning, I am not sure the Predator would have ever seen the light of day.”
Neal Blue explained this practice to the Center for Public Integrity in similar terms: "A somewhat smaller enterprise is at a disadvantage in competing with very large embedded defense companies. It became imperative upon us to find a better way … independent of the bureaucratic procurement grind.”
General Atomics does not disclose its financial information, but stats gleaned from public data show that they took in just under $5 billion from U.S. taxpayers from 2000 to 2009. Current annual revenue is estimated to between $600 million and $1 billion, with about 80 percent coming from government defense contracts.
Today, General Atomics dominates 25% of the UAV market--a market that will only keep getting bigger and bigger.
Recently, General Atomics tested a new stealth jet bomber drone that will compete with Lockheed Martin's RQ–170 Sentinel--the one that got hacked into by Iran's cyber-mullahs and redirected to land in Tehran.
I wanted to ask the Blue brothers about all of these things, given the still escalating controversy in this country about the use of drones, both abroad and here at home. I'd tried getting in touch with the Blue brothers through official channels, of course. But my request for an interview, or a tour of the base, was denied. Their press person explained that GA's owners are "very selective” when it comes to granting interviews. Which is why I'd come to the base in person, in the somewhat optimistic attempt to talk my way inside for a look around.
I didn't even make it to the gate.
The moment Dave and I step out of the car, two security guards materialize out of a trailer and come racing out of the gate towards the car, yelling.
"You can't stand here! You can't stand here!"
"Isn't this public property?" I ask, doing my best impression of a confused tourist.
"Yes, but you can't stop here. You have to move."
"Why? What is this place?"
I can't tell you that, sir. Please, sir. Move."
"I think they're from Securitas," explains Dave. "That's what the Pinkertons are called these days."
I slam the car into reverse, gunning the Mustang away from the base, back out into the desert. Finally we stop and I look left and right, ahead and behind, expecting to see a General Atomics' security goon bearing down us, ready to drape sacks over our heads and drag us to some private black site dungeon from which we'd never emerge.
But there's nothing. Not even a drone in the sky. Just a couple of vultures circling overhead.
